Court Opinion

ID: 6575023
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:33:26.879167+00
Date Added: 2024-06-11T15:57:03.546984
License: Public Domain

The opinion of the court was delivered by
Redfield, Ch. J.
It is said, in some of the cases upon this subject, that Chancery cannot interfere to compel the trustee to make a distribution of the funds in his hands, contrary to the express terms of the deed, but that when there is a fair opportunity to introduce' construction, that court will compel a distribution to all the residue of creditors, not expressly provided for, if by the terms of the deed they are not expressly excluded. 1 Am. Leading Cases, 100, referring to the decisions in South C.
But after the most patient examination, which I have been able to give this case, both upon the former argument, and at the present term, notwithstanding we have felt a disposition to give this class of contracts the same favorable consideration which we do all other contracts, we have not been able to convince ourselves, that the provision for the residuum of the property assigned, to come to the assignor, after the payment of all his “ individual debts,” could fairly be held to extend to all his debts. If that could be regarded as an allowable construction of the contract' of assignment, there is no insurmountable impediment in the way of upholding it, as it seems to us. The provision in regard to the disposition of the property not being intended, as we think, to give the assignor an absolute and irresponsible direction, in regard to *360time, but only a reasonable and legal discretion, which is always implied in all trusts, whether expressed or not, and is under the control of the Court of Chancery, and may be implied in their discretion.
But the express reservation of the residuum, after paying all the “ individual debts” of the assignor, seems to us to have been adopted de industria. And although capable, in literal interpretation, of bearing an import consistent with no exclusion of partnership creditors, inasmuch as partnership debts are equally individual debts, yet it seems to us, such is not a fair construction of the wmrds used, with reference to the subject matter and the attending circumstances. The word individual, as applied to debts in this connexion, is evidently a correlative. And, as such, it could ordinarily be only an antithesis to joint debts, or partnership debts. And for this purpose, I think it is competent to take into the account the fact, that the assignor owed such debts, if that fact is shown in the case, or even that in connexion with, and as part of the same transaction, he had joined with his partners in making an assignment of the partnership property, to secure partnership creditors —under all these surrounding indicia of the obvious import of the term “ individual ” in its connexion, it seems to us unreasonable to say, that we will, even for the sake of upholding a contract, ut eis magis, declare, that it shall have only its literal import, as synonymous with my or mine. It seems more in accordance with the cardinal rule of construing contracts, to give it such a meaning as will not obviously defeat the clearly expressed intention of the assignor.
Giving to the assignment this interpretation, the case of Dana Admr. v. Lull, 17 Vt. 390, seems to be decisive of the case, so far as the assignment of Hapgood is concerned. It is true, that the assignment, in the case of Dana v. Lull, might be regarded as fatally defective in many other particulars, besides reserving the residuum to the assignor, by way of resulting trust, before making provision for all the creditors; but the case was decided upon this ground chiefly. And a case, if it is authority at all, is only so, for the ground upon which it was decided. There may be many other grounds upon which it might have been decided, far more satisfactorily, but it surely could not be regarded as authority upon a ground upon which it was not decided, or for a principle which *361was in no sense recognized by the court, in the decision. We must then, we think, to give this first assignment a reasonable construction, and follow the published decisions of this court, regard the assignment as void.
The only other question, which appears, by the exceptions, to have been decided by the County Court, in regard to the liability of Collins, is, that he is liable for the property taken out of his hands, by virtue of an execution in this same suit. It is claimed that the execution being premature, is void, and so the officer a trespasser, and therefore the transaction is to be wholly disregarded. There are doubtless many questions involved in that matter, which do not properly arise here, and which of course we would choose not to determine. We are satisfied the trustee should not be held liable for property taken out of his hands, under these circumstances. If the execution was irregular, or void, the party, will still have his redress, for the actual damages. But he cannot be thus held liable for property which this same creditor has already taken from him, upon the ground that he may recover its value. This would be to encourage circuity of action, which courts will not do. It may deserve consideration how far the party is to be held liable for executing final process, which is in its nature judicial, until it shall be set aside by the court from which it issues. But that we have no occasion to determine here, perhaps. .
The grounds upon which the court below came to the sum of $208,86, with which they charged Collins, is not stated, nor is it stated that all the facts upon which they proceeded are contained in the disclosure. We could not therefore revise the decision of that court, in regard to that. It is very probable they came at it, in the manner stated in the brief of defendant’s counsel, as the sums agree, which would be a rare coincidence, unless the computation was identical. ■ But we have so repeatedly decided, and declared in the reports, that this court cannot revise the decisions of the County Court, in trustee cases, unless that court report the facts, and all the facts, upon which they decide the case, that it seems needless to say more.
We do not remand trustee cases to the County Court, unless it is apparent upon the papers, that a further inquiry in regard to the facts is indispensable to the justice of the case, The result in *362regard to Collins then is, that upon this bill of exceptions, he is liable only for the lesser sum of $208,86.
II. In regal'd to the assignment by Hapgood and Carlisle, it would seem to be liable to the objection of not providing for all the creditors, before the residuum was to be paid back to the assignors; but there is clearly another fatal objection, that it gives, or attempts to give, preferences to the separate partners, for debts they have against the partnership, before paying the other creditors. This could in no sense be allowed, without violating every principle of justice and fair dealing. If the principle is allowable at all, it is to the extent of securing the whole assets to the use of the separate partnez-s, to the entire exclusion of the general creditors.
But this question becomes practically of zzo importance, inasmuch as the court found the trustees not liable, even upon the basis of holding the assignment void. And although the particular grounds upon which the court proceeded az'e not shown in the exceptions, as it should be, if it was desired to raise any question' of law, yet from examination of the facts, as stated in the disclosure, it seems to us they were properly discharged.
Thé note which was given to Slack for $1,800, to secure him for certain liabilities which he had assumed for the firm, and which it was provided by the assignment should be paid, seems to us not necessarily to fall with the assignment. And although not all due, if Slack did not attempt to justify it as wholly a Iona fide debtor beyond what he had assumed, it would be a good gz-ound of allowing the trustee to z’etain for his own security, as to what he had actually paid, or assumed before the service of the trustee process.
We do not think he could be compelled to look to the real estate for his security. This will not be required, unless when there has been intentional misconduct of the trustee.
The judgment of the County Court, as to Slack and Marsh, affirmed. As to Collins, "reversed, and judgment that he is liable only for $208,86.