No. 833 | Nev. | Jul 15, 1877
By the Court,
On the fourteenth day of January, *1876, the creditors of one Neil McLeod, among whom was the defendant Luchesi,
“Witnesseth: That whereas, the said Neil McLeod has sold and transferred to us, in satisfaction of his indebtedness to us, ail of his property, both real and personal, in the counties of Eureka and White Pine, state of Nevada; now, therefore, in consideration of the premises, it is mutually agreed between us to place said property in charge of Max Oberfelder, Fred. Barnes, W. H. Clark andH. Crowell, as our agents to manage the same for our mutual benefit; and we further agree to receive forty cents upon the dollar for each of our debts, respectively, to be paid as follows: one third to be paid six months from date, one third nine months from date and one third twelve months from date; and it is mutually agreed that, upon the payment being-made as aforesaid, said property shall be returned to said McLeod; otherwise said property to be sold for the benefit of all parties, creditors hereto and divided pro rata between said creditors.”
After the execution of this agreement the creditors of Luchesi brought suit and obtained judgment; and the appellants were regularly served with notice of garnishment. Certain proceedings were thereafter instituted in the district court, under the provisions of the “act to protect the wages of labor” (1 Comp. L. 141-143), and the plaintiff Luigi was therein declared to have a preferred lien, as against the other creditors of Luchesi, for four hundred dollars.
Subsequently the plaintiff Luigi obtained an order of court requiring the garnishees to appear and show cause why judgment should not be entered against them in favor of the plaintiff for the four hundred dollars and costs.
In obedience to this order the garnishees appeared and made answer by affidavit, showing, among other things, that they and one Hiram Crowell were appointed by the creditors of McLeod, trustees and agents to take charge, manage and dispose of the property assigned by McLeod; “that Noil McLeod did not'pay the said forty per cent, of his said indebtedness, nor any other sum or amount of money there
It was admitted on the hearing of the rule in this proceeding, that the evidence offered by the garnishees is true, “ except the opinions on the questions of their legal liability.” It was also admitted that the plaintiff was entitled to receive whatever amount of money there was in the hands of said garnishees coming to Luchesi as a creditor of McLeod.
Thereupon the court entered judgment “against the said garnishees, * * * for the sum of four hundred and forty dollars,” and costs.
From this judgment the garnishees appeal.
From the record it appears that the trustees of the creditors of McLeod sold the property to B. Sadler and Max Oberfelder (one of the trustees), in July or August, 1866.
Admitting for the purposes of this opinion (a point that is very doubtful,) that the proceedings against the garnishees were regular, and that the court thereby obtained jurisdiction to enter judgment against them, we are of the opinion that the court erred in rendering the judgment for four hundred and forty dollars.
We are unable to perceive how the plaintiff Luigi could obtain any greater right or privilege by virtue of the proceedings had in the district court than the defendant Luchesi possessed. He certainly cannot claim any greater sum from the trustees of the creditors of McLeod than Luchesi, a creditor, could have claimed if he had not been
Were the trustees authorized to sell the property under the agreement for less than forty cents on the dollar of the indebtedness due from McLeod? This, in our judgment, is the material question presented by this appeal.
The clause in the agreement, that if forty per cent, of the indebtedness was paid within a certain time the property should be returned to McLeod, was evidently inserted because it was one of the conditions that induced McLeod to make the assignment, and was not, as counsel for respondent claims, a specific trust that the property should be sold for an amount not less than forty cents on the dollar of the aggregate claim of the creditors.
The agreement, though not as specific as it might have been made, will not, in our judgment, reasonably admit of the construction sought to be placed upon it by respondent. The authority to sell the property was clearly given to the trustees. The very object of the execution of the agreement evidently was to place the property in the hands of the trustees, in whom all the creditors had confidence, so as to enable them to act for the creditors without further consent. Under the terms of the agreement, the trustees were to act for the mutual benefit of all the creditors. The creditors were willing to receive forty cents on the dollai-, and if that amount was paid the property was to “be returned to said McLeod;” if not paid, then the property was “to be sold for the benefit of all parties creditors hereto, and divided pro rata between said creditors.” No restriction was placed upon the trustees, either as to the manner of the sale, the time when it should be made, or the price for which the property was to be sold. These were questions left to the good sense and sound judgment of the trustees, who were, of course, bound to act in good faith for the mutual benefit of all the creditors.
It is admitted that the sale was honestly made and fairly
But, notwithstanding the admissions in the record, respondent argues that the trustees could not sell the property to one of their own number. If this proposition is admitted, in what position does it place the respondent? From the admissions in the record it is apparent that the trustees could not, in any event, be held for any more than the full value of the property. (Osgood v. Franklin, 2 John. Ch. 27; Higgins v. Whitson et al., 20 Barb. 141" court="N.Y. Sup. Ct." date_filed="1855-05-07" href="https://app.midpage.ai/document/higgins-v-whitson-5458878?utm_source=webapp" opinion_id="5458878">20 Barb. 141; Litchfield v. White, 7 S. Y. 443; Neff’s Appeal, 57 Penn. St. 96; Pitt v. Petway, 34 N.C. 69" court="N.C." date_filed="1851-06-05" href="https://app.midpage.ai/document/pitt-v--petway-3678299?utm_source=webapp" opinion_id="3678299">34 N. C. 69; Roberts v. Roberts, 65 N.C. 27" court="N.C." date_filed="1871-01-05" href="https://app.midpage.ai/document/roberts-v--roberts-3679362?utm_source=webapp" opinion_id="3679362">65 N. C. 27.)
As respondent does not contend that the value of the property was any more than was obtained by the trustees, what difference does it make to him whether he accepts the amount the trustees actually received or recovers from them in proportion to the full value of the property? The latter position, if maintained, would necessitate a new trial and involve unnecessary costs and expense without any accruing benefit or advantage. Still, if the respondent desires to dismiss the proceedings herein and commence an action to recover the pro rata proportion of the full value of the property he ought, perhaps, to be given an opportunity to do so.
It is clear that in this proceeding no judgment can be sustained against the appellants in excess of the sum of two hundred and forty dollars, that being the amount they admit having received.
Under the peculiar facts and circumstances of this case, it is ordered that the judgment of the district court be reversed and cause remanded for further proceedings, unless the respondent, within twenty days after the filing of the remittitur herein, remits the sum of two hundred dollars and all costs incurred by appellants on this appeal, in which event the judgment as modified by the remission will be affirmed.