Woods v. Timmerman's Assignee

Napton, Judge, delivered the opinion of the court. It has been heretofore determined that, under our recent statute concerning assignments, debtors may still prefer some creditors over others, although they <can not make distinctions between the preferred claims. Such a construction, although falling far short of the goal which the legislature appeared to be arriving at in the 39th section of the law, Avas rendered necessary by other provisions suffered to remain in the statute. If preferences are allowed as to the individual creditors, there is no reason why the same preferences may not be made with reference to the debt as to the individual who holds it. A debtor may choose to protect a particular debt, as for example a security note, in preference to other debts due the same individual. We can see no reason of public policy which will permit the one and exclude the other. This being the law, it becomes a mere question of intent in [110] tbe construction of the instrument of assignment, as to whether the claim of Woods, Christy & Co. upon the note for 13,130.50 was one of those' provided for in the assignment. The facts show very clearly that it was not. Woods, Christy & Co. were preferred on an indebtedness by two notes amounting to $554.55. These two notes, exactly to this amount, were presented and allowed. But Timmerman, the debtor, had also given his note to Woods (one of the firm), which was endorsed by Christy (another member), and this note was secured by a mortgage on leasehold estate. It appeared that the note was really owned by the firm of Woods, Christy & Co.; that it was given for goods bought by Timmerman of that house, and that the note was merely made to assume the form it did as a matter of convenience. It also appeared that only about half the note had been realized from the mortgaged property; but it further appeared that the mortgaged property was not included in the assignment, and that the property and effects assigned would not pay more than fifty cents on the dollar of the claims named, exclusive of this claim of W., C. & Co. Under these circumstances it is very plain that Timmer-man had no intention of working any provision for this note of $3,180.50. He does not mention it, but names two other notes and their exact amount. The only question, it seems to me, is, whether a debtor can select particular debts, as he undoubtedly can select particular creditors. The statute does not prevent this, and before the statute there could be no doubt on this question. In fact the language of the 39th section appears to recognize the law as above stated ; it says, “ and all debts and liabilities within the provisions of the assignment shall be paid pro rata from the assets thereof.” Judge Scott concurring, the judgment is reversed; Judge Richardson not sitting.