Bank of Mobile v. Dunn

67 Ala. 381 | Ala. | 1880

BBICKELL, C. J.

— Assignments for the benefit of creditors are subject to the same rules of construction which are applied to other contracts or conveyances. The object of all construction is to ascertain, and, so far as it is possible, to give effect to the intention of parties. If the intention is not clearly and distinctly' expressed — if the words of tlm instrument are general, or, if there is ambiguity of expression, admitting of two or more constructions, that construction must be adopted, in obedience to the maxim, ut rea magia váleat quam pereat,. which will make the instrument available by all its parts, and for all its purposes, rather than a construction which would defeat it in any respect.— Tarrer v. Rappe, 7 Ala. 873; Shackelford v. P. & M. Bank, 22 Ala. 238. The circumstances surrounding the parties when the assignment was executed, the motives leading to its execution, and the objects to be accomplished, should be regarded in construing it; for, if there is a want of clearness in its terms, leaving the intention in uncertainty or doubt, these may often remove it. Burrill on Assignments, 374.

It is obvious, that when the assignment was executed, Crawford was in failing or insolvent circumstances, and that his purpose was the appropriation of all his individual, separate property to the payment of his debts; all property of which he had the sole and exclusive power of disposition, as distinguishable and separable from the property and assets-of the several partnerships of which he had been, or was, a member, mentioned in the assignment as then, or previously, existing. There is no reservation, or exclusion, from the operation of the assignment of any other of his property, distinguishable and separable from the property and assets of these partnerships, than such as was by law exempt from the payment of debts. The intent to assign and transfer all such property, subject to the specified reservation, whatever may have been its kind, or whatever the nature of the title to it, is clearly expressed, not only in the recital of the objects, purposes, motives, and considerations leading to the execution, but in the granting clause of the assignment. It is also apparent that the assignment is framed in view of the statute, (Code of 1876, § 2126), which converts evei’y general assignment into an equal security for the benefit of all creditors, annulling all preferences which may be expressed in it. The assignment gives a preference to the separate, individual creditors of the assignor, who are to be fully paid ; and then, if there be any surplus of assets, it is to be applied equally to the payment of the creditors of the partnership mentioned. In this respect, the assignment conforms to the principle upon which a court of equity would proceed in marshalling and distributing the joint and separate property of partners, to joint and separate creditors; applying partnership assets first to pay partnership debts; giving the individual creditors of each partner an equal and ratable proportion, with other individual creditors, of the share of such partner in the partnership assets remaining after paying partnership debts, and giving him preference of payment from the individual, separate property of the partner. In other words, first paying partnership creditors from partnership assets, and individual creditors from separate assets. Story on Part. § 363. The only partnership debts for which the assignment provides, and the only debts subordinated in payment, are the debts of the partnerships which are mentioned in the assignment. The words of the assignment, descriptive of the debts secured, or intended to be secured, are, “each and all of his own individual debts and liabilities, and, in addition thereto, the debts and liabilities of the said several mercantile firms.”

The point of contention now involved is, whether the debts of a mercantile firm, of which the assignor was a partner, not mentioned in the assignment, which had been dissolved several years prior thereto, the assignor promising, when the dissolution occurred, that he would pay such debts, are individual debts and liabilities within the meaning of these terms, as employed in the assignment, entitled to share in the preference created by it. If these debts are not embraced within this description, they are not entitled to share in any event in the distribution of the property assigned ; for they are not, certainly, within the other description, d^bts and liabilities of the said several mercantile firms mentioned in the assignment. To this extent, the intention to provide for the payment of all the debts of the assignor, clearly disclosed, in the order in which a court of equity would devote the assets, would be defeated; and it may well be-questioned, if the preference created by the assignment would not by the statute be annulled, so far as such debts are affected. The separate estate of a partner is that in which his co-partners have not a joint iuterest with him — in which he has a right and interest disconnected from the partnership ; and it may consist of his interests in other partnerships. — Oollyer on Part. § 880. So the individual, separate, debts of a partner may be the debts of other partnerships than such as are specifically referred to in at particular instrument. These terms, separate estate, and separate (or individual) debts, may be, and are often, used relatively. Such is the use of the terms individual and partnership debts, in this assignment; the latter designating all the debts and liabilities of the mercantile firms mentioned; and the former, all other debts and liabilities of the assignor, which are individual debts, in relation to, and distinguished from, the debts of these firms. There is no narrowness, or closeness of construction, of the description of debts iu assignments; it is enough that, upon a fair, just interpretation of the terms of description, though not within the precise words, they are broad enough to comprehend the particular debt. Accommodation paper, which the assignor was bound to the parties appearing on the face of it to be solely liable, to pay primarily has been regarded as embraced in the term debts by him due. — Bank v. McCalmert, 4 Rawle, 307. Acceptances of negotiable paper have been regarded as falling within the description of notes made or indorsed for his accommodation. — DeCosta v. Guien, 7 Serg. & Rawle, 462. It does not require any liberality of construction to understand the words individual debts and liabilities, employed in the assignment, as comprehending the debts of James Crawford & Son. They were, as between the assignor and his former partner, strictly individual debts which he was bound primarily to pay; and in the event of his death, and the insolvency of his estate, the partner as to ' such debts would have shared equally with individual creditors in the distribution of his separate estate. — Hogan v. Calvert, 21 Ala. 194; Peacey v. Peacey, 27 Ala. 683. We are of opinion the Chancellor erred in- not allowing the appellants to share equally with other individual creditors in the distribution of the funds derived from the assignment.

The decree must be reversed, and the cause remanded for further proceedings in conformity to this-opinion..