Opinion
Argued November 12, 1877
Decided November 20, 1877
S.P. Nash, for appellants.
Henry E. Davies, for respondents.
The questions involved upon this appeal were so thoroughly examined and considered in the Supreme Court that little more is needed here than briefly to announce the conclusions we have reached.
First. The case of Barry v. The Equitable Life Assurance Co. ( 59 N.Y., 587), concerned one of the policies attempted to be assigned by the same instrument which was proved in this case. It was there held that the assignment was wholly invalid, and conveyed no legal or equitable title to, or interest in, the policies attempted to be assigned. That, like this, was an equitable action to determine the conflicting claims of the plaintiff and of the defendants Brune and his assignee, to the amount due upon the policy there involved, and it was decided that she was entitled to recover the amount. Therefore, but for the new policies taken out by Brune, this case would be wholly controlled by the decision in that.
Second. Brune, having no title to, or interest in, the policies, had no right to surrender, cancel or impair them, or to deal with them in any way. But, for the purpose of getting title to them, he and plaintiff's husband arranged, without her knowledge or consent, to permit the policies to lapse for non-payment of the premiums, and then to take out new policies to Brune, as creditor of the assured. It matters not that neither Brune nor Mr. Barry was bound to pay the premiums. We may assume that she, a married woman, expected and had the right to expect that one of them would keep the policies in life by payment of the premiums. The policies were of value to her, and she had an interest to keep them in life, and they, at least, owed her the duty to apprise her of what was going on with the policies, so that she could pay the premiums, if they were unwilling to do so.
It is clear that the old policies were the consideration of, and the inducement to, the new policies. The new policies could not have been obtained but for the possession and surrender by Brune of the old policies, and the premiums upon the new policies were paid, in part, by a cash dividend due upon one of the old policies. Brune thus, by means of the possession of the old policies, which belonged to the plaintiff, and by using and surrendering them, obtained the new policies. The real substance of the transaction was a substitution of the new policies for the old, for the purpose of getting the security which the old did not give him. Under the circumstances of this case, both upon reason and authority, the substituted policies, in equity, simply take the place of the old policies, and the money payable thereon must go to the party entitled under the old policies. For this conclusion there is abundant reason and authority. (Story's Eq. Jur., §§ 1254, 1257, 1258, 1259, 1262, 1265; Bunyon on Life Ins., 302; Nesbit v. Berridge, 10. Jurist [N.S.], 53; Norwood v. Guerdon, 60 Ill., 253; Chapin v. Fellowes, 36 Conn., 132; Lemon v. The Phœnix Life Ins. Co., 38 id., 294; Dutton v. Willner, 52 N.Y., 312; Mitchell v. Reed, 61 id., 123.)
Third. The pleadings, proofs and findings show that the insurance company was willing to pay the amount due upon the policies to the person entitled thereto; that the plaintiff claimed it was due to her, and that Brune's assignee claimed it was due to him; and hence it was proper to determine in this action the conflicting claims to this money, and the judgment of the court, making such determination and protecting the insurance company against double payment, was right.
The judgment must, therefore, be affirmed, with costs.
All concur, except FOLGER, J., not sitting.
Judgment affirmed.