Court Opinion

ID: 6734588
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:17:17.187025+00
Date Added: 2024-06-11T16:01:43.464370
License: Public Domain

ON REHEARING.
In denying the petition for rehearing .we deem it necessary to refer to and answer a contention on the part of the defendants not noticed in the original opinion. It is urged that a rule applies to assignments for the benefit of creditors different from that which governs ordinary contracts, and that, where there is any uncertainty as to the true construction of the instrument, arising upon the face thereof, the instrument is void. No authority is cited which supports this novel exception to the otherwise universal rule that an ambiguous instrument is regarded as meaning what the courts construe to be its true interpretation, and is overthrown or sustained accordingly as such interpretation does or does not bring it udthin the condemnation of some rule of law. Whatever authority there is on the subject is the other way. Coyne v. Weaver, 84 N. Y. 386. The reasons urged for this *98distinction do not appear to us to possess any force. Not only would this distinction be a departure from all former rulings, and be without support in reason, but it would leave the creditors in the same state of uncertainty as to the validity of the assignment as it is insisted they are in when the instrument is ambiguous on its face. There would arise in every case the question whether the instrument was sufficiently obscure with respect to its true interpretation to bring it within this rule. To escape one kind of uncertainty the creditors would be offered another equally troublesome. We would'have that very point to meet in this case. It might with much force be urged that the assignment in question is not so ambiguous as to warrant the application of this doctrine for which counsel for defendants contend. The Minnesota decisions cited by him do not sustain his position. Two of them have no bearing whatever on this case,—In re Bird, 40 N. W. 827; May v. Walker, 35 Minn. 194, 28 N. W. 252. In the other one—McConnell v. Rakness, 42 N. W. 539—the uncertainty as to the purpose of the assignor was created by an uncertainty as to a fact outside of the assignment. The assignment was in fact a common law assignment, it not reciting the facts, necessary to make it an assignment under .the insolvency act, and it appearing that such facts did not exist. The clause of the assignment which the court held destroyed its validity provided for the payment of all creditors of the assignor who should file releases of their claims, or who should otherwise be or become entitled to payment of their claims out of the property assigned according to law and the statute in such case made and provided. The ground of the decision was that the assignment itself did not infoxun creditox’s as to the terms and conditions on which they would be entitled to share in its benefits; that they might be led to believe from its provisions that because of an extraneous fact —i. e. the seizure of the assignox"’s propexty by a creditor — the assignor had made an assignment requiring x-eleases, which would, if this fact existed, be a valid assignment under the insolvency law, Whether the assignor intended to require releases could *99not be determined by a construction of the instrument based upon its language alone, but depended also upon the existence or nonexistence of a fact outside of the assignment. The court in that case did not hold that the instrument was ambiguous on its face alone, and that, therefore, it was void, but held that, inasmuch as the assignor might lawfully require releases in certain cases, there was an uncertainty as to his purpose, growing not out of the language of the assignment alone, but out of that in connection with the fact that he could, in specified cases, require releases to be'given; that the assignment would not on its face inform creditors whether releases were necessary, but that only by ascertaining an extrinsic, fact — the fact whether the assignor’s property had been seized by his creditors — could they find out whether the assignor intended to exact releases as a condition of their participating in the benefits of the assignment. We regard that case as an authority against the defendants, for the court impliedly holds that when the instrument itself, when properly construed without reference to extrinsic facts, informs the creditors as to the terms and conditions on which they will be entitled to share in the benefits of the assignment, it is valid. The language of the court in that case is “that creditors have a right to be ■ informed My the assignment itself what its conditions are, and on what terms they are entitled to share in its benefits, and not have their rights left in a state of uncertainty, and dependent upon the existence or nonexistence of certain extraneous facts.”
(64 N. W. Rep. 78.)
The application for a rehearing is denied.