Norton v. Kearney

10 Wis. 443 | Wis. | 1860

By the Court,

Dixon, C. J.

There is no rule better established than that all contemporaneous agreements between the same parties, and in relation to the same subject matter, are to be taken together and construed as one instrument for the purpose of determining the character of the transaction, and the intention of the makers. It is unnecessary to cite authorities in support of this rule, as they are familiar to every lawyer. Accordingly the bill of sale of Norton & Nairn to Nelson R. Norton, and his agreement back to them, made on the 26th of November, 1856, are to be construed together. When so considered, they clearly amount to an assignment for the benefit of creditors with a preference to those creditors, to whom Nelson R. Norton stood in the relation of surety for the assignors. No particular form of words or instrument are necessary to contribute a valid assignment of chattels or things in action. Any valid transfer by which the uses and trusts for which the property is assigned, and to which it is to be appropriated by the transferee, are intelligibly indicated and declared, is an assignment. Nothing can be clearer than that Newton, the assignee, received the goods for the purpose of disposing of them, and applying the proceeds, first, to the notes upon which he was’ surety, secondly, to the payment of the other debts of Newton and Nairn, pro rata. The only feature in which it differed from ordinary assignments made with a view to insolvency, except in matters of form, is that the assignee covenanted absolutely to pay the preferred debts in full and to save the assignors harmless from all costs and expenses on account thereof. This in no way changed the character of the instrument. If assignors see fit to indemnify themselves by the insertion of such covenants with the assent of the assignee, there can be no objection to their doing so. The fact that Norton & Nairn were insolvent, and contemplated a total suspension of business, tends strongly to show that an assignment was intended. Numerous cases are to be found in the books where instruments though not in the form of assignments have been held to be valid and binding as such.

In Sharpless vs. Welch, 4 Dall., 279, A being indebted to several persons in Philadelphia remitted a bill to B in his favor, saying at the same time, that in a few days he would send directions about its disposition, which he accordingly did, and appropriated the proceeds of the bill among certain of his creditors; subsequently one of them levied a foreign attachment upon A’s funds in the hands of the acceptor of-the bill, and of B. It was held that B became a trustee for the creditors, from the time of receiving A’s appropriation, and that the creditors thereupon acquired such an interest in the trust' fund as could not be disturbed or affected by the attachment. In Watson vs. Bagaley, 12 Pa. St. R., 164, a power of attorney to collect certain moneys and pay them to certain creditors, in a prescribed order of preference, was holden to be virtually an assignment. In Beers vs. Lyon, 21 Conn., 604, an absolute bill of sale by a debtor in failing circumstances was held to be an assignment, and the vendee a trustee of the property.

As an assignment for the benefit of creditors it does not fall within the principles of Hutchinson vs. Lord, 1 Wis., 286, and Keep vs. Sanderson, 2 Wis., 42. In those cases it was determined, that a clause in the assignment authorizing the assignee to sell and dispose of the assigned property upon such terms and conditions, as in his judgment might appear best, and most for the interest of the parties concerned; in-eluded a power' to sell upon credit, and therefore rendered the transfer fraudulent and void. In the present case those words do not occur, nor are. those of an equivalent meaning used. The language used is: "And I further promise said Norton & Nairn that I will dispose of said goods, wares and merchandize to the best advantage, in my discretion,” &c. It is contended that the words, "in my discretion,” are as broad and comprehensive as the words "upon such terms and conditions,” and necessarily imply an authority to sell upon credit. We are of opinion that the discretion here vested must be understood as a legal discretion, that is, a discretion to be exercised within the limits which the law fixes in such cases. There is ample room for the exercise of this discretion without transcending any rule of law. It must be held to apply to the mode of sale as to whether it shall be public or private, by the quantity or single article, and the various other details of such transactions. By this construction the instrument is sustained and its language satisfied.

We have examined the cases of Kellogg vs. Slawson, 1 Kern., 302, and Nye vs. Van Huson, 6 Mich., 329, cited by counsel for the defendant in error, and are abundantly satisfied with the reasoning of the courts, as applied to the facts of this case. In the former case, the earlier New York decisions holding assignments, authorizing the trustees to take possession of the property, and sell and dispose of the same, upon such terms and conditions as in their judgment might appear best, and most for the interests of the parties concerned, invalid, as authorizing a sale upon credit, are directly overruled by the court of appeals; and an assignment containing such a clause is held valid. The reasons given are, that the discretionary power conferred by the expression, "terms and conditions,” is to be exercised within legal limits; that the law will not imply an unlawful discretion, not given by express words, and will not defeat the instrument by inferring that the assignor contemplated an unlawful act; but that legal intendments are always in favor of its validity. It was further observed that there was ample room, within legal bounds, for the exercise of the discretion conferred, whilst there was no express authority given to sell on credit, or to do any other thing prohibited by law. Various-authorities are cited in support of the construction given. Nye vs. Van Huson is to the same eifect. Both appear to have been determined, in accordance with the fundamental principle, that the law always presumes in favor of innocence, and against fraud; that it will never infer evil intentions and dishonest purposes from language or conduct which is susceptible of upholding those which are good and honest; its maxim being: “ Odiosa et inhonesta non sunt in lege prsesumenda, et in facto quod in se habet et bonum, et malum, magis de bono, quam de malo, prsesumendum estP

The allegation in the complaint, that a mistake occurred in drawing the assignment, by which the debt due the respondent was not named in the list of preferred claims, seems altogether foreign to the purposes of this action. If such mistake occurred, the rights of the parties are no way changed or affected by it. The instrument being prima facie valid as an assignment, it could make no difference with the plaintiff’s right of recovery, as against supposed trespassers, whether the order in which the debts were to be paid was or was not that intended by the parties. That was a matter in which creditors alone were interested, and with which the defendants, when prosecuted in the character of wrong doers, had nothing to do. It could only be inquired into in a direct proceeding to correct "it, where all persons interested could be made parties. The assignment, in effect, provided first, for the payment of the debts particularly named, and then for a distribution of the surplus proceeds, if any, pro rata among all the other creditors of the assignors. How could proof that the assignors intended to include one of the latter class of creditors among the former, affect this action ? It is evident that it could neither strengthen nor impair the validity in law of the instrument. It presented ground for equitable relief, but such was not the object of this suit. The proper parties were not before the court. It is equally obvious that it was neither directly or indirectly connected with the question of fraud in fact. If the defendants had admitted the mistake, it would have placed them in no worse situation; nor would it in any possible state of proof have relieved the plaintiff in the least. The defendants should have moved to strike it from the complaint, as irrelevant; and on their failing to do so, the circuit court should have excluded the testimony offered under it, as wholly immaterial. This view strips the case of many objections and exceptions, on the part of the appellants, some of which appear otherwise well taken, but all of which it becomes unnecessary for us to consider.

We shall, therefore, only notice such as do not grow out of the admission of this improper testimony. The declarations of the assignors, made after the assignment, as to their circumstances and intentions, were properly held inadmissible. They were mere hearsay. Roberts vs. Justice, 1 C. & K., 93; (47, E. C. L., 93;) Paige vs. Cogwin, 7 Hill, 361; and cases there cited.

The position assumed in this court, that the defendants were not entitled, under their answer, to attack or impeach the transfer as fraudulent, as against creditors, is no doubt correct. This objection does not appear to have been taken in the court below. If it had, no doubt the evidence offered for that purpose would have been excluded, unless an amendment of the pleadings had been allowed, upon a proper application for that purpose. The answer alleges no indebtedness from Norton & Nairn to the attaching creditors. The affidavits were not proof of it, and if they were, they were inadmissible for that purpose, without a proper allegation in the answer. It was held by this court, in Jones vs. Lake, 2 Wis., 210, that the party attacking a sale as fraudulent and void, as against creditors, must first show his relation of creditor.

That part of the charge in which the jury were instructed that inasmuch as the defendant, Jones, was one of the appraisers who valued the goods, at' the time they were seized in attachment, all the defendants were estopped from denying the correctness of the appraisal, and that if they found for the plaintiffs, their verdict should be for the appraised value and interest, from the time of taking, was clearly erroneous. In no view was the act of appraising the goods one which ought to preclude the defendant, Jones, from showing their true value; much less his co-defendants, who were in no way connected with it An estoppel in pais happens where a party makes a statement, or admission, either expressly, or by implication, with the intention of influencing the conduct of another, and that other acts upon the confidence of such statement or admission, and will suffer injury if the party is permitted to deny it. In what way did the appraisal made by Jones influence the conduct of the plaintiff, or how could he have been injured by his being allowed to gainsay it ? The plaintiff was an utter stranger to it, and could in no way have been influenced by it. It would be strange indeed if persons called upon and compelled by law to act as appraisers, under such circumstances, should afterwards, in an action against them for wrongfully intermeddling with the goods, be held liable to pay twice or three times the value of the goods appraised, as a penalty for an honest, but erroneous exercise of judgment, and still more strange, if all others jointly liable with them in the action should likewise be liable for the same penalty.

The judgment of the circuit court must be reversed, and a new trial awarded.