Perry v. Holden

Shaw C. J. drew up the opinion of the Court. This is an action of replevin for printed goods and other personal property to a large amount. The plaintiffs claim the property in the double capacity of mortgagees and assignees in trust, or rather in one of these capacities, under a mortgage and assignment made by Turner & Laflin ; the defendant is a deputy sheriff, who attached them, as the property of the same Turner & Baffin. The mortgage and the assignment set forth in the case stated, were both made some time before the attachment, and if they, or either of them, give the plaintiffs a good title, they will hold the goods against the attachment. Several objections are made to the title of the plaintiffs and their right to recover, besides the main question hereafter considered. The mortgage was made to five persons, and the action is brought by three of them only. It being a deed poll and delivered to some of the grantees for the usé of all, it would seem to vest the property in all, unless the dissent of the two were shown. But in case of such dissent, it would still be very questionable, whether, as the conveyance was intended to be made to five, if the five did not accept, it must not be considered as incomplete and inchoate merely, until the acceptance of all the grantees. But we have passed over all other questions, without thinking it necessary to express any opinion upon them, in order to come to the question which arises upon the construction of the statute, St. 1836, e. 238. The avowed purpose of this statute was, to regulate the assignment and distribution of the property of insolvent debtors'. One great object and purpose of it was, to discourage prefer-., enees amongst creditors, and to insure an equal distribution of the debtor’s property This great principle of natural equity, is kept in view in every system of distribution of effects, when the assets are insufficient to pay the whole, both upon a distribution inter vivos, and upon the death of the insolvent debtor. There [276] are two provisions in this statute, intended to enforce and carry this principle into effect. One is, (§ 3 and 11,) that no assignment shall be valid, unless it is so made as to give to each of the creditors who shall become parties to it, an equal share of the property, with the exception of debts preferred by law. Another section provides, that all creditors shall have a right to become parties. The result of both provisions is, that all the creditors of the insolvent shall be entitled to an equal distribution. The other provision, founded on the same principle of equity and policy, is, that the debtor shall have no benefit of his discharge, if he has, in contemplation of an assignment, made any payment, or made any conveyance of his property, with a view to give any creditor a preference. In the present case, it is contended, that the assignment itself is void, under the 3d and 11th sections of the statute above cited, which requires that the assignment shall be so made as to give every creditor an equal share without preference, and declares every assignment void, which is not so made. What would be the effect of a previous mortgage of the personal property of the debtor, made in contemplation of an assignment, with or without the knowledge of the mortgagee that such was the intent, either upon the validity of the mortgage or of the assignment, we give no opinion. But on the present state of facts, the Court are of opinion, that the mortgage and the assignment are, in point of law, to be considered as constituting one transaction; the mortgage is made part of the assignment, and therefore, by force of the statute, both are void. Instructions were given at the same time, by the debtors, for drawing the mortgage and the assignment. The same persons are trustees under the assignment, and mortgagees under the mortgage. Though the mortgage was executed a few hours first by the debtor, and accepted by one. of the mortgagees, yet the assignment was executed before the mortgage was accepted by the other mortgagees. And the object and purpose of both was the same, namely, to transfer the property of insolvent debtors, so as to secure payment, in whole or in part, to their creditors. The assignment referred to these [277] mortgages, and excepted them from its operation. Whoever should become party to the assignment, was thus put upon inquiry, and might know the circumstances under which the mortgages were made, and of course that they were in law, part' of the assignment itself. Instruments made at the same time, between the same parties, to accomplish one and the same object, shall be construed and taken together, as one transaction. Carey v. Rawson, 8 Mass. R. 159 ; King v. King, 7 Mass. R. 499. And the same is held, as to deeds between different parties. Chickering v. Lovejoy, 13 Mass. R. 51. It is also a well settled rule, that where a deed refers to another deed or instrument, such other deed is to be deemed a part of it, as if recited in the later deed. On every view which we have been able to take -of the case, the Court are of opinion, that the mortgage and assignment must be construed together as parts of one and the same transaction, and one arrangement, conveyance and disposition of the insolvent’s property. Then as the assignment expressly refers to the mortgages and is made subject to them, and as the mortgages do give a preference to creditors by first securing the available personal property to certain creditors to the exclusion of others, the assignment, by force of the statute, is invalid and void, as against an attaching creditor. And the Court are also of opinion, that it follows as a necessary consequence, that the property cannot be held by the plaintiffs, under the mortgage, because the mortgage cannot be considered as an independent transaction, but as part of the assignment. ' There are no means of ascertaining that the mortgage would have been given by the debtors and accepted by the preferred creditors, if it had been prepared and executed without the assignment. Very probably the inducement to the debtors, to execute the mortgage, was, that the mortgagees, having themselves been thus secured and preferred, would become trustees and assignees under the assignment. And if it be said that the debtors thereby would not have had the benefit of the discharge under the assignment, it may be answered by the suggestion, that in this instance, the assignment drawn at the same time with the mortgage, contained an express stipulation for a discharge by every creditor who should sign the as [278] signment, which the debtors may have supposed would operate so as to give them a discharge on the part of all those who should sign the assignment. And as no visible property remained subject to attachment, the creditors might be induced to sign it, by the hope of obtaining something out of the property. The Court are of opinion that the attachment was good, and that there must be Judgment for the defendant.