Court Opinion

ID: 3863830
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:57:23.911157+00
Date Added: 2024-06-11T15:05:52.679494
License: Public Domain

The claims of John P. Smith  others are embraced in the general description of claims preferred in the first class of this assignment; and the first question put to us by the assignees in their bill for instructions is, whether these debts are excluded from this preference by the fourth exception to the claims thus described, upon the ground, that by virtue of them, the claimants were entitled to a dividend under the assignment of Philip Allen  Sons. *Page 312 
Nothing is better settled at this day than that, to understand what the maker of an instrument intends by his description of the subjects or objects of his conveyance, the court is entitled to know precisely what he knew with regard to them, so that it may occupy his position in construing his language. Now the facts stated in the bill show, that although these claims were embraced in the prior assignment of Philip Allen  Sons, yet, when this assignment was made, their condition was unalterably fixed in such a class under that
assignment, that it was reduced to an absolute certainty that they could receive no dividend under it. The assigned property of Philip Allen  Sons had all been sold; its proceeds precisely ascertained; and the result was, that there remained only $425,000, to be apportioned amongst debts of the first class, amounting to $1,180,000. As the claimants had not released Philip Allen  Sons, and the time for release had elapsed, they were postponed in payment to this vast mass of debt, and, as the bill states, their condition in this respect was well known to Zachariah Allen when he used in his assignment the above words of exception.
With these facts before him, we are all satisfied that it was not his intent to exclude the present claimants from the first class in his assignment by his fourth exception in the clause descriptive of that class. The claimants could not have been in his view entitled to a dividend under the assignment of Philip Allen  Sons, when he knew that under the circumstances it was absolutely impossible that there ever could be a dividend for them to receive. A title to that, which to his knowledge could have no existence, can hardly have been intended by him to exclude from his preference those whose claims, in his view, otherwise entitled them to it. His substantial meaning in this exception plainly was, that those should not be included in the first class of his assignment, who had received or might receive, and not might have received, a dividend under anyother. His assignment speaks from the day of its date; and whatever might have once been the position of these claimants under the assignment of Philip Allen  Sons, must be construed to regard them, in the position in which they *Page 313 
then stood, as wholly excluded from the chance of dividend under that assignment.
The criticism, that the specification, as preferred, of certain new notes of the assignor given for debts previously evidenced by his notes indorsed by Philip Allen  Sons, which follows the fourth exception, upon this construction of the exception, is not warranted by the context. The notes before mentioned as preferred, and to which all the exceptions apply, were notes "originally given exclusively" for the assignor's "own indebtedness as principal, and not otherwise;" whereas these new notes were preferred without reference to the origin of the debts which they represent.
Our instruction to the assignees, therefore, must be to pay the claims in question pari passu with the other claims in the first class of the assignment, as not within the fourth exception to the claims first mentioned therein as preferred.
In this view of the fourth exception, the question with regard to the claim of the Mechanics'  Manufacturers' Bank ceases to be of any importance. The amount of their old note, which, under the above construction of the exception, is entitled to dividend in the first class of the assignment, was precisely equal to that of their new one; and whichever was technically released, their right of dividend remains the same. It becomes unnecessary, therefore, to decide, whether the mistake in their release, coupled with the fact that they have surrendered, and the assignees have accepted the surrender of both notes, is not tantamount, in equity, to a technical release of both.
The claim of Wood  Erringer, which is for a final balance of their account with the assignor as his commission agents, and of D.W. Vaughn  Co., on unpaid checks on banks, signed by the assignor, are both embraced in the first class, so called, of the assignment. Wood  Erringer have received, however, from the assignor, in payment of their balance, certain drafts of D.W. Vaughn  Co., which the assignor purchased of the latter firm with his unpaid checks on bank now held by them, or by their assignee Burges. So far as the drafts of D.W. Vaughn  Co. remitted to Wood  Erringer have been paid, they sink the balance of their account against the assignor; *Page 314 
leaving them for the remainder of their balance the double security of the assignor's liability, and the drafts of D.W. Vaughn  Co. Upon this remainder of their balance only, are Wood Erringer entitled to a dividend; and as the receipt of this dividend from the estate of the assignor, will, so far, go to decrease the liability of D.W. Vaughn  Co. upon their drafts to Wood  Erringer, D.W. Vaughn  Co. should be allowed to prove only for the balance of their checks, after deducting the dividend received by Wood  Erringer.