Brunt v. Brunt, 3 Edw. Ch. 14

Brunt v. Brunt

3 Edw. Ch. 14 | New York Court of Chancery | 1834

The Vice-Chancellor :

From a perusal of the composition agreement and release, it would appear that no other sums than such as constituted the amount of one thousand and eighty-two dollars and twenty-five cents were intended to be released. It is limited in its terms to such debts, claims or demands as are spoken of in the recital; and yet again, these may have been all the debts owing by Elias Denman or which existed against his estate. I think the fair interpretation of the instrument is that all the debts and sums of money owing to the nineteen creditors were taken into account. Its language, in the recital, is that Denman, at the time of his death, was indebted to them in divers sums of money amounting “ in the whole” to the sum already mentioned, that the personal estate being insufficient to pay all the debts owing by the said Denman at the time of his death, the said several creditors had consented and agreed to let the widow retain the property and each accept his proportion of its estimated value ; and then follows the discharge of their several debts in consideration of her having secured, in the manner agreed upon, the payment and distribution of such estimated value among them. The obvious meaning is that all debts and demands whatso*17ever which any of the creditors who came into the arrangement had against Elias Denman or his estate in the hands of the administratrix were thereby discharged. I know not how to put any other construction upon it.

The rule, undoubtedly, is that a release, although made out in broad and general terms, is to be restricted in its operation to such matters as, upon a fair construction of the whole instrument, shall appear to have been intended by the parties and within their contemplation at the time: McIntyre v. Williamson, 1 Edwards’ V. C. Rep. 34. But this restriction upon its operation is matter of construction only. The intention of limiting it to a particular debt or demand, where general words are used, must be ascertained from the deed itself or the instruments in pari materia containing the agreement and release. Extrinsic evidence cannot be received to show that a particular debt or demand was not included or intended to be discharged, contrary to the plain letter of the instrument or where the words are sufficiently broad to comprehend all claims which the releasor might possibly have : Russell v. Rogers, 10 Wend. 473."

It may seem strange that a debt of six hundred and twenty-five dollars secured by the bond of a third person and a mortgage of lands of sufficient value to satisfy the whole debt should have been included in an agreement by which the creditor was to accept, in satisfaction and discharge of his whole debt, a share of his debtor’s personal property sufficient to pay only about forty per cent, of the amount; and the natural inference would be that such debt was not included, but that some other demand existed which was the subject of the compromise. Indeed, this is a matter not left to inference : for proof is exhibited, on the part of the complainant, of another bond which he held against Elias Denman for three hundred and thirty-three dollars, upon which he received his dividend and then cancelled it—also, that the composition and release had no reference to the bond and mortgage in question. But this evidence, for the reasons already given, is inadmissible. The complainant cannot be permitted to say he entered into this arrangement in common with other creditors, bringing in a part of *18his demand or one debt only and keeping back another part or a co-existing debt. There is no evidence to show that the other creditors knew of two distinct debts which he held against Denman, and that one of them was secured by a mortgage which he intended to reserve and not to discharge by coming in with them and signing the release. It was clearly a general composition agreement. As the law stood when the document was made, specialty creditors were entitled to preference over those by simple contract; and among the creditors of equal degree, the administratrix was at liberty to exhaust the assets by paying one in full to the exclusion of others, or by confessing judgments to give one or more the preference of payment out of the assets. If there were no other inducements, these considerations alone might be sufficient for proposing and entering into an arrangement, by way of compromise, amongst the creditors by which such inequality should be prevented and all be made to fare alike in the settlement of the estate. Good faith, then, required that each creditor, coming into the arrangement and professedly submitting the whole of his debt or demand to its operation, should be bound to the full extent. His example probably served as an inducement to others to subscribe to its terms ; and after holding out such an example or after professing to act a generous part towards his debtor—although he might have been the last who actually signed the composition deed—he shall not be permitted, by any private agreement with his debtor, to reserve to himself a part of his debt or hold any claim against him for further payment, or to stipulate for any thing better in the shape of security or otherwise than other creditors receive, and with whom he makes a common cause. This principle is firmly established in courts of law: Russell v. Rogers, supra, and cases there cited ; and it is no less so in equity : Ex parte Sadler and Jackson, 15 Ves. 52. Thus, the complainant would be precluded from asserting any further claim upon the bond for six hundred and twenty-five dollars against the estate of the principal obligor, Elias Denr man or his personal representative—and being discharged as to him, the debt is gone as well as all the security for the payment of it—in fact, the mortgage cannot now be enforced.

*19An objection was taken at the hearing to the release, upon the ground of its having undergone an alteration since it was executed, by the erasure of one word, probably that of notes and writing, in its place, the word mortgages, so as to appear a release of mortgages as well as of bills, bonds, &c.; and from an inspection of the instrument, it is plain that such alteration has been made. Still, it does not appear by whom it was effected. A witness only testifies that the word “ mortgages” was not there at the time it was executed. The alteration, however, is an immaterial one. “ Notes” or “ mortgages” would make no difference, it would be just as effectual without them. As to the effect of an alteration in the deed:— If it be in an immaterial point and made by a stranger, the alteration will not vitiate the deed; although the rule is laid down otherwise if an alteration even of immaterial words is made by a party to or by one claiming under it : 11 Coke 27, (a), and Fraser’s note B. But in order to avoid the deed in the latter case, I consider the fact of alteration by the party in interest should be proved. Such a thing ought not to be presumed, because it would suppose him guilty of a fraud— and it is upon the idea of fraud on his part in making an alteration without the consent of the party who has executed the deed that the rule is founded. There is no proof before me of the alteration having been made by any one who sets up or claims the benefit of this release. I am of opinion, therefore, it is not to be held void in their hands.

The defence as to the second bond and mortgage has failed. There is not enough to warrant me in decreeing otherwise than in favor of this bond and mortgage. A reference must be had to take an account of the amount due upon it, with a decree in the usual form, for a sale, unless the defendant or his committee redeem by paying principal, interest and costs. If the defendant has any claim, arising under the will of his father, Cort Van Brunt, against the complainant, it must be the subject of a separate suit for an account, and in which, perhaps, other persons may be necessary parties. Such claims are not set up in this suit and cannot now be the subject of inquiry with a view to a set-off.