Court Opinion

ID: 6142817
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:43:23.045979+00
Date Added: 2024-06-11T08:54:43.151829
License: Public Domain

By the Court. Woodruff, J.
It was not only not shown by the defendant that three-fourths of his non-preferred creditors had signed the compromise or composition deed upon which he relied as a defence to the plaintiff’s action, but his own witness, Negus, proves distinctly that three-fourths in amount had not signed at the time of the trial. Whoever, then, had the burthen of showing that the condition had or had not been complied with, the fact was proved, and that is sufficient, if the non-compliance with the condition down to the time of . the trial rendered the composition deed inoperative.
The agreement was dated January 7th, 1852, and provided in substance that the plaintiff would accept fifty cents on the dollar, by three installments—the first payable on or before the 16th August, 1852; the second payable on or before the 15th February, 1853, and the third payable on or before the loth August, 1853—with this condition annexed, “Provided that unless three-fourths of the non-preferred creditors of the said George W. Guión, in amount, execute these presents, they shall be void and of no effect.”
This suit was commenced prior to the 7th of February, 1853, and the defendant proved that on the 16th August, 1852, he tendered to the plaintiff the first installment provided for, but the court below held the agreement inoperative because three-fourths of the creditors had not signed it. If the construction of the agreement depended solely upon the provisions above referred to, I should be inclined to think the decision correct.
The condition in relation to procuring the signatures of the other creditors is entirely silent regarding the time within which it must be done, and its construction in this respectas therefore to be gathered from the whole instrument together, if, upon an examination of its various provisions, the intent of the parties can be reasonably inferred.
There were over one hundred and fifty creditors. Some timo to procure the signatures of three-fourths was necessarily ccm*82templated. The very insertion of the proviso shows that the execution by all who signed was not to be simultaneous, and if not, some time must be allowed to enable the defendant to reach creditors' who resided in New'York, Vermont, Connecticut, Rhode Island, and, it may be, ■ other states, and one firm in England. Correspondence, if not journeys, might be necessary to the conclusion of the whole arrangement.
It would be little less than absurd to say that the plaintiff might sign the composition deed on one day and on the next day declare it void, and bring his action because the whole number of signatures had- not been obtained within ■ twenty-four hours.
But, as above intimated, if there were nothing more in the deed than is above stated, I should be inclined to say that the proper construction of the condition was,- that before the signers were called upon to do anything further or change their relation to the defendant in any respect, even by accepting an installment of the fifty per cent., he should perform the condition in question, i. e: whenever after the signing by the plaintiff, the defendant came forward to perform the agreement on his part and called upon the plaintiff to do any act recognizing the existence of the deed as a valid operative instrument, he must be prepared to show, or at least it must be true, that the condition upon which it was to be operative and valid had been complied with.
But the covenant with which this deed of composition concludes shows, to my mind, that this was not what the parties intended, and on the contrary, that by the proper construction of the whole deed the defendant had until August, 1853, tb comply with the conditions.
The creditors respectively covenant that they will not arrest, sue, implead or molest the defendant during the term granted for making the payments, i. e. until August 15, 1853, until or unless he should fail to make the payments stipulated, and that these presents shall be a free and absolute discharge from all actions and suits already commenced or to be commenced during the time or term aforesaid, i.e. unless and -until a breach or failure in -making the' payments should happen.
*83It will be seen, then, that if, he paid the installments -as -they became due, the covenant not- to' sue Was absolute in its terms, and the instrument was, declared to -be a full-discharge of all suits brought in the meantime, and full effect is given to every part of the instrument by adding: If, besides mating such payments, the defendant also procured the signatures of three-fourths of his creditors, then the instrument was to operate as a final discharge and release.
Entertaining this view of the construction of the agreement or composition deed, I think that when the suit was commenced the conditions of the deed had.not been broken, and that itwas and ought to -have been held a sufficient protection to the defendant.
Judgment reversed.