Court Opinion

ID: 3652688
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:06:51.312249+00
Date Added: 2024-06-11T12:18:48.027115
License: Public Domain

The bill was filed against the defendant, as trustee in a deed of trust, for an account. The pleadings disclose the following facts: On 19 February, 1858, Richard Cox and John L. Andrews, trading as Cox  *Page 270 
Andrews, made a deed of trust to the defendant, one clause of which is in the following words: "Secondly. To pay and discharge in full the several and respective debts, notes, bonds, obligations, and sums of money due, or that may grow due, from the said party of the first part, for which they are jointly liable to the said party of the second part, pay to L. S. Webb, cashier of the Branch Bank of the State of North Carolina at Windsor, Kader Biggs  Co., of Norfolk, Va., and Britton, Todd  Young, of Petersburg, Va., the several and respective debts, notes, bonds, obligations, and sums of money due or to grow due thereon to them." The deed then provides that the debts due to a third class shall be paid pro rata if there should not be enough to pay them fully.
Alanson Capehart, the defendant in this suit, is the trustee in this deed of trust, and claims precedence of the other parties mentioned with him in the above recited clause of the deed. The deed is filed by Biggs 
Co., Britton, Todd  Young, and L. S. Webb, who claim a pro rata division of the fund. The cause was set for hearing on the bill and answer and sent to this Court.
The only question presented by the pleadings for our consideration is, whether the defendant has a preference over, or is to share equally with the other creditors mentioned as the second class in the deed of trust executed for their benefit by Cox  Andrews. The clause upon which the controversy arises is as follows: "Secondly. To pay and discharge in full the several and respective debts, notes, bonds, obligations, and sums of money due, or to grow due, from the said party of the first part, for which they are jointly liable to the said party of the second part, pay to L. S. Webb, cashier of the Branch Bank of the State of North Carolina at Windsor, Kader Biggs  Co., of Norfolk, Va., and Britton, Todd  Young, of Petersburg, Va., the several and respective debts, notes, bonds, and sums of money due, or to grow due, to them."
As the funds in the hands of the defendant, as trustee, are not sufficient to pay all the debts specified in this class, the general rule that among those standing on the same footing, "equality is equity" must prevail, unless there be a clear manifestation of a purpose in the makers of the deed to give to one or more of the creditors a preference over the others. We think there is such a purpose indicated in favor of the defendant, and that the clause of the deed in question will not fairly admit of any other construction. The debts due the defendant are first mentioned, and it is declared that they are to be paid and discharged infull, *Page 271 
while the provision in favor of the other creditors is simply that they are to be paid. The counsel for these creditors insists that to pay, and to pay in full, means the same thing. That may perhaps be so when the expressions are applied to the same debt, but the former expression is manifestly stronger than the latter when applied to different debts. The sentence in which the debts due the defendant are secured is, in its meaning, a distinct one from that in which the other debts of the second class are provided for, although only separated from it in the manuscript by a comma. The repetition of the verb "to pay" shows this, as we think, very clearly, and we do not feel at liberty to disregard the words "in full annexed to that verb in the first sentence. The grantors (342) in the deed of trust thought, no doubt, that all the debts specified in the second class would be fully paid out of the effects which they had conveyed to the trustee, and they did not, therefore, provide expressly for a pro rata distribution among the creditors of that class as they did with respect to those of the third class as to whom a deficiency of funds was apprehended. Still a suspicion seems to have crossed the minds of the debtors, suggested, probably, by the trustee himself, that there might not be enough of funds to discharge the debts due to him and the other creditors put in his class, and it was to meet such a contingency that it was provided that, at all events, his debts should be paid in full. Being a creditor himself, the trustee very naturally, and not unreasonably, desired to have his own debts made secure in priority to all others, and, in our opinion, his purpose was accomplished by the language upon which we have commented. There must be an account and a distribution of the funds in the hands of the trustee upon the principle declared in this opinion.
PER CURIAM.                                       Decree accordingly.