Wight v. Sampter

Citations

• 127 Ill. 167
• 20 N.E. 47

Syllabus

<p>1. Trust—whether a trust arises—one creditor receiving assignment of other securities, whether he takes as trustee for another creditor. A partnership firm being indebted to A in the sum of $25,000 and to B in the sum oí $15,000, and in failing circumstances, it was agreed by the parties that A-should advance to the debtor firm $15,000 and B $5000, which was done, and judgment notes were given by the debtors, to A for $40,000, and to B for his $15,000 and further advances, but the note to A was left with the debtor firm, who agreed to enter judgment thereon if necessary to protect A. Afterward B, by persuasion and threats, obtained possession of A’s note, and took steps for the entry of judgment on his own notes. To prevent this, A agreed to guarantee the payment of $10,000 of the debt of B, and that if judgment should be entered for the balance of B’s debt, it should have priority over any judgment in favor of A. New notes were given to B, $10,000 of which were guaranteed by A, and all the notes were left with an attorney under a letter of direction, signed by A and B, that no judgment should be taken on any of them without the order of A. The debtor firm afterward gave judgment notes to other persons, and notified A of that fact, and induced him to accejit notes and accounts, or run the risk of getting nothing. The guaranteed notes were paid, and part of the residue due to B, who obtained judgment for the balance, and by creditor’s bill sought to coerce payment of his judgment from A, on the ground that A held the notes and accounts assigned to him, as trustee: Held, that a decree holding A liable was erroneous, and that the bill should have been dismissed.</p> <p>2. Contract—strict construction, in equity. Where one of two creditors of a'failing firm, by unfair means, gains an advantage over the other, and thereby secures a contract giving him certain preferences, the party so obtaining the preferences will be entitled to no other than a strict construction of