Robbins v. Butcher

• Decision Date: 01 March 1887
• Citation: 104 N.Y. 575,11 N.E. 272
• Parties: ROBBINS v. BUTCHER.
• Court: New York Court of Appeals Court of Appeals

104 N.Y. 575

11 N.E. 272

ROBBINS

v.BUTCHER.¹

Court of Appeals of New York.

March 1, 1887.

Appeal from a judgment of the general term, second department, affirming a judgment of the special term, in favor of the defendant.

Phillips & Avery, for appellant.

Wm. G. Cooke, for respondent.

FINCH, J.

It is to be expected that the unpreferred creditors of an assignor' regarding his transfer as an obstacle to the recovery of their debts, will often assail it either as fraudulent in law or in fact, sometimes justly, and sometimes upon quite narrow and technical grounds. In either event our duty is to both parties, not hesitating where fraud is proved, or ought conclusively to be inferred, but preferring a construction, where the choice is open, which indicates innocence rather than fraud. The question raised on this appeal is to some extent a question of such construction, and arises solely upon the language of the instrument. It contains a provision thus expressed: ‘And it is further provided that, should it be necessary, and to the better performance of the trust, that the party of the second part shall have full power and authority to finish such work as is unfinished, to complete such buildings as are incompleted, and to pay all necessary charges and expenses for such completion prior to the payment of all debts and liabilities hereinbefore mentioned and provided.’ The repetition of the word ‘that’ permits it to be said that this provision is an unfinished sentence, and confers no authority at all; but no such criticism is made, and the meaning of the language is more accurately expressed by disregarding the word ‘that,’ where it occurs the second time. Both parties have argued the case upon such construction. The appellant claims that the provision confers upon the assignee an authority derived from the assignor to unduly delay the execution of the trust, and divert the trust funds, in the exercise of his discretion, and free from the supervision and control of the courts, and so is fraudulent and void upon its face. The respondent contends that the authority given is upon a condition which rests in the discretion and judgment of the courts, and, if exercised by the assignee without their prior permission and approval, must be so exercised at his peril, and subject to their prohibition or direction at any moment, and upon the application of any person interested or aggrieved, and so does not involve an intent to hinder, delay, or defraud the creditors of the assignor. We think the latter view of the instrument discloses its true and intended meaning.

Two cases in this court have drawn the line of distinction between the constructions which have been argued. In one of them (Dunham v. Waterman, 17 N. Y. 9) the assignment gave authority to the assignees to pay such sums ‘as they may find expedient,’ in completing unfinished articles, as ‘in their judgment shall seem most advisable.’ The assignment was held to be void. The whole point of the decision was that the instrument conferred a discretion upon the assignees which superseded the authority of the courts,-a right to judge when and how long to delay, what and how much to expend,-with which equity could not interfere; and the question was asked, ‘If the courts uphold this condition, must they not execute it? Can they substitute their discretion for that...