Court Opinion

ID: 7334006
Source: CourtListenerOpinion
Date Created: 2022-07-25 22:25:49.696699+00
Date Added: 2024-06-11T16:20:11.592980
License: Public Domain

LANDON, J.
The learned trial judge held that inasmuch as the literal reading of the fourth provision of the assignment is to the *893effect that if, after payment of the preferred debts, or of .so much thereof as the law would permit, the residue applicable to the payment of the nonpreferred debts should not be sufficient to pay them in full, then the assignee should apply such residue to and in payment of the preferred debts, the assignment made no provision for the nonpreferred debts in case of inability to pay them in full; and such is the case. That the assignor intended to make a valid assignment seems to be apparent from all its parts, except the portion of the fourth provision thus criticised. The assignment begins with the declaration that the assignor “is indebted to divers persons in sundry sums of money, which he is unable to pay in full, and is desirous of providing for the payment of the same, so far as is in his power, by an assignment of all the property for that purpose.” He then provides for the proper expenses, and next for his preferred creditors, but expressly subject to chapter 503, § 30, Laws 1887, which operates upon the preferences, and limits them to one-third of the assigned estate. He next, in the fourth provision, first provides for the payment out of the" residue of all his other debts; but he qualifies this provision with a clause which, literally construed, would defeat.the lawful intent and scheme which he had up to that point aptly expressed. We should construe this assignment so as to give effect to the manifest intent of the assignor, as gathered from the instrument itself, and so that it may stand, rather than fall, .if either construction is open to us. Roberts v. Buckley, 145 N. Y. 215, 39 N. E. 966; Pearson v. Eggert, 15 App. Div. 125, 44 N. Y. Supp. 330; Coyne v. Weaver, 84 N. Y. 386. The difficulty with the fourth provision of the assignment seems to arise from the omission of the word “not” in its proper place, as follows:
“And, if such residue shall not he sufficient to pay and discharge all such debts and liabilities in full, then the said party of the second part shall apply the residue of said proceeds to and in payment of the debts and liabilities not mentioned in the preference, ratably.”
We think the intention to insert “not” is clear, that its insertion is necessary to prevent the defeat of the instrument, and that we should read it in, or construe the instrument as if it were in it. The fifth provision evidently contemplates that the fourth does provide for the payment in full, or ratably, of the nonpreferred debts, after applying to the preferred debts all the law will permit. When the actual terms of the agreement contradict the manifest intention, the intention governs. Where the condition of a bond for the payment of money was that the bond should be void if the money was not paid, it was held to be wholly inconsistent with the nature of the bond itself, and the “not” was rejected, and the bond held valid. Story, Cont. § 636, and cases there cited. Mr. Justice Story, in Ferguson v. Harwood, 7 Cranch, 408, 413, said, “Mistakes of this nature are usually mere slips of attorneys, and do not touch the merits of the case.” “Northeasterly” was read “northwesterly” in Brookman v. Kurzman, 94 N. Y. 272. The word “hundred” was read after “one” in a bond, because the previous terms of the bond required it. Waugh v. Bussell, 5 Taunt. 707. *894With “not” inserted, the instrument makes sense; with “not” omitted, nonsense.
But the statute (chapter 503, Laws 1887) limiting the preference to preferred creditors to one-third of the assigned estate imposes its limitation upon this assignment. Bank v. Seligman, 38 N. Y. 435, 34 N. E. 196; Abegg v. Bishop, 142 N. Y. 286, 36 N. E. 1058. Hence, if the fourth provision does provide that, in case the residue shall be insufficient to pay all the unpreferred debts, such residue shall be paid upon the preferred debts, such provision is nugatory, to the extent that it first devotes more than one-third of the assigned estate to the preferred debts, and thus leaves the provision in full force in the fourth clause, namely:
“After fully paying and discharging all the aforesaid debts as before provided, the said party of the second part shall pay, all and singular, all other debts and liabilities of the party of the first part.”
Thus the assignment conforms to the law. All concur.
We think the judgment should be reversed, and judgment directed for the appellant, with costs here and below.