Chew v. Buchanan

Stewart, J., delivered the opinion of the Court. In the decision of the question under this appeal, our conclusion is different from that of the Court below; but we have been much aided by their learning and research in pronouncing their opinion. Whilst some diversity of practice prevails in different States, in applying rules as to priorities in the distribution of funds in Court, in the absence of satisfactory evidence of the intention of the parties interested, some adopting the pro rata rule of distribution — others, the priority of assignment without regard to priority of payment — others, priority in the order of the maturity of the debts without reference to the priority of assignment; there is a universal concurrence in the principle that the intention of the parties contracting, must govern where that can be discovered unless in contravention of some rule of law. Where the meaning of the parties has been expressed, or can be inferred from their acts, there has been no difficulty in disposing of the question. Their intention must be ascertained by the ordinary rules of construction, and the effect of their acts indicating their [374] purpose, is equivalent to express provision. No particular form of assignment indicative of preference, is essential. Such we infer was the opinion of the Court below, with which we fully concur, but they did not find any evidence of preference in this case in which we cannot agree with them. This case is relieved from all embarrassment from conflicting rules, because-not only is the fact of a preference fairly inferrible from the acts of the parties, but they have so expressly declared. In the mortgage deed from Simmons and wife to Mrs. Tyson, bearing date the 2d March, 1857, it is recited that Simmons is indebted to Mrs. T. in the sum of $8,728.75, for which he has delivered to her three” promissory notes of the same date, drawn by Simmons to her order; one for $2,300, payable in three years; one for $3,214.37, payable in four years; and the other for $3,214.38, payable in five years; all of them to bear interest payable annually; that it was understood these notes should be secured by the mortgage, which contains the proviso, that if Simmons shall pay Mrs. Tyson, or her assigns, the said sum with the interest, at the respective periods limited by the notes, then the mortgage was to be null; and it is further declared to be the agreement of the parties, that until default he made in the payment of the mortgage debt, or of some part thereof, Simmons was to retain the possession of the property conveyed. The mortgage was thus given to secure the payment of the debt indicated by the notes at the time specified, and in case of failure to pay- any part, according to the terms stipulated, Mrs. Tyson had the right to the possession of the property as mortgagee, and which right was transferred to Ghew by the first assignment to him. On the same day Mrs. Tyson, together with Mr. Tyson, executed to Chew an assignment of this mortgage, referring in the same to the previous mortgage given to secure the payment of the respective amounts mentioned in the notes, and reciting that Tyson and wife have assigned to Chew the note for $2,300, being the first note, payable in three [375] years, and for the purpose of granting to him the full benefit of the security held under the mortgage, it conveys to Chew all the right in the mortgage of Tyson and wife, to the extent of the sum of $2,300, with interest, cost, charges, expenses, &c., so that the said Samuel Chew shall have ‘priority of lien therefor ; as the said Rachel Tyson might or could have held the same, if this assignment had not been executed.” The latter part of this instrument is the usual formality, and has reference to the general interest Mrs. Tyson held in the properly, and should be read as if immediately following the preceding words: “in as full and ample manner,” to give to it its proper meaning and application. It was designed to denote her interest in the property conveyed by the mortgage, and was not intended to limit or qualify the express lien secured to Chew by the language, “ and so that the said Samuel Chew shall have priority of lien,” to the extent of his note. It was, undoubtedly, the design of the parties, by such words, to afford to Chew a prior lien over Mrs. Tyson, as the holder of the other notes, and her subsequent assignees of said notes could take no greater interest in them than Mrs. Tyson, the assignor, held. These words were inserted, we must presume, for a substantive purpose, and to give to them the meaning we have ascribed, it is not necessary to invoke the rule of construction, that instruments are to be taken more strongly against the grantor. It is the natural and obvious import of the expressions — otherwise, they are mere surplus-age — whereas all the words should have meaning, if consistent with the scope of the instrument. This assignment, by the understanding of the parties, conferred upon Chew a lien, in advance of all others, upon the mortgaged property, for the payment of the note assigned to him. This was Chew’s position on the 2d of March, 1857. It is admitted that this assignment to him was duly acknowledged and recorded. On the 3d of August, 1857, Buchanan took an assignment of the same mortgage, so far as Tyson and wife could convey [376] it, which recites the mortgage from Simmons and wife to Mrs. Tyson, and further recites, that the mortgage was given to secure the payment of $8,728.75, “in the manner therein expressed, agreeably to the tenor of three promissory notes,” describing particularly the times of payment. There is no clause giving to him, or undertaking to do so, any special priority, but other property is embraced in the assignment for his better security, furnishing additional evidence of the understanding of the parties. Buchanan’s assignment was also duly ácknowledged and recorded on the 5th of June, 1860; Clark took a similar assignment from Tyson and wife as given to Buchanan, embracing the additional property, to secure the payment of the note assigned to him. There is no clause giving to him any priority. His assignment was also acknowledged and- recorded. These parties, thus holding transfers of the mortgage, occupy the relation of three several assignees of the three respective notes, with the security of the mortgage appurtenant thereto, according to the tenor of the assignments. This they would have held as an incident to the transfer of the notes, if there had been no actual assignment of the mortgage. Under these circumstances, with the indicated understanding of the parties, to which reference has been made, with prior lien given to Chew, there is no doubt of his right to priority of payment, in the fund in Court. Such was the manifest intention of all the parties. It would Ho violence to the contract of the parties, and to the principles and practice of Courts of Equity, to permit these various assignees to divide the proceeds of the mortgage ■property, pro rata, when not-sufficient to secure payment of all the notes, and thus exclude the prior lien of Chew, whose assignment, besides holding the express lien, was the first one made, and was first recorded, and transferred, the note first due and payable. Finding abundant evidence and authority to guide us in disposing 'of the question of distribution, from the transac [377] tions of the parties, it would be superfluous to decide wbat would liave been the effect if there had been no such indication of the agreement of the parties, or to consider the effect of the transfers under our Eegistry laws. (Decided 12th March, 1869,) We think the auditor’s account A, giving to Chew the . benefit of his preference, should have been ratified, and the case is remanded for further proceedings, in conformity herewith. Decree reversed and cause remanded.