Eliassof v. Dewandelaer

The learned trial judge held that, inasmuch as the literal reading of the 4th provision of the assignment is to the effect that if, after payment of the preferred debts, or of so much -thereof as: the law would permit, the residue applicable to the payment of the nom - preferred debts should hot be sufficient to pay them in full, then the assignee should apply such residue to and in payment of the preferred-debts, that the assignment made no provision for the non-preferred debts in case-of inability .to pay them in full; and such is the case.

That the assignor intended to make a valid assignment seems to be apparent from all, its parts, except the portion of the 4th provision thus criticised. The assignment- begins with the declaration . *157that the assignor “ is indebted to divers persons in sundry sums of money, which he is unable to pay in full, and is desirous of providing for the payment of the same so far as in his power by an assignment of all his property for that purpose.” He then provides for the proper expenses, and next for his preferred creditors, but expressly subject to section 30 of chapter 466 of the Laws of 1877, added by chapter 503, Laws of 1887, which operates upon the preferences and limits them to one-third of the assigned estate. He next in the 4th provision first provides for the payment, out of the residue, of all his other debts; but he qualifies this provision with the clause which, literally construed, would defeat the lawful intent and scheme which he had up to that point aptly expressed. We should construe this assignment so as to give effect to the manifest intent of the assignor ás gathered from the instrument itself, - and so that it may stand rather than fall, if either construction is. open to us. (Roberts v. Buckley, 145 N. Y. 215 ; Pearson v. Eggert, 15 App. Div. 125; Coyne v. Weaver, 84 N. Y. 386.) .

The difficulty with the 4th provision of the assignment seems, to arise from the omission of the word not in its proper place, as follows: “ And if such residue be not sufficient to pay and discharge all such debts and liabilities in full, then the said party of the second part shall apply the residue of said proceeds to and in the payment of the debts and liabilities not mentioned in the preference ratably.” We think the intention to insert not is clear; that its insertion is necessary to prevent the defeat of the instrument, and that we should read it in or construe the instrument as if it were in it.

The 5th provision evidently contemplates that the 4th does, provide for the payment in full or ratably of the non-preferred debts, after applying to the preferred debts all the law will permit. When the actual terms of the agreement contradict the manifest intention, the intention governs. Where the . condition of a bond for the payment of money was that the bond should be void if the money was not paid, it was held to be wholly inconsistent with the-nature of the bond itself, and the not was rejected, and the bond held valid. (Story Cont. § 636, and cases there cited.) Hr. Justice Story in Ferguson v. Harwood (7 Cranch, 408, 413) said: “ Mistakes of this nature are usually mere slips of attornies and do not touch. *158the merits of the case.” “ Southeasterly ’’was read “ southwesterly” in Brookman v. Kurzman (94 N. Y. 272). The-word “ hundred ” was read after “ one ” in a bond, because the previous terms, of the bond required it. (Waugh v. Bussell, 5 Taunt. 707.)

With not, inserted, the instrument' makes sense ; with not omitted^ nonsense. - ' •

But the statute (Chap. 503, Laws of 1887) limiting the preference to preferred creditors to one-third of the assigned estate, imposes its limitation upon this assignment. (Central National Bank v. Seligman, 138 N. Y. 435 ; Abegg v. Bishop, 142 id. 286.) Hence if the 4th provision does provide that in case .¡the residue shall be insufficient to pay all the unpreferred debts such residue shall be - paid upon the ■ preferred debts, such provision is nugatory -to the extent that it first devotes more than one-third of the assigned estate to the preferred debts; and thus leaves the provision in full force in the 4th claiise, namely: W After fully paying and discharging all the aforesaid debts as before provided, the said party of the second part shall pay all and singular all- other debts and liabilities of the party of the first part.” Thus the- assignment conforms to the law.

We think the- judgment should be reversed-, and judgment directed for the appellant, with costs here and below.

All concurred; ¡Mebwin, j., in result.

Judgment reversed, with costs, and judgment directed for appellant, with costs.