238 F. 543 | 3rd Cir. | 1917
The opinion accompanying the order from which this appeal was taken ([D. C.] 235 Fed. 635) so correctly states the law that nothing more than an affirmance by this court would be necessary, were it not that the authority upon which the decision was made, being a case decided by this court, is on appeal attacked or distinguished. The facts are fully stated and the law thoroughly considered in the opinion. We will therefore repeat only what is necessary to a consideration of the phase of the question raised on appeal.
John K. Evans, James Evans and Alan S. Evans, individually and as partners, were adjudged bankrupts. The appellant bank held four of their notes given in different capacities. Two were admittedly partnership notes, being signed by the firm name of Evans Bros. These were paid by the proceeds of the sale of a portion of their accompanying collateral, leaving as an excess certain securities and funds now claimed by the appellant and held by the trustee awaiting this decision. The third note was for $15,000. It was the jbint note (not the joint and several note) of James Evans and Alan S. Evans, made, so far as shown upon its face, in their individual and not in their partnership capacity, with accompanying collateral separately owned but jointly pledged “for the payment of this and all other liabilities of the undersigned to the holder hereof, now or hereafter due.” The fourth note was a joint unsecured note for $4,500 made by James Evans, Alan S. Evans, and John K. Evans. Upon default in payment of the $15,000 note, the appellant bank realized upon its collateral approximately $17,000, applied the proceeds first to the full payment of the $4,500 note and the balance in part payment of the $15,000 note, proved a claim against the bankrupts’ estate for the residue, and made a claim for the excess remaining from the sale of the collateral of the two Evans Bros, notes. The referee dismissed the appellant’s claim to this excess, and entered an order disallowing its claim for the alleged unpaid residue on the $15,000 note and directed it to pay the trustee of James Evans and Alan S. Evans, individually, a sum approximating $3,000, which would have been the balance if nothing had been paid upon the three-party $4,500 note and if the proceeds had been applied in full to the two-party $15,000 note.
When the joint makers pledged their individual property for the payment of their joint obligation, the pledge became joint as between tire owners and the bank, and did not affect or alter the joint character of the obligation, nor did it affect or alter the rule of the’ Torrance Case that the pledge was available only for other obligations of the same parties in the same joint character. In the Torrance Case the makers were Saulsbury and Graham, the words of the pledge in their note being precisely the same as those in the note of the two Evanses. The court said:
“It seems "to us that the words ‘of this or any other liabilities of the undersigned’ clearly indicate that the other liabilities referred to are of the same character as the joint liability in the (note in suit). Moreover, the natural inference from the words' ‘liabilities of the undersigned’ would be that the jointly owned securities were pledged only for the joint liability of the two makers. So that the clause is as if written ‘any other liability or liabilities of Graham and Saulsbury.’ ”
. _ As the liability of one maker, singly made, is different from the liability of two makers, jointly made, as held in the Torrance Case, so in this case, pari ratione, the liability of three joint makers is different from that of two joint makers. The liability of the two joint makers in this case is similar to that of the two joint makers in the Torrance Case, which, when similarly paraphrased, is “any other liability or liabilities of James Evans and Alan S. Evans.” A liability of James Evans, Alan S. Evans, and John K. Evans is, therefore, not another liability of James Evans and Alan S. Evans in the sense of the Torrance decision. In other words, the joint obligation of three is no mere the joint obligation of two than is the single obligation of one the joint obligation of two. We are therefore of opinion that the appellant bank acted upon a misconception of the law, not only in applying proceeds of the collateral of the $15,000 two-party note, first to the $4,500 three-party note, but in applying any of those proceeds to that note. We do not find the two cases distinguished by the difference in facts, and are of opinion that the principle of the Torrance Case rules this case and was properly invoked by the referee in his finding and by the District Court in its order.
The appellant bank claims the right to proceed against the partnership and appropriate the proceeds of. the various collaterals upon the theory, first, that the $15,000 two-party note was in fact a partnership note, and second, that by an independent contract between
The order of the District Court is affirmed.
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