Hewlett v. Cutler

C. Allen, J. The whole question in this case turns upon the construction of the assignment. If, by its true construction, all the property assigned was to be distributed among such creditors only as should become parties to it, then the whole property will be exhausted by dividends to the creditors who became parties before the attachment in this action was made, and there would be nothing left for the attachment to reach. Mechanics' National Bank v. Eagle Sugar Refinery, 109 Mass. 38. May v. Wannemacher, 111 Mass. 202. Pierce v. O'Brien, 129 Mass. 314. But if, on the other hand, the property assigned was to be distributed among all the creditors of the assignors, without regard to whether they had signed the instrument or not, then the fact becomes important that creditors to a considerable amount had not signed it at the date of the attachment, and the dividends which otherwise would have become due to such creditors could be reached by trustee process. The former appears to us to be the true construction. It was expressed to be the purpose of Cutler and Company to have the instrument executed by all their creditors whose claims should equal or exceed fifty dollars in amount, and to secure their own release from all personal responsibility for their debts, except those which were trifling in amount. ' It was provided that, when they should express their satisfaction with the due execution of the instrument in writing and upon the instrument, it should be a perfected conveyance and agreement, and not before. The assignment was in consideration of the covenants and agreements therein expressed to be performed by their creditors and the trustees named in it, and of one dollar and other good and valuable considerations to them paid by said creditors and trustees. The assignors covenanted with said grantees and said creditors to execute further conveyances, if required. The trustees were to manage and dispose of the property for the benefit of said creditors. It was recited that said grantors’ creditors had appointed an advisory committee, who were to advise the trustees; and there was a provision for filling vacancies by a [292] vote of said creditors. The trustees were constituted the attorneys of said grantors and of said creditors. The trustees, being the president and vice-president of the International Trust Company, covenanted with said grantors and their creditors, “ parties hereto,” that it would execute the trust faithfully; and the said respective creditors of the grantors, each for himself, ratified the conveyance, and agreed to take and accept from the trustees their dividend or proportionate part of the estate in full payment, satisfaction, and discharge of their respective debts; “and an acceptance of this conveyance for our benefit, evidenced by our signatures hereto, shall constitute such discharge.” In view of all these provisions, the further provisions, especially relied on by the plaintiffs, that “ the trustees shall pay pro rata dividends to all the unsecured creditors of said grantors,” and that, “ in making such payments to creditors, there shall be no preference or priority, except to holders of valid liens, and other creditors whose claims would be preferred under the laws of said Commonwealth relating to insolvency,” &c., must be held to refer to such creditors only as (should become parties to the assignment. It was designed to make it an object for all the creditors to become parties, by giving to them the dividends. The scheme, stated in a general way, was, that the debtors should assign all their property to the trustees; that all the creditors should become parties, and thereby release the debtors; and that, if it should be found impossible to procure the signatures of all the creditors, the debtors might nevertheless elect to make the assignment valid and complete, for the benefit of such creditors as should sign, leaving the debtors personally responsible to the others. Exceptions overruled.