Court Opinion

ID: 6353715
Source: CourtListenerOpinion
Date Created: 2022-06-24 18:31:10.012749+00
Date Added: 2024-06-11T15:49:37.092502
License: Public Domain

Opinion,
Mb. Justice McCollum :.
We must dispose of this case on the answers to the interrogatories filed in it, and these show that the creditors of Thomas Gamón, who accepted his claim against the Scots’ Presbyterian Church, in part payment of their dividends, were purchasers of it. It was united with his demand against the board of education, and the sum was considered by the creditors, who were parties to the settlement, as a cash fund from which each should draw eighty-three per cent of his claim. An agreement of all the creditors with Gamón and the board of education, was necessary to enable any creditor to receive any portion of this fund. In order to create a fund sufficient to pay the dividends agreed upon, it was at first proposed that Gamón should collect and pay to the board of education his claim against the Scots’ Presbyterian Church, and that the board of education should pay to the several creditors their *213dividends in money. But as this plan involved delay, and a prompt settlement was desired, certain creditors consented to accept the claim as the equivalent of money and to apply it on their dividends in the proportion agreed upon between them. For their convenience it was transferred to one of their number to collect and pay to each accepting creditor his share of it. The board of education then paid to these creditors the balance of their dividends, and to the remaining creditors their full dividends, in money. All the creditors, except the plaintiff in this attachment, in pursuance of the arrangement under which the claim against the Scots’ Presbyterian Church was transferred and the money due from the board of education was paid, then canceled their demands against Gamón.
The agreement which governed the distribution was entire and all who shared in the distribution were parties to it. It was an agreement which blended in one fund the debts due Gamón from the board of education and the Scots’ Presbyterian Church, and distributed that fund as money. The creditor who has in his pocket the cash dividend which it gave him, cannot seize and appropriate to his own use the chose in action which other creditors accepted in lieu of currency. As he has his share of the fund, he cannot repudiate the agreement which created it and under which it was distributed. As between the parties to the settlement, the creditors who accepted the claim against the Scots’ Presbyterian Church have as valid a title to it, as the remaining creditors have to their cash dividends. If the plaintiff in this attachment received, as the answers allege, 83 per cent on account of his demand against Gamón, or as he contends 81 per cent of it, his relation to his fellow creditors is the same, because his dividend was such as the agreement gave him. An election by him to take 81 per cent and have a judgment against Gamón for the balance, rather than 83 per cent and satisfy his claim, did not enable him to seize and appropriate to the payment of that judgment the dividend of another creditor.
There is another fatal objection to this action. The transaction disclosed by the answers was not an assignment for the benefit of creditors. It was a contract between them and their debtor by which their demands against him were satisfied. It created a fund, of which ninety-six per cent was money on *214hand and the balance a chose in action. The creditors who accepted the latter allowed the rest of the creditors to receive their dividends in full from the cash portion of the fund. The contract of Gamón with his creditors divested all his interest in the fund transferred to them, and, with the exception of the claim of the plaintiff in this attachment, extinguished all their demands against him.
In the case of Wallace v. Wainwright, 87 .Pa. 263, “ Wallace & Krebs had no beneficial interest whatever in the claims assigned to them. They were neither creditors nor purchasers; they had made no advances and they had no lien.” There was no element of contract between debtor and creditor in it. In the present case McAvoy to whom the claim was transferred was a creditor and purchaser; he and the other accepting creditors made advances from their cash portion of the fund and they satisfied their demands against their debtor. Regard must be had to the substance rather than the form of the transaction.
We are of opinion that it was error to enter judgment against the garnishees upon the answers filed.
Judgment reversed and procedendo awarded.