4 Rawle 307 | Pa. | 1833
after which, the opinion of the court, in which the whole case is stated, was delivered by
This was an action brought against the defendants, who had become the assignees of the estate of John Strawbridge, in trust for the benefit of his creditors, upon certain conditions, to recover the amount of two dividends upon a note drawn by George Strawbridge for the accommodation of John Strawbridge, for thirteen hundred and fifty dollars, bearing date the 21st day of August, 1822, and payable sixty days after the date thereof to Jonathan Smith, or order, who endorsed it for the accommodation of John Strawbridge, who after endorsing it himself, got it discounted at the Bank of Pennsylvania, where he received the proceeds of it.
■ John Strawbridge, by his agreement with the drawer and payee of the note, was to pay it at maturity. Before, however, this time came around, John Strawbridge failed, and on the 13th of September, 1822, executed a deed of assignment to George M‘Calmont, John Turner, Junior, and John Hemphill, the defendants in this action, of all his estate, both real and personal, in trust: — First, to pay all the expenses of the execution of the trust. Second, to pay all such custom-house bonds as were then due by him, or owing, or growing due, or for the payment of which he was in any way liable. Third, to pay and discharge all the debts that were by him then due, or were owing or growing due, to such of his creditors as should within the space of ninety days after the date of the assignment, if residing within the United States, and within six months if residing elsewhere, execute a general release of all demands and debts uwhatsoever against him; paying to his said creditors their debts in full, if the estate thereby assigned should be sufficient therefor; if not ,then in an equal and rateable proportion, according to the amount of their debts respectively. And in the last place, after satisfying and discharging the debts aforesaid, then to pay all his other creditors in equal proportion, according to. the amount of their respective debts. He also furnished a list in writing to his assignees of his debts, which included the note in question.
On the 14th of September, 1822, George Strawbridge, the drawer of the note, having also failed, executed an assignment to Henry
On the 14th of October, 1822, at half past nine o’clock in the morning, the plaintiffs in this action executed a release, which had been prepared by John Strawbridge for his creditors generally to sign, in compliance with the condition contained in the deed of assignment, and is in the following terms: “ To all to whom these presents shall come, we who have set our hands and seals hereunto, creditors of John Straiubridge of the city of Philadelphia, merchant, send greeting. Whereas, the said John Strawbridge is indebted unto us respectively in certain several sums of money, for the payment of which he has assigned over all his estate, real and personal, by indenture, to certain trustees therein named, for the use of and to the intent that the same may be divided among his creditors, according to the provisions of the said indenture. Now know ye, that for the considera-, tion aforesaid, each of us the said creditors, who have hereto set our hands and seals, for himself, his heirs, executors, administrators, successors and co-partners, doth by these presents, remise, release, and forever discharge the said John Strawbridge, his heirs, executors and administrators, of and from our said several debts ar.d demands, and from all actions and manner of action, and actions and suits, which against the said John Strawbridge each of us now hath, or which each of us, and every of our heirs, executors or administrators respectively may hereafter have, by reason of the said several debts to us respectively due or owing, or growing due, from the said John Strawbridge. In witness,” &c.
This release was also executed by Henry Simpson and John H. Linn, the assignees of George Strawbridge.
On the same 14th of October, at ten o’clock in the morning, the-plaintiffs also executed a release to George Strawbridge, which had been procured by him for his creditors to sign, in compliance with the condition contained in his assignment, and had been executed about a week before by the defendants, as the assignees of John Strawbridge. It is in the following terms: “Know all men by these presents, that we whose names are hereunto subscribed, do hereby remise, release, and forever discharge, George Strawbridge of the city of Philadelphia, merchant, and his heirs, executors and administrators, of and from all, and all manner of actions, and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agree
The note fell due on the 23rd of October, 1822, and was protested for non-payment, of which notice was duly given to John Strawbridge as the endorser.
On the 25th of February, 1823, the assignees of George Strawbridge, paid to the plaintiffs a dividend of ten per cent, amounting to one hundred and thirty-five dollars. On the 26th of March, in the same year, notice was given to the plaintiffs, that the creditors of John Strawbridge should send in their claims to the counting-house of the assignees, in order that they might declare a dividend. And again, on the 25th of February, 1824, another dividend of ten per cent, amounting to the like sum of one hundred and thirty-five dollars was paid by the assignees of George Strawbridge, to the plaintiffs.
Anterior to the bringing of this suit, two dividends were declared by the defendants, as the assignees of John Strawbridge; one of thirty-three and one-third per cent., which, on thirteen hundred and fifty dollars, would amount to four hundred and fifty dollars; and the other of ten per cent., which would amount to one hundred and thirty-five dollars, if calculated on the same sum. This action is brought to recover these two dividends.
On the trial of the cause, John Strawbridge was offered as a witness by the plaintiffs, to prove that the note of thirteen hundred and fifty dollars, was drawn by George Strawbridge for the use and accommodation of the witness. He was objected to by the defendants’ counsel, but admitted by the judge who tried the cause. He testified, that although George Strawbridge was indebted to him on his private account, in the sum of thirty-three dollars, and on their partnership accounts in the sum of nine thousand dollars, yet the note was not given or drawn on account of this indebtedness, but for the accommodation of the witness, with an understanding that he was to take it up when due, wherever he might get it discounted: That he did not seek payment of the debt owing to him by George, because he knew from his circumstances that he was unable to make it.
A verdict of the jury was given in favour of the plaintiffs for five hundred and eighty-five dollars, with interest from the times of declaring the dividends respectively, subject however to the opinion of this court, whether, on the whole of the evidence, which went to establish the facts as already stated, the plaintiffs were entitled to recover anything in this action, and if they were, the court to say what amount.
The first question which presents itself is, was John Strawbridge, a competent witness ■, and in the next place, was his testimony admis
The true meaning of this rule is, as I apprehend, that the party after having given currency to such paper, shall not be permitted to invalidate it, nor to impair it as a security, nor to change the liabilities of the parties respectively, contrary to the tenor and form of the note or paper and the endorsements thereon, to the prejudice of the
The testimony of John Strawbridge having been properly received on the trial of the cause, establishes clearly, that the note was made for his accommodation and exclusive benefit, which disposes of one of the objections made by the defendants to the plaintiffs’ recovery, that it was not an accommodation note.
But then it is further contended, that although it be an accommodation note, the release by the plaintiffs of George Strawbridge, the drawer of it, discharged John Strawbridge, the endorser, and that they therefore can have no-claim as creditors of him to any portion of the funds assigned by him to the defendants for the payment of his debts.
To this it may be answered, that the plaintiffs did not execute the release to George Strawbridge, until after they had executed one in favour of John Stawbridge, in compliance with a condition required by him in his assignment, in order to entitle them to a certain grade of preference upon the fund assigned by him for the payment of their debt. By this arrangement, I consider that they are embraced by the terms of the assignment, which I shall endeavour to show' more fully in answer to the next objection, became absolutely entitled to their proper proportion of this fund, which had been given up to them, or to the defendants for their use, with others, which is in effect the same, to be applied towards the payment of their debt, by the very man who, in point of fact, was the real debtor, and so considered and acknowledged by himself to be; and how or why the subsequent release of George Strawbridge could divest the plaintiffs
The next and last objection which has been raised against the plaintiffs’ recovery in this case, is, that they are not embraced in the terms of the assignment made by John Strawbridge, which are, “ to pay and discharge all the debts that were by him then due, or were owing or grmoing due, to such of his creditors as should,” &c., and that the plaintiffs’ claim does not fall within this description. In support of this, it has been argued that John Strawbridge was not absolutely bound by his endorsement to the plaintiffs for the payment of the amount of the note: That his liability was only conditional and contingent; and that the nature and extent of his liability must be determined solely by his endorsement, and according to its legal effect: That by his endorsement he merely promised to pay the plaintiffs the amount of the note, provided they would present it at maturity to the drawer, demand payment of him, and upon his failing to pay, give immediate notice thereof to him, the endorser, but not otherwise: That until all this had taken place, it could not be said that John Strawbridge, the endorser, was indebted to the plaintiffs any thing upon his promise, and possibly never might become so; for if the drawer paid the note at maturity upon its being presented to him for that purpose, neither lapse of time, nor any thing that the plaintiffs could do, would ever make the endorser debtor to the plaintiffs or make them his creditors; but without indebtedness there could be no debt, and as no debt ever existed, it could not be said that any was either due, oioing or growing due; and consequently the plaintiffs did not come within the provisions of the assignment. This all appears to be very specious, and I must confess that I was at first so much taken with it as to incline to give into it; but after revolving the whole case over and over again in my own mind, and upon more full deliberation and inquiry into the practice and usage which have obtained under such assignments, and especially in respect to those who have generally been considered and allowed to claim as creditors under them, I have come to the conclusion, that the plaintiffs are included in the terms of the assignment, and entitled to recover.
The note having been given without consideration, for the accommodation of John Strawbridge, no debt of any kind existed until he got the note discounted, but as soon as that was done a debt was created most clearly, and that too by his act, for his own exclusive benefit; and under his agreement with the drawer and payee of the note,he then became absolutely bound to payit at maturity, to the bona fide holders, whoever they might be. Although not absolutely bound to pay by virtue of his endorsement, yet, I conceive, that there can
The only thing which remains now to be considered and settled, is the rule by which the amount of the plaintiffs’ demand ought to be ascertained. Upon inquiry, I am induced to believe, that the rule which has been adopted generally in practice, where more than one of the persons liable to the payment of a note or bill have failed, and made voluntary assignments of their property for the purpose of paying their respective debts and liabilities, is to take the amount actually due upon the note or bill, at the times respectively at which the first dividend is declared, of each fund so assigned. For example, take the case before us: the first dividend was declared of. the property assigned by George Sirawbridge, in February 1823, when the
This rule possibly has been derived from that which seems to have been adopted in England in cases of bankruptcy, which is, to take the amount of the debt actually due at the time of the creditor’s first proving it against the fund. See Ex parte Wildman, 1 Atk. 109. S. C. 2 Ves. 113. Ex parte Royd and Ex parte Bennet, cited 2 Ves. 114, and Ex parte Leers, 6 Ves. 644. The only difference between the two cases seems to be, that in the case of bankruptcy the amount of the debt due at the time of the creditor’s first proving it, is taken as the sum for which a dividend shall be allowed, but in the cases of voluntary assignments here, the amount due at the time of declaring the first dividend of each fund respectively, is taken as the sum upon which the dividend is to be allowed. I do not see any sufficient reason why this rule, which has already been adopted in practice here, should not also be adopted by the courts; for if it be as well suited as any other to subserve the ends of justice, and I think it is, it has at least the advantage of being known and familiar to that portion of the community who have the most to do with it, which is no slight recommendation for its adoption by the court. And indeed, it is highly probable, that from the long experience which has been had of its operation, without any attempt that we have heard of, to change it, it is quite as equitable, just and salutary, as any other that could be substituted.
We therefore direct the sum of each of the two dividends for which this suit was brought, to be ascertained by this rule, that interest be calculated on each from the time it was, or ought to have been declared, and that judgment be entered for the aggregate amount thereof in favour of the plaintiffs.
Judgment for the plaintiffs,