Court Opinion

ID: 7094085
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:09:02.42859+00
Date Added: 2024-06-11T16:13:11.244921
License: Public Domain

Dillon, Ch. J.
*123i. Contract: mortgage.1011' *122The claim of Little & Wilson is, that the agreement between Stephenson and his cred*123itors, including themselves, was, that, when Babcock should sell the property, he should first pay them the full amount of their debt, and then distribute the balance to the other creditors. This claim is resisted by the plaintiff, as the representative of the other creditors who were parties to the agreement mentioned in the statement of the case, and who insists that by this agreement, which is in writing, all of the creditors, including the appellants, were placed upon an equal footing, —that is, all were to contribute ratably to pay off the deed of trust, and to share ratably in the property thereby secured. And such is the plain meanifig of the written agreement.
It is urged, that it is improbable that the appellants, whose claim was a lien, should have waived this and have consented to place themselves upon a common plane with the unsecured creditors of Stephenson. But there may have been motives for this which they deemed adequate. They may have thought the value of the property sufficient to pay all, or it may not have been deemed advisable themselves to advance the whole amount necessary to rescue the property from the deed of trust.
But, whatever the motives, they signed an agreement, the obvious meaning of which is, that all of the creditors shall stand upon an equal footing. They stipulated no priority, and agreed to stipulations which are inconsistent with the idea that they were to have priority.
%_ offco”araotn: equity. Though they have taken testimony aliunde the agreement, to show that they intended to be preferred, yet this testimony fails to establish that there was any fraud, accident or mistake in drafting the written contract such as to justify a court of equity in reforming it. It is our opinion that the District Court did not err in settling the rights of the *124appellants according to the legal effect of the written agreement to which they were parties.
In a prior suit between Little & Wilson and the representatives of Babcock, the trustee, and who was also one of the creditors of Stephenson named in the written contract, it was adjudged as between them that Little & Wilson were to be first paid. By virtue- of this decree, Little & Wilson, as against the representatives of Babcock, are, as respects the debt due the estate, to be preferred ; and in the present suit the District Court should have so held.
With this- modification, the decree below is
Affirmed.
Beck, J., having been of counsel in this cause, took no part in its decision.