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Dillon agt. Horn and Moring.
The insolvency of the partnership and of the several partners, which is admitted in this case, is undoubtedly an important ingredient; for it is well settled, that in a dissolution, where there is no insolvency, the priority of the creditors can be worked out only through the equity of the partners; and an injunction and receiver will not be granted, except on the application of one of the partners, and then only when they do not agree among themselves. But where there is such insolvency, can those who have a prior right over all others, to the trust fund, assert that right before obtaining judgment and execution?
There is another element in this case, which must not be overlooked; and that is, that the indebtedness to this plaintiff is conceded by the defendants, and a judgment is not necessary to establish the right of the plaintiff as a creditor. Must he then obtain a lien by execution, before he can assert his admitted right?
As partnership property is acquired by partnership debts, it ought first to be applied to the discharge of them. Those funds ought first to be liable on which the credit was given; so that when the property of three partners becomes the property of two of them, it is never divisible till the partnership debts are satisfied; and joint creditors have a primary claim on the joint fund of an insolvent partnership, prior to separate creditors. How are these rights to be asserted, except in the manner indicated by the application now under consideration?
If the plaintiff must wait until he can obtain judgment on a claim which is undisputed, in the mean time these insolvent partners may waste a trust fund (to which he and his cocreditors have a prior claim), by expending it in satisfaction of their separate debts, and his right be utterly unavailing, and his priority a mere dead letter.
But this could always have been said, before the case of Innes vs. Lansing, of an insolvent partnership, whether general or limited; and yet it has never, until that case, that I can learn, been held to be good ground for the interference of the Court of Chancery before judgment and execution. In that case, however, it is held otherwise, and upon grounds which I confess appear to me to be well taken.
Dillon agt. Horn and Moring.
My embarrassment is, how to avoid that decision, and the application of its principle to the case before me.
It may be said that the Chancellor did not intend that his ruling should extend beyond a limited partnership. That may very well have been his intention; but I repeat that I can not see any difference in the rights of creditors in a general or a limited partnership, nor any reason why the principle which has been laid down as to the latter does not apply with equal force to all cases of insolvent partnerships, where the indebtedness of the moving creditor is conceded.
It seems to me that to hold that this action will not lie, I must overturn that decision; and that I am not disposed to do, though I agree with the Chancellor in the opinion that it is somewhat of an enlargement of the prior jurisdiction of the court. But I am not alarmed at that consideration in this case, and for this reason: Under the English system of jurisprudence, from which we have borrowed our equitable jurisdiction, there is a remedy for a case like this under their bankrupt laws. But as we have no bankrupt law; unless we retain the principle of Innes vs. Lansing, and extend its operation, we shall have no adequate means of restrain- . ing insolvent partners from wasting what is most justly held to be a trust fund, or of enforcing the clearly acknowledged right in partnership creditors to priority of payment over all the world. Therefore it is that I hesitate to overrule that case, or to circumscribe the application of its principle; preferring to submit that question to the court in bank, where it may go on appeal if I retain the injunction, and order a receiver to be appointed.
These remarks apply only to the question of the general debt of this plaintiff, about which alone I have my doubts. So far as the joint adventure of these parties, which is set out in the complaint and admitted by the defendants, is concerned, there is no difficulty: the injunction pro tanto must be retained, and a receiver be appointed of course. And in order to take the other question before the general term, I shall retain the injunction in toto, and order a receiver to be appointed.
The costs of these motions to abide the event.
Decisions in Court of Appeals.
COURT OF APPEALS.
Decisions September Term, 1848, at the Capitol in the city of
SEABURY BREWSTER, plaintiff in error, vs. Gakrit H. STRIKER, JR., defendant in error. Judgment affirmed. DANIEL Lord and GEORGE Wood for plaintiff in error; EDWARD SANDFORD and Charles O’Conor for defendant in error.
This was a case involving the construction of the will of the late John Hopper of the city of New York, deceased. The questions were, what estate did the grand children take under the will in the real estate of the testator? and what interest therein or power over the same was vested thereby in the executors? Reported, 2 Comstock, 19.
SEABURY BREWSTER, plaintiff in error, vs. David Thomas and Garrit H. STRIKER, JR., defendants in error. Judgment affirmed.
This cause was submitted to abide the event of the abovc. The same questions being involved.
Tue PRESIDENT, &c. OF THE CAYUGA COUNTY BANK, plaintiffs in error, vs. ETHAN A. WARDEN and FRANKLIN L. GRISWOLD, defendants in error. Judgment reversed with venire de novo; costs to abide the event. John Porter for plaintiffs in error; WARREN T. WORDEN for defendants in error.
The question in this case was, whether the demand and notice of protest was sufficient to charge the defendants in error as endorsers of a promissory note. Reported, 1 Comstock, 413
Bander agt. Bander.
BANDER agt. BANDER.
To recover annual interest upon the whole principal sum, payable in instal
ments; appropriate words must be used, in the note or obligation, clearly
to express such intention. Thus, where a promissory note was made payable as follows: “ For value re
ceived I promise to pay M. Bander or bearer the sum of $1000, payable in ten annual instalments with use, the first payment to become due on the first day of June, 1848,” held, that the interest was not payable annually on the whole principal sum, but only on the several instalments as they respectively fell due.
Montgomery Circuit, December, 1849. Trial by the Court. This suit was brought on a promissory note in the words following: “For value received I promise to pay M. Bander or bearer the sum of $1000, payable in ten annual instalments, with use, the first payment to become due on the first day of June 1848.” March 6, 1847.
Yost & LOBDELL, for Plaintiff
PAIGE, Justice.—The only question presented for decision, in this case, is, whether by the terms of the note on which the suit is brought, interest is payable annually on the whole principal sum or only on the respective instalments at the respective times they become due.
A promissory note is, like any other written contract, to be construed in accordance with the intention of the parties as declared by the express words of the note, or as it is deducible by clear and manifest implication from its terms. The force and effect of the note must be determined by its terms and not by proof aliunde. And when the operation of a contract is clearly settled by the general principles of law, the parties must be deemed to have entered into the contract in reference to such principles (Thompson vs. Ketchum, 8 John. 189; 2 Cow. & Hill's Notes, 1460). There is no general principle of law
Bander agt. Bander.
which requires the interest on notes, bonds, or other written contracts for the payment of money, to be paid annually. Whether the interest is to be paid semi-annually, annually, biennially, or at any other times, must depend altogether upon the agreement of the parties as expressed in the contract. Interest is a mere incident or accessory to the principal debt. It is not a part of the debt. And where there is no express contract to pay interest it can only be recovered as damages for the non-payment of the principal when it becomes due (13 Wend. 640-1-per SAVAGE, Ch. J.; 15 Wend. 80, In Error—Per CHANCELLOR). In all cases where there is no express agreement to pay interest, if the creditor accepts the amount agreed to be paid in full satisfaction of the principal, without requiring payment of the interest from the time the principal became due, no action will lie to recover such interest (13 Wend. 641; 15 Wend. S0; 3 John. 229; 5 John. 268; 3 Cow. 87). So where there is no express contract to pay interest independently of the principal, if the demand for the principal is barred the accessory falls along with it (Hollis vs. Paline, 2 Bing. N. C. 713; Tindal, C. J). And if a party pays the principal of a debt barred by the statute of limitations, such payment does not revive the claim for interest thereon (4 Bing. 315). On contracts for the payment of money, which contain no express agreement for the payment of interest, interest is only recoverable from the time the principal debt falls due (7 Wend. 109; Chit. on Bills, 678; 15 Wend. 310).
And if the contract contains an agreement for the payment of interest but is silent as to the time when it is to be paid, the inter: cst is not payable until the principal debt becomes due. This is undeniable upon principle, and is apparent from the cases (2 Mass. 568; 3 Mass. 221; 1 Bouv. L. Dic. 700, tit. Int.; 4 Esp. 147; Blake vs. Lawrence; Catlin vs. Lyman, 16 Vern. 45). There is nothing in Blake vs. Lawrence which countenances the idea, that interest upon a note like the one in this case, is payable annually on the whole principal. In that case the note was payable by instalments of ten pounds every three months, and in default of payment of any instalment the whole was to be payable immediately. Lord Ellenborough held, that as on default of payment