Pearson v. Eggert

Willard Bartlett, J.:

The object of this action was to set aside an assignment made on or about the 1st day of August, 1894, for the benefit of their creditors, by the defendants William Eggert and Edward Eggert, composing the firm of William Eggert & Co., to the defendant Theodore Rohrberg. There was a preference in the assignment of the holders of certain enumerated promissory notes aggregating the sum of $32,519.19, “ all bearing the indorsement of William Eggert & Co., the assignors, and delivered to the Chatham National Bank of New York by said William Eggert & Co., the assignors, and discounted by said bank and the proceeds thereof paid to said William Eggert & Co., the assignors, the preference to apply only to such portion of sand promissory notes as the holders shall fail to collect from makers thereof."

The plaintiff, a judgment creditor, attacked the transfer as fraudulent on its face, by reason of the preference in the language which I have placed in italics, 'and as fraudulent. in fact by reason of various circumstances set out in the complaint and which he attempted to establish upon the trial. As to the first point, the learned judge before whom the case was tried construed the preference to apply simply to the liability of the assignors as indorsers at the time the assignee should be ready to make distribution, and not as applicable to the contingent liability of guarantors of collection; and he held that the clause “ as the holders shall fail to collect from makers thereof,” should be read as the holders shall not collect from makers thereof.”

As to the second branch of the case, he found upon the evidence taken before him that the assignment was made in good faith for the benefit of the creditors of the defendants Eggert.

An examination of that evidence satisfies us that we ought not to interfere with the conclusion reached in the court below in respect to the facts.

*127As to the contention that the assignment is void on its face as matter of law, we should have been quite content to affirm this judgment upon the opinion at -Special Term were it not for the earnestness with which the learned counsel upon the additional brief insists that the liability preferred was really the contingent liability of guarantors of collection, which was as yet non-existent and incapable of being the subject of a valid preference. This has led us to consider the question with the utmost care, but has only seiwed to confirm us in the view that the preference should receive the interpretation which Hr. Justice Clement placed upon it, under the rule that if possible such a construction should be adopted as will sustain an assignment rather than defeat it. (Roberts & Co. v. Buckley, 145 N. Y. 215; Coyne v. Weaver, 84 id. 386.) In the case last cited the opinion of the court was written by Finch, J., who said : “ Two rules should guide us to the proper result. The meaning and intention of the assignor is to be gathered from the whole instrument, and where two different constructions are possible, that is to be chosen which upholds and does not destroy the instrument.” There, the phrase in question might have meant either that the assignee was at liberty to compromise any claim against the assigned estate if he should choose to do so, or that the assignee might compromise such claims as in the exercise of a sound discretion the interests of the trust should require. In holding that the latter was the proper construction Judge Finch added: “If it was necessary, in order to reach that interpretation, to be subtle and astute in our study of the language used, the quaint expression of Lord Hobart, cited with approval in Townsend v. Stearns (32 N. Y. 215), would furnish our justification. A court may wrestle, if need be, with unwilling words to find the truth or preserve a right which is endangered.”

We think the judgment should be affirmed.

All concurred, except Goodrich, P. J., not sitting.

Judgment affirmed, with costs.