32 N.Y. 219 | NY | 1865
On the trial before the referee, the question was raised by the plaintiffs that the assignment was void on its face on account of the following provisions contained in it: 1. Authorizing the assignee forthwith to take possession of all the assigned property, "and within such convenient time as to him may seemmeet, by public or private sale, for the best price that can be procured, shall convert all and singular the said premises, property and estate into money," c.; 2. A provision that the assignee might retain from the moneys to be realized "a sufficient sum to pay off, satisfy and discharge all such debts and liabilities as may be due and owing from Benham (the assignor), and on which or for which the said Elisha H.Huntington (the assignee) is, or may be hereafter, or becomeliable as an indorser or surety in any manner, and to fully indemnify and save harmless the said Elisha H. Huntington therefrom, amounting to about the sum of $5,000; 3. A provision that the assignee pay to one Joel W. Crane, "a sufficient sum to satisfy, pay off, and discharge all debts and liabilities as maybe due and owing from the assignor, and on which or for which thesaid Joel W. Crane is, or may be hereafter, or become liable asindorser or surety in any manner, and so as fully to indemnify and save harmless the said Joel W. Crane therefrom, amounting to about $1,500." *222
On these grounds the referee held the assignment void on its face as against the plaintiffs, creditors of the assignor. To this decision the defendants excepted. The correctness of this decision is the real question in the case. The exception taken on the trial sufficiently presents the point here, though there was no exception to the referee's report, which gave this construction of the assignment as the ground of his decision.
There has not been an entire uniformity of decisions in the courts upon this and kindred questions arising upon this kind of instruments; but the difference, I think, has been more in giving construction to language, in the slightly varying forms of expression employed in the instrument from which the intent of the assignor is determined, than from any variation in the principle which has been intended to be applied in determining what power the assignor may confer in this character of trusts.
The first ground of objection in this case, is that the language in the power, "within such convenient time as to himmay seem meet," to sell, c., authorizes the assignee to sell on credit. If such is interpreted to be the intent of this assignment, it is void, within the authority of all the cases.
The power conferred in the assignment in this case cannot be distinguished from that of Woodburn v. Mosher, decided at Special Term, and reported in 9 Barb., 255. The language in this assignment is identical with that. The assignment in that case was held to be void by MUNSON, J., as being in conflict with the provisions of 2 R.S., 137, § 1, which makes void instruments made with intent to hinder, delay or defraud creditors. Another Special Term case, Murphey v. Bell, reported in 8 How. Pr., 468, the language in the assignment was, "within such convenienttime as to them shall seem meet, and as shall be most conduciveto the interests of all parties concerned." WELLS, J., held this assignment void, for the same reason, citing Woodburn v.Mosher as authority. In another Special Term case, Whitney v.Krows, reported in 11 Barb, 119, HARRIS, J., held that a provision "to sell and dispose of the property upon such terms and conditions as in their judgment may appear best, c., and to convert the *223 same into money," was not to be construed as conferring authority to sell on credit; adding, "that it should not be presumed that the parties intended that the power should be exercised in a fraudulent or unlawful manner." The same construction was given to a like power in a case decided at Special Term, by EDWARDS, J., reported in 7 How. Pr., 414. These cases, apparently in conflict, were decided subsequent to the case, in this court, ofGriffin v. Barney (2 Comst., 365), and they differ from the latter case in this particular; the power to sell on credit, in the two first cited cases, is implied from the language used in the assignment; while, in the latter case, the power is expressly given, "to sell for cash, or upon credit, or partly for cash and partly upon credit," — an important distinction. BRONSON, J., who delivered the opinion in the case of Griffin v. Barney, approves of a remark of the chancellor, in Meacham v. Stearns (9 Paige, 406), who said, "that creditors were entitled to have the assigned property converted into money, and applied to the payment of their debts, without any unnecessary delay." To the same effect, is the case of Nicholson v. Leavitt (2 Seld., 510), Burdick v. Post (12 Barb., 168), and Porter v.Williams (5 Seld., 142). The next case, in the order of time, is the case of Kellogg v. Slauson (1 Kern., 302), decided in this court, in 1854, subsequent to the cases above cited. The language by which the authority was conferred, in this case, differs from the former cases, and was as follows: "to sell and dispose of the same upon such terms and conditions as, in theirjudgment, may appear best, and most for the interest of theparties concerned."
It was held that the power to sell on credit was not to be implied from the language employed; that the law will imply, from the use of the words "terms and conditions," that the discretion thereby given to the assignees was only that which the law itself conferred; and, also, that where an instrument does not, by an express provision, authorize an illegal act, the legal inference is, that the assignor did not contemplate or intend to authorize one; that case further held, that where the language of an assignment *224 could be abundantly satisfied by a construction that would support the instrument, the well settled rule would control, that a construction must be given which should not defeat it. And, also, where the authority conferred is general, it will be deemed to be, and to have been intended to be, within the limits prescribed by law. These liberal and comprehensive rules in regard to the construction of these assignments, thus seem to have been clearly established and settled in this court. It seems to me they are entirely sound. It then only remains to make the application of them to cases as they arise. The various changes of language, and selection of expression, which are employed for this purpose, slightly differing from former cases, makes the labor of interpretation, sometimes, a difficult one. Keeping in mind, however, the rule that the assignor can interpose no express authority, nor employ language which necessarily implies authority, that authorizes delay in converting the assigned property into money for the immediate benefit of his creditors; the decision of the case of Brigham v. Tillinghast (3 Kern., 215), became a clear exposition and illustration of this principle. That case authorized the assignees to convert the property into "money, or available means." This was held void. "Available means" cannot, in law, be regarded as money or its equivalent. Creditors are not bound to accept of available means in payment. Such means necessarily require time, longer or shorter, to be converted into money. This must create delay. The power to delay by necessary implication, from the language used, was, therefore, held to be intended to be conferred.
Next, in chronological order, in this court, followed the case of Dunham v. Waterman (in
The case of Jessup v. Hulse (
The second and third grounds upon which the referee held the assignment void may be examined together. The first is, that the assignee may retain sufficient moneys to pay all such debts and liabilities as may be due and owing from the assignor, and on which, or for which, the said assignee is or may be hereafter, or become liable as indorser or surety. The second ground is similar in relation to one Crane; a creditor provided for in the assignment. The argument is, that under these provisions in the assignment, the assignee and Crane are authorized to assume liabilities upon any of the assignor's notes or obligations, after the date of the assignment, and thus are empowered to create preferences among the creditors. As between the assignor and assignee, there may be some latent ambiguity on the face of this assignment, that would authorize the admission of evidence to explain, but as between the assignee and the creditors of the assignor, I can see no authority in the instrument in terms, or by necessary implication that creates the authority alleged. Such is not the fair and reasonable construction of it. The first part of the provision clearly relates to existing or matured debts and liabilities, and next, for such contingent liabilities as surety or indorser, where the liability may hereafter become absolute by proper protest, notice or otherwise, but in relation to the liabilities, either absolute or contingent, the instrument must be construed as speaking in the present tense, and it fixes the limit to the assignee about $5,000, and to Crane, about $1,500. I think the referee was in error in holding these objections to be good, and that this judgment should be affirmed.
Judgment affirmed. *229