Nye v. Van Husan

| Mich. | May 19, 1859

Martin Ch. J.:

It is Avell settled that a schedule detailing at large the property conveyed, is not necessary to the validity of an assignment. — See Hollister v. Loud, 2 Mich. 809; Rundlett v. Dole, 10 N. H. 458. It is sufficient to constitute a legal transfer that the property is described with reasonable certainty. If then a schedule be referred to in an assignment, it may, or may not, be a necessary part of such instrument, for the purpose of ascertaining what property is conveyed; and it may, or may not, have the effect to restrict the general words of the grant, according to the context, and the mode in which reference is made to it. No arbitrary rule can therefore be laid doAvn respecting the necessity or effect of a schedule, if one be referred to, but these are to be determined by a consideration of the whole instrument, from which the intent of the parties making it is to be gathered; and such intent, when ascertained, is to control its construction in this respect, as in all others.

A great diversity exists in the reports respecting the construction of debtors’ assignments, and a disposition has been not infrequently manifested to construe them with great technical nicety, sometimes approaching illiberality. This tendency has led to the application of particular and subordinate rules of construction in some instances, in disregard or forgetfulness of those paramount rules which control the interpretation of all other written instruments. The principle most generally applied to the construction of this class of instruments is this: “That if a general clause in an instrument be followed by special words which accord with the general clause, the deed shall be construed according to the special matter.” But in the application of this principle care is not always taken to observe how far the special words accord with the general clause, nor the manner of their application to it; and general words have been controlled and limited in their operation by special words, from an arbitrary application of this principle, although at the obvious sacrifice of the intent of the assignor, as manifested by the whole instrument. The diversity also which exists in the forms of assignments, their subjects, and the manner in which schedules have been referred to, has induced some errors from want of care in observing their dissimilarities.

“In construing contracts, deeds, and other written instruments,” says Selden J., in Platt v. Lott, 17 N. Y. 478, “resort is had to a variety of legal rules for the purpose of aiding in their interpretation; but all other rules are subordinate to that primary rule which requires that every such instrument should be construed according to the intention of the parties. Whenever, from an examination of the writing itself, and on a comparison of its various parts, the intent with which it was executed can be clearly ascertained, that intent is to govern, whether the construction to which it tends is, or is not, in accordance with those minor rules, which arc merely auxiliary to the one great paramount rule referred to. Hence, notwithstanding the ordinary rule, that general words are controlled hr their operation by those which are more particular and specific, if, upon looking at the assignment in this case, we are able clearly to see that it was the intention of the assignors to convey to the assignees th.eir whole property, we are bound to give effect to that intention.”

The cases cited will be found, upon careful examination, not to conflict with this rule, while Driscoll v. Fiske, 21 Pick. 503, expressly recognizes it. — See also Burr. on Assets (2 ed.), 265, 268.

An examination of the deed of assignment from Wallace & Co., and a comparison of its different provisions, leave no doubt in our minds as to the design with which it Was executed. It commences by a recital of the reasons which induced it, and the object sought to be accomplished by it; the reasons being the heavy indebtedness of the assignors, and their utter inability to discharge it with punctuality or in full; and the object being to secure their credi-' tors the póssession of whatever property and effects they were seized of, at as early a day as possible, and to prevent undue sacrifice of the same. It then, in general terms, conveys aE their personal property and choses in action, of ■every name and nature whatever, to the assignees “as the same is more particularly described in the schedule proposed to be hereafter annexed to this instrument, marked schedule A., and especially including all the stock and merchandise” in their several stores, describing their locality, and “ other property, accounts, debts, and demands as herein already intended to be conveyed,” together with all the ashes on hand at their ashery, &c. It further requires and empowers the assignees to take immediate possession of the property and choses in action assigned, and to appropriate them to the payment of their debts. These provisions clearly manifest an intention by the Wallaces to assign •all their property for the purposes expressed in the instrument, and that it should presently operate. And such, we think, was its effect, notwithstanding the reference to a schedule. And so it was evidently regarded by the parties; for the proof is that the assignees did immediately reduce the assignors’ property to possession, as well that specially designated, as other property not mentioned hut obviously regarded as embraced in the general language of the assignment.

But the reference to the schedule is claimed to render one necessary to the conveyance of any property. The difficulty in this case, is from the reference being made in the present tense. If it had been “ as the same is to be more particularly described,” or had a provision been inserted that a schedule should be. made and annexed, no doubt would have arisen respecting the present operation of the assignment, nor of the property covered by it. Such we think to be the true purport of this reference. Language is to be construed by its context; and no one can read this instrument without arriving at the conclusion that the schedule was contemplated to be subsequently made, and was not in existence when the assignment was drawn up. The inartificial manner in which this reference is made can not affect the general and controlling language of the instrument, but such reference should be read so as to accord with it. Now if, as we have already shown, a schedule is not necessary to the validity of an assignment, and if, when one is referred to, it will become necessary or not, according as the language of the whole instrument shall demonstrate such necessity to determine what property is conveyed, it follows that the absence of such schedule, although referred to, does not necessarily render the instrument incomplete, nor authorize the presumption that the assignors had property not conveyed by it.

In Platt v. Lott (supra), where the general words of assignment were no stronger than those in the one before us, the reference to the schedule was as follows: “The same being more fully and particularly enumerated and described in a schedule thereof hereunto annexed,” &c.: the assignment, from a consideration of the whole instrument, was held good to convey all the assignor’s property, whether enumerated in the schedule or not; and the Court says, “This (the reference to the schedule) however by no means indicates an intention to qualify or limit the broad and comprehensive language previously used. A schedule Would, of course, be necessary as a matter of convenience, and as a guide to the assignee; and the provision for its annexation, although it is thereby made a part of the assignment, does not warrant the inference that it was intended that if. any portion of the property of the assignors should be omitted, which might well occur through accident or inadvertence, the title to such property should not pass to the assignee.”

In the case before us, the reference is to a schedule proposed to be annexed; and when this is read in connection with the declared object of the assignment, the desire expressed that the creditors should have possession of all the property and effects of the assignors “at as early a day as possible,” the general words of the grant, and the subsequently declared trust that the assignees should at once, or as soon as practicable, take possession of the property assigned, the idea that such proposed schedule was necessary to the perfection of the instrument, and that nothing was assigned until such schedule should have been made and attached, is without foundation. It is very apparent from a consideration of the whole deed, that this reference to a schedule Avas not made in contemplation- that Avhen annexed it would operate as the only descriptive words of the grant, nor to limit or restrict its general words; but that, as the assignment was by general words, the nature and situation of the property was such as to render one necessary to afford the assignees specific information of the items of property and choses in action thereby assigned, to enable them fully and understandingly to execute them trusts.

The reservation of a power to perfect the schedule at some future time, if it should become necessary, strongly confirms our construction of the reference to the schedule, and clearly shows that the schedule was not regarded as essential to the immediate operation of the assignment, or as limiting its general language. But it was objected that this reservation renders the assignment void. From what has been already said, it follows that the exercise of this reserved right can have no effect to restrict, in any degree, the assignment, or to limit the general words of conveyance, or to divest the assignees of the property reduced to possession, whether scheduled or not. The evident intention in inserting it was to secure the right to furnish evidence of the particular property embraced within the general terms of the assignment, if that should become necessary. The power to perfect the schedule does not imply the power to impair the assignment.

The first three objections to the admissibility of the assignment as evidence were therefore properly overruled. By this construction, we give effect to the instrument consistent with the intention expressed in its preamble, and with the construction put upon it by the parties at the time of its execution, as manifested by the change of the possession of the property before a schedule was made; and when an honest intent can as clearly be inferred from its language as a fraudulent one, we are not at liberty to infer the latter.

It was fourthly objected that the assignment was void as allowing the assignees to sell upon credit. The assumption that they Avere allowed to sell upon credit is based upon the ■following language: “And sell and dispose of the same, either at public or private sale, as they, in their good judgment, may deem best, and upon such terms and conditions as they may deem most advisable, and for the best interest of the creditors, converting the same into money,” <fco. If it be true that the grant of a power to sell upon credit would render the assignment void (which .is a question not before us) yet Ave think; a fair and reasonable interpretation of this language will not justify the conclusion that -an illegal act was contemplated. This provision is Usually found in the forms of assignments consulted by draftsmen; and it is as reasonable to presume that the intent in following such form, and in using the language, was for a lawful as for an unlawful purpose. It was undoubtedly inserted to clothe the assignees with full and entire power over the assets, and to invest them with every discretionary power which they might lawfully exercise. We think, therefore, as no express power to sell upon credit is given by the assignment, so none should be inferred from this general and, to some extent, technical language; and such are now the later and better adjudications. — See cases cited in Burr. on Ass'ts (2 ed.), 217, 222.

It was lastly objected that the assignment was void as allowing the assignees to delegate their trust without restriction. It is difficult to determine the meaning of this objection. The instrument concludes with the usual clause authorizing substitution, and was evidently intended to clothe the assignees with power to appoint such agents or attorneys ■as they might find necessary for the collection of debts, or the transaction of any other business matters where an agent ■might be necessary, and can not, except upon the most violent presumption, be construed into a power to delegate their trusts. We see nothing unusual or objectionable in this provision.

The assignment being valid, the court below properly refused the first five requests of the plaintiffs in error, in charging the jury. The sixth request of the counsel for the plaintiffs in error was also properly refused.

The assignment itself makes no preference of any private and individual debts of the assignees, but such are placed in the fourth and last class.

It is time that there was evidence in the case showing that individual debts were included in the schedule of preferred debts, but how many, or to what amount, does not appear. Whether the assignors have the right to prefér individual debts, or not, is a question upon which some diversity exists in the courts, of the different states, but one we are not required to determine in the present case, as the current of authorities, and the better opinion, we think to, be that suoh preference does not render the assignment void. — See Hollister v. Loud, supra; Newman v. Bagley, 16 Pick. 570; Kirby v. Schoonmaker, 3 Barb. Ch. 46; Nicholson v. Leavitt, 4 Sandf. S. C. 252; Kemp v. Carnley, 3 Duer, 1; Burr. on Ass'ts (2 ed.), 137, 140.

The judgment of the court below is affirmed, with costs.

Manning and Chkistiancy JJ. concurred. Campbell J, did not sit in the case, having been counsel for one of the,parties.