(Jurnell Saw Bttytml IGibtanj Cornell University Library KF1181.A8H66 Law of assignments of life policies / ■'3""i924 018 742 340 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018742340 LAW OF ASSIGNMENTS OF \. LIFE POLICIES A brief examination of the legal status of another class of instruments, viz., bills of lading and warehouse receipts, will further illustrate the dis- tinction between non-negotiable, or quasi-negotiable instruments, as they are termed, like policies, which are not negotiable at common law, and bills of exchange and the like which are recognized as negotiable. These receipts, TRANSFER BY DELIVERY. 11 transferred by manual delivery ; their sale is therefore accom- plished by a legal transfer of the claim termed an assignment, and, as in the case of personal property generally, delivery is the lite policies, are evidences of title to personal property in another shape in the hands of third parties. Under the common law it was held in England, in the leading case of Thompson vs. Doruiney, 14 M. & W., 403, that a bill of lading was not negotiable like a bill of exchange to enable the endorsee to sue in his own name, and in another leading case, that of Lickbarrow vs. Mason, 1 Smith's Lead. Cas., pt. 2, p. 1147, the principle first laid down, that the right of stopping goods in transitu to an insolvent consignee may be defeated by a sale to a third person by a transfer and indorsement of the bill of lading for a valuable consideration, was overruled, and it was held that a bill of lading was not negotiable as a bill of exchange, but simply assignable, and passed no better title than that of the assignor. But here, be it observed, was a class of property whose ready and secure transfer to innocent third parties was imperatively demanded in the interests of commerce, and we find the law on the subject modified to the precise extent deemed necessary to meet these requirements. The case last cited was again overruled by the English House of Lords, whose judgment was that "at law the property passed as absolutely by the endorsement of the bill of lading as if the goods had been actually delivered into the hands of the consignee." The evils of non-negotiability; were remedied by special statutes 18 and 19 Vic, so that the endorsee might have a right of action iu his own name, and in several of the States similar acts have been passed vesting the right of action and the property absolutely in the assignee. The doctrine of assigna- bility and that such assignment vests the title in the bona fide assignee as against the world, has been applied by the courts of the United States and State courts both to bills of lading and warehouse receipts ever since the ruling of Justice Story in the case of Conard vs. Atlantic Insurance Co., 1 Pet., 386. {See Gibson vs. Stevens, 8 How., 384; Harris vs. Bradley, 2 Dill., 285; Second National Bank vs. Wallbridge, 19 Ohio St., 311; Hale vs. Dock Co., 29 Wis., 482; Broadwell vs. Howard, 77 111., 305; Eobson vs. Swart, 14 Minn., 370.) In the case of policies, however, the courts, while recognizing their assign- ability, have not deemed their negotiable element to be such as to admit of an absolute and indefensible title passing by the assignment, and while in special cases disposed to recognize the claims of innocent third parties as deserving consideration, they have adhered to the general principle that the assignee takes subject to the infirmities of the assignor. Just in proportion as the assignability of the policy is shown to be an essential element of the contract may a relaxation or modification of the law on this subject be expected. With these classes of negotiable or senri-negrtiable instruments may be contrasted those which are from their nature strictly personal and incapable of transfer. Such are a license to do some specific act, as to cut timber or erect a dam, a contract of apprenticeship, which is a personal trust, and rights of action for strictly personal injuries not affecting property. On this latter principle life companies have been denied subrogation where the insured has been wrongfully killed. 12 EFFECT OF NON-NEGOTIABILITY. essential feature of the transfer, so here the delivery of the instrument or evidence of debt becomes the most essential fea- ture of the assignment. If policies of insurance were like checks or bills payable to bearer, nothing beyond this manual delivery would be needed ; their mere possession would be suffi- cient evidence of title on the part of the holder ; but they are non-negotiable and essentially personal in their character, hence in addition to possession of the instrument must be added evi- dences of the right to that possession, either by word or action from the original owner. These two things, the transfer of the right to possession and the possession itself, complete the assignment, and as in the case of an oral contract to insure, a court of equity will compel a specific performance and a delivery of the policy, so in the case of a written assignment of a policy or other instrument of contract, the assignee may compel the assignor to perfect his title by the delivery of the policy itself. 4 Addison e defines an assignment as follows : "Asa general rule, anything written, said, or done, in pursuance of an agree- ment and for a valuable consideration, or in consideration of an antecedent debt, to place a chose in action out of the control of the creditor, and appropriate it in favor of another person, amounts to an equitable assignment." It will be observed that not only must there be the word or action necessary to appropriate the chose in action, but also to c The transfer of title to real property by deed and possession have their counterpart in the assignment of the chose in action. As the title to real prop- erty may be absolute, or qualified by deed and defeasance, or by mortgage, and as the character of the title will depend not on the single instrument of transfer but on other evidences as well from which the real intention of the parties may appear, so in the assignment the nature of the interest trans- ferred, whether absolute, a mortgage, or a pledge, will be determined from all the circumstances of the case. See Dungan vs. Mutual Benefit Life Ins. Co., 7 Ins. Law Journal, 171. But this difference is observable between the two : possession is of primary importance in the assignment, while in the case of real property the legal title may be indefeasible though possession has never been acquired. Again the publicity of a court of record gives a certain pro- tection to the innocent purchaser of the latter, while the assignee only takes subject to whatever equities may exist against the assignor. a Addison on Contracts (.Amer. Ed.), vol. 1, p. 599; Hall vs. Robinson, 2 Comst., 293; U. S. vs. Buford, 3 Pet., 30; Bigelow vs. Wilson, 1 Pick., 485; Haskell vs. Hilton, 30 Me., 419. e Addison on Contracts (Amer. Ed.), vol. 1, p. 598. LOSS PAYABLE TO MORTGAGEE. 13 place it out of the control of the creditor, in order to perfect the assignment. So long as no actual or symbolical delivery of the instrument itself has been made, like any other form of personal property, should it come into the hands of innocent third par- ties the rights of the assignee are liable to be defeated. Parsons in his work on Contracts says : f " A mere agreement to assign without any delivery, actual or symbolical, of the writing evidencing the debt, or an endorsement upon the instru- ment directing the debtor to pay a portion of the amount due to a third person, such endorsement being notified to the debtor, but the writing remaining in the hands of the creditor, does not constitute a sufficient assignment." The term assignment, while in a broader sense used to signify the transfer of any interest whatever in a policy, in a stricter sense has been limited to such transfers as convey a title or a right of action. In the fire policy the endorsement of "loss payable to mortgagee," was formerly frequently treated by the courts as a qualified form of assignment, but the repeated litiga- tions under this clause have led to a greater refinement of the doctrine, and a discrimination has been made between the clause in question which simply designates the party who shall receive the money as a representative of the insured, but who has no other rights under the contract, and an actual assignment of the instrument itself which passes the title and puts the assignee in the place of the assignor. 8 i 1 Parsons on Contracts, p. 228 ; Citing Willes vs. Twambly, 13 Mass., 204 ; Bosh vs. Lathrop, 22 N. T., 335; Crocker vs. Whitney, 10 Mass., 316; and other cases. g In Brunswick Savings Inst. vs. Ins. Co., 8 Ins. Law Journal, 120, the Supreme Court of Maine says concerning the clause ''Loss payable to mort- gagee," that it is not an insurance of the mortgagee's interest in the property nor an assignment of the policy to the mortgagee." It is merely a contingent order or stipulation, assented to by the defendants, for the payment of the loss of the assured, if any, to the plaintiffs. It gives the plaintiffs the same right to recover that the assured would have if no such clause had been inserted in the policy. Any violation of the conditions and stipulations of the policy which would defeat the right of the assured to recover upon it will defeat the right of the plaintiffs. To the same effect is Martin vs. Franklin Fire Ins. Co., 5 Ins. Law Journal, 145, where the X. J. S. C. distinguishes between the case of a fire policy and that of a life policy where the right of action is in the beneficiary. The court says, "The direction to pay the sum in which the insurance was effected to the mortgagee in case of a loss is collateral 14 BENEFICIARY AND ASSIGNEE DISTINGUISHED. Herein the life policy essentially differs from the other : the title, instead of vesting in the party insured, vests in the bene- ficiary, and the mere act of designating a beneficiary in the instrument has been declared by the courts to be virtually an assignment to the latter. 1 Hence the distinction observed in fire insurance is not applicable to the life policy. Nevertheless it would not be correct to say that no distinction exists between a party designated to receive the payment under a life contract and a subsequent transfer of title under the ordinary form of assignment. An important distinction does exist. In the case of Franklin Life Ins. Co. vs. Lefton, 6 Ins. Law Journal, 95, the Indiana Supreme Court, in 1876, while declaring that a party having no insurable interest could not purchase and take an assignment of the policy so as to vest the title in himself for his own benefit, as was also held in Franklin Life Ins. Co. vs. to the principal contract, and is not an assignment of the policy. The legal effect of such a clause in favor of a third person in a policy, in terms between the insured and the owner, is that of a direction in advance as to the mode of payment, which when made is performance of the contract in the manner assented to by the insured, and discharges the obligation pro tanto. This view of the nature of a clause of this kind in a policy is expressed by Shaw, C. J., in Fogg vs. Middlesex Ins. Co., 10 Cush., 346; by Bigelow, J., in Hale vs. Mechanics Ins. Co., 6 Gray, 172; by Dewey, J., in Loring vs. the Manufac- turers Ins. Co., 8 Gray, 29; and by Ames, J., in Turner vs. Quincy Ins. Co., 109 Mass., 573." See also Sias vs. Ins. Co., and cases cited by U. S. C. C. of N. H., 9 Ins. Law Journal, 166; Continental Ins. Co. vs. Heilman &. Cox, 9 Ins. Law Journal, 91. See also Hastings vs. Westchester Fire Ins. Co., 7 Ins. Law Journal, 434; Bates vs. Equitable Ins. Co., 10 Wall, 33; Grosvenor vs. Atlantic Ins. Co., 17 N. Y., 391 ; State Mut. Fire Ins. Co. vs. Roberts, 31 Pa. St., 438; Foote vs. Ins. Co., 119 Mass., 259; Smith vs. Ins. Co., 120 Mass., 90; City Five Cents Savings Bank vs. Ins. Co., 122 Mass.; 165; Buffalo Steam Engine Works vs. Ins. Co., 17 N. Y., 401. 1» In Mallory vs. Travelers Ins. Co., a case of accident insurance, 1 Ins. Law Journal, 840, the New York Court of Appeals in 1871 said: "The policy was procured by him, and he paid the premium therefor, and made the loss paya- ble to the plaintiff or legal representatives. This in effect was a policy pro- cured by him upon his own life, and an assignment thereof to the plaintiff." Grosvenor vs. Atlantic Fire Ins. Co., Supra, and Eawls vs. Amer. Mut. Ins. Co., 27 N. Y., 282, are cited in support of the proposition. The court thus apparently gives the same legal effect to the payment of loss in the life as in the fire policy. But as already remarked, this court among others formerly treated the designation of payment in the fire policy as a species of assign- ment, while at the same time its legal effect has been restricted just as it has been where the character of assignment has been denied to it altogether. INSURABLE INTEREST WHEN NECESSARY. 15 Hazard, 41 Ind., 116 ; adds, however, " a person may take a policy upon his own life, and, by the terms of the policy, appoint a person to receive the money in case of his death, during the existence of the policy, as was the case in the Provident Life Ins. Co. vs. Baum, 29 Ind., 236. The distinction as drawn by the court in this case contem- plates the policy as a contract with the party whose life is insured and who pays the premium, and which is presumed to be taken out and held primarily for his own benefit. Provident Ins. Co. vs. Baum, referred to, was a suit on an accident policy in which the question of insurable interest was raised concern- ing the party designated to receive the payment, and the court regarded the contract as kept alive in good faith in the interest of the insured, and such interest it has repeatedly been held is sufficient to support the contract whether made payable to him- self, his executors or a third party, the essential point being that it is not a cover for a wager contract, and this is the feature which the court apparently seeks to emphasize in this Indiana case. On the other hand, the actual assignment passing the whole title to one not interested in the life insured, and reducing the latter to a mere subject of insurance, gives to the whole con- tract a gambling character which the court refused to sanc- tion. But this argument has no proper application to a case where the original contract is wholly with the beneficiary. Here the question of insurable interest at the inception is fundamental, and the validity of the title of a subsequent assignee may depend on the interest of the original beneficiary . J It should be further noted, in contrasting the doctrine of assignment as applied to the fire and the life policy, that while j See, farther on, the language of the U. S. Supreme Court in 1876 on this subject in Mtna Ins. Co. vs. Sehaeifer, 5 Ins. Law Journal, 257; and in Cam- mack vs. Lewis in 1872, 1 Ins. Law Journal, 679 ; also that of N. J. S. C. in Franklin Fire Ius. Co. vs. Martin Supra ; Mallory vs. Travelers' Ins. Co., 1 Ins. Law Journal, 840; Lemon vs. Phoenix Mut. Life Ins. Co., 1 Ins. Law Journal, 520, where the Supreme Court of Connecticut says that if the claimant, who was the affianced of the insured, had herself obtained an insurance upon his life, the question of her insurable interest might have arisen ; "but surely Mr. Peterson had an insurable interest in his own life, and he obtained the insur- ance on it, and we know of no law to prevent him making the policy payable 16 LIFE AND FIBE POLICY DISTINGUISHED. the mere assignment in the case of the former does not always divest the original insured of his interest in the policy even when consented to by the company, unless a new contract has been entered into with the assignee ; k in the case of the latter the beneficiary is regarded from the inception as the real party in interest. In the fire policy the contract originally is with the party designated as insureds except where special stipulations have been made guaranteeing the assignee, the rights of the latter flow wholly from those of the former, and are liable to be forfeited by his acts. In the life policy the contract, according to its tenor, may or may not be with the life assured. The latter more properly occupies the position of the property under the fire policy. He is the risk, the subject of insurance, and while the assignee or beneficiary is liable under as the fire policy to a forfeiture through the acts of the party thus insured, it is not by reason of the claim of the beneficiary flowing from such insured party, but because there has been a breach of condition as to the subject of insurance. in case of his death to the person to whom he was affianced ; and if such pol- icy is delivered as a gift to the party to whom payable, we know of no law to prevent such gift from being effectual." Citing the language [of the court in Hands vs. Ins. Co., 27 N. Y., 282 : "If the contract is with the party whose life is insured, he may have the loss payable to his own representatives or to his assignee or appointee." k See Fogg vs. Middlesex Ins. Co., 10 Cush. (Mass.), 337, for an able dis cussion of the effect of assignments in the case of fire policies. CHAPTEE II. THE ESSENTIALS OP AN ASSIGNMENT. What is Requisite to a Complete Assignment — Actual and Construc- tive Possession. — Written and Oral Evidence of Title. — Special Formalities not Necessary. — Assignment Distinguished from Testamentary Devise. — Assignment of Part Interest. — The En- glish Doctrine. It has been already observed that, in general, the two factors essential to a complete assignment are evidences of the title or interest of the assignee and possession of the instrument. The principal authority cited by recent text writers on this subject is the case of Palmer vs. Merrill by the Supreme Court of Massa- chusetts (6 Cush., 2b2), where a part interest in a life policy was assigned to a third party by endorsement on the policy, notice being given to the company, but the policy being retained by the assignor, who died insolvent. The company refused a de- mand of the assignee for payment after the loss, on the ground that the assignment was not in the form required by it and that it was not obligated to pay in installments. The whole sum was paid to the administrator of insured, and the assignees brought suit against him to recover their portion, which he claimed as assets belonging to the general creditors of the insolvent. The court said : " According to the modern decisions, courts of law recognize the assignment of a chose in action, so far as to vest an equitable interest in the assignee, and authorize him to bring an action in the name of the assignor, and recover a judgment for his own benefit. But in order to constitute such an assignment two things must concur: First, the party holding the chose in action must, by some significant act, express his intention that 18 ASSIGNMENT MUST BE OF THE WHOLE. the assignee shall have the debt or right in question, and accord- ing to the nature and circumstances of the case, deliver to the assignee, or to some person for his use, the security, if there be one, bond, deed, note, or written agreement, upon which the debt or chose in action arises ; and, secondly, the transfer shall be of the whole and entire debt or obligation in which the chose in action consists, and, as far as practicable, place the assignee in the condition of the assignor, so as to enable the assignee to recover the full debt due, and to give a good and valid discharge to the party liable. The transfer of a chose in action bears an analogy in some respects to the transfer of personal property ; there can be no actual manual tradition of a chose in action, as there must be of personal property, to constitute a lien ; but there must be that which is similar, a delivery of the note, cer- tificate, or other document, if there is any, which constitutes the chose in action, to the assignee, with full power to exercise every species of dominion over it, and a renunciation of any power over it on the part of the assignor. The intention is, as far as the nature of the case will admit, to substitute the assignee in place of the assignor as owner. It appears to us that the order indorsed on this policy, and retained by the insured, fails of amounting to an assignment in both of these particulars. We do not question that an assignment may be made of an entire fund, in the form of an order drawn by the owner on the holder of the fund or party indebted, with authority to receive the property or discharge the debt. But if it be for a part only of the fund or debt, it is a draft or bill of exchange which does not bind the drawee, or transfer any proprietary or equitable interest in the fund until accepted by the drawee. It therefore creates no lien upon the fund. * * A man cannot, by his own act, charge a personal chattel, a carriage and horses for instance, with a lien in favor of a particular creditor, and yet retain the dominion and possession of them till his death ; a fortiori, where he retains the memorandum or instrument of transfer of such chattel in his own possession and under his own control, it seems to us equally impracticable to charge a debt due to him, by an order or memorandum retained in his own possession, purport- ing to give to a particular creditor an equitable lien by the assignment of such chose in action, without a transfer or delivery REQUISITES TO A COMPLETE ASSIGNMENT. 19 of the security by which it is manifested. Such an assignment would not constitute the debtor himself a trustee to the credi- tors ; what trust then devolves on the administrator ? Were the law otherwise, an administrator instead of succeeding to the property and rights of his intestate, to be administered and distributed equally among all the creditors, might be obliged to dispose of it in very unequal proportions, according to such sup- posed declaration of trust." It was accordingly held that as the claimant could maintain no suit against the company, neither had he any equitable lien on the fund in the hands of the administrator, and it must be treated as general assets for the benefit of all the creditors. This case, as was said, contains the fullest exposition of the doctrine ever laid down by an American court, and has been regarded as a leading authority on the subject ; it will therefore be important to compare this decision with others of more recent date, and observe just what was and was not decided by the court. In the first place, the decision must be interpreted in the light of the special facts on which it was based. The question was not whether the alleged assignee could in general acquire no rights whatever under such an assignment, but whether it gave him any rights which he could enforce against the company holding the fund, or the administrator of the insol- vent. The court was contemplating the case of an alleged assign- ment of which no other valid evidence existed than the mere indorsement. While it defined the essentials to a complete assignment, and emphasized the importance of possession of the instrument, it did not decide that all these essentials must in all cases be complied with. It did not decide that the want of possession alone would defeat recovery, nor that an imperfec- tion in the assignment might not be remedied by a proper course in equity, nor that an assignment of a part interest would not be valid when properly assented to by the insurer. The funda- mental doctrine here laid down is that a decedent, by such an imperfect proceeding as this, cannot charge his estate with a special lien in favor of a single creditor, and the principle is one generally recognized by the courts. All this is manifest from ' the subsequent history of this case. It was shown to the court that the essential facts in the case were different from those 20 EFFECT OF LACK OF POSSESSION. which appeared upon the face of the record, and upon which this judgment was predicated ; that assignments had actually- been delivered to the assignees, and the company had been duly notified at the time, and had assented either expressly or by implication, whereupon a new trial was subsequently granted, and the assignees were allowed to recover. While possession of the instrument and evidence of title are the two great requisites, it frequently happens that the lack of such possession will not prevent a recovery where a constructive possession can be inferred from the facts. In Fowler vs. But- terly, 9 Ins. Law Journal, 329, the New York Court of Appeals in 1879 held that an endowment taken out by the husband, pay- able to himself if living, or, in the event of his prior decease, to his wife, did not require any actual or even symbolical posses- sion by the wife to vest the interest in her, owing to the relation of the parties. The court says : " The fact that the covenant in the policy was with Butterly as the assured, and the legal title and interest was with him if he lived until the time named, does not establish an intention to keep the control of the policy other- wise than as specified [for his own benefit in case of survival,] or deprive the wife of the right which she had by virtue of the same. Nor was there any such retention of possession, or failure to deliver the policy by the assured, as indicated a design on his part to assume the absolute ownership of the same. It was delivered to the wife, and placed where both herself and her husband had access to it ; and even if we may assume there was no actual delivery, this omission is not conclusive, for the reason that the language of the policy was such that the hus- band might properly retain it in his own possession as long as he lived, prior to its expiration. His possession was the possession of the wife; and the general rule that where there is a gift there must be an actual delivery, therefore has no application. The policy itself shows the intention, and no argument is to be derived from a failure to surrender that in which the husband had a present interest before the wife had an absolute right to receive the money." a In the case of Lemon vs. Phoenix Mutual Life Ins. Co., 1 a In Mallory vs. Travelers' Ins. Co., already cited, the New York Court of Appeals said : " The policy was upon the life of W. S. Mallory. The policy EFFECT OF LACK OF POSSESSION. 21 Ins. Law Journal, 520, the Supreme Court of Connecticut, in passing upon the claims of an affianced of a party who procured an endowment on his life payable to her, and subsequently sur- rendered it without her. consent, said : " It is not claimed that the mere "fact of making the policy payable to Miss Lemon, without more, vested in her a complete title. It is conceded that so long as Mr. Peterson retained it in his own possession, he might control it as his own. On the other hand it is not doubted that if Mr. Peterson had delivered it to Miss Lemon as a gift to her, such delivery would vest in her a complete title. * * The fact that Mr. Peterson caused the policy to be made pay- able to Miss Lemon indicated a settled purpose in his mind that she should have the benefit of it. And his acts immediately after will naturally be construed as intended to carry out such purpose. When therefore the policy is, by Mr. Peterson's order, sent to Miss Lemon's brother, we naturally regard it as sent to him for her, as depositary for her, and for her benefit rather than as depositary for Mr. Peterson himself." The court accord- ingly held that there had been an executed gift, and as the policy had been obtained from her brother, and surrendered without her consent, the new policy issued in its place and made payable to the brother of Peterson was held to be the consideration given for the first, and as such the property of Miss Lemon, who was entitled to recover the proceeds on the death of the testator, although she appears never to have had actual posses- sion of either instrument. We may also remark in passing con- cerning this case that the court admitted that the brother having gone to Canada, beyond the jurisdiction of the court, might possibly be able to recover a second time of the company in a suit there upon the instrument, but it intimated that the com- pany, in order to protect itself, ought to have brought a bill of was procured by him, and the premium paid therefor, and made the loss pay- able to the plaintiff (his daughter), or legal representatives. This, in effect, was a policy procured by him upon his own life, and an assignment thereof to the plaintiff." Citing Grosvenor vs. Atlantic Fire Ins. Co., 17 N. Y., 391 ; Eawls vs. Amer. Mut. Ins. Co., 27 N. Y., 282. In fact this court has generally treated the nomination of the beneficiary as a species of assignment, whether under the fire or life policy, while discriminating as to the effect of such assignment. 22 WHAT IS SUFFICIENT DELIVEKY. interpleader in Canada when this suit would have been continued to await the result. Comparing these two cases of endowment policies, it will be observed that while delivery or possession was recognized in' both as essential to complete the gift, the relation of the parties determined what must be sufficient to constitute such completed gift. In the case of the wife mere possession by the husband, in the absence of any reason to the contrary, may be regarded as her possession, while in that of the affianced the evidence should be of a more certain character. A very instructive decision as to what is essential to a com- plete assignment was rendered by the Supreme Court of Indiana in 1879, in the case of Pence vs. Conn. Mut. Life Ins. Co., 8 Ins. Law Journal, 746. Suit was brought against the company to recover by one Cor win as administrator of Allen Makepeace, to whom as administrator it was alleged the policy had been assigned as satisfaction for a debt due the estate. The policy was taken out by James Makepeace, a brother of Allen, and made payable to his wife Melissa. Subsequently an endorse- ment on the policy was executed assigning it, and purporting to be signed by the insured and his wife, witnessed and accompa- nied by a certificate of acknowledgment on the part of the wife before a justice of the peace, bearing even date with the certifi- cate. The administrator had possession of all the papers. Pay- ment was forbidden by the wife, who denied that she had ever assigned, delivered or indorsed the policy to Corwin or author- ized any other person to do so. The attesting witness denied that she had signed the instrument in his presence, or that he had attested it, and finally the justice denied that she had ever personally acknowledged the instrument before him. It was claimed that the transfer had been made by her husband, and her signature attached without her consent. On the other hand there was a mass of evidence in conflict with this, the companv filed a bill of interpleader, and the question was left to the jury as one of fact. The jury found, specially in response to certain interrogatories submitted, that the policy was not delivered to the administrator as security for a debt ; that at the time of its delivery to Corwin, the written assignment, with the signatures and certificate, were not endorsed and attached ; that the copy WHAT IS SUFFICIENT DELIVERY. 23 of the policy and assignment filed in this proceeding was not a correct copy of those documents ; that the nusband did not deliver a mortgage signed by himself and wife as part security along with this assignment, etc. ; and generally they found for the alleged assignee. It would seem that some of these special findings by the jury were directly in the face of the evidence, except on the assumption that the terms " assignment " and " delivery," as applied to the case, were misnomers, and a con- trary finding might have been regarded as involving by implica- tion an admission of the validity of the assignment. The court held that the jury had a right to regard the ques- tions which had been skillfully prepared by the opposing coun- sel, as designed for such a purpose and to answer accordingly. It said : " Of course the word ' deliver,' as applied to a necessary part of the execution of every written instrument, means some- thing more than the mere manual delivery of the instrument. The delivery of a writing, as a part of its execution, can only be made by a person lawfully authorized to execute the writing, or at least to make delivery thereof. * * Take, for example, the first interrogatory. The actual manual delivery of the policy to John E. Corwin by some one, and perhaps as a security for the debt mentioned in the interrogatory, were unimportant and immaterial facts, which could have no possible bearing upon the proper decision of this cause, except upon the hypothesis that such delivery was made either by the appellee in person, or by some one thereunto by her lawfully authorized. The policy of insurance, prior to the alleged assignment thereof to John E. Corwin, was undoubtedly the property of Melissa C. Makepeace. If the appellee owned the policy, she alone could deliver it, in the sense of an assignment by delivery ; and it is quite clear, we think, that the word ' deliver ' was used in that sense in the first interrogatory. * * The jury had the right, we think, to ascer- tain the intent and purpose of the interrogatory, if they could, and to answer accordingly, but without doing violence to the language used therein." The court below also instructed in this case that in order to prove the assignment by the defendant, the plaintiff must prove not only that she signed her name to the assignment, bnt must prove also that she either delivered or authorized the delivery of 24 VALUE OF EVIDENCE. the policy to the assignee ; that possession of the policy, and payments of premium upon it by the assignee, either as admin- istrator or otherwise, could give him no right to it, even if it appeared to be assigned, if the defendant had not signed the assignment or authorized its delivery to him. This was held to be the correct doctrine, in the absence of any evidence that she had authorized another to sign for her; had there been any such evidence, it would have been the duty of the court to add that such authority to sign must be proved by the plaintiff. And further, the jury could not presume from the relation of husband and wife that the defendant had given any authority to her husband to sign or transfer for her. Such authority must be proved by evidence. It will thus be seen that the burden of proving the alleged assignment is thrown on the assignee ; it is not enough that he holds possession, nor that the transfer was apparently executed with every legal formality, nor the delivery made by one who might be supposed to be authorized, nor that the circumstances might fully warrant it, nor that the assignee holds in good faith for value received, all these will confer no right unless assented to by the party in interest. Hence arises the importance of sufficient evidence of the assignment. Here was a subscribing witness, and the court says : " The testimony of a subscribing witness, in whose presence a written instrument purports to have been executed, is the best evidence of the execution of the instrument, but it is not the only evidence that may be given." There was also an acknowledgment, and the court discussed the effect of such acknowledgment as an instrument of evidence if it was not attached to the policy at the time when taken, nor had any reference to it, but was afterwards attached without the plaintiff's consent. From all of which it will be observed that while any acts which sufficiently indicate the intention of the assignor, and place the instrument within the control of the assignee, will support the assignment, whatever added formali- ties are observed are in the nature of confirmatory evidence, and as a rule the greater the formality the stronger the presumptive evidence in support of the assignment. Thus in the case of Dungan's, Adm'x, vs. Mut. Benefit Life Ins. Co., 3 Ins. Law Journal, 106, the Maryland Court of Ap- EFFECT OF FORMALITIES. 25 peals, in discussing the question whether an assignment was intended to operate simply as a pledge or a mortgage, thus em- phasized the importance of the formalities observed as evidence on the subject : " The assignment is under seal, and in the most formal terms conveys to Webb, his heirs and assigns, the policy itself, and all interest and advantage existing or hereafter to arise under it. Language affords no more apt words to make it absolute and complete. Then comes a defeasance clause in the most technical form. * * The purport and substance of the contract, and the intention of the parties as disclosed by the language they have made use of to express it, clearly indicate a sale or mortgage rather* than a pledge." In 1874, the Baltimore Circuit Court, in a case subsequently affirmed by the Maryland Court of Appeals, used the following language: "It is objected that the assignment not being pro- duced, there is not sufficient evidence of its loss or execution ; but I think this objection clearly untenable. Its loss is proved by Mr. Brune, and its execution by Mrs. Barry and Mr. Middle- dith. Then it is objected that the assignment being at the time Mrs. Barry (the assignor) signed it, a blank printed form of assignment without names, date, attesting witness or written recitals of any kind, with no authority from her to anybody to fill up the blanks or to deliver the policies, is not a valid assign- ment, and will not be enforced. * * But I think that the weight of authority as well as reason is in favor of the validity of an assignment of personal property when the paper is signed and delivered in blank, either upon an implied or express parol authority from the party signing it to fill up the blank to the person to whom it is delivered, and it is afterwards filled up by the holder." 1 ' b National Life Ins. Co. vs, Barry, 3 Ins. Law Journal, 234. The court draws a distinction between assignments of personal property and a transfer of real estate or conveyances under statute by deed declared void for informal- ity, as in Drury vs. Foster, 2 Wall., S. C. Kep., 24 ; Hibblewhite vs. McMerine, 6 Mass. and W., 200 ; and cites in its support White vs. Vermont Co., 21 How., 575; Van Duzen vs. Howe, 21 N. T., 534; McNeil vs. Tenth Ward Nat. Bank, 46 N. Y., 329; Leitch vs. Wells, 48 N. Y. ; Edgerton vs. Thomas, 5 Selden, 40 ; Davison vs. Cole, 16 Whason, 54; Kent vs. Somerville, 7 Gill, and John., 265; Chesley vs. Taylor, 3 Gill., 257; Shriver vs. Lawborne, 12 Md., 174. Still further the court, in discussing the power of the wife thus to charge her sepa- rate estate, while the Maryland statute expressly prescribed the formalities to 26 NO SPECIAL FORMALITIES NEEDED. Nor was the assignee allowed to claim the benefit of an inno- cent holder for valuable consideration, although he had taken no part in procuring the wife's signature. Said fhe court : " The assignment was procured by the husband, acting in his interest and for his benefit, and as his acceptance of the assign- ment implies an adoption of his agency, he can have no right to enforce it free from the infirmities of fraud and imposition to obtain the assignment." c But it should be added that this view was grounded on the fact that the assignee had contracted with the husband to procure the assignment, and had parted with a valuable consideration on the strength of that agreement, not on the strength of an apparently valid assignment already made. Whether the latter would have entitled him to protection as a holder for values, is left uncertain. 4 The doctrine that no special formalities are essential to a complete assignment, receives a still further confirmation in the recent case of the Estate of Malone, by the Supreme Court of Pennsylvania, in 1880, where it was declared that a voluntary assignment by a married woman without any separate acknowl- edgment is valid, and that a valid gift or assignment may be made by mere delivery. That actual manual delivery is not always essential to complete such a gift. While it may not necessarily follow from the relation of husband and wife that a policy in the possession of the former is in the possession of the latter, declarations of the donor that he has given it, or renounc- ing all ownership, accompanied with an intention of retaining it in his own possession, simply in trust for the donee, as between be observed, distinguishes between the incapacity of a woman to divest her- self of her estate -without her husband's consent, where he might be supposed interested, and her right to contract thus by an informal assignment in a manner to encumber the estate, which a court of equity would enforce, and though lacking the legal formalities, would treat as liable to all the incidents of a strictly legal mortgage, "as much so as if all the formalities of acknowl- edgment, privy examination and registration had been pursued." Citing Brundige vs. Poor, 2 Gill, and John., 1. o Citing Central Bank of Frederick vs. Copeland, 18 Md., 310 ; Davis vs. Calvert, 5 Gill, and John., 259; Hagenia vs. Basely, 14 Ves., 273; Bridge- mann vs. Green, Wilmer, 64. 4 That an assignee for valne cannot set up the defense of an innocent holder in good faith to protect himself against a fraudulent assignment, see beyond where this question is more fully discussed. NO SPECIAL FORMALITIES NEEDED. 27 a husband and wife is sufficient. In this case, the husband, while retaining the possession of the policy, which was on the life of a stranger, and therefore not under the wife's policy law, had assigned it to his wife, as was alleged, to protect it from cred- itors. Comparing the decision with that noted above on a wife's policy by the New York Court of Appeals, it will be seen that they are essentially in harmony. In the New York case, under the wife's policy law, the mere designation of the wife as bene- ficiary was sufficient. In the Pennsylvania case, the circum- stances were different ; the policy was not under the statute, but primarily in the interest of the husband, and evidence of some more formal action on his part in completing the gift or assign- ment was looked for, but in neither was any formal manual delivery needed ; the husband might well retain the instrument in his possession. In the case of Marcus vs. St. Louis Mutual Life Ins. Co., 6 Ins. Law Journal, 186, the New York Court of Appeals in 1877 said : " A policy of insurance may be transferred by delivery without writing, being in this respect subject to the same rules as govern the assignability of other chases in action ; " citing St. John vs. American Life Ins. Co., 13 N. Y., 31. The court thus discussed the evidence of the alleged assignment : " There was no written assignment. The policy had been procured by the assured through the agency of one Rhodes, who acted as a solic- itor for the defendant, and as agent for the assured. After it had been delivered to the assured he took it to Rhodes, and desired him to procure another policy in another company, and Ehodes testified : ' He gave me this one for his wife (the plain- tiff). Said I, you need the usual power of transfer. And I told him he ought to have a written power of transfer on this one to his wife, and he said he would come in and do it, and I never saw it (him) again. He died. I took it for his wife, and have kept it ever since.' He further testified : ' I think I have sub- stantially stated all that took place between us when Mr. Marcus came and told me he gave the policy to his wife, and when Marcus handed the policy back to me for his wife.' Another witness who was present at the time testified : ' He handed the policy to Mr. Rhodes, and asked him if he would keep this policy for his wife.' I think this evidence was sufficient to au- 28 ASSIGNMENT DISTINGUISHED FROM WILL. thorize the submission to the jury of the question whether the transaction was a completed gift of the policy to the plaintiff. The suggestion made by Mr. Rhodes that he ought to have the usual power of transfer, meaning (I suppose) the written consent of the company, was made after the insured had handed the policy to Mr. Rhodes for the plaintiff. The promise of the insured to come in and make a formal transfer, or procure the consent of the company, did not necessarily qualify the transac- tion, or prevent its taking effect as a present gift of the policy to the plaintiff. At all events the intention of the parties at the time was a question which should have been submitted to the jury." An assignment must, however, be clearly distinguished from a testamentary disposition of a policy. The former only acquires validity when it takes effect during the life of the assignor or in presenti. A disposition of the policy, whether in the form of an assignment or otherwise, which is intended to take effect only after the death of the disposer, as would be the case under an ordinary will, and which, like that, is subject to his revocation, passes nothing by way of assignment. Its effect is simply that of an ordinary will. This is illustrated by the case of Schadd in the Supreme Court of Pennsylvania in 1878, 8 Tns. Law Journal, 5. The insured had taken out the policy for his own benefit ; but in a book which remained in his possession until his death, had written the following document : " Pittsburgh, December 11, 1875. I, Conrad Schadd, husband of Margaretta Schadd, have insured my life with the Knickerbocker Company of New York for $4,000. I, Conrad Schadd, assign the whole amount, $4,000, to my wife, Mrs. Margaretta Schadd, after my death, when she can do with it according to her best will, without par- tiality to her children. This I have written in good sound mind, and set my name to it. Conrad Schadd." This document, not- withstanding its designation by the donor, the court declared to be testamentary in character, and not an assignment, and hence the wile had no equity as against creditors. The case of a tes- tamentary disposition, however, must not be confounded with that of actual assignment, which owing to special circumstances may not acquire full validity until a future date. Thus in the case of Estate of Trough, 8 Philadelphia, R., 214, the insured SPECIAL CIRCUMSTANCES MAY CONTROL. 29 assigned the policy by a written instrument to a third party in trust for his children, and deposited it in a safe of the firm of which he was a member, addressed to the assignee, with a writ- ten request to deliver after his death. It was held that the assignment having been made while the assignor was solvent, there had been a sufficient delivery to make it valid against creditors, although the assignor was insolvent at his death. The claims of the former were limited to premiums paid after insol- vency. 6 This case presents several interesting features, illustrating what is believed to be the true doctrines on this subject in America. The court apparently looked at the intention of the party. It was not, as in the case of Schadd, to devise an inter- est after the testator's death, of which the only evidence was securely in the possession of the testator, but to make a present gift, reserving only the actual manual delivery to be deferred, and signifying that intention by the deposit in the firm safe. The actual possession and delivery were non-essential, so long as there was in this symbolical act a sufficient substitute. The apparent good faith of the assignor was sufficient protection against the claims of creditors, and the court in such case was not disposed to rigidly insist on the technicalities of an assign- ment. The decisions of the courts as to the sufficiency of the assignment have generally been controlled by the special cir- cumstances of the case, having regard to the real character of the transaction rather than by a strict construction of techni- calities. Thus in the case of Wood vs. Phoenix Ins. Co., 7 Ins. Law Journal, 629, the Louisiana Supreme Court in 1874 declared the judgment of the court of another State, on a bill of inter- pleader, that the assignee was entitled to the policy, to be con- clusive, although the policy itself was in the possession of a citi- zen of Louisiana. The court declared that possession of the policy was only prima facie evidence of a right to claim the proceeds, and was open to the objection that there was an assignment outstanding in the hands of another, or to any evidence explana- tory of the possession. On the other hand the same court, in the succession of Bisley, declared that the continued possession of See also case of Swift vs. Railway etc. Ass'n., cited in the following chapter. 30 ASSIGNMENT OF PART INTEREST. the policy by the assignor, when there was no evidence of acceptance of the assignment by the assignee, and no notice had been given to the company, made it void as to creditors. In one of the earlier cases in New York, St. John vs. Ameri- can Mutual Life Ins. Co., 2 Duer, 419, it was held that a mere record on the books of the company that a policy was for the benefit of the wife gave her the equitable title, and its delivery to her husband was simply as her trustee. In the case of the succession of Kichardsons, the Louisiana Supreme Court decided, 14 La. Ann. 1, that a transfer of the policy to the wife executed simultaneously with the application, had the same effect as if her name had been inserted as beneficiary. One other point emphasized in the case of Palmer vs. Merrill, supra, requires to be noticed. Great stress was there laid on the fact that no assignment could be regarded as valid unless it was of the entire fundf; that an assignment of a part only was at best but a draft or bill of exchange, which, until accepted, gave no equitable lien. This, however, be it observed, was spoken with .regard to the assignee's right of action, and his claims as against creditors of an insolvent. It does not always hold good where the contest is not with third parties, but with the assignor or his representatives. In Pomeroy vs. Manhattan Life Ins. Co., 40 111., 398, the wife, who by the statute of that State enjoyed the sole property in the policy, assigned a part interest to secure a debt of the husband, and subsequently undertook to deny the validity of her act. The company filed a bill of interpleader, thus making the suit of an equitable character, and it was held that in equity the assignment could be enforced against her. The court said : " While this is not such an instrument as can be assigned at the common law, or under our statutes, so as to pass the legal title to the instrument or the money, and while the assignment of a part of the money due on any instrument does not transfer the legal title, it is such an equitable assign- ment as will be protected and enforced in equity. The assign- ment of a portion of the money specified in this instrument was valid in equity." The New York Supreme Court in Reilly vs. Demestre, in 1878, declared that an order upon a particular fund amounts to an equitable assignment, upon notice to the drawee without acceptance, and the latter to retain the fund as a ASSIGNMENT OF PART. INTEREST. 31 special deposit. The Supreme Court of Pennsylvania, in the city of Philadelphia, appeal in 1878, declared partial assignments good in equity between individuals, while objecting to its appli- cation in the case of corporate securities, simply on account of the trouble that would be occasioned to the corporation. A special statute authorizes the assignee of a part interest in a life policy to sue in Pennsylvania. It will be observed, however, that in the case of Pomeroy, the principal obstacle in the way of such suits, viz., opposition on the part of the insurer to a split- ting up of the cause of action, was removed by the voluntary action of the company in making the contestants parties, and it would seem to follow that whatever the rights of the assignee of a part has against the company, he may have his remedy against the claimant of the fund. Another noticeable fact in this case is that though not so stated, the presumption is that the policy itself remained in the hands of the wife, but as between the two parties no importance was attached to this fact by the court. The doctrine that the assignee of a part interest may not sue in his own right is one of general recognition.* One of the most recent considerations of this subject was by the Supreme Court of Michigan in the case of Hartford Fire Ins. Co. vs. Davenport, in 1877. The loss under a fire policy was payable to the mort- gagees as their interest might appear. But it appeared that their interest was only partial, not including the whole property covered, and the court below had allowed them to sue, but lim- ited their recovery to their interest, thus excluding Headley, the insured, entirely. The court, on appeal, ruled that they had no right of action in the premises. It said : " There can be no split- ting up of causes of action on a single policy. The party insured retained, by the terms of the policy itself, interests beyond the control of the mortgagees. Their interests were several, and not joint. Under such circumstances it cannot be held that the mortgagees have any control of the policy which would authorize them to sue upon it. No doubt the company would be pro- f That an order for part does not amount to an equitable assignment, see also cases cited in Chitty on Contracts, 11 Amer. ed., p. 1365, foot note. The Supreme Court of Maine, in the case of Getchell vs. Maney, in 1879, ruled that an assignment of a chose in actum for part of the sum due is not a valid assign- ment unless the assignee assents, and there is nothing in the Maine statute to vary this rule. 32 ASSIGNMENT OF PART • INTEREST. tected in paying them their share as equitable appointees, but they cannot be treated as trustees for Headley's benefit. He and not they must be held the legal owner of the policy, which stands in his name and was made for his benefit. No case was cited, and we cannot conceive that any will be found which would justify us in holding the mortgagees, having only a par- tial interest under an appointment in a policy, authorized to assume its legal ownership. Whoever sues must be able to en- force the whole policy." s But a specific promise to pay the assignee on the part of the company, or its equivalent, will remove this disability, as was intimated by the court. h Such a promise operates as a new contract between the company and the assignee. Hence it is specially important that the consent of the insurer should be obtained to assignments of part interests. 'Thus, while it may be laid down as the general doctrine that the assignee of a part interest has no legal right of action, he has been allowed his remedy in equity. In Field vs. City of New York, 6 N. T., 179, it was held that assignments of parts of a demand to different persons, to secure payments to them of specific sums in succession are good, and will be enforced in equity. So in Caldwell vs. Hartruple & Co., 20 P. F. S., 74, an order for part of a fund was held to be a valid assignment. Caldwell was to receive money for use of Hartruple & Co., who were indebted to a firm of which Caldwell was a partner. Hart- ruple & Co. gave an order to Cuthbert for $1,500 out of proceeds of the last note coming to them, which, on presentation, Cald- well refused to accept, saying : " Hartruple & Co. owed them money, and he was going to apply it on their book account." At the time of the refusal Caldwell had in his hands only about $30, but afterwards received more than enough to pay the order. On the trial Caldwell's defense of set off was rejected as to the amount of the order, and allowed for the balance in his hands. These two cases were cited with approval by the Supreme Court of Pennsylvania in 1879, in the case of Euple vs. Bindley, where suit in the name of the assignor, and for his use, was brought by the assignee of an order, where the order covered g See also Bodle vs. Chenango Co. Mutual Ins. Co., 1. Const. (N. Y.), 53. n See Wood vs. Rutland Mutual Ins. Co., 31 Vt., 552. DOCTRINE SUMMED UP. 33 the whole indebtedness except a sum which, by original agree- ment between the debtor and the creditor, was to be paid to a third party. Eegarding this as virtually an assignment of the whole, however, the court added : " Whether such assignments (of a part) are valid in Pennsylvania need not now be said." In the case of Newcomb vs. Mutual Life Ins. Co., 9 Ins. Law Jour- nal, 124, the United States Circuit Court of Massachusetts, in 1879, ruled that a wife had at least a life interest in a policy assigned to her subject to the wife's policy statute, and that she might assign this partial interest. In conclusion, the American doctrine as to the essentials of an assignment may be summed up thus : Possession of the instru- ment is generally of prime importance. But such possession is only wimafoLVi evidence of title, which may be controverted. The lack of possession will not necessarily defeat the rights of an assignee, but it may put in controversy his title as against adverse claimants, and especially the creditors of insured. The weight that will be attached to the want of possession will de- pend on the circumstances. In that form of assignment where the assignee is made by the terms of the policy itself the benefi- ciary, possession is of minor importance ; according to the set- tled doctrine of the courts, the title is vested in the beneficiary by the execution and delivery of the policy, unless it should ap- pear that the intention of the contracting parties was otherwise, and the executed trust is generally irrevocable ; the party receiv- ing the policy holds it simply as a depositary for the benefici- ary . J The chief importance of possession in such case, is as evi- dence of the intention of the party effecting the insurance to complete the gift. Where a constructive possession can be fair- ly inferred, it will usually cure the defect arising from want of actual possession, and, in general, while the doctrine on this point is still unsettled, the courts are disposed to regard the equities of the case and the relations of the parties in determin- ing the sufficiency of an imperfect assignment. Bare possession will not give title. It must be accompanied by acts or writing sufficient to show the intention of the assignor and the greater j See on this subject beyond, under " Who may be an Assignee," and "Wife's policy." 34 THE ENGLISH DOOTlilME. the formality observed in this respect, the more unquestionable becomes the title of the assignee. The English doctrine, in its principles, is substantially in harmony with our own. There the common law prevails, and the assignment is of course more strictly treated as a purely equitable right. The bankrupt law of England too is more rigid in its exactions against the debtor, any property found in his possession being conclusively presumed to belong to him. Hence it would seem the English courts have laid a greater stress than our own on the formalities observed in connection with an alleged assignment. Special emphasis has there been laid on the actual delivery and possession of the instrument, and on the effect of notice and consent of the company. There, as here, the courts endeavor to ascertain and effectuate the intentions of the parties. Mere payment of premium gives no title, and mere possession, while not conclusive proof of title, nor essential to entitle to the money, k has been treated, where the delivery was for the purpose of assignment or security, as not only sufficient to protect the equitable rights of the assignee without any writ- ing, but as vesting in him a right superior to that of one claiming under a written assignment, or of the assignee in bankruptcy, but a voluntary assignment is void as to creditors. Such a deposit as security for a loan will cover subsequent advances. 1 Special importance too is attached to the effect of notice to the company, and an assignment accompanied by such notice has been held superior to any claim based on possession of the instrument. Thus in Chowne vs. Baylis, 31 Beav., 351, a letter written by the owner and shown to the company saying : " Please to take notice that I wish to transfer my interest in the policies," which was noted on their books, was a valid equitable assign- is Burridge vs. Row, 1 Y. & C. C. C, 183; Alwyn vs. Witty, 30 L. J. Ch., 860; Chapman vs. Chapman, 13 Beav., 308. 1 See as to Claim of Assignee in Bankruptcy and Creditors, in re Styan, 1 Hull. Ch., 105; Stokes vs. Cowan, 29 Beav., 637; Kyall vs. Rowles, 1 Ves. Sen., 348; Dearie vs. Hale, 3 Russ., 1, 24; Edwards vs. Martin, 1 L. R. Eq. Cas., 121. As to possession, Chapman vs. Chapman, 13 Beav., 308; ex parte /Kensington, 2 V. & B., 79 ; ex pari': Whitbread, 19 A r es., 209 ; ex parte Langston, 17 Ves., 227; Wells vs. Archer, 10 S. & E., 412; Maugham vs. Ridley, 8 L. T. N. S., 309; Moore vs. Wesley, 4E.&B., 243. THE ENGLISH DOCTBINE. 35 ment which would hold good against a subsequent assignee hav- ing possession of the instrument. But such notice must suffi- ciently indicate the fact of the assignment. A mere direction to the office to communicate with certain solicitors of the assignee, who afterwards paid the premiums, was held not to protect the policy against the assignee in bankruptcy in West vs. Eeid, 2 Hare, 249. In Neale vs. Molineaux, 2 C. & K., 672, the claim of an assignee who paid the premiums and gave notice to the com- pany was held superior to that of a subsequent assignee who had innocently advanced money on the policy, even though the first had never obtained possession of the instrument. The relation of the parties is considered in determining the sufficiency of the assignment. Thus in the case of Cook vs. Black, 1 Hare Ch., 390, m a deposit as security for a debt, with a letter agreeing to assign upon request, without notice, was held a valid assign- ment within the meaning of the policy clause, which stipulated that it should be valid to the extent of his interest in the hands of a bona fide assignee in case of suicide. And in Defaur vs. Life Ass. Co., 25 Beav., 599, in a similar case, mere deposit was sufficient without notice, and the term " legally assigned " in the policy was held to mean simply such an assignment as the courts would recognize in equity. In England, as here, the vital question has been, in case of voluntary transfer's of title, whether the gift is to be regarded as completed ; and it has been ruled, according to the circum- stances, that an assignment without notice, and without delivery of the policy, was good against all except the company accepting a surrender without notice, and also the contrary, 11 and a direc- tion to a trustee or a company to hold in trust, if assented to and acted on, is enough. In brief, the chief distinction observable between English and American decisions on the subject, is a greater relaxation on m See also Jones vs. Consol. Invest Ass. Co., 26 Beav., 256. « Fortescue vs. Barnett, 3 il. & K., 36; Edmunds vs. Jones, 1 My. & Cr., 226 ; Ward vs. Audland, 8 Beav., 201 ; Kekewich vs. Manning, 1 De G. Mac. & G., 176; Richardson vs. Richardson, 3L. R. Eq. Cas., 686. ° McFadden vs. Jankins, 1 Phil., 153. ; Magawley's Trust, 5 De G. & S., 1. 36 ENGLISH AND AMEKICAN DOCTEINES DISTINGUISHED. the part of the latter of the common law doctrine on the subject, and a stronger disposition to regard the policy as a quasi-nego- tiable instrument in view of its assignability. Hence, notice to the company, while importantin America as in England, as a protection to the assignee, is not regarded as so prominent a feature of the law of assignment here. CHAPTEE III. PORM AND NOTICE OF ASSIGNMENT. Form of Assignment Immaterial if Intention is Clear. — Power of Sale or Surrender. — Notice and Consent of Com- pany Important, — Consequences of Assignment when Prohib- ited. — Effect of Notice as to Creditors. — Form of Notice. That no particular form is needed to give validity and effect to an equitable assignment of a chose in action has been suffi- ciently shown in what has been said heretofore. The whole doctrine on this subject was summed up in a few words by the Supreme Court of Pennsylvania in 1879, in the case of Euple vs. Bindley, cited above. The court said : " The form is imma- terial, so that there be a clearly expressed intention of an immediate transfer of the right to the assignee. Where one was indebted to a number of persoDS, and remitted a sum of money to B., with orders to give specific parts to certain credi- tors, it was held that B. became a trustee for those creditors, and that they therefore acquired such an interest in the trust fund ' as could not be divested by an attachment against the debtor, though some of the creditors had no notice of the trust before the service of the attachment.* An order to the drawer's attorney to pay to W. the amount of a note on H., when col- lected, is an assignment of the fund, by the agreement of the parties, and cannot be revoked, even if the draft was not accepted by the drawee. b a Sharpless vs. Welch, 4 Dal., 279. b Nesmuth vs. Drum, 8 W. & S., 9. 38 FOEM OP ASSIGNMENT. So it was held by the English Court of Bankruptcy in 1878,° that an undertaking by a person " that he will pay over, when and as received, &c," is a good equitable assignment. So in the case of Young vs. North 111. Coal and Iron Co., the U. S. Circuit Court of Illinois, in 1880, held that drafts drawn for coal about to be delivered under contracts which were discounted by a bank, amounted to an equitable assignment to the latter of any amount due for coal delivered. In the case of Firemen's Ins. Co. vs. Hemingway, 8 Ins. Law Journal, 520, a company had assigned a stated deposit to another, on condition of the latter reinsuring certain classes of its policies. The assignment was made, " sub- ject to all the legal claims and demands on said fund binding thereon under the statutes of this State." This conditional fea- ture was made an objection to its validity, but the U. S. Circuit Court of Mississippi said : " Whilst a negotiable instrument must be unconditional, such is not necessary to transfer a claim of the kind under consideration^ The assignments are certainly good as equitable assignments. 4 In the case of Swift vs. Railway Pass. etc. Ass'n, in the Supreme Court of Illinois in 1880, 10 Ins. Law Journal, a party holding a policy in an association which entitled him to certain benefits in case of injury, and also to a certain sum at death on payment of all assessments against him, sent his wife a writing duly signed and dated, that being of sound mind and revoking all former life policies, by these presents he made his life policy read for her benefit in case of his death, and for her special benefit all that might be derived therefrom, and also wrote to her of his inabil- ity to pay his dues, and that " this makes the policy yours if you will keep it up," and she paid the assessments accordingly. It was held that this, in connection with the wife's policy .law, o Ex parte Brett. a The following general propositions are laid down in the 11th Amer. Ed. of Chitty on Contracts, p. 1365, and supported by copious American authori- ties with reference to the form of assignment : " No particular form is neces- sary, in equity, to constitute an assignment of a debt or chose in action. Any order, -writing, or act which makes an appropriation of a fund, amounts to an equitable assignment of that fund. An assignment of a debt may be by parol as well as by deed. And where the assignment has been executed by a delivery of the evidence of the contract, no writing is necessary to its validity. If the case is such that an actual delivery cannot be made, a symbolical delivery seems to be sufficient. POWER OF BALE OR SURRENDER. 39 amounted to an equitable assignment of the sum payable afc death, but not of the sum payable for personal injury. While the form of the writing it was admitted, seemed to indicate that the writer regarded one of the instruments as a will, the court held that the writer being illiterate, and his apparent intention, taking all the writings together, being to vest her with an imme- diate title, and not one to take effect only at his death, the writ- ing would be regarded as an assignment rather than a will. As already stated, a delivery of the instrument itself, with sufficient evidence of the assignee's intention, does away with the necessity of any formal writing (see case of Marcus vs. St. Louis Life Ins. Co. ante), and where the intention is simply to assign a partial interest, and the formal assignment has been properly endorsed and the company duly notified, it would seem that the retention of the instrument itself by the assignor ought not to affect the rights of the assignee. But, in practice, for pro- tection against adverse claims for the purpose of evidence, and to secure a speedy and certain remedy, it is prudent to observe all the formalities necessary to that end. Prominent among these is the power of sale or surrender, without which the assignment, when held merely as a pledge, is apt to be an unwieldy collateral in the hands of the holder, and its subsequent disposition, even under an absolute assignment, is liable to provoke legal strife, a matter which will be referred to more at length hereafter. The familiar practice of inserting a power of sale, or to receipt to the company in case of surrender, was adopted at an early date in Eng- land. Ellis, in his work on insurance, thus refers to the custom there more than fifty years ago : " In these assignments it is usual to stipulate that if the debt for which it is the security be not paid within the period named, it shall be lawful for the assignee, without the consent of the assignor, to sell the policy ; and a power is inserted to give a receipt for the purchase-money, and to exonerate the purchaser from any liability or responsibility, and out of the monies to satisfy any premiums paid by the assignee for the purpose of keeping the policy on foot, and all costs, and to apply the residue towards payment of the sum due, and to pay the surplus to the assignor. The assignor consti- tutes the assignee his attorney to bring actions and give receipts, and covenants to pay the premiums and to produce to the as- 40 NOTICE OF ASSIGNMENT. signee within a certain period receipts for the samej and that he will observe the terms and conditions of the policy ; that if the assignor do 'not pay the premiums the assignee may do so, and such sums shall stand charged on the policy ; that the assignor will not do certain acts whereby the policy would be vitiated or require a higher premium, and that he will not release the sum due on the policy." These formalities, though some are applicable only to assign- ments by way of security, or have been rendered unnecessary by the operation of law, suggest the dangers liable to flow from an imperfect assignment. The assignee has a right, without special stipulations, to recover premiums which he has paid, but he is not protected against acts of the assignor which forfeit the policy. The power of the assignor to release the sum due is not the same here as in England, where a notice to the company has been allowed to override every prior claim. But the impor- tance of such a notice demands its consideration. As a measure of safety every assignment should be duly notified to the company, and its consent thereto obtained, whether required by the policy or not. Where the latter is made payable to the assigns, this of itself is an agreement on the part of the company to pay the assignee, and it would seem does away with the necessity of notice even when required by the policy. 6 Such was the decision in the case of Mutual Pro- tection Ins. Co. vs. Hamilton, 5 Sneed, 269, where at the bottom of the instrument were these words : " N. B. If assigned, notice to be given the company " The court said the only reason for such notice would be to secure the company against the hazard of loss from paying the policy a second time to the assignee. Whether a promise to pay the assigns would override a policy stipulation that such assignment should be void, or work a forfeiture of the contract, seems never to have been decided. The courts would, presumably, in such a case, seek to give effect to the whole contract and the intention of the parties on the familiar principles applicable to such cases. On the one hand for- feitures and contracts are to be strictly construed against the insurer and written parts are entitled to greater force than printed stipulations, while the same necessity for requiring notice cannot be supposed to exist as in the case of fire policies, where the personal character of the insured is one of the most important elements of the risk. On the other hand, such clause may be regarded as a special limitation of the contract with respect to assigns. The circumstances of the case, too, would probably be taken into consideration. EFFECT OF MERE PROHIBITION. 41 What might have been the consequence to the assignee if the money had been paid to the personal representative, or if it had been attached by the creditors before the knowledge of the assignment on the part of the company, we need not stop to consider, as neither of these things occurred in the present case. And as the company sustained no possible injury for want of such notice, the omission cannot be set up as a defense against the right of the assignee to recover the money." In New York Life Ins. Co. vs. Flack, 3 Md., 341, the contract was with the insured and his assigns, as in the case last cited, but was payable to his legal representatives, and contained the same notice at the bottom. The court said : " Taking into con- sideration the whole instrument, our opinion is that the provi- sion to pay to the legal representatives was designed to apply only to a case where the assured died without having previously assigned the policy, and not to be construed as in any sense limiting the power of the party insured to assign. The nota bene at the close of the policy was evidently inserted for the protec- tion of the company. Knowledge of the assignment could only be important to it in one view : to prevent the possibility of its being compelled to pay both the assignee and the legal repre- sentatives of the insured." In this case notice had been given after the death of the insured, though within two days of the assignment, and this was deemed sufficient. Indeed, where the assignment is simply prohibited without consent, but no penalty is attached", a violation of the prohibition does not affect the validity of the policy or of the assignment. The familiar doc- trine controls which is so often applied to the violation of such stipulations in the fire policy. In the absence of any material increase in the risk the contract is not affected, and since no such increase can be presumed from the assignment of a life policy, a mere empty prohibition will not invalidate it. But if a distinct penalty is prescribed, the violation, like the violation of an ordinary warranty, becomes material by the express agree- ment of the parties, and an assignment without consent .will be void, or will forfeit the whole policy if it be so stipulated. The law on this subject was laid down by the New York Court of Appeals in the case of Marcus vs. St. Louis MutuaJ Life Ins. Co., in 1877, 6 Ins. Law Journal, 186. The court said : " If the 42 BEAL CONSEQUENCE OF VIOLATION. contract of insurance prohibits such assignment during the continuance of the risk, or unless the company consent, and declares that an assignment of the policy in violation of the contract shall make the policy void, an assignment made with- out such consent would avoid the policy at the election of the insurer. The policy in question in this case declares that the policy can be assigned only upon the written approval of the company, but the insured may^ if the policy is not assigned, at any time change the beneficiaries, or surrender the policy to the company. It does not declare that a violation of the provision in respect to an assignment shall avoid the policy, although such a declaration is made in prior clauses in this policy, in respect to certain other acts or omissions on the part of the assured. The policy permits the assured, without the consent of the com- pany, to change the beneficiary at his option. What the object was of requiring the consent of the company to an assignment is not very apparent ; but, at all events, an assignment without such consent would be simply a violation of the contract not in- volving a forfeiture of the policy. The assignee would be enti- tled to enforce the contract of insurance, although the company had not consented to the assignment, subject to any defenses which might have been interposed, if no assignment! had been made." The concluding sentence indicates the real consequence of such a violation. The assignee loses the advantage of whatever benefit he might have derived from complying with the policy. This was illustrated in the case of Stevens vs. Warren, 101 Mass., 564, where the policy stipulated that an assignment without consent should be void, and it was claimed that the as- signee had no valid interest which would support the policy. The Court said : " When the contract between the assured and the insurer is expressed to be for the benefit of another, or is made payable to another than the representatives of the assured, it may be sustained accordingly. Gen. Sts., c. 58, § 62 ; Camp- bell vs. N. E. Ins. Co., iJ8 Mass., 881. The same would probably be held in case of an assignment with the assent of the insurers. But if the assignee has no interest in the life of the subject of insurance .which would sustain a policy to himself, the assign- ment would take effect only as a designation, by mutual agree- NOTICE AS AGAINST THIRD PARTIES. 43 ment of the contracting parties, of the person who should be entitled to receive the proceeds, when due, instead of the per- sonal representatives of the .assured." In other words, the court intimates that an assignment consented to by the company might have cured the defect arising from want of interest. On the other hand, in the case of Piedmont and Arlington Life Ins. Co. vs. McLean, 9 Ins. Law Journal, 26 1 , the Supreme Court of Virginia decided, in 1879, that where the company had consented to the assignment, the address of the assignee on the indorsement was sufficient legal notice of his address, and enti- tled him to the same notification as to premiums comin» due to which the original party'was entitled, and his failure to remit through neglect of such notice would work no forfeiture. But if notice is important as between the company and the assignee, it is much more so as a protection of the assignee against third parties. A brief examination of the legal status of the parties to an assignment will miike this matter clearer. Un- less the company expressly contracts with the assignee, or stipu- lates to pay him, it has no concern with the latter until notified of the assignment. It has the same right to continue to deal with the original party that any ordinary debtor has to deal with his creditor. Its rights and interest are in no way affected, and it is not bound to inquire whether an assignment has been made. It will be protected in dealing with the original party or his rep- resentatives just as if the policy had not been assigned, and on payment of the debt to them will be discharged ; such is the general doctrine in this country as to all choses in action, which are not negotiable.' But after the debtor has been notified, the status of the parties is changed. If he deals with the assignor, he does so at his peril. An equitable obligation in favor of the assignee is now devolved on him, and if the assignment is valid, the debt is no longer in the disposition of the assignor or of bis assignees in bankruptcy. 8 No subsequent acts of the assignor or dealings with him will affect the assignee. t Loomis vs. Loomis, 26 Vt., 198 ; Comatock vs. Farnuiu, 2 Mass., 95 ; Jones vs. Witter, 13 Mass., 304; ParkhuTSt vs. Dickerson, 21 Pick., 310; Mowry vs. Todd, 12 Mass., 281. S Mowry vs. Todd, 12 Mass., 281; Parkhurst vs. Dickerson, 21 Pick., 310^ Lees vs. Whiteley, L. R. Eq;., 143; Bartlett vs. Pierson, 29 Me., 9; Jenkins vs. 44 THE ENGLISH DOCTRINE. In England, where most of the decisions usually cited as to notice have been rendered, the issue has generally been be- tween the assignee and creditors of bankrupt assignors. As already stated, the bankrupt laws in that country are very rigid against the debtor. All property subject to his disposition and control belongs to his creditors. Hence when a policy has been assigned without notice to the company, the English courts have argued that, as the assignor might still have dealt with the com- pany, the policy was within his control, and therefore belonged to his assignee in bankruptcy. In a leading case, that of Wil- liams vs. Thorpe, the actuary of the company testified that the regulations of the society did not require notice, that it was not customary, and that no attention was paid to such notices when given. Nevertheless, the court held that no assignment would protect the policy against creditors without notice. If the society had paid the assignor, it could not have been compelled to pay a second time to tbe assignee. "If this society does not take no- tice of assignments, it takes all the risk of such conduct upon itself." This decision has since been followed there in other cases, and the doctrine has been applied to subsequent assign- ments, those being allowed a preference where notice has been given. 11 In America, however, ( these principles have been essentially modified, and, as observed, greater weight has been attached by the courts to the quasi-negotiable feature of the chases in action. The rules by which American courts are now generally governed in pronouncing on the character of assignments as being fraudu- Brewster, 14 Mass., 294; Duneklee vs. Mill Co., 23 N. H., 245; Laughlin vs. Fairbanks, 8 Mo., 367; Cuuimings vs. Fullman, 13 Vt., 434; Bishop vs. Hol- comb, 10 Conn., 444. But, of course, this does not apply to such acts of the assignor who may be the life-insured as are in violation of the policy. Here the rule applies that the assignee takes subject to equities in the hands of the assignor. li Ex parte Colville and Geddes, 1 Mont., 110; Byall vs. Bowles, 1 Ves., 367; Ex park Osborne re Baker, 1 Glyn & James, 207; Loveredge vs. Cooper, 3 Buss., 10. But Ellis, referring to these decisions shortly after, says, that they gave much dissatisfaction to the mercantile world, this species of security be- ing frequently resorted to, and the parties assigning not being desirous of hav- ing their credit affected by giving publicity to the fact. He argues that, as nothing could be collected on the policy until due, there is no natural reason requiring notice. THE AMERICAN RULE. 45 lent and void against creditors, are founded on re-enactments of the celebrated statute of 13 Elk., in various forms, by the differ- ent States, and entitled statutes " against fraudulent convey- ances." J Where the assign ment has actually been made in fraud of creditors, neither in England nor here will notice avail to place the policy beyond their reach ; the rule applies that the as- signee takes subject to any equities against the assignor. In this country the rule seems to be that, in the absence of any require- ment as to notice, a first assignment without has preference over a subsequent assignment with notice ; k and when the as- signment has been made in good faith, but without notice, the creditors cannot avoid or defeat it under the trustee or other similar process ; 1 but the doctrine is not uniform on this subject. In the case of Mutual Protection Ins. Co. vs. Hamilton, 5 Sneed, 269, the court declared that notice is not necessary in the case of a life policy as in that of a fire policy, as between the in- sured and the assignee, to complete the right of the latter to re- cover from the former. After referring to ths English doctrine concerning the necessity of notice, which it added, depended upon the effect of the bankrupt law in that country, and had little application to the present case, the court said : " We have also been referred to the doctrine applicable to the assignment of equitable rights and choses in action, as recognized by this court in Clodfelter vs. Cox, 1 Sneed, 330, 339, according to which, in a contest between different assignees of the same equitable property, he will be preferred who has given first no- tice of his assignment to the debtor. And, consequently, a sec- ond assignee of a chose in action, or incumbrance upon equitable property, without notice of the prior assignment or incumbrance, by giving notice to the debtor or trustees of the property, will secure a preference over a prior assignee who has not given such J Burrill on Assignments, p. 396. ktfuervs. Schenck, 3 Hill, 228; Story on Cont., 11 Amer. Ed., p. 1387, foot note. l Littlefield vs. Smith, 17 Me., 327 ; Brown vs. Me. Bk., 11 Mass., 158 ; Spring vs. So. Car. Ins. Co., 8 Wheat., 268. But in Connecticut the assignment takes effect against creditors and subsequent purchasers only from time of notice, following the English doctrine. Warren vs. Copelin, 4 Met., 594; Vanbuskirk vs. Ins. Co., 14 Conn., 141. See also Succession of Eisley, 11 KoK, La. 298. 46 CONSENT Wi THE COMPANY. notice, the title of the latter being incomplete for want of such notice. See also Story's Eq., §§421, 426, note 2. But this doc- trine applies to the doctrine of equitable interests, and conse- quently has no bearing upon assignments of negotiable instru- ments, or of instruments which, though not negotiable by the law merchant, are made assignable by law, so as to pass the le- gal interest, and entitle the assignee to sue in his own name." In fine, notice, while not generally regarded here as of the same high legal import as in England, is obviously exceedingly impor- tant in all cases as a protection to the assignee. In Hall vs. JDorchester Mut. Ins. ,Co., Ill Mass., 53, the insured, under a fire policy payable to mortgagee, after the loss, executed and delivered an order upon the company in favor of another party for the balance, of which the company had notice. Neverthe- less, it paid the amount to the insured on his representations that the order was of no moment. It was held that the assign- ment was valid, and payment was no defense to a recovery by the assignee. An actual consent to the assignment by the company is not necessary unless expressly so stipulated. The debtor cannot re- fuse to recognize the claim of a valid assignee in the absence of an express stipulation to the contrary.™ The form of notice is immaterial ; it may be verbal or written ; the one essen- tial feature being that the fact of the transfer itself shall be brought to the attention of the company. Indeed, the general doctrine on this subject is that knowledge of an assignment on the part of a debtor, however acquired, affects him with the trust, and if the circumstances are such as ought to induce a reason- able belief in his mind, no specific notice whatever is re- quired. 11 Hence it would be unsafe for a company having good reason to believe a policy has been validly assigned, to deal with the assignor because it had not been formally notified. But the n> Bell vs. Loud & N. W., R. Co., 15 Beav., 548; Spring vs. So. Car. Ins Co., supra ; McGowan vs. Smith, 269 L. J., ch. 8; Belcher vs. Campbell, 8 Q. B., 1, 11. n Mx parte Stright, 2 Dea. &.Chit., 314 ; North Brit. Ins. Co. vs. Hallett, 7 Jur., N. S., 1263 ; Gale vs. Lewis, 9 Q. B., 742 ; Smith vs. Smith, 2 C. &. M., .231 ; Meux vs. Bell, 1 Hare, 73 ; Edwards vs. Scott, 1 M & Q., 962 ; Anderson vs. Van Allen, 12 John., 343; Hackett vs. Martin, 8 Greenl., 77; U. S. vs. Sturges, 1 Paine, 525. LIFE AND FIRE POLICIES DISTINGUISHED. 47 notice must be such as will bring the fact clearly before the com- pany. It is enough if an agent authorized to accept such notiees be informed, although he neglects to notify the company, unless he has an interest in the policy adverse to the company ; ° but a mere casual mention to a clerk or officer not calculated to spe- cifically call attention to the fact is not. p If the company demand proof of the assignment, it is entitled to evidence, but such proof is not required when not requested ; a bare an- nouncement is sufficient. 11 In conclusion, it may be remarked that the doctrine on this subject is very different, both in the case of life and, marine poli- cies, from that of the fife policy. In the latter the personal ele- ment of the contract renders notice and consent, in case of transfer, a matter of prime importance, and hence the assign- ment is generally invalid without them. In the former the power of transfer enhances the value of the contract, and usually im- poses no additional risk beyond the danger of paying to wrong parties. o Gale vs. Lewis, supra ; Brown vs. Savage, 4 Drew, 1020. p Edwards vs. Scott, 2 Scott N. K., 266; Edwards vs. Martin, 1 L. E., Eq. Cas., 122. ' q Bean vs. Simpson, 16 Me., 49 ; Davenport vs. Woodbridge, 8 Greenl., 17 ; Johnson vs. Bloodgood, 1 John., eh. 51. CHAPTER IV. WHAT INTEREST PASSES BY ASSIGNMENT. When an Absolute Sale.— When a Mortgage or Conditional Sale.— When a Pledge.— Right of Redemption.— What is Requisite to Complete the Title. The general rule observed in determining the construction to be placed on an assignment is, as already observed, the intention of the parties, as indicated by all the facts. Burrill, in his trea- tise on Assignments, p. 374, uses the following language : " The general rule applied by the courts to the construction of assign- ments is that well-known one expressed by the maxim, Ui res magis valmt quampereat." Such a construction will be given to the assignment as will carry into effect the intention of the par- ties. The deed is to be construed by the res gestce; and thus courts are permitted to look at the circumstances and motives which led to its execution, and the object to be accomplished. Under the maxim above cited, the courts have upheld assign- ments void in part (as containing a trust prohibited by statute), if otherwise va!id. a Assignments of a chose in action may be divided into three different classes : first, an absolute sale, in which the title and interest wholly pass to the asignee ; second, a mortgage, or con- ditional sale, in which only a qualified title passes, and the as- signor is not divested of all interest ; third, a pledge in which the title still remains in the hands of the assignor, and the assignee a Citiiig Darling vs. Rogers, 22 Wend., 483 ; Coverdale vs. Wilder, 17 Pick., 181 ; Bellamy vs. Bellamy's Adm., 6 Flor., 6. RIGHTS OF PARTIES. 49 takes only a limited interest. Whether the assignment belongs to the one or other of these classes must be determined by the rules laid down above. A better conception of the effect of these distinctions will be obtained by considering their applica- tion to personal property generally. In the case of the mort- gage, if the condition is not performed by the mortgagor, the title of the mortgagee becomes absolute at law, though regulat- ing statutes in the various States usually fix a time within which it may be redeemed, or, in the absence of such statutes, equity will sometimes interfere to secure a redemption. Mortgages of chattels, however, under special statutes, are good only between the parties and those having notice, unless properly recorded. In the case 6i a conditional sale, the seller usually stipulates that he shall remain the owner until the condition is fulfilled, and no record of the contract is required to give it validity. The purchaser has a right to tbe use of the thing sold, but the own- ership remains with the seller, and can be maintained even against innocent third panies who purchase without notice. A pledge is simply a delivery of the property in trust for the pur- pose of security until the condition is performed. Ordinarily the legal title does not pass with the pledge, but if the pledgor has a right to the return of the property at any time on fulfill- ment of the condition, the fact that legal title has passed is not inconsistent with a pledge. The rights of the parties in case of a pledge are determined by the law of bailments, the leading principles of which may be stated as follows : The pledgee is bound to use ordinary care for its preservation, but is not re- sponsible in case the pledge is lost without fault. The pledgor is still liable for the debt. The pledge must be delivered up on fulfillment of condition, or the pledgee will be liable to damages in case of failure, and, in case of loss of the pledge, the burden of proof is on him to show an absence of fault. The possession of the pledge merely secures payment ; it does not pay the debt. Further action is necessary to that end. It cannot be held to se- cure obligations other than those for which it has been pledged, but it will cover interest on the debt and expenses. When no time is fixed, the condition must be fulfilled on demand, but a failure tb so fulfill does not vest the title of the pledge in the pledgee. The latter may have his remedy against the debtor, SO POWER OF SALE. regardless of the pledge, or may proceed to realize on -the latter. To this end, after demand for payment and due notice to the debtor, he may usually proceed to a summary sale of the pledge. But the sale must be to third parties, and for a fair considera- tion. The pledgee is not allowed to be himself the purchaser, and equity will interpose to protect the pledgor against an unlaw- ful appropriation. Any surplus above the debt is held in trust for the pledgor by the pledgee. The application of these general principles to the assignment of life policies was most thoroughly considered by the Maryland Court of Appeals in 1877, in, the case of Dougan, adm'x, vs Mut. Benefit Life Ins. Co., 7 Ins. Law Journal, 171, and also in a prior decision of the case by th,e same court in 1878i 3 Ins. Law Journal, 106. The policy was on the life of one Dougan, and payable to his wife or assigns. Dougan and his wife executed a written assignment, absolute in form, witnessed and under seal, to one Webb, an agent of the company, who, at the same time, delivered a receipt to the assignors, reciting that the assignment was " as security for the prompt payment at maturity of their note at four months from date ; said assignment to be null and void upon the payment of said note at its maturity ; otherwise to continue for sole benefit of W. P. Webb." The company was notified of the assignment, but not of the receipt, and gave consent as required by the policy. The note had been given the agent for the premium, but was never paid, and the policy was afterwards surrendered to the company by the agent. Prior to the surrender there was considerable correspondence between the insured and the president of the company as to the terms demanded by Webb for a re-transfer of the policy, which were largely in excess of the amount due on the note. The insured, holding that the assignment was in the nature of a pledge, the ; title still remaining in the insured, and that the company had no right to accept a surrender under the circumstances, brought suit against the latter for damages for illegal conversion in an action for trover. The company, on the other hand, contended that the assignment and receipt either constituted a conditional sale, which became absolute on failure to pay the note, or a mortgage, and that, in either event, there was no legal title in .the insured to support an action of trover. The legal result of MORTGAGE AND PLEDGE DISTINGUISHED. 51 either position was admitted to be correct ; the only question was as to the real character of the transaction. The court said : " The difference between a pledge and a mortgage of goods, or choses in action, is said to be marked and easily understood, but it is sometimes in practice very difficult to determine whether a particular contract is the one or the other. The general distinc- tion is that in a mortgage the title is conveyed with a condition of defeasance ; that is to say, a condition rendering the convey- ance void on the payment of a certain sum of money on or be- fore a day agreed upon ; while in a pledge the goods bailed are deposited as a collateral security, and only a special property is transferred to the bailee, the general property in the meanwhile remaining with the bailor. The difference has also been well stated thus : " A mortgage is a pledge, and more, for it is an ab- solute pledge to become an absolute interest, if not redeemed at a certain time. A pledge is a deposit of personal effects, not to be taken back, but on payment of a certain sum, by express stipulations, or the course of trade, to be a lien upon them." With respect to goods and chattels, it is in most cases very easy to apply the distinction, but with respect to choses in action, which cannot be otherwise delivered, the fact that title passes does not necessarily create a mortgage. To constitute a mort- gage, the title must be conveyed, but it is not in all cases a mort- gage because the title is conveyed. Thus a transfer of stock may be absolute ; but still, if its object and character are quali- fied and explained by a contemporaneous paper which forms a part of the contract, and declares it to be a deposit of the stock as collateral security for the payment of a loan, and there is nothing in the contract to work a forfeiture of the right to re- deem or otherwise defeat it, except by a lawful sale under the power expressly conferred in the agreement, the transaction will be regarded as a pledge." b Applying these tests, and consider- ing the formal and technical character of the language employed, the absolute time of the transfer, the defeasance clause, and the absence of any declaration that the deposit was simply as security, or of any expressed power of sale, the court decided b Citing 2 Story's Eq., sec. 1030; Story on Bailments, sees. 287, 345, 346; 2 Kent's Com., 581 ; Edwards on Bailments, 201, 251, 252, 253; 1 Parsons on -Cont., 113, 115 ; Bateman on Com. Law, sees. 674, 681. 52 MORTGAGE AND PLEDGE DISTINGUISHED. that the transaction was a mortgage and not a pledge. It was further said : " If the subject-matter of the contract be consid- ered, it leads to the same conclusion. Continuing policies, if they have any, have not the same easily ascertained market value as personal chattels, or shares of stock in banks and other cor- porations. They are not ordinary articles of sale in the market overt, or at the stock boards. The power of sale incident to a pledge could not be readily exercised, if at all, in case of de- fault, and hence no one would be inclined to accept them as se- curities for loans and advances, with no more interest or title in or control over them than that which the law of bailments con- fers. The assignee of such an instrument must, in order to keep it alive as a contract against tbe company, pay the accruing pre- miums, and run the risk of other conditions upon which it may become null and void. The company may stand upon their con- tract, and refuse assent to an assignment, or to pay anything for its surrender, relying upon the expectation, or contingency in a particular case, of greater profits resulting from the duration of the life insured and annual premiums payable thereon." Nor was there anything in the conduct of the parties, in the judg- ment of the court, to lead to a different conclusion. Notice of the terms of the receipt, it was said, was not necessary, and a • doubt was intimated whether even the notice and assent to as- signment were needed. The result was that it was decided an action of trover against the company would not lie. • In accordance with these views, another suit in equity was begun against the company, on the theory that the transaction having been a mortgage, there was no such foreclosure as to preclude the right of redemption, and that the plaintiff was enti- tled not only to redeem, but to recover the full amount of the policy less the amount due on the note and for unpaid premi- ums to the time of the death of the insured. In passing upon the issue as thus presented, the court said : " Any agreement in the assignment or in the separate instrument, showing that the parties intended the assignment to operate as a security for the repayment of money, is all that is necessary to make it a mort- gage, and such an agreement is plainly apparent on the face of the defeasance before recited, and when it is once ascertained that the assignment is to be considered and treated as a mort- EIGHT OF REDEMPTION. 53 gage, then all the consequences appertaining in equity to a mortgage must be strictly observed, and the right of redemption is regarded as an inseparable incident (Jaques vs. Weeks, 7 Wall., 261), and, as a general proposition, an agreement at the time of the loan, to purchase and take the estate at a given price, in case of default, is not permitted to interfere with the right of redemption ; the court looking at the contract, which is but a security for the debt, treats the time mentioned for re- demption as only a formal part of the instrument, and thus makes the general intention override the words of the particular stipulation. Hipnell vs. Knight, 1 Y. & Coll. Ex. Cas., 415, 416. Indeed, it may be stated as a rule, never to be transgressed, that a mortgagor cannot, by any contract entered into with the mort- gagee at the time of the mortgage, give up his right of redemp- tion, or fetter it in any manner, by confining it to a particular time, or to a particular description of persons. This proposi- tion is abundantly supported by decided cases, which are col- lected in the notes to the leading case of Howard vs. Harris, 3 Eq. L. Cas., 605, 506, and 625-6-7. It is clear, therefore, that, notwithstanding the express terms of the defeasance, that in de- fault of the payment of the note at maturity, the policy was to continue, for the sole use of the mortgagee, the right of re- demption was not thereby defeated after the day' of payment.. Policies of insurance on life, as well as stock and personal annu- ities, are not only assignable, but proper subjects of mortgage, and if accompanied by an actual transfer, the mortgagee may, after default and due notice to the mortgagor to redeem, proceed to sell, without the trouble and delay of bringing a bill to fore- close, and in such case the title, if the sale be bona fide made, will vest absolutely in the vendee. But the court ruled that, in case of such assignment, no obli- gation rests on the assignee to pay the premiums, and keep the policy alive, though such payment on his part does not alter the relations of the parties nor the right of redemption. As in this case, the assignor had failed to tender the premiums needed to keep the policy in force after its surrender, therefore the claim to redeem and enforce the policy as if in force at the time of c Citing Dyson vs. Morris, 1 Hare, 413, 435 ; Tucker vs. Wilson, 1 P. Wm's, 261 ; Hart vs. Ten Eyck, 2 John., ch. Dec. 100 ; 2 Stor. Eq. Jur., sec. 1031. 54 POWER OF SALE. the death of insured could not be supported. The company could not be made to bear the risk without consideration." 1 But there was an equity to which the court decided the plaintiff was entitled. " Webb, holding the policy as mortgagee, held it sub- ject to the right of redemption, provided it was exercised within a reasonable time. He could only sell the policy alter giving due notice to the assured to redeem ; and while we think it was perfectly competent for him to surrender the policy to the com- pany either for its reserve or equitable value, as an advantageous mode of sale and foreclosure, yet it was necessary that notice should have been given to redeem before the surrender took place ; and the party purchasing, or the company accepting the surrender, without such notice, would only acquire the interest of the mortgagee, and hold subject to the right of redemption, as the mortgagee held before the sale or surrender." The court accordingly decreed that, as no notice had been' given in this case, the surrender must be treated as made on the joint account of the assignee and assignor, and the latter was entitled to re- cover of the company any excess of value above the amount to \»hich the assignee was entitled as mortgagee. The law on this subject may, therefore, be briefly summed up as follows : Where the policy is held simply as a pledge, the holder, in order to realize upon it, must, after due notice to the pledgor to redeem, sell iu open market for a fair value, having himself no right to be interested in the purchase ; where it is held as a mortgage, he may, after due notice to redeem, sell or surrender, and may become himself the purchaser. It therefore becomes important that the company accepting a surrender from the assignee should be thoroughly protected against subse- quent claims of the assignor, either by due notification or con- sent of the latter, with authority to the assignee to receipt for the values. Another very instructive case on this subject was that of Matthews vs. Sheehan, decided by the New York Court of Ap- peals in 18"i7, 7 Ins. Law Journal, 36. An arrangement was made between one O'Keefe and one Sheehan, under which a Citing Want vs. Blunt, 12 East., 183; Simpson vs. Ac. Death Ins. Co., 2 C. B. (U. S.), 257; Pritchard vs. Merch. and T. Hut Life Ins. Soc, 3 C. B. (U. S.), 662. SALE AND BE-SALE. 55 O'Keefe procured a policy on his life, and assigned it to Shee- han, the latter to pay the premiums, and have the benefit of the policy, with the understanding that, if the former desired at any time, he might redeem the policy by repaying the premiums ad- vanced, with interest. A subsequent tender of the premiums by the assignor was refused, and upon his death the assignee col- lected the whole amount from the company, and suit was brought against him by the administratrix of the assignor to re- cover the excess above premiums paid, with interest. On the one hand, it was contended that the transaction was an absolute sale and conditional re-sale, which latter could not be enforced in the absence of writing. ' On the other hand, it was insisted that it was simply a mortgage, in which the right of redemption remained. The court said : " While O'Keefe was not bound to redeem, or personally liable for the money advanced by the de- fendant, there was sufficient consideration for the arrangement made. O'Keefe submitted to examination, procured his life to be insured, and assigned the policy to the defendant in consid- eration that the defendant would pay the premiumsj and give him the option to redeem. The substance and legal effect of the transaction was to make the defendant a mortgagee of the policy to secure him for the premiums paid, and he could not claim an absolute title thereto except upon O'Keefe's failure to exercise his option to redeem. This was not simply an agreement by the defendant to sell to O'Keefe upon payment by him of the amount of the premiums advanced, with interest, a policy abso- lutely belonging to the defendant, an agreement void under the statute of frauds, because there was no writing or part payment. It was an agreement that the defendant might take and hold the policy as security, and the right to redeem attended the policy into the defendant's hands, and at all times affected his title. Such an agreement may be shown by parol, although the as- signment be absolute in form.® It matters not that O'Keefe did not absolutely promise to pay the amount which defendant should advance for the premiums. To constitute a valid mort- gage, it is not essential that the mortgagee should have any other e Citing Hodges vs. T. M. & T. F. Ins. Co., 8. N. Y., 416; Despard vs. Walbridge, 15 N. Y., 374 ; Horn vs. Keteltas, 46 N. Y., 605 ; Hope vs. Bolen, 58 N. Y., 380. 56 MORTGAGE AND ABSOLUTE SALE DISTINGUISHED. remedy but that upon his mortgage. * * It is sometimes dif- ficult to determine whether a transaction constituted a mortgage or an absolute sale and conditional re-sale ; and whether it shall be construed to be one or the other depends upon the intention of the parties as evidenced by the instrument executed, and all the circumstances of the case. No general rule upon the sub- ject can be laid down which will govern all cases, although it is said that the fact that there was no debt which could be person- ally enforced is a strong, but not an absolutely, controlling circum- stance, that the transaction was not a mortgage, but a sale and a conditional re-sale. In all doubtful cases a contract will be construed to be a mortgage rather than a conditional sale, be- cause, in the case of a mortgage, the mortgagor, although he has not strictly complied with the terms of the mortgage, still has his right of redemption ; while, in the case of a conditional sale without strict compliance, the rights of the conditional pur- chaser are forfeited. 1 " It was accordingly decided that, as the absence of personal obligation to pay the premiums was not de- cisive, and there was nothing said about a re-purchase or re-sale, or re- assignment, but the right to redeem was expressly stipulated, in order to preserve the intention of the parties, the transaction would be treated as a mortgage, and further, that, if it were re- garded as a pledge, the same reasoning would apply. In How vs. Union Mut. Life Ins. Co., decided by the New York Court of Appeals in 1880 (9 Ins. Law Journal, 177), the policy had been assigned subject to all its conditions, with the assent of the company. A cash note which was not due at the time of assignment, and of which the assignee had no knowl- edge, remained unpaid, and thereby worked a forfeiture. It was held that the assignee merely occupied, the place of the assignor, and that the company was under no obligations to notify her of the existence of the note ; she had no right to rely on a recital in the policy acknowledging a receipt of premium. f The Court, on this point, cites and discusses, at considerable length, the cases of Longuet vs. Scawen, 1 Ves., sec. 402 ; Glover vs. Payne, 19 Wend., 518 ; Conway's Exis. vs. Alexander, 7 Cranch, 218 ; Edington vs. Harper, 3 J. J., Marshall, 354 : Floyer vs. Lavington, 1 P. Win's, 278; Chapman's Ad- ministratrix vs. Turner, 1 Call's K. , 280; Wharf vs. Howell, 5 Bimiey, 499; Brown vs. Dewey, 1 Sandy, Chy. E. 56, 2 Barb., 28 ; Holmes vs. Grant, 8 Paige, 243 ; Flagg vs. Mann, 14 Pick, 467. EFFECT OF NON-NEGOTIABILITY. 57 The Philadelphia Common Pleas, in Filon vs. Knowles, in 1875, held that an absolute assignment, with power of sale, in the most solemn form, with an executed notice of the assign- ment by the assignor to the company, in the face of a separate instrument by assignee agreeing to resell on certain conditions, was but a mortgage. 8 In Page vs. Burnstine, decided by the Supreme Court of the District of Columbia, in 1877, the former assigned to the latter an interest in a policy on his life as security for loans, and after- wards, being unable to pay the premiums, made an absolute as- signment to Burnstine, who thereafter paid the premiums, and was treated by the company's agent as the owner. It was held in a suit instituted after the death of the insured, that, under such circumstances, a court of equity would not treat the assign- ment as a mere security for the money advanced as a considera- tion for the transfer. The effect of non-negotiability upon the rights of the assignee was forcibly illustrated in the case of Charter Oak Life Ins. Co. vs. Smith, decided by the Cincinnati (Ohio) Superior Court in 1«76, 7 Ins. Law Journal, 718. The policy on the life of M. was prepared, and upon it was indorsed an assignment to P., and a receipt for an all-cash premium was given with the policy to the broker who placed the insurance, with instructions to de- liver only on receipt of the money. The broker disobeyed, and delivered the instrument to F., who in- turn sold the policy to S., a purchaser in. good faith, and without knowledge of the defect. The insured shortly died, and S. brought suit to recover. But the court decided that the policy, assignment, and receipt were simply muniments of title as between the company and insured, not representations to third parties. S. was -negligent in pur- chasing a non-negotiable security without inquiry, and could not recover. In Wheeler vs. Pereless, it was declared by the ir upreme Court of Wisconsin in 1877, that where a policy assigned simply by way of security for a loan, was wrongfully surrendered to the e 2 Weekly Notes. See also Spering's Appeal, 10 P. F. Smith, 199 ; Reitz's Appeal, 14 do., 165 ; Harper's Appeal, 11 do., 315. 58 EVIDENCE OF EELEASE. company, the assignor was entitled to damages in a suit against the assignee for conversion. In McKenty vs. Universal Life Insurance Company (3 Ins. Law Journal, 385), before the U. S. Circuit Court of Minnesota in 1873, a creditor effected insurance on the life of his debtor, and upon the death of the latter accepted from the company an amount equal to the debt, but less than the face of the policy, and thereupon surrendered the latter and executed a receipt for the money, and " in full for all claims under the within policy." Afterwards he executed an assignment of all his interest in the policy to the administratrix of the debtor, subject to the pay- ment already made by the company and receipted for. The ad- ministratrix thereupon sought to recover the balance from the company, on the ground that the creditor was but the trustee of the debtor for the excess, and could not, by the surrender or re- ceipt, affect the latter's estate. But the court ruled that, as the contract was wholly with the creditor, there was nothing to show such trusteeship, and therefore, even if the creditor could have recovered more than his debt, the right of action belonged solely to him, and his proof of claim, receipt, and surrender re- leased the company from all further liability, and there was noth- ing to assign. The old common law rule of accord and satisfac- tion had no application ; there was no demand for the full sum named in the policy, and that rule was only intended to secure a deliberate agreement to discharge the debt. When this was es- tablished, it was sufficient. The court said : " A formal instru- ment under seal is not the only evidence, in my opinion, to es- tablish a release. The surrender of the policy in this case was, to say the least, prima facie evidence of an intention to release all claims under it, and when this fact is conceded, and a receipt in full of all demands is written upon the face of it, and signed by him, I think in law the company is absolutely discharged."* i Citing Rawls vs. Life Ins. Co., 27 N. Y. Rep., 282 ; Ins. Co. vs. Robert Shaw, 23 Pa. St. Rep. ; Brooks et al. vs. White, 2 Met., 283. CHAPTEE V. BIGHTS OF INNOCENT PURCHASERS, AND OF THE COMPANY TO PAY OR ACCEPT A SURRENDER FROM AN ASSIGNEE. Bights of Assignee no Greater than those of the Assignor. — When Innocent Holder Acquires Valid Title. — What is Necessary for the Protection of the Company in Case of Payment or Surrender. While it may be laid down as a general rule that the assignee acquires no greater rights than the assignor possessed, the courts have, nevertheless, in several instances, shown a disposition to take into consideration the question of an innocent purchaser in determining the equities of the case. Thus, in the case of Dun- gan's adm'x, supra, the court, in discussing the responsibilities of the company, laid special emphasis on its knowledge of the respective claims of the assignor and assignee. On the other hand, in the case of Northwestern Mut. Life Ins. Co. vs. Eoth, 8 Ins. Law Journal, 74, Pa. Supreme Court, 1878, the administra- . trix of the assignor brought suit to recover against the company which had already paid to the assignee. There was evidence tending to show that the policy had always remained in the hands of Spieler, the assignee, who was the agent ; that he pro- cured the assignment in blank, and filled it out after the death of Roth, the insured. But the company paid on the strength of the assignment and a receipt by the assignee. The court said : " Without something to show that the case was, in fact, not as it appeared by this paper — that a fraud had been perpetrated upon Roth's estate by the insertion of Spieler's name into the assign- 60 HOLDER FOE VALUE. ment after Eoth's death, and that of this the defendant had no- tice before payment of the money — the plaintiff has no standing to maintain this case." In the case of France vs. iEtna Life Ins. Co., 2 Ins. Law Journal, 657, the U. S. Circuit Court of Pennsylvania, in 1873, ruled that, while an assignee for value would receive no better title than that of the assignor, yet if he purchased the policy on the assurance of the agent that it would be paid, the company would be estopped from setting up fraud in the application. The doctrine concerning a holder for value was well stated by the New York Court of Appeals, in 1875, in the case of Barry vs. Equitable Life Ins. Co., 4 Ins. Law Journal, 920, where the assignment was procured from the wife by coercion, but the de- fendant claimed to be a holder for value from the original as- signee. The court said : " We do not agree, however, with the learned justice, that a bona-fide purchaser for value acquires a good title to a clwse in action which he has bought from one who has procured it from the owner of it by undue influences, com- pulsion, and coercion. There is a class of cases which hold that where the owner of property, induced by false representations, sells it, and parts with the possession of it, with the intention of passing the title to the vendee, then the bona-fide purchaser for value from the fraudulent vendee obtains a title which he can de- fend. In such case there is a voluntary parting with the posses- sion of the property, and with the uncontrolled volition to pass the title. But when there exist coercion, threats, compulsion and undue influence, there is no volition. A case is presented more analogous to a parting with property by robbery. No title is made through a possession thus acquired." Citing Loomisvs. Eusk, N. Y. C. A., 1874. There is also another class of cases in which the innocent holder acquires a valid title against the assignor of a non- nego- tiable security, viz. : where the latter is estopped from setting up his claims through laches. The doctrine on this subject was laid down by the U. S. Supreme Court, in 1879, in Shaw vs. Mer- chants' National Bank. The purchaser of a stolen bill of lading claimed the right to hold the property against the real owner. The court dwelt on the distinction between such bills and bills of ex- change and promissory notes, which are exceptional, and whose PROTECTION IN CASE OF PAYMENT. 61 negotiability renders them valid in the hands of innocent third parties, by reason, not simply of their negotiability, but because of the necessities of trade. But it was declared that such con- sequence does not necessarily attach even to negotiability, where bills of lading are made negotiable by special statute. There is no such necessity for a ready transfer. The real owner could only lose title through his own negligence. The court said : " It may be that the true owner, by his negligence or carelessness, may have put it into the power of the finder, or thief, to occupy ostensibly the position of a true owner, and his carelessness may estop him from asserting his right against a purchaser who has been misled to his hurt by that carelessness." The same rule is applicable to the assignment of policies, and where the assignee or the company has been misled through the negligence or care- lessness of the assignor, the latter is estopped. A question of the utmost practical importance to the com- pany is as to what requirements are essential in order to protect it in paying an assigned claim, or accepting the surrender of an assigned policy. This question has not been completely adjudi- cated on. The right of surrender must be concurred in by all parties interested, a matter which will be more fully discussed hereafter, and a company accepting a surrender without such concurrence may be liable to those who have not joined, if they act with due diligence.* Usually, however, a surrender results in the cessation of further liability on the part of the company on the original contract, through the non-payment of premiums. But it was intimated by the U. S. Circuit Court of Vermont, in the case of Herrick vs. National Life Ins. Co., in 1875, that where a wife's policy had been wrongfully surrendered without her consent, a prompt tender, on the part of the wife, on discov- ering her rights, might have avoided the forfeiture. To the same effect was Stillwell vs. Mut. Life Ins. Co., 7 Ins. Law Journal, 444. An examination of the various decisions bearing on this subject leads to the following conclusions: The payment of a claim or acceptance of surrender from a party having no real or apparent authority, will not release the company from its obli- a See Conn. Mut. Life Ins. Co. vs. Burroughs, 34 Conn., 305; Chapin vs. Fellows, S. C, Cfc, 1869; White vs. Penn. Mut. Life Ins. Co., St. Louis C. A., 1879; Stillwell vs. Mut. Life Ins. Co., N. Y. C. A., 1878. 62 PROOFS OF TITLE. gations. But acceptance of such surrender, or payment to one claiming under a valid assignment absolute in form, it would ap- pear, will be a release in the absence of any actual or construc- tive notice of adverse claims. It is the duty of the company to secure satisfactory evidence of the claimant's title, and it has a right to protect itself, so far as possible, against future litigation by adverse claimants. It may well require a receipt from the assignor or original creditor for abundant security, but it is not legally entitled to such receipt, and if the assignee is unable to procure it, must pay without it. Contested claims of this nature have usually been between the assignor and assignee, in which, if payment had been made, it seems to have been assumed that the company was thereby released. Suits in which the latter was the real party have generally been founded on imperfect as- signments or wrongful surrenders by parties without apparent authority, or on a real or constructive knowledge on the part of the company of adverse claims. Such was the case in Dungan's Adm'x, supra, where the company was notified of the adverse claim. Mere possession, as we have seen, is not proof of title, but where such possession is accompanied by sufficient evidence of an absolute title, it would seem that the company is not put On inquiry concerning private understandings of a different character, unless it has reason to suspect their existence. Never- theless, for its own protection, every needed precaution should be observed in the payment of an assigned claim. A company can only be compelled to pay on the production of the policy, or a satisfactory explanation of its loss, and when lost a decree of the court is sufficient protection, and it has no right to exact an indemnity. It must pay to an assignee who has power to give a valid receipt, even though such authority be not expressly con- ferred in the instrument, but where only the equitable interest passes, while the power to sue remains with the assignor, the company is entitled to not only an equitable discharge, but to a receipt which shall secure it against the legal rights of the as- signor." The general doctrine on this subject was laid down by the Supreme Court of Kansas, in 1880, in the case of Kelley vs. ;t> England vs. Lord Tredegar, 1 L. E. Eq. Cas., 344; Prud. Ass. Co. vs. Thomas, 3 L. E. Ch. Ap. 74; Mut. Prot. IuS. Co. vs. Hamilton, 5 Sneod 269- Crookatt vs. Ford, 25 L. J. Ch., 552. RECEIPT BY ASSIGNOR. 63 Caplice, 9 Ins. Law Journal, 834 The policy was an endowmeuton the life of C. in favor of his wife, which both joined in assigning absolutely to M. for a debt and a further sum in addition. M. afterwards paid the premiums. The assignment, under seal, re- cited that the assignors " do assign and transfer * * all our right, title, and interest * * for his sole use and benefit," and that, in case of assignee's death, the policy should be pay- able to his heirs or assigns. On the back of the policy was the following blank receipt : " Eeceived — 18 — of the Northwestern Mutual Life Ins. Co. — Dollars, in full of all claims on the within policy." This receipt was not signed by C. and wife at the time of the assignment. When the policy became due, the company refused to pay M. without the signature of C.'s wife to the receipt. The latter thereupon required M. to give her a written agreement to pay her a further sum upon collecting the policy, in consideration of her signature, and this suit was brought to enforce the agreement." The court said : " On the part of the plaintiff in error, it is claimed that Mrs. Caplice ought not to recover, because it is alleged that it was her moral and legal duty to execute the receipt. On the part of Mrs. 0., it was contended that she was under no moral or legal obligation to give her signature ; that her signature was purchased for the writing sued on, and that such agreement is valid and binding. We do not agree with counsel for plaintiffs in error, that Mrs. C. was under a legal duty to sign the receipt. She had previ- ously done all that the law required of her in the assignment and transfer of the policy ; she had actually performed every act necessary to put plaintiffs in error in possession of the policy, and every benefit to be derived therefrom. The illustration of the release of a mortgage by the mortgagee is not applicable* By the statute, it is the legal duty of the mortgagee to enter sat- isfaction on demand of the mortgagor, when the mortgage is paid. Independent of the statute, such duty existed, which could have been enforced in a court of chancery against the mortgagee, on his refusal to enter a release after payment. On the other hand, neither can we agree with counsel for defendant in error, that the written promise ought to be fully enforced. The agreement is an unreasonable and unconscionable one. Mrs. C. is only entitled to reasonable compensation for the in- 64 DUTIES OF TIUJSTEES. convenience or service of making her signature. She suffered no loss, injury, or disadvantage, nor parted with anything of value in signing her name. The demand for the signature of Mrs. C, on the part of the insurance company, before payment, was arbitrary, and yet out of abundant caution in transacting its business, not very unreasonable. Frequently, insurance policies, especially endowment policies, are hypothecated for the repay- ment of money, and in such cases just such assignments are ex- ecuted as appear in this case. On their face they are absolute, yet in fact the transfer is only for security. When the debt is paid, the beneficiary or owner of the policy is entitled to its re- turn. Notwithstanding the execution of such an assignment in the latter instance, the company, after due notice, has no right to pay the pledgee. So, to save any question of this character arising, we suppose the insurance company was anxious to have the signature of Mrs. C. on the policy. Morally Mrs. C. ought to have given it without making the extortionate demand." Nevertheless, the company, as custodian of the fund, is obli- gated to exercise due care that parties claiming title have the rights which they claim, and payment under . circumstances which should have put the company on inquiry, will render it liable. In the case of Stewart & Duffy vs. Firemen's Ins. Co., 9 Ins. Law Journal, 838, this subject was considered by the Maryland Court of Appeals in 1880. Parties acting as trustees and executors caused shares of the cestui que trust to be trans- ferred to themselves, and unlawfully converted the property to their own use. It was held that the company must be presumed to have known the contents of the will under which the execu- tors acted, and should have been put on inquiry by the suspicious character of the transfer. By negligence in this respect, it be- came responsible for the misappropriation. The following gen ■ eral principles touching the powers and duties of trustees are pertinent to this subject : A trustee cannot shield himself by doubts that he takes no measures to clear up. "When in doubt he may wait until a bill is brought against him, or may himself bring a bill in equity seeking direction of the court, and when such bill is justified, the costs will be decreed out of the trust es- tate. But if he acts in good faith and with due care, he will be entitled to the protection of the courts in the case of an assign- MISTAKES OF LAW AND FACT. 65 ment afterwards declared void. Trustees' receipts have been subjects of much complication and doubt. Though they possess the legal title, in < quity the title is in the cestui que "trust, and companies should be on their guard concerning the powers of such to give a valid discharge." _ In Tabor vs. Mich. Mutual Life Ins. Co., Supreme Court of Michigan, 1880, 10 Ins. Law Journal, 97, the policy had been taken out by the husband, payable to his wife, or, in case of her death, to their children. By misstatements of fact and law, the agent succeeded in convincing the insured, who was in poor health, that the policy was void through non-payment of a note, and by working on his feelings, .procured its surrender ' from him, the wife not being consulted or treated as a party further than on hearing the statements, she gave the policy to her husband, who surrendered it to the agent for another. The court dwelt on the fact that no active consent of the wife was evidenced, that ad- vantage was taken of the ill-health of insured to work on his feelings, and no time allowed him to ascertain the real law and facts. Had there been a mutual mistake of law, it was said, and the ordinary surroundings of a fair contract, the application of the rule that relief will not be granted against mistakes of law might not be improper, but that rule is not universal when the hardship is great, and especially when fraud or misconduct is combined. The wife was entitled to have the original policy de- clared reinstated for its full amount, after the death of the in- sured, unless there had been an unreasonable or injurious delay in the application. ° Gilbert vs. Sutliff, 3 Ohio N. S., 129 ; Pratt vs. Adams, 7 Paige, 615 ; Trot- ter vs. Blocker, 6 Porter, 269 ; Barney vs. Griffin, 2 Comst., 365. d Perry on Trusts, 2d Ed., vol. 2, p. 426, et seq. ; Hill on Trustees, 754. It should be added, however, that while the company may be regarded as the custodian of a trust fund, its ordinary relations with the policy-holder are not those of trustee and cestui que trust, but of two equal and contracting parties, and the legal principles applicable to trusteeship will not always apply. Thus the principle that a trustee may not profit at the expense of the cestui que trust without his knowledge, cannot be invoked to set aside policies issued in ex- change for others surrendered, in which u, profit is alleged to the company. Hencken vs. IT. S. Life Ins. Co., 9 Ins. Law Journal, 912. CHAPTER VI. THE EXTENT OF AN ASSIGNMENT. Assignment of Future Contingent Benefit— Extent of '' Creditor's Interest— Dividends and Accruing Benefits.— Effect of Fraud. How far an assignment can properly be made of a future contingent benefit is a question which has been raised in connec- tion with wives' policies. To understand the proper beariDgs of this question, it may be well to glance at the general doctrine on the subject. The general rule is that to render a debt or claim a proper subject of assignment, it must have an actual or poten- tial existence ; it must be something more than a mere possi- bility. There must be an actual subsisting contract under which the contingent claim may arise. An employee may assign his future contingent earnings, although their amount or the dura- tion of his employment be uncertain. But he cannot assign his possible earnings where no present agreement subsists, and his employment at all is a mere matter af speculation. But in equity assignments are frequently supported, not merely of con- tingent interests and expectation j , but also of things which have no present actual or potential existence, but which rest in mere possibility. a In the case of Landrum vs. Knowles, 22 N. J. Eq., 594, a a See Chitty on Cont., 11 Amer. Ed., 1352, and foot notes. See also South- ern Law Review for July, 1880, where the subject of mortgages of future per- sonal property is fully diseussed, and case of People vs. Bindley decided by Pa. S. C. in 1879, where the court held that an assignment of demands hav- ing at the time no actual existence, but which rest in expectancy only, is valid in equity as an agreement, and takes effect as an assignment when the FUTURE CONTINGENT BENEFITS. 67 policy -taken out by a wife on the life of her husband, in favor of her children, was assigned by her to secure a debt, and it was ruled by the New Jersey Court of Appeals that the gift to the children was executed only to the extent of the premiums paid, and the act of assignment passed the interest arising from sub- sequent payments made by the assignee to himself, since the payments on the part of the wife were voluntary. In the case of Charter Oak Life Ins. Co. vs. Brant, 1 Ins. Law Journal, 38, the question was raised whether a wife could defeat her right of survivorship by joining her husband in the assignment of a policy payable to her separate use after the death of her hus- band, and the court said r* " With respect to reversionary closes in action and other reversionary equitable interests of the wife, in personal chattels, the doctrine has been for a long time well-set- tled, and in a manner most favorable to her rights, for no assign- ment by the husband, even with her consent and joining in the assignment, will exclude her right of survivorship in such cases. The assignment is not and cannot, from the nature of the thing, amount to a reduction into possession of such reversionary in- terests." But it was held that the case did not come within the rule, and the consideration moving from the husband, who, in- dependent of statute, might assign, the voluntary action of the wife must be held to be binding. A somewhat similar course of reasoning, however, seems to have furnished the foundation for the doctrine maintained by the New York Court of Appeals, that a wife's policy under the statute was unassignable, which was originally laid down in the case of Eadie vs. Slimmon, 26 N. T., 9, and where the court declared it would be a violation of the spirit of the provision, to hold that a wife insured under the act could sell and traffic with her policy as though it were real- ized personal property, or an ordinary security for money. In the case of Baker vs. Young, 1 Ins. Law Journal, 11, the Su- preme Court of Missouri, in 1871, declared that where the parties are living, the doctrine that a wife may not defeat her reversion- ary interest by assignment does not apply. In general, the extent of interest which passes by an assign- demands are subsequently brought into existence. Citing Field vs. City of N. Y., 6 N. Y., 179; East Lewisburgh L. & M. Co. vs. Marsh, 27 Pitts. L. J., 178. 68 EXTENT OF CREDITOR'S INTEREST. ment, as security for a debt, must be determined from the facts in the case. In Harrison vs. McConkey, 1 Md. Ch. Dec, 34, the policy had been assigned under an agreement that the proceeds should be received by the assignee, and in case other securities held by him were insufficient to pay the debts, the proceeds were to be applied for that purpose, and the residue was to be paid to wife of assignor; the claim of the assignee to collect the money and hold any surplus for the wife, was declared indispu- table as against the administrator of the assignor. In McCord vs. Noyes, 3 Bradf., 739, the policies had been assigned in part as security for a debt, the remainder to be paid to the widow of assignor, and the company notified, and it was held that the as- signment transferred the complete title to the assignee, and the wife as against the husband's administrator. That a policy is assignable absolutely, as well as by way of mortgage, to secure a debt, has been repeatedly declared by the courts* A somewhat analogous question has been repeatedly raised in England concerning the extent of the creditor's interest, where, instead of an assignment by the debtor, the insurance has been effected by the creditor directly on the" debtor's life, The general rule adopted in such cases has been that, in order to entitle the debtor to an interest in the policy, there must have been an agreement between the parties that the debtor is to be chargeable with the premiums, or he must have allowed such charges without objection. In such case, the policy will be treated simply as a security, and the debtor will be entitled to the surplus. But it is not enough that the premiums are charged to the debtor, unless he consents thereto.* 1 If there be sufficient to take the contract out of the general prohibition against gambling insurances, the interest conveyed b Hutson vs. Merrifield, Ind. S. C, supra ; Anthracite Ins. Co. vs. Sears, Mass. S. C; Emrich vs. Cookly, Md. C. A., 4 Chic. Leg. News, 465; Norwood vs. Guerdon, 111. S. C. ° Courtenay vs. Wright, 2 Gift"., 337; Moorland vs. Isaac, 20 Beav.,389; Holland vs. Smith, 6 Esp., 11; Freme vs. Bvade, 2 De G. and J., 582; Lea vs. Hinton, 5 De G. M. and G. ; Gottleib vs. Cranch, 4 De G. M. and G., 440 ; Triston vs. Hardey, 14 Beav., 232; Knox vs. Turner, 5 L. J., Ch. Ap. 517; Drysdale vs. Piggott, 8 De G., M. and G. ; Johnson vs. Swire, 3 Giff., 194. a Bruce vs. Garden, 8 L. R. Eq. Cas., 430; 5 L. Rep., Ch. Ap., p. 32. EFFECT OF FRAUD. ,69 by an assignmm6nt has not been generally regarded by our courts as limited by the debt or other consideration, although in several cases the question has been raised and a doubt intimated. The true rule seems to be, that, if the facts will justify a recov- ery of the whole by the assignee, he may so recover, but if the foundation for his claim is so disproportionate to the benefit as to justify the presumption of a speculative insurance, otherwise. This subject will be more fully considered in the following chap- ter. The assignment, as has been observed, carries with it all dividends or other benefits which have accrued or may subse- quently accrue.® Fraud or undue influence, amounting to du- ress, on the part of the assignee, or in procuring the assignment, will vitiate the transfer, and fraud on the part of the assignor will enable the assignee to recover the consideration paid.* The effect on the assignment of the interest of the assignor, and of the insurable interest of the assignee, of insolvency, and as regards the right of action, will be considered in the subse- quent chapters. * Roberts vs. Edwards, 9 Jur. U. S., 1219; Partes vs. Bott, 9 Sim., 388 ; Courtney vs Ferrers, 1 Sim., 137; Johnson vs. Johnson, 15 Jur., 714 ; Gilly vs. Burley, 22 Beav., 619. 1 Jones vs. Keene, 2 Mood. & Eob., 348; Turner vs. Harvey, Jac, 169; Brealey vs. Collins, You., 317; Strickland vs. Turner, 7 Exch., 208. It was held in the first case that concealment of the dangerous illness of insured from the assignor, and unduly depreciating the value of the policy by the assignee, forfeited the assignment, and in the last case that the purchase of an annuity, without knowledge of the death of the annuitant, by either party, entitled the purchaser to recover back for want of consideration. See as to fraud or duress in procuring the assignment, Lemon vs. Phoenix Mut. Life Ins. Co., supra ; Eadie vs. Slimmons, 26 N. Y, 9 ; and Whitbridge vs. Barry, and other cases cited beyond under wives' policies. CHAPTEK VII. WHO MAY BE AN ASSIGNEE, AND HEREWITH OE INSURABLE INTEREST. Wager Contracts. — What is Sufficient Interest to Support a Policy in the Case of a Nominee or Beneficiary. — In the Case of a Creditor. — The Doctrine of Insurable Interest as Applied to Assignments. — The Company as an Assignee. It has been well remarked by one of the courts that, without the power of assignment, life insurance policies would lose a great part of their value ; therefore the courts have been dis- posed to look with favor upon such transfers when there is suffi- cient interest to support them. On the other hand, the tempta- tion to speculate in human life through contracts in which the beneficiary is interested solely in the death of the insured, and the evil consequences that have flowed from such insurances, have led the courts to condemn and set aside as invalid, all con- tracts of a purely speculative or gambling character. Hence the rule as to who may be an assignee may be stated broadly as fol- follows : Any person may be an assignee, provided the transfer is not of the nature of a wager contract, but all such contracts are invalid as against public policy. On the doctrine as thus stated, all the courts are in substantial accord, but a wide diversity ex- ists in its application. Great want of harmony prevails in the decisions as to what constitutes a gambling contract, founded on differing views as to the nature and extent of the interest which is essential to support a policy. In order to a better understanding of this subject, ft will be ENGLISH GAMBLING ACT. 71 necessary to glance at the general doctrine concerning insurable interest and wager policies, a matter which has already been briefly alluded to in the opening chapter. The right to effect insurance on a life in which the party had no interest, seems never to have been questioned until the evils resulting from the practice in England led to the passage there of the celebrated gambling act in 1774. This act prohibited any one from making insurance on the life of another in whom he should have no interest, or by way of wagering, or the issue of any ^policy, without inserting the name of the beneficiary or partj- interested, and provided that the insured should recover no greater sum than the amount of his interest. After its pas- sage the question was for the first time raised in life insurance whether a wager policy was void at common law. Contrary de- cisions were rendered in England, although the prevailing doc- trine seems to have been that they were not illegal apart from the statute, and such has been the uniform doctrine in Ireland, where the statute was not in force until recently.* Indeed, at an earlier period, wager conti acts were common in marine in- surance, and the English courts were disposed to uphold them on the ground of their convenience. On the contrary, insur- ances on life, under any circumstances, were long regarded in some of the continental countries as an unholy traffic, and were prohibited by law. The passage of the gambling act not only rendered a strictly pecuniary interest of some sort necessary in taking out the policy, but has been applied by the English courts to its subsequent assignment, where the facts warranted the as- sumption that the spirit of the act had been violated, or the as- signment was a mere cover for its evasion.,, As the gambling a Brit. Cam. Ins. Co. vs. Magee, Cooke & Ale, 182 ; Crawford vs: Hunter, r> T. K., 14 ; Dalby vs. Ind. and Lond. Life Ass. Co., 18 Jur., 1024 ; Shilling vs. Ace. Death Ins. Co., 2 H. & N., 42; Shannon vs. Nugent, 1 Hayes, 536; Scott vs Eoose, 1 Longf. & Town., 54. The English doctrine prior to the revolu- tion of 1688 was the same as our own, that mere wager policies are void as against public policy. Afterwards a course of decisions grew up sustaining them, until the legislature interposed, first in the case of marine policies, and afterwards in regard to life policies requiring an insurable interest. See Conn. Mut. Life Ins. Co. vs. Schaefl'er, 6 Ins. Law Journal, 386. b Wainwright vs. Bland, 1 Mood. & Rob., 481 ; Hebdon vs. West, 3 B. & S. 579; Shilling vs. Aec. Death Co., .vupra; Prince of Wales Ins. Co. vs. Palmer, 25 Beav., 605. 72 WAGER CONTRACTS. act is no part of American law, its provisions have no proper application in this country, but the English common law is the foundation of our own, while the continental prejudice has not been without its influence on our courts. Some of the States, like New York, have enacted laws prohibing wager contracts generally, with a provision that they shall not extend to insur- ances made in good faith for the security or indemnity of the party insured. In most of the American decisions, therefore, the question has been whether wager policies are void at com- mon law, or on principles of public policy. The decisions have 1 generally been to the effect that they must be held void as against public policy, although the decisions are at variance whether they are void at common law. A contrary rule has been inci- dentally asserted in one or two, but all are substantially agreed that a downright gambling contract will not be sustained. 3 As to the nature or extent of the interest sufficient to support the contract, a much more liberal doctrine has prevailed than in England, a direct pecuniary interest not being usually deemed essential, but it is sufficient if a reasonable expectation of pecu- niary advantage from the continuance of the life exist, although- the courts are not agreed as to what will constitute such an in- terest or advantage. A wide distinction has been drawn in America between the fire policy, which is a contract of indem- nity, and which requires a strict pecuniary interest for its sup- port, and the life policy, which has been broadly asserted by at least one court to be essentially a wager contract. It may thus be laid down as the invariable rule that, at the time of making the contract, there must be sufficient interest ex- isting, either in the party procuring the insurance or in the bene- ficiary, to justify it. Such an interest exists in all cases where the beneficiary is dependent on the party insured for support, or is his creditor, or is in danger of pecuniary loss or injury through his death, as between partners, and every person has an insura- ble interest in his own life to an unlimited amount. In doubtful cases the courts are governed by the special circumstances of the c See Lord vs. Dall, 12 Mass., 145. a Singleton vs. St. Louis Mut. Life Ins. Co. , 5 Ins.. Law Journal, 576 ; Trenton Mut. L. and T. Ins. Co. vs. Johnson, 4 Zab , 576 ; Loomis vs. Eaglo L. & H. Ins. Co., 6 Gray, 396. See also cases cited beyond in this chapter. CESSATION OP INTEREST. 73 case in determining whether there was sufficient interest to jus- tify the insurance. 6 It is usually enough, where the beneficiary has not been changed, if such an interest existed at the incep- tion of the contract. The fact that it has since ceased will not prevent recovery.' In one of the most recent cases in which this question was considered, that of Singleton vs. St. Louis Mutual Life Ins. Co., 7 Ins. Law Journal, 576, the Supreme e Thus it has been held that a sister has an insurable interest in a brother, where dependent on him for support, or likely to be pecuniarily benefited from his continued existence; a master in his apprentice or slave, a wife in her husband, a woman in her intended husband, and friends generally in the lives of each other, under joint life or survivorship insurances, where the contract is made for their mutual advantage. Lord vs. Dall, 12 Massachusetts, 115; France vs. JEtna Life Insurance Company, 2 Ins. Law Journal. 657 ; .35tna Life Insurance Company vs. France, 5 Ins. Law Journal, 257 : Lemon vs. Phoenix Mut Life Ins. Co., ante; Conn. Mut. Life Ins. Co. vs. Schaeffer, 6 Ins. Law Journal, 883 ; Miller vs. Eagle L. & H. Ins. Co., 2 E. D. Smith, 268; Summers vs. U. S. Ann. & T. Co., 13 La. Ann., 504; Valton vs. Nat. Loan Fund L. Ass, Soc, 22 Barb., 9; Rawls vs. Amer. Life Ins. Co., 36 Barb., 357 ; Morrell vs. Trenton Mut. L. & F. Ins. Co., 10 Cush., 282 On the Other hand, mere relationship, apart from- any pecuniary interest, will not support a policy. A father may or may not be justified in insuring the life of a son, or a brother that of a brother, a nephew that of his uncle, or a husband that of his wife, and an uncle has naturally no insurable interest in the life of a nephew. As between creditor and debtor, the benefit to be realized by the former, though not necessarily limited to the debt, must not be so greatly in excess as to partake of a wagering character. Charter Oak Life Ins. Co. vs., Brant, 1 Ins. Law Journal, 38 ; Mitchell vs. Union L. Ins. Co., 45 Me., 104; Loomis vs. Eagle L. & H. Ins. Co., 6 Gray, 396 ; Cammack vs. Lewis, 2 Ins. Law Journal, 679 ; Singleton vs. St. Louis Mut. Life Ins. Co , 5 Ins. Law Journal, 576, and cases there cited ; Guardian Mut. Life Ins. Co. vs. Ho- gan, 5 Ins. Law Journal, 837 ; Leonard vs. Eagle L. & H. Ins. Co., 4 Liv. Law Mag., 282 ; Hoyt vs. N. Y. L. Ins. Co., 3 Bosw., 440 ; Mitchell vs. Union Life Ins. Co., 45 Me., 104. ' Phoenix Mut. Life Ins. Co. vs. Bailey, 1 Ins. Law Journal, 658. A want of interest at the inception of the contract may sometimes be cured if the subsequent circumstances are such as would justify a recovery. Thus a company may waive its right' to allege a want of interest by consenting to the assignment, and a subsequent loan will justify the creditor in hold- ing a policy taken out in anticipation of such loan. Swick vs. Home Life Ins. Co., post ; J5tua Ins. Co. vs. France, post; Stephens vs. Warren, pout. So in Trenton F. & L. Ins. Co., post, and other cases where the policy lias been declared to be essentially a wager policy, interest actually existed at the time of death. But these, cases assume good faith to have existed at the time of making the contract or ratifying the assignment. It does not follow that A., holding a policy on the life of B., absolutely void as a wager contract, may 74 INTEREST OF UNOLE AND NEPHEW. Gourt of Missouri, regarding the question as still an open one in that State, discussed at considerable length the leading au- thorities on the subject. The plaintiff sued to recover on a pol- icy which he had procured on the life of one Anderson, a nephew, and on which he had paid the premiums. The court said : " It was neither alleged nor proved by plaintiff that he had any pecuniary interest in his life, and the mere relation of uncle and nephew does not constitute an insurable interest to en- able either to insure the life of the other. It is maintained by attorneys for plaintiff that a policy of insurance, effected by one on the life, of another, in which he has no pecuniary interest, is valid ; and they rely upon Chisholm vs. Nat. Cap. Life Ins. Co., 52 Mo., 213, in which the court said : 'In this State we have no statute on the subject covering this case, and as the policy is not void by the common law, it can only be declared so on the ground that it is against public policy. There is nothing to show that the contract was a mere wagering one, or that it is in anywise against or contrary to public policy.' These remarks, of course, are to be restricted to the case under consideration. The plaintiff there had insured the life of Clark, between whom and herself there was a marriage engagement, and the court held that she had a pecuniary interest in the life of Clark, re- marking that, ' had he observed and kept the same (his contract of marriage), then, as his wife, she would have been entitled to support. Had he lived and violated the contract, she would have had her action for damages.' There are* intimations in the opin- ion which support the views urged by the respondent's attorney, but they are obiter dicba. e The case of the Trenton Mut. Life and Fire Ins. Co. vs. Johnson, 4 Zab., 576 (N. J. C. E.), is approv- ingly cited by the court, but a different doctrine from that an- nounced in that case had been held in Massachusetts, New York, cure the defect by subsequently becoming a creditor, -without the consent of the company. A distinction is to be observed between policies absolutely void ab initio, whose validity can only be established by the consent of both con- tracting parties, and those which are merely voidable or inoperative under certain conditions. See Amer. Ins. Co. vs. Henley, 7 Ins. Law Journal, 685 ; Sutherland vs. Old Dominion Ins. Co., 8 Ins. Law Journal, 181. g The court, in the case of Chisholm, ruled substantially that an interest sufficient to give the insured an indirect advantage, and relieve the policy of its gambling aspect, is sufficient. INTEREST OF INSURED IN HI8 OWN LIFE. 75 Connecticut, Maine, Rhode Island, Indiana, by the Supreme Court of the United States, by Dillon, J., in Swick vs. Home Ins. Co., 2 Dillon, 161, and in this State in McKee vs. Ins. Co., 28 Mo., 383. And in Gambs vs. Covenant Mut. Life Ins. Co., 50 Mo., 44, it was held indirectly that a person procuring an insur- ance on the life of another must, to make it valid, have a pecu- niary interest in the life insured." The court was therefore con- strained, after a further examination of authorities, 11 to hold " that the policy of insurance procured by one upon the life of another, for the benefit of the former, who has no pecuniary in- terest in the life insured, is against public policy, and therefore void." It was further ruled that it devolved on the plaintiff to aver and prove affirmatively, as part of the case, that he has such an interest in order to recover. 3 As every person has an insurable interest in his own life, it is generally agreed that where he is the real contracting party who continues to pay the premiums, he may designate a beneficiary or appointee to receive the money, regardless of want of interest on the part of the latter* As remarked in an earlier portion of this work, this doctrine seems to be grounded in the principle that so long as the contract thus continues within the control of the original insured, it will be kept alive only from motives of self-interest, or a laudable desire to benefit another ; it is not a speculation in which the beneficiary is himself investing. But when it appears that the party whose life was insured was only the contracting party in name, that the insurance was in reality procured at the instance of the beneficiary who pays the pre- miums, or of an assignee to whom the policy was immediately assigned, and that the arrangement was only a specious cover for h The court also cites in support, Evers vs. Life Ass., 59 Mo., 430 ; Kent's Com., Vol. 3, 462 ; Lord vs. Dall, supra ; Stevens vs. Warren, supra ; Mitchell vs. Union Life Ins. Co., 45 Me., 104; Lewis vs. Phoenix Mut. Life Ins. Co., 39 Conn., 101; Bevin vs. Conn. Mut. Life Ins. Co., 23 Conn., 244; Maury vs. Home Life Ins. Co., 9 JR. L, 346 ; Franklin Life Ins. Co. vs. Hayes, 41 Ind., 117 ; Bouse vs. Mut. Ben. Life Ins. Co., 23 N. Y., 516 ; Freeman vs. Fulton F. Ins. Co., 38 Barb., 247 ; Cammack vs. Lewis, 15 Wall, 543 ; May on Ins., p. 784. i Citing Freeman vs. Fulton F. Ins. Co., 38 Barb. ; May on Ins., sec. 587 ; Kuss vs. Ins. Co., supra; Guardian Mut. Life Ins. Co. vs. Hogan, 80 111., 35. k See cases cited beyond. 76 REAL AND NOMINAL CONTBACTING PARTY. a gambling contract, the fact that the original contract was with the life insured will not render it valid This point was fully considered by the U. S. Circuit Court of Missouri, in 1873, in the case of Swick vs. Home Life Ins. Co., 2 Ins. Law Journal, 415. The instructions were by Judges Dillon and Treat, who remarked : " We have taken some pains to ex- press them carefully, because of the great importance which at- taches to all controversies of this kind, and on many points of which the law remains yet to be fully settled," The policy on the life of one Henry was assigned by him, about five weeks later, with the consent of the company, to Swick. The court, after observing that the assignee had no better claim than the original insured would have had, and if his heirs could not have recovered on account of breach of condition, neither could the assignee, said : " The plaintiff claims that, prior to and at the date of the application for the policy, and at the date of the policy, he was a creditor of Henry, and remained such creditor until this time, and that the policy was assigned to him as security for the debt, and fOr any sums he might after- wards advance to Henry. If you find; upon the evidence, this to be the case,-then the plaintiff can recover on such policy, if Henry's executor could have recovered thereon if the policy had not been assigned. And in such case the plaintiff can recover, if entitled to recover at all, the full amount of the policy, al- though the debt of Henry to him may be much less than the arnount insured. On this subject we may observe that no life policy is valid, if taken for the benefit of a person who has no insurable interest in the risk Hence, if this policy on the life of Henry had been taken directly for the benefit of Swick, and Swick at the time was not a creditor of Henry, and there was no agreement or understanding that it was for the purpose of secur- ing him for advances to be made to Henry, then the policy would have been void. The law forbids such mere wager policies, and also forbids any scheme or contrivance whereby its require- ments in that respect are sought to be evaded. Hence, if Swick and Henry confederated together to procure this policy for the 1 Cammaek vs. Lewis, supra : Swick vs. Home Life Ins. Co., 2 Ins. Law Journal, 4l:> ; Miller vs. .Eagle, L. & H. Ins. Co., E. D. Smith; 568 ; Maury vs. Home L. Ins. Co., 9 K. I., 346. See also cases cited beyond. INSURABLE INTEREST OF ASSIGNEE. 77 benefit of Swick, who was not or had not agreed to become a creditor of Henry, and with the view . of having the same as- signed thereafter to Swick without consideration, or not as a se- curity for a debt due or to become due, then such fraudulent contrivance made the policy void. If, on the other hand, Swick was a creditor of Henry, and if the purpose in procuring the policy was to have the same assigned thereafter to Swick for his indemnity, and Swick paid the premium, and the facts were known to the agent of the company, the policy is not void. So, if there was, as plaintiff contends, an understanding betwee;n Henry and Swick, the latter being a creditor of Swick, or having agreed to become such, that this policy should be taken on Hen- ry's life, with the view of having Henry or Henry's estate in the event of his death, in a condition to meet his debt to Swick, and that Swick paid the premium with the knowledge of the compa- ny's agent, and thereafter the policy was assigned to ISwick when such creditor of Henry, or as a security for debts due or -agreed to be created, and the company agreed in writing to such assignment, then the policy and assignment were not invalid. In other words, the law exacts fair dealings in these respects from all parties in interest. It will not uphold a policy made or fraud- ulently contrived to be made for the benefit of a person who has no insurable interest in the risk." These preliminary considerations bring us to the question whether an insurable interest is necessary to support the bona fide assignment of a valid policy. Here again the courts are at variance. Two contrary views have been taken. On the one hand, in some of the States, as in New York, Bhode Island, and New Jersey, it has been argued that, if the policy is originally a honafide contract, the object of the law against gambling insur- ance is sufficiently accomplished ; that to further limit its transfer to parties having an insurable interest would greatly impair its value, and Work needless injury to parties no longer desiring to continue their contracts. On the other hand, in others of the States, as Indiana and Kansas, the courts have refused to recog- nize any distinction between one who takes the title to an exist- ing contract, and. one who originally contracts, and insist that in either case a valid insurable interest is essentia). The doctrine of the United States Supreme Court, while entitled to the high- 78 DOCTRINE OF THE U. S. SUPREME COURT. est consideration, is, it is believed, the fairest exposition of the legal principles involved. The doctrine of this court is found in the cases of iEtna Ins. Co. vs. France in J 876, 5 Ins. Law Jour- nal, 257, and 6 Ins. Law Journal, 331 ; Conn. Mut. Life Ins. Co. vs. Schaeffer in 1876, 6 Ins. Law Journal, 383, and in Camniack vs. Lewis in 1872, 2 Ins. Law Journal, 659. In the first men- tioned of these cases, the policies were on the life of one Chew, by whom the consideration was recited to have been paid for the benefit of a sister who was married. Afterwards one of the pol- icies was assigned by the sister and her husband as collateral for a loan, on representations by the agent to the assignee, as was claimed, that it would be paid. It was ruled by the court below, U. S. Circuit Court of Pa. (2 Ins. Law Journal. 657), that persons presumptively next of kin may insure the lives of their relatives, and if Chew was at the time unmarried, his sister, though married and not dependent on him for support, might le- gally .insure his life ; also that the assignee would take no better title than the assignor, unless the agent had estopped the com- pany from objecting by his representations. On appeal to the Supreme Court, the facts were fully considered. The policy re- cited that it was issued in consideration of a sum "paid by Chew," while the company " agreed with the said assured, her executors," &c, to pay the sum insured. But it further recited that, if any notes given by Chew for premiums should be unpaid when due, it should be void. The receipts also acknowledged that the premiums were received from Chew. The policy, while thus in terms recognizing Chew as the contracting party in pro- curing the policy and paying the premiums, at the same time ex- plicitly contracted with the beneficiary as to the payment of the benefit, thus raising the question as to~ which was the real con- tracting party. It further appeared that Chew was a man of small means,- and had received loans to the amount of over two thousand dollars from his sister, who had in turn insured his life to the extent of twenty thousand dollars by these two policies. The court said : " The construction given to the policy by the court below was, that it was a contract between the company and Chew for an assurance on his life, with a stipulation and agreement that the money should be paid to his sjster ; and the court held that such a policy is sustainable at law on account of ASSIGNMENT OF BROTHER TO SISTER. 79 the nearness of the relationship between the parties, and espe- cially as Mrs. France, at the time the insurance was effected, was one of Chew's next of kin, prospectively interested in his es- tate as a distributee. We concur in this construction of the policy made by the court, and the validity of the transaction. As was held by us in the case of the Connecticut Mutual vs. Schaeffer, just decided, any person has a right to procure an insurance on his own life, and assign it to another, provided- it be not done by way of cover for a wager policy ; and where the relationship between the parties, as in this case, is such as to constitute a good and valid consideration in law for any gift or grant, the transaction is entirely free from such imputation. The direction of payment in the policy itself is equivalent to such an assignment." The court below had refused to charge as request- ed, that three of the notes for premiums having been given by Mrs. France herself, there- was evidence that the policy had been taken out by her for her own benefit, and in such case she must show an insurable interest beyond mere relationship in order to recover. The refusal was adjudged no error. The court said : " The company, when taking the notes in question, acknowl- edged the premiums to have been received from Chew, and was estopped from going behind its own admission under the circum- stances of the case. The contract of insurance, as correctly construed by the court, was made with Chew ; and the relation- ship of the parties was such as to divesfc the assignment of the policy, or the direction of its payment to his sister, of all sem- blance of a wagering transaction. Under the circumstances, it matters not if the money or notes required for paying the pre- mium did come from Mrs. France ; at most it was by way of ad- vance on her brother's account, and on his contract. He had a right- to take out a policy on his own life for his sister's benefit ; and she had a right to advance him the necessary means to do so. As between strangers, or persons not thus nearly connected, such a transaction would be evidence to go to the jury from which, according to the circumstances of the case, they might or might not infer that it was mere gambling. But, as between brother and sister, or other near relations, desirous of thus pro- viding for each other, and presumed to be actuated by consider- tions of strong morals and the force of natural affection between 80 INTEBEST IN CASE OP JOINT LIVES. Bear kindred, operating often more efficaciously than those of positive law, the case is divested of that gambling aspect which is presented where there is nothing but a speculative interest in the death of another, without any interest in his life to counter- balance it. On this ground we hold that where, as in this case, a brother takes out a policy on his own life for the benefit of his sister.,, it is totally immaterial what arrangement they choose to make between them about the payment of premiums. As the company get a perfect quid pro quo in the stipulated premium, it cannot justly refuse to pay the insurance." m In the case of Connecticut Mutual Life Ins. Go. vs. Schaeffer, the insurance was taken out on the joint lives of a husband and wife payable to the survivor. They were afterwards divorced, and each married again. The company objected to payment on the ground of an alleged cessation of insurable interest. The court observed that, while an insurable interest of some sort is necessary, precisely what that interest must be has been the sub- ject of much discussion. In life insurance the loss can seldom be measured by pecuniary values. Said the court : " It is well settled that a man has an insurable interest in his own life and in that of his wife and children ; a woman in the life of her hus- band ; and the creditor in the life of his debtor. Indeed, it may be said generally that any reasonable expectation of pecuniary benefit or advantage from the continued life of another creates an insurable interest in such life. And there is no doubt that a man may effect an insurance on his own life for the benefit of a relative or friend, or two or more persons on their joint liyes for the benefit of the survivor or survivors. The essential thing is that the policy shall be obtained in good faith, and not for the purpose of speculating upon the hazard of a life in which the insured has no interest." n It was accordingly held that the policy was sustainable with- out regard to further interest or cessation of interest, but, added 1 i" The right of a company to refuse payment on the ground of want of in- terest in the assignee, has been differently regarded according to the circum- stances. In some cases the courts have emphasized the fact that the company has received a quid pro quo, and therefore has no special concern with the re- lations of the parties, such as might exist between rival claimants, while in others no stress has been laid on this distinction. n Citing Loomis vs. Eagle Life Ins. Co., 6 Gray, 399. INADEQUATE AND TEMPORARY INTEREST. 81 the court : " We do noi hesitate to say, however, that a policy taken out in good faith, and valid at its inception, is not avoided by the cessation of, insurable interest, unless such be the effect of the provisions in the policy itself. Of course a colorable, or even merely temporary, interest would present circumstances from which want of good faith and an intent to evade the rule might be inferred. * * But supposing a fair and proper in- surable interest of whatever kind to exist at the time of taking out the policy, and that it be taken out in good faith, the object and purpose of the rule which condemns wager policies is suffi- ciently attained, and there is then no good reason why the contract should not be carried out"ftccording to its terms." The impossi- bility of adjusting the equities of the parties, if a cessation of interest should be allowed to invalidate insurance already partly paid for, is also urged by the court. Iu the case of Cammack vs. Lewis is presented the other as- pect of this question, viz., the absence of a valid interest. Lewis was indebted to Cammack to the amount of $70, and, at the sug- gestion of the latter, procured a policy for seven years on his life for $3,000, on which Cammack paid the first and only premium, taking an assignment of the policy from Lewis, who died during the year, and a note for $3,000, cpnfessedly without consideration. Cammack, having collected the money, paid over to his executrix $1,000 in accordance with an alleged agreement with Lewis that he should pay the premiums and receive two- thirds of the policy in the event of his death. The executrix' sued for the balance. The court declared that so far as. Cam- mack was concerned, " the transaction was a sheer wagering policy, and probably a fraud on the insurance company. To pro- ■ cure a policy for $3,U03 to cover a debt of $70 is of itself a mere wager. The disproportion between the real interest of the credi- tor and the amount to be received by him, deprives it of all pre>- tence to de a bcmas-fide effort to secure the debt, and the strength of this proposition is not diminished by the fact that Cammack was only to get $2,0UO out of the $3,000 ; nor is it weakened by the fact that the policy was taken out in the name of Lewis, and assigned by him to Cammack." It was accordingly held that Cammack could only hold the policy as a security for the debt and the premium advanced. In the absence of evidence of 82 VIEWS OP THE STATE COURTS. fraudulent participation by Lewis, his executrix was entitled to recover the balance. It would seem that in this case the com- pany would have been justified in resisting any recovery beyond the actual indebtedness, unless Lewis had intended the policy for his own benefit as claimed, and merely trusted Cammack as a friend. The same views were stated still more broadly by this court, in 1871, in Phoenix Mutual Life Ins. Co. vs. Bailey, 1 Ins. Law Journal, 658. It was said that the doctrine that the insured must necessarily have some pecuniary interest was, according to the better opinion, founded on an erroneous conception of the contract. The company agrees, in consideration of the premium, to pay on the happening of a specified event, and it is enough if a relation between the beneficiary and the insured be such as warrants the conclusion that the former had an interest, whether pecuniary, or arising from interest or natural affection, in the life of the latter at the inception of the contract. In the light of these decisions, the general doctrine of the United States Supreme Court may be briefly defined as follows : Any interest sufficient to justify the insurance, and relieve it of the gambling aspect, will render it valid, and such policy will continue valid in the hands of a beneficiary or assignee, regard- less of the cessation of interest, provided the facts show entire good faith and a sufficient justification. Turning now to the decisions in the various State .courts, it was held by the Supreme Court of Illinois,' in 1876, .5 Ins. Law Journal, 835, that a pecuniary interest of some sort is required to justify the contract, and that this doctrine is not inconsistent ' with that of the U. S. Supreme Court above. The mere rela- tionship is not sufficient to justify a son in insuring the life of his father where it is manifest that no such interest exists.- The case of Franklin Life Ins. Co. vs. Lefton, decided by the Su- preme Court of Indiana in 1876, 6 Ins. Law Journal, 95, reviews the previous rulings of that court upon this question. The dis- pute was between the administrator of insured, one Cone, and ° Citing Dalby vs. Ins. Co., 15 C. B., 365 ; Loomis vs. Eagle L. & H. Ins. Co., 6 Gray, 396 ; Lord vs. Dall, 12 Mass., 118 ; Trenton L. & F. Ins. Co. vs. Johnson, 4 Zab., 576 ; Eawls vs. Am. L. Ins. Co., 36 Barb., 357. It should he noted, however, that in all these cases interest actually existed at death. INTEREST REQUIRED IN- ILLINOIS. 83 his alleged assignee, one Hazard, who, it was claimed, having no insurable interest in the life of the former, could not take a valid assignment. The court adhered to its ruling in the case of the same company vs. Hazard in 1812, .41 Ind, 116, that a party- may not purchase and take by assignment an interest in such a policy. Such contract" is void as against public policy, leading to gambling on human life, and a statute of the State authoriz- ing the assignment of contracts will not aid the matter. The court added, however, "that, after the death of the insured, there would seem to be no reason w"hy the policy might not be transferred, by those having the right to make the transfer, to any one who might choose to purchase. Doubtless, also, a per- son may take a policy upon his own life, and by the terms of the policy appoint a person to receive the money in case of his death, during the existence of the policy, as was the case in the Provi- dent Life Ins Co. vs. Baum, 29 Ind., 236. As was said in that case : ' It cannot_be questioned that a person has an insurable interest in his own life, and that he may effect such insurance, and appoint any one to receive the money in case of his death, during the existence of such policy. It is not for the insurance company, after executing such a contract, and agreeing to the appointment so made, to question the right of such appointee to maintain the action. If there should be any controversy as to the distribution among the heirs of the deceased of the sum so contracted to be paid, this does not concern the insurers.' This is all in entire harmony with the proposition that a party cannot take by assignment from the insured, and hold for his own bene- fit, a policy on the life of one in whose life he has no insurable interest." The court further distinguished the case from that of Hutson vs. Merrifield, 51 Ind., 24, which was simply a transfer by operation of law upon the prior death of the wife (who was the beEfeficiary of a policy upon the life of her husband, which went to her heirs), and was declared totally different from a transfer by assignment and purchase during the life of the bene- ficiary. 5 It was further added that, in case of such prior death of the beneficiary, it might, perhaps, be competent for her ad- P See also Rues vs. Mut. Ben. Life Ins. Co., 23 N. Y., 516 ; Lewis vs. Phoe- nix Mut. Life Ins. Co., 39 Conn., 100. 84 REQUISITES : IN KANSAS AND MASSACHUSETTS. ministrator to- sell the policy to one having no interest, in order to settle up the estate. The same doctrine was laid down by the Supreme Court of Kansas in the case of the Mo. Valley Life Ins. .Co. vs.- S (.urges, in 1877, 6 Ins. Law Journal, 337. The insurance was procured by one Haynes on his own life, and shortly after assigned to Stur- ges with the consent of the company, yet the court ruled that the assignee was not entitled to recover in an action against the latter,, dwelling strongly in its argument on the interest of the assignee in the death rather than in the life of the insured, and declaring that he had no right to procure the insurance directly, neither had he a right to procure it- indirectly through an assign- ment. The/ Supreme Court of Massachusetts also favors the view that an insurable interest is necessary to support an assignment, -unless consented to by.the company. In the case of Stevens vs. "Warren, 101 Mass., 564, the policy required the company's con- sent to the assignment, which had not been given. The court said : " The general rule recognized by the courts has been, that no one can have an insurance upon the life of another, unless he has an interest in the continuance of that life. Dewey K. War- ren had no such interest, and could not legally have procured in- surance upon the life of Barton. We understand the answer to deny that the policy was held by Warren as creditor, and for his security, and to assert an absolute right of purchase. The rule of law against gambling policies would be completely evaded' if the court were to give to such transfers the effect of equitable assignments, to be sustained and enforced against the represent- atives of the assured. When the contract between the assured and the insurer is ' expressed to be for the benefit of ' another, or is made payable to another than the representatives of the assured, it may be sustained accordingly. Gen. Sts., C. 58, § 62 ; Campbell vs. N. E. Ins. Co., 98 Mass., 381. The same would probably be held in case of an assignment with the assent of the insurers. But if the assignee has no interest in the life of the subject of insurance which would sustain a policy to himself, the -assignment would take effect only as a designation, by mutual' agreement of the contracting parties, of the person who should be entitled to receive the proceeds when due, instead of the per- VIEWS IN OTHER STATES. F5 sonal representatives of the assured. And if it should appear that the arrangement was a cover for a speculating risk, con- travening, the general -policy of the law, it would not be sus- tained." On the other hand, an entirely different view has been enter- tained in a number of States. Iu New Jersey and Ehode Island it has even been questioned whether an interest of any kind is needed to support a policy in its inception apart from statutory requirements, but, conceding such .an interest, the policy has been regarded as essentially a wager contract, sanctioned by the law, and valued at the sum expressed on its face, and not in any sense a contract of indemnity. The New Jersey Supreme Court, in the case of Martin vs. Franklin F. Ins. Co., in 1875', 5 Ins. Law Journal, 144, said : " An interest in the life insured is not necessary to give validity to the contract." But this, it. should be added, was said in. considering the distinction between a life and fire policy, and was not intended to countenance gambling policies. In Valton vs. Mutual Loan Fund Life Ins. Co., 22 Barb., 20 N. Y., 32, the New York Supreme Court declared, in 1854, that the question whether a person can insure. his life for the benefit of another who has no insurable interest, was one whiqh had never been adjudged. After a strenuous contest, it was finally decided by the Court of Appeals that a life policy which is valid in its inception will not be avoided by its subsequent assignment to one who has no insurable interest. In Campbell vs. New Eng- land Mutual Ins. Co., in 1867, 93 Mass., 381, the Supreme Court of Massachusetts affirmed the same doctrine concerning a policy taken out by the insured, and expressed to be for the benefit of another. The latter is declared to be merely the person desig- nated by agreement of the parties to receive the money. But this view was afterwards modified as regard the assignee. (See be- yond.) The Supreme Court of Pennsylvania, in Cunningham vs. Smith's Adm'r, 7 Pa. St., 450, declared that while it might be questionable whether defendants had such an interest as would, Lave authorized an insurance directly by them, the insured pos- sessed such an interest in his own life to an unlimited . extent, " and if he was willing to insure himself with their money, and 86 VIEWS OF. RHODE ISLAND SUPREME COURT. then assign the policy to them, there is no principle of law which can prevent such a transaction." The New York Court of Ap- peals, in St. John vs. Amer. Mut. Life Ins. Co., 13 N. T., 31, de- clared " that, without the right to assign, insurances on lives lose half their usefulness." That, so far as concerns the liability of the company to the assignee, it matters not whether a full con- sideration was paid for the assignment or not. If the policies were valid in their inception, their assignment in good faith enti- tled the assignee to recovei", regardless of interest. The Court of Appeals of Maryland, in two or three recent decisions (ante), would seem to favor the same views. But not to multiply authorities, this whole question was discussed in the light of the various decisions, and the result most ably summed up by the Su- preme Court of Rhode Island, in the case of Clark vs. Allen, in 1877, 11 K. I., 441, and a rule laid down which seems on the whole to be sustained by the great weight of authority, and to be the most consistent and equitable in its principles.* 1 The court said : " A life policy is a chose in action, a species of property, which the holder may have perfectly good and innocent reasons for wishing to dispose of. He should be allowed to do so unless the law clearly forbids it. It is said that such an assignment, if per- mitted, may be used to circumvent the law. That is true if in- surance without interest is unlawful ; but it does not follow that such an assignment is not to be permitted at all, because, if per- mitted, it may be abused. Let the abuse, not the bona fide use, be condemned and defeated. * * * Perhaps Cammack vs. Lewis, 15 Wall., 644 (ante), may be found to be a case of that kind. Again the assignment is said to be a gambling transac- tion, a mere bet or wager upon the chances of human life. But the wager was made when the policy was effected, and has the sanction of the law. The assignment simply transfers the pol- icy, as any other legal chose in action may be transferred from the holder to a bona fide purchaser. * * * But finally it is urged that the purchaser or assignee subjects himself to the temptation to shorten the life insured, and that this the policy of the law does not countenance. The law p ermits the purchase of an es- 1 See also Lord vs. Dall., 12 Mass., 15, 1 Big. and notes ; Trenton Mut. L. & F. Ins. Co. vs. Johnson, 4 Zab., 576; Eawls vs. Am. L. Ins. Co 36 Barb 357, 27 N. Y., 282 ; Mowry vs. Home Ins. Co., 9 R. I. ' "' PRACTICAL CONSIDERATIONS. 87 tate in remainder after a life estate, which exposes the purchaser to a similar temptation. It has been decided, too, that a policy effected by a creditor on the life of his debtor does not expire when the debt is paid, though the holder then ceases to be in- terested in the continuance of the life, and is thereafter exposed to the same temptation which is supposed to beset the assignee without interest, to bring it to an end. If the danger is not suf- ficient to avoid^ the policy when the interest ceases, why should it be sufficient to avoid the assignment to an assignee without interest ? The truth is, it is one thing to say that a man may take insurance upon the life of another for no purpose except as a speculation or bet on his chance of life, and may repeat the act ad libitum, and quite another thing to say that he may purchase th§ policy as a matter of business, after it has once been duly issued under the sanction of the law, and is therefore an existing chose in action or right of property, which its owner may have the best of reasons for wishing to dispose of. There is in such a purchase, in our opinion, no immorality and no imminent peril to human life. We should have strong reason before we hold that a man may not dispose of his own. Courts of justice, while they uphold the great and universally recognized interests of so- ciety, ought, nevertheless, to be cautious about making their own notions of public policy the criterion of legality, lest, under the semblance of declaring the law, they in fact usurp the func- tion of legislation. We therefore decide that whatever the law of this State may be in regard to procuring insurance upon the life of another without any interest in the life insured, it does not forbid the sale and assignment of a valid policy which is already in existence, to an assignee without interest in the life insured, when the assignment is permitted or is not prohibited by the pol- icy, and is made, not as a contrivance to circumvent the law, but as an honest and ponafide transaction. 1 The following practical considerations would seem to flow from a review of these cases. The courts have as yet reached no settled position with regard to the question of insurable in- terest in assignments. Many of the decisions have apparently r In several of the States the right to assign is expressly conferred by stat- ute especially in- the case of wives' policies, and in two or three an insurable^ interest by the assignee is declared unnecessary. 88 , SUMMARY OF THE VIEWS. been controlled by the special facts existing in the case under consideration. The bona fide purchase of a policy with a view to its continuance by one having no interest is permissible in some States, but not in all, but its transfer as security for a valid debt is universally allowable. The company, upon payment of the claim, however, is under no obligations to inquire into the inter- est which supports the policy in the hands of a bona fide assignee in the absence of adverse knowledge ; yet, for abundant security, it may properly inquire. The purchase of a policy by one hav- ing no interest, with a view to its surrender and not to its con- tinuance, does not present the case of a holder interested in the death of the insured, and would seem to be wholly unobjection- able. Even the consent of the insurer to the assignment will not cure the defect where such assignment is regarded as wholly against public morals, but where a more modified view is held, as in Massachusetts, such consent may sustain the claim of the assignee, and a contract generally to pay the beneficiary and -his assigns may operate to estop the company from objecting to want of interest in States where little weight is attached to the question. 8 A promise to pay insured and his assigns ought, it would seem, to be construed according to the general rules governing, insurance contracts, and the intention of the parties be sought from the whole tenor of the instrument, giving weight above the, printed portion to such language when written, and modifying stipulations concerning notice, &c., which may be inconsistent, as was done by the Md. C. A., ante} Where the assignee has no right of action in his own name, a mere general promise to pay the assigns is not usually sufficient to give him such right ; he must have the company's consent to the assignment u In con- " The general principle is that a contract against public morals -will not he enforced. The defense of illegality prevails, not as a protection for the de- fendant, but as a disability in the plaintiff. Horton vs Buffiugton, 105 Mass., 400 ; Myers vs. Mcinrath, ifi., 366. But equity will often modify this rule where the circumstances seem to call for it, and the parties are not in pari de- licbi. Schermerhorn vs. Talman, 4 Kern. (N. Y.), 93 ; Sampson vs. Shaw, 101 Mass., 150 ; Lowell vs. B. & L. E. E. Co., 23 Pick., 33. * IT. Y. L. Ins. Co! vs. Flack, 3 Md., 341. " Exchange Bank vs. Eicc, 107 Mass., 37; Jessel vs. Williamsburg City Ins. Co., 3 Hill, 88; Conover vs. Mut. Ins. Co., 1 Comst, 200. THE COMPANY MAY BE ASSIGNEE. 89 elusion, it may be added that, whatever objections there may be against an assignment prior to the maturity of the claim, do not affect an assignment of the claim itself after it has become due. Such assignment is permissible on general principles of law, even in the case of fire policies, and no prohibition by the company can impeach it.^ The companies themselves, as well as individuals, may usu- ally be the assignees of policies issued by them, and the surren- der of a policy is in effect a species of assignment ; the same may be said of liens upon a policy ; and both are governed by the same general principles as ordinary assignments. The right to surrender or create a lien* aside from the stipulations of the con- tract, belongs only to those holding title to the policy. Thus, in Brooks vs. Phoenix Mut. Life Ins. Co., 8 Ins. Law Journal, 740, the U. S. Circuit Court of Vermont, in 1879, declared that the husband had no right to create liens on a policy in favor of his wife without her consent, and she was entitled to the entire pro- ceeds without any deduction for unpaid notes given for premi- ums. The same doctrine has repeatedly been applied to unau- thorized surrenders. w But it has been held that relief associa- tions, limited by charter to the relief of widows and children of deceased members, have no right to take an assignment of a policy for a loan ; that it is subversive of the charter. 1 It should be observed, however, that the relation of debtor and creditor, as between the company and the insured, also affects the rights of the parties, as is said elsewhere. T West Branch Ins. Co. vs. Helfenstein, 40 Pa. St., 289. This principle is too well recognized to need citations. w Wheeler vs. Peerless,6 Ins. Law Journal, 560 ; Dungan's Adm'r vs. Mut. Ben. Life Ins. Co., ante. In Stillwell vs. Mutual Life Ins. Co., 7 Ins. Law Journal, 444, the N. Y. C. A., in 1878, held that the wife is entitled to the restoration of a policy wrongfully surrendered by her husband without any return of the sur- render paid, if she act with due diligence. To the same effect is Herrick vs. Nat. Life Ins. Co., 5 Ins. Law Journal, 80. In White vs. PenD. Mut. Life Ins. Co., 8 Ins. Law Journal, 78, the St. Louis Court of Appeals held that, while all interested must concur in a surrender, yet where the company has agreed to give a paid-up in exchange, it has no right to require a written surrender from one who has no real beneficial interest, and to whom it could never in any way be liable. See also Fraternal Mut. Life Ins. Co. vs. Applegate, beyond, 7 Ohio St. x Deitrich vs. Mad. Kelief Ass., Wis. S. C, 1878, 8 Ins. Law Journal, 70. CHAPTEE VIII. WHO MAY ASSIGN, AND HEREWITH OP TITLE TO THE POLICY. Title is in the Beneficiary. — Rights .of Party procuring the Insur- ance. — When Gift is Incomplete— When Beneficial Interest Fails. — When the Policy is not Paid-up. — Who are the Benefi- ciaries. The general doctrine is now settled by the uniform current of authority, that the title to life policies, from the moment of their execution and delivery, vests in those who are designated as beneficiaries, and these are the only parties who are authorized to assign or' surrender them. Where more than one party has an interest in the money, all must concur, and an assignment by one party only will be invalid as against those not joining. The party paying the premiums or procuring the insurance acquires no title thereby, although under no obligation to keep the policy in force. If the beneficiaries are under legal disabilities, their rights are subject to the State laws regarding such disabilities. Thus, in New York, until recently, the wife was not permitted to assign a policy for her benefit under the statute. In some of the States, though not in all, the husband must join in an assignment by the wife. An assignment by one judicially decreed insane, while a guardian is in charge of his affairs, has been held void ; but if, upon restoration to his legal rights by the same court, he verbally confirms his act, saying to the assignee that he is glad he gave it to her, this is a ratification and a valid gift in pre- senti. Infants must be represented, not by their natural, but by a Quigley vs. Mut. Life Ins. Co., U. S. C. C, Ohio., 4 American Law Record. EXCEPTION TO THE RULE. 91 a legal guardian. The former has no right in virtue of his posi- tion to control their property. 1 * Such is the general doctrine as to the title to a life policy. It rests on the assumption that, by the act of its execution and de- livery, in the absence of any reservation of authority by the party procuring the policy, an unqualified and irrevocable trust is created in favor of the beneficiary ; and this doctrine has been especially emphasized in the more recent decisions concerning policies issued under special statutes whose object is to confirm the title in the beneficiary. But the doctrine is subject to this im- portant qualification, that the party procuring the insurance may, if he so elect, reserve the'right to its future disposition. If such a reservation be expressed in the contract itself, its validity is beyond dispute. It seems also to be admitted, by some of the courts at least, that where the intention of the donor to retain such control is otherwise clearly indicated at the time of issue, though not expressed in the contract, the mere fact of procuring a policy. without more will not divest the procurer of all author- ity, at any rate where the contract is not made subject to a stat- ute which deprives him of such authority. In several of the earlier decisions the party paying the premiums was regarded as acquiring certain rights in the policy thereby, and to obviate questions of this kind was one of the objects of wife's policy laws. But the doctrine is not settled as to what acts of the party procuring the policy will amount to a reservation of authority, or be sufficient evidence of such an intention. The question is whether the gift has been completed. Where the instrument still remains in the control of the original contracting party, the right of the latter ,to dispose of it in all cases has not been settled. It has been said in New Jersey, that " it may be stated as a general rule that, on a life policy, where the money to become due under it is payable to !» See Price vs. Phoenix. Ins. Co., 2 Ins. Law Journal, 'Z2'3 ; Chapin vs. Fel- lows, 36 Conn., 132 ; Eickenbacker vs. Zimmerman, 8 Ins. Law Journal, 423. Assignments by infants are not void, but simply voidable by the infant, or one empowered to stand in his place. Soppr vs. Fry, Mich. S. C. , 1878 ; Holmes vs. Eice, Mich. S. C, 1831. It has been held in South Carolina that an infant may procure and assign a policy on his life to a creditor as security for a debt, not for necessaries. Kivers vs. Gregg, 5 Eich. Eq., 274. c Martin vs. Franklin F. Ins. Co., ante. 92 THE BETTER ETJLE. certain persons named as beneficiaries, the policy, and money payable thereon, belong, the moment it is issued, to the persons designated, and they are the proper parties to receipt for the money and sue on the policy. The legal representatives of the insured have no claim upon the money, and cannot maintain an action therefor, if it be expressed to be for the benefit of some one else. a Similar views have been expressed in New York in relation to policies procured for the benefit of a wife, e and the point has been emphasized here and elsewhere that in such case no formal delivery is needed. This view, as has been said, is grounded on the assumption that the intention of the contract- ing parties was to execute an unqualified trust in favor of the beneficiaries. It is not disputed that the parties may contract with a view to change the beneficiary, if they so elect.* The argument that the insured had not completed the gift, but had retained the policy in his possession, is one whose validity against the beneficiary has repeatedly been recognized. The Su- preme Court of Connecticut said, in the case of Lemon vs. Phoenix Mut. Life Ins. Co., 1 Ins. Law Journal, 520 : " It is not claimed that the mere fact of making the policy payable to Miss Lemon, without more, vested in her a complete title. It is conceded that, so long as Mr. Peterson retained it in his own possession, he might control it as his own." The better rule would seem to be that while the executed contract is strong presumptive evidence of the beneficiary's complete title, it is capable of rebuttal in the case of policies not under the wife's statute, at any rate, and while a complete assignment may be safely accepted from the beneficiary, it cannot be from the original contracting party. The courts of at least three States, Wisconsin, Missouri, and New Jersey, have refused to admit that the party paying the premiums has no further control over the policy. 11 The Supreme a See, per contra, Landrum vs. Knowles, beyond. ••Barry vs. Equitable Life Ass. Soc, ante, and Fowler vs. Butterly, auk; Mallory vs. Travelers' Ins. Co., 1 Ins. Law Journal, 800. i Hutchings vs. Miner, 46 N- Y., 456. g See also Kerman vs. Howard, 23 Wis., 108, and Estate of Malone, Pa. S. C, 9 Ins. Law Journal, 767. h In a few States, the party paying the premium on a wife's policy is authorized by statute to control it in case of the death of beneficiary. EIGHTS OF DONOR. 93 Court of Missouri, in the case of Gambs vs. Covenant Mut. Life Ins. Co., in 1872, 1 Ins. Law Journal, 338, declared concerning a policy taken out by the husband for the benefit of his wife or her legal representatives, previous to the passage of the wife's policy law, that had the husband died previous to the wife, the contract would have been enforced according to its terms, but that it does not follow that, in case of her prior decease, it must be held to be for the benefit of her representatives. The object was her support, and that being lost, he was not bound to con- tinue it for the representatives, but might surrender it, or with the consent of the company change the beneficiaries. The same doctrine was laid down by the Supreme Court of Wisconsin in a similar case, where the policy was under the wife's policy law. Kerman vs. Howard, 23 Wis., 108. It has held that, in the event of his survival, he might dispose of the policy by assignment or otherwise. So in the case of Clark vs. Durand, 12 Wis., 223, ;this court held, where a mother insured her life for the benefit of her son in the name of a guardian, that she, holding possession of the policy and paying the premiums, might, during her life, pass the policy over absolutely to the guardian. The son had no vested rights, and could have none until the death of the in- sured. It was but an executory contract which could be changed or abandoned at the will of the parties. In the case of Landrum vs. Knowles, 22 N. J. Eq., 594, it was held by the New Jersey Court of Appeals that, where a wife had taken out a policy on the life of her husband in favor of her children, she paying the premiums, and she afterwards assigned it, the subsequent pre- miums being paid by the assignee, the policy was an executed one only to the extent to which the premiums had been paid, and the children were entitled, upon the death of the insured, to the value of the policy at the time of assignment, but beyond this the contract was executory and the payments voluntary. She had a right to assign, and the assignee was entitled to the re- mainder. The Virginia Supreme Court of Appeals, in the case of Universal Life Ins. Co. vs. Cogbill, in 1877, 7 Ins. Law Jour- nal, 371, held that the husband, and not the wife, was the party to recover premiums paid by him on a policy for the benefit of his wife, in the event of the company's insolvency. The wife has, it is said, no interest in such a claim. But these views, as y$ EIGHTS OF DONOR will be shown in the following chapter, are not in harmony with the prevailing current of authority, especially as regards the more recent decisions. The courts sought in this way to avoid the seeming injustice of compelling the donor, upon the failure of the original motive for insurance, to forfeit what" he had already purchased, or to continue payments for the benefit of parties in whom he had no sufficient interest. But the legal embarrass- ments of such an indefinite title have apparently been recognized by most of the courts, as the subject, by repeated litigation, has become better understood.- 1 j The views here expressed have received additional confirmation since the above was written, by a decision rendered by the Supreme Court of Wisconsin, just as these sheets were being prepared for the press, in the case of Foster vs. Gill, 10 Ins. Law Journal. * * The policy on the life of B., who paid the premiums, was payable to his children, their executors, administrators and assigns. The children died, and shortly afterwards the insured, among whose papers was found one bearing the signature of himself and wife, purporting to assign the policy to one P., and another signed only by himself, addressed to his administrator, stating how he desired the insurance money applied. Neither of these papers, it would seem, had ever been out of the hands of the insured, and were only discovered upon his death. The court, referring to its previous rulings in Clark vs. Durand, 12 Wis., 223, and Kerman vs. Howard, 23 Wis., 108, that the person procuring the insurance and paying tha premi- ums has a right to dispose of it to. the exclusion of the beneficiary, declared that the opposite doctrine, recently held in Kicker vs Charter Oak Life Ins. Co., 2 Minn., 101, seemed to be' fortified with authorities. Nevertheless, un- til the legislature enacts otherwise, it was added, the previous rulings must be adhered to ; but both, it was said, were extreme views. Said the court : " Of course we cannot adopt the doctrine of the Minnesota case to its full ex- tent ; for, as already observed, it overturns Clark vs Durand and Kerman vs. Howard. But if there is any middle ground which commends itself as more reasonable and jnst, it ought to be adopted. We believe there is such ground, and we feel at liberty to adopt it. Notwithstanding what was said in Clark vs. Durand, we think the taking of the policy by the insured, payable to an- other, is so far iu the nature of an executed voluntary settlement, that it vests in the person to whom the insurance money is made payable an actual sub- sisting interest in the policy, but not the absolute, unconditional ownership of it, and of the moneys therein agreed to be paid. The interest of the benefi- ciary is subject to the right of the insured, who has paid the premiums, to re- voke the same, and retain it himself, or vest it elsewhere. At least, he may do this with the consent of the company which issued the policy." It was accordingly held that, neither of the papers having ever been delivered to the assignee, nor executed with the legal formality requisite to bequests, and never having seen the light prior to the death of insured, they were mere in- dications of an intention to dispose never carried out. The previous death of the beneficiaries did not abrogate the stipulation in their favor. They took THE PREVAILING DOCTBINE. 95 The prevailing doctrine on this subject, in the absence, at any rate, of any apparent intention by the insured to reserve the right of disposal at the inception of the contract, was laid down by the Supreme Court of Tennessee, in Gosling vs. Coldwell, in 1878, where the policy taken out by a husband on his own life, and made payable to his " legal heirs," was afterwards assigned by him, to parties not his heirs. It was held that the authorities are uniform on the point that, when the policy is issued, the rights are vested, and cannot be divested without the consent of those to whom they are secured ; k and the same rule applies where the policy issued to the party himself has been afterwards assigned by an executed contract, though voluntary. x It was further said that, under the Tennessee wife's policy law, while a policy taken out by the husband, payable to himself, would in- ure to his wife and children, free of creditors, this did not de- prive him of the fight to its disposition." 1 The same doctrine was laid down by the Court of Appeals of Kentucky, in Robinson vs. Duval, in 1880, 9 Ins. Law Journal, 89 ". The policy was taken out by the husband on his life, payable to his wife and children or their representatives. The wife died, then all the children, leaving one grandchild surviving, where- upon the husband assigned and delivered the policy to a niece as a gift. In a contest between his executors, the guardian of the child, and the assignee, it was held that the acts and rela- tions of the parties, and the nature of the transaction, must be looked at to ascertain the intention of the parties. The contract was of the nature of a ^testamentary provision for his family, and it would be unreasonable to suppose that the insured in- tended, in case of the death of a beneficiary, its interest should a present conditional interest, and their administrator was entitled to the proceeds. k Citing Gould vs. Emerson, 99 Mass., 154; Eadie vs. Slimmon, 26 N. Y., 9; Ins. Co. vs. Burroughs, 34 Conn., 305; Rupert vs. Ins. Co., 7 Robert, 155; Ins. Co. vs. Applegate, 7 Ohio St., 292. 1 Citing Fortescue vs. Barnett, 3 Myl. and K. 36 ; Harrison vs. McKonkey, 1 Md., ch. 34 : MeCord vs. Noyes, 3 Bradf., 139. m Citing Rison vs. Wilkinson, 3 Sneed, 565 ; Williams vs. Corson, 2 Tenn., ch. 269. 96 THE PREVAILING DOCTRINE. revest in himself. Upon the death of each child without issue, its share went to the survivors, and upon the death of the last leaving issue, to that issue, as the representative. There was, therefore, no interest in the insured which he had a right to as- sign. So in the case of Goodrich vs. Treat, the Supreme Court of Colorado held, in 1877, that a policy for the benefit of the wife, her heirs, executors, or assigns, is part of her personal es- tate, and in case of her prior death passes to her administrators, not those of the husband. So also in Continental Ins. Co. vs. Palmer, a policy by the wife on the life of her husband, payable to herself if living, if not to her children, was declared by the Supreme Court of Connecticut, in 1875, 5 Ins. Law Journal, 305, to be testamentary in character ; that the children have an inter- est in the policy from its inception, and in case of the prior death of the wife, the husband has no claim. The Supreme Court of Louisiana held, in Trager vs. La. Eq. Life Ins. Co., in 1879, 9 Ins. Law Journal, 817, that the benefit to the beneficiary cannot be revoked by the company without the consent of the latter, even though his assent is not neces- sary to complete the contract, where such assent is timely mani- fested by claiming the amount when due. In the case of Kicker et cd. vs. Charter Oak Life Ins. Co. et al., 10 Ins. Law Journal, the policy procured by the husband upon his life was made payable to the wife, and, in case of her prior death, to his children. The wife died leaving children, and the husband married again, whereupon he surrendered the policy in exchange for another precisely similar, except that it was made payable to the second wife. In a contest between the second wife and the children of the first, the Supreme Court of Minnesota, in 18fc0, while declaring the general doctrine . to be that the rights under the policy become vested^inimediately upon its issue, in the beneficiary, who alone can surrender or assign, held that it was unnecessary for the court " to consider the rule as applitd to a case where a portion of the premiums still re- mains unpaid, and where the policy is liable to forfeiture in case of non-payment," for here the entire amount of premiums re- quired had been paid up prior to the death of the wife or the attempted surrender. Therefore, according to the court, the case was the same as if the whole amount had been paid in a single INTENTION OP THE DONOE. 97 premium at the inception of the contract, and such a policy it was not competent for the husband to surrender. The transac- tion, it was said, was of the nature of an irrevocable and exe- cuted settlement upon the wife and children ; nothing remained to be done on his part to make the gift complete and effectual as against himself. " In paying for the insurance, and procuring the policy to be issued, payable in express terms to his said wife, if then living, and if not to his children, for their sole use and benefit, without any condition or stipulation reserving a right to change or alter any of the terms of the agreement, he did all that could well be done under the circumstances, in the execu- tion of an intention to vest in his said appointees the entire in- terest in the policy." * * Taking the delivery of the policy from the company under these circumstances can only be con- strued as an act of acceptance for the designated beneficiaries, and his subsequent holding of the same as that of a naked de- positary, without any interest, for those entitled thereto. Such conduct, on the part of the husband and father, was both natu- ral and proper, and it raises no presumption against the theory of a completed transaction on his part, as evidenced by his other acts." It was accordingly held that the surrender was a nullity which could not affect the rights of the children. It will be observed that the thing sought for by the court was to ascertain the intention of the insured as evidenced by his acts at the time of effecting the contract. His relations as a pa- rent and husband rendered the subsequent retention of the pol- icy by him no presumption against his intention to complete the gift, as evidenced by his acts. If he actually caused the policy to be issued as a completed gift, the act was irrevocable. On the other hand, it would seem to follow from the reasoning that, if there had been evidence clearly showing that he intended from the first to retain the control of ihe instrument, and kept it in his possession for that purpose, the result might have been different. On the other hand, in the case of Swift vs. Railway Pass., &c, Benefit Association, Supreme Court of Illinois, 1880, 10 Ins. Law Journal, 53, the insured was a member of a Railway Conduct- n Citing Adams vs. Brackett's Ex'r, 5 Met., 280 ; Landrum vs. Knowles, 22 N. J. Eq., 594. 98 BULE IN CASE OF BENEFIT SOCIETIES. ors' Mutual Association, and by reason of his membership, un- der the provisions of the articles of association, had an insurance which the company was liable to pay on his death, and which by the rules he might dispose of by will, but if not so disposed of, the insurance should belong to the widow, or in case there was no widow, then to his legal heirs or representatives. He made a will giving the proceeds to children by, a former wife, and deposited the will and his certificate of membership with the executor whom he appointed. Afterwards, being unable to pay the dues, he executed an assignment to his wife in form like a will, but designed, according to the court, from the language, to be an immediate assignment of the title, on condition that she should pay the dues, which she did. The proceeds were claimed by the wife and by the executor. The court said : " It is strenuously insisted that this contract was of such a character that it could not be assigned, even equitably, by Clark Swift. We think otherwise. Neither the wife nor children had any vested interest, conditional or otherwise, in this insurance money so long as Clark Swift lived and owned and controlled this con- tract. The contract was between the association and himself. They had paid nothing for their supposed interest. The certifi- cate had not been delivered or sold to them. The delivery to White (the executor) had made him bailee for Swift. It was a contract which was capable of being rescinded by Clark Swift with the assent of the association. It is not conceived that he had not complete control over it to the same extent that he might have controlled a promissory note payable to him. The will, of course, was of no effect until he died. At the time of his death he held no interest in that part of the money to arise from the contract relating to his death, which could pass to the executor by the will ; that interest had been sold. It was assignable in equity, and had been assigned to and paid for by the wife." In a dissenting opinion, however, one of the judges says : " I cannot concur, either in the reasoning or conclusion of the above opinion." Indeed, it is exceedingly difficult, if not impossiblej upon the facts as stated, to reconcile this decision with the pre- o See reference to this case in Chapter III., ante. REAL PARTIES IN INTEREST. 99 vailing current of authority.? The views of the court appear to have been framed upon the theory that, under the charter, the relations between the member and the association were such that, in view of the facts, he retained a complete control of the insurance, for it was said in the opinion : " Had he made a con- tract with this association by which they had taken up his cer- tificate of membership, and had made a regulation which should make the money payable absolutely to his two daughters in case of his death, there can be no doubt that Clark Swift's interest in this contract, and his control over it, was such that he might, with the consent of the corporation, have surrendered this cer- tificate, and have rescinded the contract, and might have made another." In other words, the certificate had never passed be- yond his control, and no other party had acquired any rights un- der the contract. The ease was different from that of ordinary benefit societies, for by the rules he had an unrestricted testa- mentary control, and the only question was whether he could dispose of the benefit by a method not indicated in the rules. It is not always clear from the fording of the policy who are the, real parties in interest, or what are their legal rights. Where simply the contract is with the insured, but the promise is to pay a third party, or the benefit is expressed to be for a third party, the latter is the real party in interest, and where the language is doubtful, the courts will seek to construe the contract according to the intention of the parties. Where the promise is to pay the insured, his representatives, assigns, &c, the beneficial inter- est is in the insured, who may dispose of the policy/ 1 Where the beneficiaries were simply the legal representatives of the in- sured, but the contract was with the insured, his executors, and' P See, per contra, Duvall vs. Goodson, 9 Ins. Law Journal, 901, where it was held by the Ky. C. A. that the control of insured over the fund in a be- nevolent association was strictly limited to the mode indicated by the charter. See also Ky. Mas. Mut. Ins. Co. vs. Miller's Ad'r, 13 Bush., 494. See also as to title to funds in a benevolent society, Ballou vs. Gill, Wis. S. C, 1880, 10 Ins. Law Journal. q Hoyle vs. Guardian Life Ins. Co., 6 Robertson, 567 ; Williams vs. Carson el al., Ten! Ch. Ct., 1875; .(Etna Life Ins Co. vs. France, ante; Campbell vs. N. E. Life Ins. Co., 9 Mass., 381; Myers vs. Keystone L. Ins. Co., 27 Pa., 268. 100 HEIRS AND REPKESENTATIVES. assigns, with a nota bene at the end, " if assigned, notice to be given to the company," the Maryland Court of Appeals held— N. Y. Life Ins. Co. vs. Flack, 3 Md., 341— that, taking into con- sideration the whole instrument, the provision to pay the legal representatives only applied where the insured-died without hav- ing otherwise disposed of the policy. 1 The term " heirs " is flexi- ble, and means next of kin in case of personalty. A policy made payable simply to the " legal heirs " of the insured vests the titie in the heirs ; the insured has no right to assign or otherwise dispose of it. 8 The insured, under a charter restricting the benefits to widows of members, it has been held, cannot divert the benefit by contracting that it shall be payable to himself or other parties.* An agreement to pay the assigns is not neces- sary to the assignability of a policy. 11 The meaning of the term " legal representatives " in a policy has not been free from dispute, the question being whether the proceeds of such policy belong to the executor or administrator as part of the personal estate liable for debts of the deceased. In the case of People vs. Phelps, 5 Ins. Law Journal, 885, the Supreme Court of Illi- nois held that a policy payable to the legal representatives is as- sets in the hands of the executor or administrator, as part of the personal estate, and does not go to the widow or heirs free of debts. This is the generally recognized rule. But where the term " heirs or representatives " is used, the case is not so clear and the courts look into the contract to ascertain the intention of the parties. The Supreme Court of Massachusetts, in Wason vs. Colburn, 99 Mass., 342, where the policy was an endowment payable to the insured, or, in the event of his decease, to his heirs or representatives, held that the contract was primarily with the insured, and oral evidence was incompetent to show that it was intended for a son. The term " legal representatives," it was held, indicates administrators, and the administrator was entitled to the fund as part of the personal estate. On the other hand, r See also Netfcomb vs. Mut. Life Ins. Co., 9 Insurance Law Journal, 124, s Gosling vs. Coldwell, Tenn. S. C, 1878. t Ky. Mas. Mut. Ins. Co. vs. Miller's Adm'r, Ky. C. A., 1877. But, per con- tra, see Penn Mut. Relief Ass. vs. Folmer, Pa. S. C, 1878. " De Conge vs. Elliott, 23 N. J. Eq., 486 ; Archibald vs. Mut. Life Ins. Co., 38 Wis., 542. CEEDITOBS AND TRUSTEES. 101 the Supreme Court of Missouri, in a case precisely similar (Loos vs. John Hancock L. Ins. Co., 41 Mo., . r i38), while admitting that " representatives," in the legal sense, mean executors and adminis- trators, held that they are often construed differently when such appears to be the intention, and the use of the word " heir " sin- dicated an intention on the part of the insured to make the pol- icy for the benefit of his next of kin ; therefore the heir, and not the administrator, was entitled to the proceeds. v Nor will the allegation of fraud against creditors usually deprive the beneficiary of the right to claim the proceeds. The creditors have simply the ordinary rights of following the property like any other, put out of his hands by the debtor. 17 Where the policy i^ payable to one party for the benefit of another, the right of action is usually in the first party as trustee for the ces- tui que trust, but the right has also been allowed to the lat- ter, x who should join in any assignment. (See ante as to pow- ers of trustees.) The proceeds of a policy will pass under a gen- eral devise of personal estate. y This subject will be further considered in a subsequent chapter. In Dutton vs. Wilner, 52 N. Y., 312, the insured gave the policy to another party for cancellation upon return of the pre- mium notes. The party, after having forwarded the policy through the agent, and obtained the notes, determined to renew the policy for his own benefit, and induced the agent to return ▼ See also on this subject Keller vs. Gaylor, 3 Ins. Law Journal, 303 ; and Robinson vs. Duval, ante. w In re Bear & Steinburg, 4 Ins. Law Journal, 159 : McCord vs. Noyes, 3 Bradf., 139 ;" Succession of Kugler, 23 La. Ann.; 455. But see Greenfield vs. Mass. Mut. L. Ins. Co., 47 N. Y., 430 ; Pence vs. Conn. Mut. Life Ins. Co., ante. See also beyond. x Campbell vs. N. E. Mut. Life Ins. Co., 98 Mass., 381 ; Hillyard vs. Mut. Ben. L. Ins. Co., 2 Ins. Law Journal, 442 ; Bailey vs. N. E. L. Ins. Co., 3 Ins. Law Journal, 442. The general principle is that a release, which constitutes a complete answer to a demand from the plaintiff, is a bar to the action, though brought for the benefit of others, provided they cannot enforce their claim except in the name of such plaintiff, and a party not the plaintiff on the record, and having no legal interest, but beneficially interested, cannot release the debt so as to defeat the remedy at law. But if a trustee, or merely nominal plaintiff, release on an action, without consent of the real beneficiary, it may beset aside. See Chitty on Cont. (11 Amer. Ed.), 1152, 1153, 1154, and notes. y Keller vs. Gaylor, 3 Ins. Law Journal, 303. 102 PREMIUMS PAID THitOUGU MISTAKE. the notes, and secure a new policy payable to himself, represent- ing that it was done with consent of insured, whereas the in- sured was in ignorance of the transaction. The new beneficiary afterwards paid the premiums, and received the amount. In a suit against him by the administratrix, it was held that he was authorized only to surrender, and as an agent had no right to profit from the transaction, although no harm was done to his principal. He was entitled only to credit for the amount of pre- miums paid ; the new policy must be regarded as for the benefit of the principal. Where the assignee has been held not entitled to the policy, he has usually been allowed the benefit of payments made by him to keep it in force. 2 z Lemon vs. Phoenix Mut. Life Ins. Co., 1 Ins. Law Journal, 520 ; Bur- roughs vs. State Mutual Life Ins. Co., 97 Mass., 359 ; Conn. Mut. Life Ins. Co. Vs. Burroughs, 36 Conn., 132; Gould vs. Emerson, 99 Mass., 154; Knicker- bocker Life Ins. Co. vs. Weitz, 99 Mass., 157. CHAPTER IX. WIVES POLICIES. Design and Construction of the Statutes. — AssigndbU'ty of Wives Policies in New York. — Assignability in Other States. — Ef- fect of Lapse and Revival. — Effect of Vested Interests in Children. — Surrender or Transfer without Consent of Bene- ficiary. — What Policies are Within the Statutes. By far the most important questions in connection with as- signments have arisen concerning contracts expressed to be for the benefit of a wife or wife and children. Independently of any statute, an insurable interest in the life of the husband ex- ists in favor of the wife and of minor children, and the husband, as well as the children, may have such an interest in the wife. But inasmuch as such contracts failed to furnish the full measure of protection which is usually sought by those taking out poli- cies of this kind, a special statute was passed in New York in 1840 to remedy the defects, familiarly known as the Wife's Pol- icy Law. The example of New York has since been followed by many of the other States, the provisions of these laws, how- ever, differing in the different States ; several of the older com- panies also incorporated similar conditions in their charters. Where the policy has been issued under such a statute, the power of assignment will be controlled by the statute, otherwise by the general principles governing all assignments, and especially the legal relations or disabilities of the parties. Whether a pol- icy is subject to the statute is sometimes difficult to determine, especially in the case of endowments. These statutes, in gen- lOi PE0VISI0NS OF THE STATUTES. eral terms, authorize the insurance to be effected for the benefit of the wife and children free from creditors. That of New York provides in effect that a married woman may cause the life of her husband to be insured in her own name, or in the name of any third person, with his assent, as her trustee, for any definite period or for the term of life, and, in case *of her survival, the amount shall be payable to her, to and for her own use, free from the claims of representatives of the husband, or of his creditors, or any parties claiming through him. But when the premium paid is in excess of $500 in any one year, such excess, with interest, shall inure to the benefit of creditors. The amount may be made payable, in case of the death of the wife, before it comes due, to his, her, or their children, as may be provided in the policy, and to their guardian, if under age. By a subsequent amendment in 1 873, the right was given to a married woman to surrender to the company, and in the ab- sence of children to dispose of the policy by will and deed. By another amendment in 1879, she was permitted to assign with the consent of her husband, but the effect of this amend- ment as to pre-existing contracts, which are expressly included, is a matter of some doubt. The opinion has been advanced that the statute is effectual as to previous policies issued solely to the wife, but not as to such as vest an interest in children. The Massachusetts statute provides that an insurance on the life of any person, when expressed to be for the benefit of a married woman, or assigned to her or for her benefit, shall inure to her separate use and that of her children, free from the claims of the husband or his creditors, or the party effecting the insur- ance or his creditors. The amount is unlimited, but if the pre- miums are paid with intent to defraud creditors, an amount equal to such payments with interest shall inure to the benefit of creditors. The statutes in the other States are more or less similar to these in their provisions. In two or three, express power is con- ferred to assign ; in some no special reference is made to limited term policies ; in others the term is expressly defined as definite. In some the right to the policy, or to its surrender, is given to the person paying the premiums, in the event of the beneficiary's death. They differ among themselves as to the provision re- OBJECTS OF THE STATUTES. 105 garding creditors, as to who may be the subject of insurance, and what children may be beneficiaries.. Hence the construction of such policies are necessarily somewhat different in the differ- ent States. Such statutes are now in force in some twenty-four of the States. The objects sought by these statutes were thus defined by the New York Court of Appeals, in one of the earliest suits call- ing for their construction, that of Eadie vs. Slimmon, 26 N. Y., 9 : " By the common law, a person could insure his own life for any sum for which he might choose to pay the premium, but if one desired to insure the life of another, he could only insure the in- terest which he had in s«ch other life. If he undertook to insure a gross sum, and the contract was not susceptible of a construc- tion which would limit the recovery to the actual damages sus- tained, the contract would be void under the statutes against betting and gaming. This principle the legislature, by the act of 1840, relaxed in respect to insurance as effected by a married woman, for any sum which she and the insurance company might see fit to contract for. * * There is another feature in the act which shows that it was an enabling and not a declaratory pro- vision. By the general rules of law, a policy oh the life of. one sustaining only a domestic relation to the insured would become inoperative by the death of such insured in the lifetime of the cestui que vie; or if it could be considered as existing for any purpose after that event, it would be for the benefit of the per- sonal representatives of the insured ; but by this act the contract may be continued in favor of the children of the insured wife after her death. These features distinguish this case from that of an ordinary chose in actum belonging to a married woman as her separate estate. The provision is special and peculiar, and looks to a provision for a state of widowhood, and for orphan children." Down to this point the views of all the courts are in substantial accord ; the statute does away with the necessity for proof of interest. It vests the interest in the beneficiaries ac- cording to its terms beyond the control of the insured, and looks to L a provision for widowhood, which entitles it to peculiar consideration. But the New York court went farther, and held that " it would be a violation of the spirit of the provision to hold that a wif6 insured under the act could sell or traffic, with 106 POWER OF WIFE TO ASSIGN. her policy as though it were realized personal property, or an or- dinary security for money." It was consequently held that such a contract was absolutely unassignable by the Jwife. This has since been the uniform doctrine in New York. 8, But no other State seems to have adopted this view ; all the decisions else- where have treated such policies as assignable by the wife. In New York the doctrine has since been limited to contracts strictly within the spirit of the statute. It has been declared that the wife may insure under the statute or under the general acts of. 1848 and 1849, or such insurance is good at common law, and | whether under the statute or not, must be judged from the evi- dence ; in the absence of such evidence, on the face of the pol- icy or otherwise, it may be presumed not under the statute, and the wife has unlimited power in such case to assign, nor is the policy in such case free from creditors. A subsequent accept- ance by the wife of a policy which she did not authorize is suffi- cient to bring it under the statute. 6 In Robinson vs. Mut. Ben. Life Ins. Co., the U. 8. Circuit Court of New York, in 1879, 9 Ins. Law Journal, 73, while affirming the doctrine that a wife's policy is not assignable under the New York statute for ordinary pur- poses, declared that it might, nevertheless, be assigned by her as a collateral security for the premiums necessary to keep it in force ; that such an assignment was entirely in harmony with the spirit of the statute. In two recent cases a doubt has been expressed whether an endowment, payable in case of previous death to the husband,- is not assignable under the statute. The N. Y. Court of Common Pleas, in the case of Brummer vs. Cohn, in 1880, 9 Ins. Law Journal, declared that the question was governed by the intention of the parties, to be determined from the facts, whether they designed to effect such a contract in favor of the wife. The N. Y. Court of Appeals, in 1879, in Fowler vs. a Barry vs. Eq. Life Ins. Co., 4 Ins. Law Journal, 920 ; Barry vs. Mut. Life Ins. Co., 3 Ins. Law Journal, 74, 49 How. Pr., 504 ; Stillwell vs. Mut. Life Ins. ■Co,, 7 Ins. Law Journal, 44 ; Anderson vs. Butterly, 8 Ins. Law Journal, 79 ; Eobinson vs. Mut. Ben. L. Ins. Co., 9 Ins. Law Journal, 73 ; Brummer vs. Cohn," .9 Ins. Law Journal, 160 ; Secor vs. Dalton, N. Y. S. C. ; Wilson vs. Lawrence, 7H. Y. S. C, 1878. b Baker vs. Union Mut. Ins. Co., 43 N. Y., 283; Thompson vs. Amer. Tout., &c, Ins. Co,, 46 N. Y. 675; Supreme Court case cited in Bliss on L. Ins., 2d Ed., 562. POWER OF WIFE TO ASSIGN. 107 Butterly, 9 Ins. Law Journal, 329, raised the question without deciding, and the Supreme Court of New York, in 1878, in the case of Anderson vs. Butterly, 8 Ins. Law Journal, 79, declared that such a policy was primarily for the benefit of the husband, and not within the statute. To avoid this statutory restriction, parties resorted to the expedient of allowing the policy to lapse with the consent of the company, with the understanding that a new one should be issued in its place, but the New York Court of Appeals, in 1874, where the wife claimed to have assigned un- der compulsion, and the parties doubting the validity of the transaction, agreed that the policy should be allowed to lapse, and a new one be taken out in substitution, declared that such a device gave no rights under the new policy which did not attach under the original ; as the assignee could not recover as against the wife under the first policy, and the scheme had been planned by the husband and assignee to exclude her from her benefit, she was entitled to recover. It so happened in this case that a simi- lar suit between the same parties was brought on another policy in Maryland, about the same time, where the power of assign- ment by the wife was recognized, though the assignee's claim was not allowed on the ground of compulsion. Thus were two conflicting decisions rendered concerning almost the same case, and to further complicate matters, the United States Circuit Court in Maryland, held that actions could be maintained on the substituted policies while suits on the original were actually pending in New York. But the embarrassment arising from these decisions, as has been said, compelled subsequent amend- ments to the New York statute expressly authorizing their trans- fer. On general principles, it seems to be doubtful whether any agreement to allow a policy to lapse and a new one to be substi- tuted, will aid an illegal or defective assignment, though, if suqh lapse occur and a new policy be granted in good faith by the company, without complicity, there ought to be no objec- tion. 3 Turning to the decisions elsewhere, as has been observed, the <= Barry vs. Mut. Life Ins. Co., ante; Barry vs. Eq. Life Ins. Co., ante; WMtbridge vs. Mutual Life Ins. Co., 3 Ins. Law Journal, 80. a See Chapin vs. Fellowes, 36 Conn., 132; Bunyon on Ins., p. 302, and cases cited. 108 INTEREST OF CHILDREN. uniform current of authority is in favor of the assignability of wives' policies. In the cases of Nat. Life Ins. Co. v*. Whitridge, and Whit- ridge vs. Barry, 6 it was held by the Bait. Circuit Court.in 1873, and seemingly not disputed by the Maryland Court of Appeals, in 1876, that the assignment of a wife's policy issued under the New York law, by the wife, was valid under the law of Maryland, even when the husband did not join, notwithstanding the code required him to join in the disposition of her separate estate. The ques- tion was fully considered by the United States Circuit Court of Massachusetts, in 1879, in the case of Newcomb vs. Mutual Life Ins. Co., 9 Ins. Law Journal, 124, and the doctrine there laid down seems to be the most consistent view of the rights of the parties under the statute. An endowment policy taken out by the husband on his life, and originally payable to himself or his assigns, was afterwards assigned to his wife, who subsequently assigned it to a third party" as security for a loan. The statute of Massachusetts enacts that a policy upon the life of any per- son, assigned to a married person, " shall inure to her separate use and benefit, and that of her children," and the question was whether such a policy could be assigned by the wife. It was held that, under the law of that State, the wife could convey all her separate property independent of her husband's consent, un- less this special statute made a life policy an exception. The language of the court on this point was as follows : " The stat- ute itself does not define the relative rights of the mother and her children, and might be construed to give to her, either a sim- ple life interest with a vested remainder in her children, or a life interest with an absolute power of disposal, leaving a contingent interest in the children, if she should not assign the .policy or cqjlect the money during her life. It is sound law that if a policy is limited to children upon the death of the mother before the loss, she cannot divest their title by any conveyance of the policy while it is running ; and if the statute means to say that in every policy acquired by a married woman, there shall be interpolated a limitation over to children, it would seem to follow that the woman would have a life estate without power to dispose of the remain- der. Looking at the whole scope of the act, I am much inclined e 3 Ins. Law Journal, 234 ; 6 Ins. Law Journal, 160. SUMMARY OF THE DOCTRINE. 109 to think that its intent is merely to guard the interests of the wife against the husband and hi» creditors, and that she is to be the absolute owner during her life, with only a contingent in- terest in her children. If this be not so, the legislature have un- dertaken, in a most arbitrary fashion, to limit the right of a mar- ried woman to buy or receive the gift of a policy of insurance, an injustice which I should not willingly impute to them. The courts of all the States which have passed upon this question, under statutes more or less like ours, excepting the Court of Ap- peals of New York, have held that the married woman has the full domain over the policy, and may sell, assign, or pledge it like her other separate property. * The decisions in New York are placed upon reasoning which does not apply to our statute, namely, that the statute deprives the husband's creditors of their rights, and must therefore be understood very strictly as giving a support to widows and orphans." This, as has been observed, seems to be the better doctrine on this subject, and may be summarized thus : Where the bene- - ficiaries named in the policy are the wife and children, the latter have a vested interest, and an assignment by the wife is valid only as to her limited interest ; but where the wife is the sole beneficiary named, even though the statute provide that such policies shall inure to her and to children, the latter take only a contingent interest ; the wife has an absolute title which she may assign. In harmony with this construction of the statute is the case of Gosling vs. Caldwell, ante, where the Tennessee Supreme Court ruled that the statute giving the benefit of the policy to the wife and children did not prevent the husband from other- wise disposing of it, if payable to himself. To the same effect is Williams vs. Carson, 5 Ins. Law Journal, 315, and also the case of Baker vs. Young, ante, where the Supreme Court of Missouri declared that the provision that the policy should inure to the separate use of the wife and children, refers simply to the man- ner of descent ; that the law gives the insurance to the wife, and where she is the sole beneficiary named in the policy, she may assign or otherwise dispose of it. To the same effect also t Citing Emerick vs. Coakley, 35 Md., 188 ; Baker vs. Young, 47 Mo., 453 ; Archibald vs. Mut. L. Ins. Co., 38 Wis., 542 ; Bison vs. Wilkinson, 3 Sneed, 565 ; Hulme vs. Tenant and notes, 1 Lead. Cas. Eq. (4 Am. Ed.), 679. 110 THE CONNECTICUT DOCTRINE. is Pence vs. Conn. Mutual Life Ins. Co., ante, and Eison vs. Wil- kinson, ante, where the policy did not make the wife and chil- dren beneficiaries, but was under the act of 1846, which pre- scribed that the insurance of a husband on his own life should inure to the benefit of his widow and heirs free of creditors, and it was held not to limit the right of the husband to dispose of it, but to protect the wife and children against creditors. This doctrine has been applied by Connecticut to a statute similar to that of New York. In Conn. Mut. Life Ins. Co. vs. Burroughs, 34 Ct., 305, the policy was payable to the wife, and in case of her death to her children. It was held that the wife might as- sign her interest, but nothing more; in case of the husband's survival, the policy would go to the children. In the case of Chapin vs. Fellowes, 36 Connecticut, 132, the same doctrine was laid down touching a similar policy, and it was held that, in case of the surrender of such a policy by the husband in exchange for a paid-up policy for his own benefit, the whole amount, and not simply the net proceeds, belong to the children. This subject was also fully considered by the Supreme Court of Connecticut, in 1878, in Phoenix Mutual Life Ins. Co. vs Dun- ham, « Ins. Law Journal, 173. The husband procured a policy payable to his wife after his death, for her sole, separate use and benefit, or, in case of her previous death, to their children. He , paid the premiums down to 1874, when one premium was paid by the wife, who shortly after was divorced and married another. The policy was thereupon exchanged for a paid-up, the wife con- tinuing to pay interest on the note until her death, when the in- terest was paid for one year by her first husband, who shortly after died, and a tender was also made by the administrator of the wife. The parties had no children. The policy was issued under a provision in the company's charter, that policies ex- pressed to be for the benefit of a married woman should inure to her separate use and that of her and her husband's children, as may be expressed in the policy, independent of the husband or party effecting the insurance or their creditors. In a contest be- tween the representatives of the husband and wife, the court said, referring to the charter : " By virtue of this provision, the husband is enabled to make, in a special manner, a lawful gift to his wife, for her sole and separate use and benefit, irrespective of THE CONNECTICUT DOCTKINE. Ill the claims of his creditors. Mr. McCammon bought of the pe- titioners their agreement to pay at his death a fixed sum to and for the sole use and benefit of his wife, and delivered the policy to her. There was then a valid contract between herself and the company ; she held a chose in action, subject to the principles governing other agreements involving pecuniary obligations. If the amount expressed in the policy had been made payable to her without condition, she would at once have become the owner of a valuable property, which she was permitted, both by the special law and the declaration of the husband, to hold inde- pendently of him ; of an interest which she could sell or assign, either absolutely or by way of security — one which, upon her death, would pass to her legal representatives, as would any other sole and separate estate. It is true that the gift to Mrs. McCammon was made subject to a condition subsequent ; if is- sue had survived, the amount would have been payable to such issue, but as no child was ever born to either of them, the condi- tion became void, and may be laid out of consideration. Hold- ing, then, the first policy as of her sole and separate property, she had the right to exchange it for the second. For this last she paid the entire consideration, and the annual premiums save one. Thus she purchased insurance upon Mr. McCamrnoh's life solely for her own benefit, and paid for it from her separate es- tate." It was further held that the changed relation of the par- ties could in no wise affect the destination of a valid gift thus made. The case was distinguished from those of Continental Life Ins. Co. vs. Palmer, and Chapin vs. Fellowes, and Conn. Mut. Life Ins. Co. vs. Burroughs, ante. The Court said : " The policy in each of these cases contained the proviso in behalf of children, and in each case children survived. The respective wives had received conditional gifts ; at no moment was either of them in a position to deal with her policy as its absolute owner. In each case an event occurred to put an end to any in- terest in her or in her estate in the fund. In each case the duty of the court was to enforce the proviso in favor of children, and whatever is said in either of them, as to the nature or extent of the interest of the wife in her policy, is to be understood as said of it in instances where there are children; and not as determin- ing, when ft policy is made payable without condition, to the sole 112 THE MISSOURI DOCTRINE. and separate use of the wife, in instances where there are no children, that she takes no interest unless she survives her hus- band." The St. Louis Court of Appeals, in the recent case of Con- necticut Mutual Life Ins. Co. vs. Eyan, 10 Ins. Law Journal, 72, discussed the interest of a wife in an endowment taken out by the husband on his life, pnyable to himself, or, in case of his previous death, to his executors, administrators, and assigns. The policy recited that the premium was paid by the wife, but it was in fact paid by the husband. She joined with him in the assignment to a creditor, and afterwards claimed the proceeds, alleging fraud and undue influence on the part of the creditor and her husband, and want of consid- eration. But it was held that her title as against creditors was not made out, even though she had retained the policy in her own possession. She had no claim based on premiums paid from separate sources. Even if she had any interest, she parted with it of her own accord. Undue influence would not avoid the assignment in the absence of fraud. Under the stat- ute, she would have had that power of disposition incident to property held in her own right. In Gambs vs. Covenant Mutual Life Ins. Co., ante, the Mis- souri Supreme Court held that the husband might surrender or otherwise dispose of a policy taken out for the benefit of his wife not under the statute, upon her death. g On the other hand, g The doctrine in this case has recently been applied by the St. Louis Court of Appeals to the case of a benefit association, Expressman's Aid Society vs. Lewis el al., where the husband procured, in -virtue of his membership, a benefit certificate payable to his wife. The wife afterwards died, leaving no children, but the husband made no change in the beneficiary. The constitution and by- laws provided that the object of the society was the accumulation of a fund for the benefit of the legal representatives of the insured, and provided for the payment to them in case no beneficiary was designated by the member ; also the beneficiary could only be charged with the consent of the secretary upon the surrender of the old and the issue of a new certificate. In a con- troversy between the heirs of the husband and wife, it was held that the disposition was revocable, the beneficiaries contemplated were the legal rep- resentatives of the member, the wife had no vested interest, the intention was not apparently to provide for his wife's relatives, it did not follow that the pre- scribed formalities must be in all cases followed, the case was analogous, though not strictly parallel, to that of a will, and the beneficiary having ASSIGNMENT BY BENEFICIABY. 113 in Wilson vs. Life Ass. of America, 6 Ins. Law Journal, 240, the United States Circuit Court of Missouri held, in. 1876, that a policy, procured on the life of the husband for the benefit of the •wife and children, presumably under the statute, and containing her signature as that of the person for whose benefit it was pro- cared, was a contract of the wife and not of the husband, and declarations of the latter could not be admitted against its valid- ity. In the case of Yaeger, et cd. vs. Taeger, 5 Ins. Law Journal, 238, the United States District Court of Missouri held that, where the wife joined the husband in assigning the policy, and the assignment was set aside by the bankrupt court, her rights re-attach as if no assignment had been made ; that, under the statute of that State, the husband may insure the life of any per- son for the benefit of the wife, and, if for her benefit, the bene- ficial interest is in her, and the policy will be exempt from creditors except as to any excess above $300 annual premium, the additional value belonging to his estate, and this will be based on the surrender value. The distinction will be noted in these cases as to policies independent of a special statute, and policies under statute which vests the interest in the benefi- ciary. 11 As the right of disposition by the party paying the premiums has only been admitted on the ground of failure or presumptive failure of the beneficial interest, it would seem that an assignee taking through the beneficiary by a complete assignment, and thereafter paying the premiums, had an indefeasable title, but where the party paying premiums is the husband, he should join in any assignment, and thus preclude all disputes. Where the policy is an endowment payable to the insured, if he survive the term, otherwise to the wife, the interest of the lat- died prior to the donor, the benefit should go to his heirs rather than hers. The same doctrine was applied, at the same time, to a similar case in another benefit association, designed to "benefit the families of deceased members." It may be added that the peculiar features of a benevolent association fre- quently modify the doctrines applicable to ordinary life insurance contracts, the contracts of such associations being usually controlled by the charter, con- stitution, by-laws, or statute. ii See also Conn. Mut. Life Ins. Co. vs. Burroughs, 34 Conn., 305, and N. Y. cases cited ante. 114 ENDOWMENT PAYABLE TO INSUBED. ter has been repeatedly in dispute. In Tenness vs. N. W. Mut. Life Ins. Co., 9 Ins. Law Journal, 191, the insurance was on the life of the husband, " for the sole use and benefit of " th,e wife, " for the term of ten years," and the- company further promised to pay the amount to the person whose life was insured or as- signs in ten years, or, in case of his previous death, to pay the beneficiary or assigns. It was held by the Supreme Court of Wisconsin, in 1879, that, so far as the life insurance part of the contract was concerned, it was an insurance of the husband for his own benefit, but, in case of his previous death, the wife would be entitled to the endowment. The husband surviving the term, she had no claim on the fund. In Evers Vs. Life As- sociation, 4 Ins. Law Journal, 593, the Supreme Court of Mis- souri, in an issue concerning the right of the wife to testify, held that an endowment payable to the husband, if he survived the term, otherwise to the wife, vested the sole legal interest in the husband during his survival ; there was no joint interest during that time ; the interest of the wife began only upon his previous, death. Nevertheless, that the wife has an interest in such a policy, which she may assign, and which cannot be defeated without her consent, in case her husband do not survive, see cases cited an£q. In Herrick vs. National Life Ins. Co., 5 Ins. Law Journal, 80, the United States Circuit Court of Vermont held that an endow ment taken out by the husband for the benefit of his wife, but payable to himself or his administrators, and on which she had paid part of the premium, could not be sold to the company by the husband without consent of the wife, and though, by non- payment of premium, it had lapsed, yet it was intimated that a prompt tender by the" wife on discovering her rights might have led to a different result. In Knickerbocker Life Ins. Co. vs. Weitz, 99 Mass., 157, an insurance had been effected by the wife on the life of the hus- band, for her benefit, and payable to her, her executors, adminis- trators or assigns, but in the event of her previous death, then, upon his death within the term insured, to their children. Two days after, the policy was assigned by her, with her husband's consent, for security to a creditor of the husband. The wife died first, leaving a child, and the husband died within the term ENDOWMENT PAYABLE TO INSUKED. 115 It was held that the assignment by the wife could not defeat the interests of the child, either under the statute of New York or Massachusetts, and that the latter, and not her assignee, was en- titled to the amount. In Burroughs vs.. State Mut. Life Asse. Co., 97 Mass., 359, the policy insured the husband for the use of his wife and children, and the agreement was to pay "to the as- sured, his administrators and assigns, * * for the purposes aforesaid.'.' The policy was subsequently assigned by the hus- band and wife as security for a loan, and the assignee paid the premiums. It was held that, as the policy was in terms payable to the assigns, and the assignment was consented to by the company, the right of action belonged to the assignee, but he must hold the proceeds, so far as they inure to the benefit of the child, in trust for him, and such rights, as well as the claims of the assignee for premiums paid, might be determined upon a bill of interpleader filed by the company, or a suit by the child against the assignee. In Pomeroy vs. Manhattan,Life Ins. Co., 40 111., 398, the policy was upon the life of the husband for the benefit of his wife, and, unless a New York contract, not under a special statute. The wife assigned a part interest. It was held that, in view of the agent in Illinois being required to countersign, it was an Illi- nois contract, and ^though not assignable under the New York statute, it was an equitable assignment which would be sustained by the law of Illinois. The policy was assignable by its terms, and as her separate property she had a right to assign it. This doctrine was subsequently affirmed by the same court, in Nor- wood vs. Guerdon, where the policy had been assigned to the wife, who wrote her name on it in blank, whereupon her hus- band pledged it as security for a loan. In Chapin vs. Fellowes, 36 Conn., 132, a policy on the life of the husband payable to the wife, or, in case of her previous death, to her children, under the statute, was surrendered by the husband after her death, in ex- change for a new one payable to himself. It was not disputed that the children had an interest, but it was claimed that the husband was not obligated to keep the policy in force ; therefore the interest of the children was limited to the cash value at the time of surrender. But the court held that, while, as guardian of the children, he might have had the power to sell it to the company for their benefit, he had no right to appropriate it for 116 UNADTHOBIZED DIPOSITION OF POLICY. his own, and the policy received in exchange must be regarded as the property of the children, and the premiums paid on it as paid under the statute. In Fraternal Mut. Life Ins. Co. vs. Ap- plegate, 7 Ohio St., 292, the policy for the benefit of the wife was issued under the statute, and under a chartered provision of the company making it payable to her sole use. It was held that its surrender by the husband, in consideration of certain mis- representations, in exchange for another payable to .his repre- sentatives, without her consent, was unauthorized and void, and was no answer to an action on the first policy. In Rupert vs. Union Mutual Life Ins. Co., 7 Robert., 155, the policy was for the sole benefit of the children of insured, and payable to them, their executors, &c. The insured afterwards devised it by will to his executors in trust for other purposes ; but it was held that, under a provision in the company's charter providing that poli- cies might be issued for the benefit of any minor, and should in- ure to his benefit independently of the party whose life was in- sured, the children became vested immediately upon the deliv- ery of the policy with the entire beneficial interest beyond the control of the testator. In Gould vs. Emerson, 99 Mass., 154, a father undertook to give to his wife by will an insurance on his life, in which the agreement was to pay to him, his executors and assigns, for the benefit of his widow and his surviving child or children ; it was held that the policy being under the statute, was beyond his control, that the interest of the wife and child was fixed by the policy, and in the absence of other specification they must share equally. His administrator was entitled to col- lect the money, and hold it in trust for them. j In Hathaway vs. Sherman, 3 Ins. Law Journal, 407, the Supreme Court of Maine decided, under a statute providing that the proceeds of a life policy, after deducting the premiums with interest, was not a part of the proceeds of insured's estate, for the payment of his debts, when he leaves widow or issue, but descends to them, and may be disposed of by will, though the estate is insolvent ; that the intention was to protect the widow and children, and in case of insolvency he could will the proceeds to the parties named as he pleased, but not to others ; if he left no widow or children, J See also Swan vs. Snow, 11 Allen, 284; Boe vs. Mut. Life Ins. Co., N.T. S. C. MISCELLANEOUS DECISIONS. 117 he could have no power over it. k In Keller vs. Giiylor, 3 Ins. Law Journal, 303, the policy was on the life of the wife for the benefit of the husband, or, in case of his prior decease, it was payable to his children. The husband died first, leaving no chil- dren. It was held that the possibility of a posthumous child did not make his interest so uncertain that he could not dispose of the policy by will; he had a vested interest liable to be divest- ed by a subsequent heir, and a bequest of all his personal prop- erty to his 'wife passed to her the title to the policy. In Bond vs. Ins. Co., 9 Phila., 149, the wife was not permitted to dispute an assignment, in trust for her children, of a policy by her on the life of her husband. In Winchester vs. Stebbins, 16 Gray, 52, a policy payable to the insured was assigned by him (proba- bly as security), and while held by the assignee was forfeited through failure of insured to pay the premiums, and was after- wards assigned by the assignee to a brother of the wife of in- sured, and, with the consent of insured and the company, was re- vived by the brother, who afterwards paid the premiums, for her benefit. It was held that the brother was entitled to the fund for the benefit of the wife as against the administrator of in- sured. In Succession of Hearing, 26 La., An. 326, it was de- clared that policies properly transferred to the wife, or issued to her, belong to her, and are not part of insured's estate. It has been held that a woman illegally married to a man, or living with him as his wife, may have an insurable interest in his life, but how far such policies would come under the statutes has not been considered.,?. In an English case, Winter vs. Easum, 2 De G. J. & S., 272, the policy was upon the joint lives pf husband and wife, payable to the survivor, and was taken out by them for the purpose of supporting a mortgage, and it was held that, though the policy taken by itself was not assignable by the wife so as to bar her right of survivorship, yet, as it was for the ex- press purpose of securing a loan, it was assignable. In another k See also Libby vs. Libby, 37 Me., 359, as to the construction of an earlier and somewhat similar statute in this same State, under a curious state of facts. See also Roberts vs. Roberts, 64 N. C. 695. l Equitable Life Ass. Soc. vs. Patterson, 41 Ga., 338; Hollabird vs. Atl. Mut. Life Ins. Co. 2 Ins. Law Journal, 588 — seem to rule the contrary, but nere the application stated she was his wife, and in an issue as to its falsity, it was held that she rru» prove that she was the lawful wife. 118 POLICIES NOT IN CONFORMITY WITH- STATUTE. English case, Smith- vs. Kerr, 41 Scot. Jur., 460, a policy on the wife, payable to her heirs, executors, successors and assigns, was held the property of her heirs after her death, and not communio bonorvm. The Probate Court of Shelby County, Tennessee, in the case of Wendell, in 1880, held that a father had no control of a policy on his life for the benefit of a minor child, and could not by will relieve the guardian from giving the bond required by law. A wife's policy law will not protect a policy not issued in con- formity with the statute. Thus the Pennsylvania statute pro- vides that a policy upon the life of any person, taken out for the benefit of, or bona fide assigned to the wife or children, or any relative dependent on such person, shall be free of creditors, and the Supreme Court of that State, in 1880, in U. B. Mut. Aid So- ciety vs. Grove, 8 Ins. Law Journal, 804, held that it would not cover the case of an assignment of a policy on the life of a stranger, procured by the husband to the wife to protect it from creditors ; the policy must be on the life of one on whom the beneficiaries are dependent. But in some States such policies are expressly within the provision, and a policy within the spirit of the statute may be within its protection, though not within the letter. See decision of Supreme Court of Ilhnois, in Cole vs. Marple, in the next chapter. In Missouri the statute pre- scribed that the insurance might be effected for the benefit of the wife free of creditors, but that such exemption should not apply where the premium paid was in excess of $300, and the Supreme Court, in Charter Oak Life Ins. Co. vs. Brant, ante, held, in passing upon the assignability of a policy by the wife, that, if the premium exceeded $300, it was withdrawn from the protection of the statute. But the courts of the same State, in the subsequent cases of Yaeger & Cringle, ante, and Pullis vs. Bobinson, 7 Ins. Law Journal, 556, declared that the protection was withdrawn only as to the excess, and this is the general doctrine under these statutes. The decision of the Supreme Court of Pennsylvania, in the case of Dando's Appeal in 1880, is instructive as to the,power of a married woman over her separate property in that State. It was held, citing several precedents, that, prior to the passage of the act of 1848 securing the separate estate of a married woman POWER OF WIFE OVER SEPARATE PROPERTY. 119 against disposition by the husband without her written consent as prescribed in the act, she might sell or give her rersonal es- tate to her husband or a stranger, when accompanied by a trans- fer of possession. Her power over such estate was not limited by that act, which was intended to protect her against the un- authorized acts of her husband. In accordance with this view, it was held, in Bond vs. Bunting, 28 Sm., 210, that the assign- ment by the wife of a portion of a life insurance policy upon the life of her husband for the benefit of his children by a former marriage, without transfer of the possession of the policy to the transferees, without consideration and without acknowledgment, was good as against her after the death of her husband, he hav- ing joined in the assignment. When she cannot restore the con- sideration, equity will not permit her to repudiate the asssign- ment on the ground that she had not acknowledged it. Fryer vs. Eishel et vx., 3 Norris, 421. m m See also cases cited in previous chapter concerning wives' policies. CHAPTER X. THE EFFECT OF INSOLVENCY AND EIGHTS OF CIUEDITOKS. English Doctrine concerning Notice and Possession. — American Doc- trine. — Equities as between Creditors and Assignees. — Extent of Creditors' Claims where Tiile to Policy u in Debtor. — When Policy is Under a Statute. — When Title Vests in Assignee. — When Policy is Procured by an Insolvent. — Creditors of the Beneficiary. In England, as has been said, under the bankrupt law, which conclusively holds all property found in the possession of the debtor to be the property of his creditors, possession of the pol- icy and notice are essential to the protection of the assignee. In this country they are also exceedingly important, but the same high degree of importance does not attach, since neither posses- sion nor the absence of notice are regarded as conclusive evidence of title. a In Conard vs. Ins. Co., 1 Pet., 449, Mr. Justice Story a The principles laid down in England concerning tbe effect of notice on the rights of creditors are illustrated in the following, among other cases. In Chowne vs. Baylis, 31 Beav., 35, a first assignment for a debt, with notice, was held to take precedence over a subsequent assignment, accompanied with a delivery of the policies, but without notice. To the same effect was Neale vs. Molineux, 2 C. & K., 672. But a letter from the solicitor of the assignee to the company to send letters to him concerning the policy, though noted on the company's books, does not take the policy out of the disposition of the bankrupt assignor, where the company does not know whom the solicitor represents, but the assignee is entitled to recover premiums advanced. West vs. Keed, 2 Hare, ch. 261. In re Russell's Policy, 15 L. E. Eq., 26; 27 L. T. (N. S.), 706, A mortgaged a policy to B without notice, and afterwards be- came bankrupt. After his death the company was notified by the mortga- gee. Subsequently notice of the bankruptcy was given. It was held that P SSESS10N AS A BADGE OF FBAUD. 121 used the following language : " Without undertaking to suggest whether, in any case, the want of possession of the thing sold constitutes, per se, a badge of fraud, or is only prima facie a pre- sumption of fraud, a question upon which much diversity of judgment has been expressed, it is sufficient to say that, in case even of an absolute sale of personal property, the want of such possession is not presumptive of fraud, if possession cannot, from the circumstances of the property, be within the power of the parties ." A recent legal publication," after reviewing the va- rious American authorities on this subject, reaches the following conclusions : that possession is not necessarily conclusive, or even prima facie, evidence of fraud ; it may be evidence of own- ersnip as respects personal property, but mere possession with- out coloring circumstances will not prove fraud. It is always open to explanation, and is a link in a chain of circumstances having greater or less weight according to those circum- stances. B's claim took priority over those of the general creditors, citing Stewart vs. Cockerell, 8 L. R. Eq., 607; in re Webb's Policy, 15 W. E., 529. In re Brom- ley, 13 Sim., 475, however, where the policy was deposited as security for a debt, but no notice was given, the assignee in bankruptcy was allowed the benefit of it, and in Edwards vs. Martin, 1 L. E. Eq., 121 ; 13 L. T. (N. S. ), 236, the same doctrine was laid down, although an officer of the company was casually aware of the assignment. In North British Ins. Co. vs. Hallet, no- tice to a resident director who failed to notify the company was held sufficient to protect a policy assigned to a trustee in trust, and who subsequently be- came bankrupt. But as against the company, the rule as to notice is not so strict. In Cook vs. Black, 1 Hare, ch. 390, no notice was required to protect a policy which stipulated that it should be valid in the hands of an assignee in case of suicide, where the policy had been deposted as security, with a letter promising to assign on request ; this was declared to be a bona fide assignment in equity. A mere deposit of the policy is sufficient. Moore vs. Woolsey, 4 E. &B.,243; Jones vs. Consol. Ins. Co., 26Beav., 256; Dufaurvs. Prov. Life Ass. Co., 25Beav., 603. In Le Feuvre vs. Sullivan, 10 Moore's, P. C. C. 1, the policy was deposited as security withont notice, and the insured by false representations obtained a duplicate policy which he assigned to his wife by deed. It was held that, if the latter assignment was without notice to the wife of the prior assignment, her rights were superior to those of the first as- signee, hut not otherwise. In Thompson vs. Speirs, 13 Sim., 469, it was held that membership in a mutual company was not such a partnership as made knowledge of the assignment by a bankrupt member knowledge of the com- pany, and excused notice. t> Cent. L. J., vol. 11, No. 4. 122 WHEN POSSESSION IS UNNECESSAKY. In the application' of these principles to chases in action, and especially life policies, it may be stated as the general doctrine in this country, that, while the law is not settled as to the effect of lack of possession by the assignee of a life policy, in case of ad- verse claims by the creditors of an insolvent assignor, the equi- ties of the case will be considered, and where it appears that the assignor has bonajide parted with his title or interest, the mere fact that the contract itself is found among his effects, will not generally be allowed to defeat superior rights of the assignee. It is usually enough if the right to receive the money is beyond the control of the assignor, whether effected through notice, deliv- ery, or otherwise. Especially does this rule hold good in regard to policies where the assignee is the beneficiary named in the policy, who, in the absence of proof that the gift had never been completed, and that the party procuring -the insurance had re- served the power to change its disposition, becomes vested with the title by the issue of the policy, regardless of the possession of the instrument. The rule especially holds good, too, regarding policies in which the relations between the assignor and assignee are such that the former may properly retain possession of the instrument as custodian for the latter, as in the case of policies assigned to a wife or to minor children. As was said by the court, in the case of Bicker vs. Charter Oak Life Ins. Co., ante, 10 Ins. Law Journal, a party procuring and paying for a policy made payable to his wife and children, without reserving the right to alter the terms of the agreement, does " all that could well be done under the circumstances, in the execution'of an in- tention to vest in his said appointees the entire interest in the policy. * * Taking the delivery of the policy from the com- pany, under these circumstances, can only be construed as an act of acceptance for the designated beneficiaries, and the subse- quent holding of the same as that of a naked depositary with- out any interest for those entitled thereto." So in the case of Estate of Trough, 8 Philad. E., 214, the insured, having assigned the policy by a written instrument to a third party in trust for his children, and deposited it in the safe of a firm of which he was a member, addressed to the assignee, with a written request to deliver after his death, the assignment having been made c See also cm this point aide, under " Who may assign ? " chap. VIII. ENGLISH AND AMEEICAN DOCTRINES DISTINGUISHED. 123 while still solvent, the delivery was declared sufficient to protect it against the claims of creditors, except as to premiums paid after insolvency. 4 In the case of "Wood vs. Phoenix Mutual Life Ins. Co., 22 La. An., 617, the Superior Court of Louisiana used the Mlowing language in the case of a dispute between the ad- ministrator and the mother of insured, who alleged that the policy was taken out for her benefit, and had been assigned to her : " We are not prepared to say that the possession of a written or printed policy of insurance is conclusive proof of a right to recover the insurance money. Such an instrument is merely the evidence of the contract, and is not negotiable. The right to the insurance may be assigned entirely dehors this instru- ment ; and, as it appears from the record that the defendants have paid, or been judicially ordered to pay (in a suit by the as- signee in another State), to a party who asserted a right by as- signment, they should have an opportunity to establish the val- idity of the alleged assignment and payment." But an assignment which is sufficient as against a beneficiary or personal representative of the insured will not always avail against creditors or third parties whose claims are of a stronger character. The distinction in this respect, as well as between the English and American doctrine on the subject of insolvency, is indicated in the case of Mut. Protection Ins. Co. vs. Hamilton, 5 Sneed., 269. The contest was between the assignee and the administrator of insured, who claimed that the estate would probably prove insolvent, that the assignment had been made without notification to the company or its consent, and without valid consideration, and was therefore void as to creditors. After insisting on the fact that notice was not necessary in the case of a life policy, as in that of a fire policy, to perfect the claim of the assignee : that, under the Tennessee act of 1801, ch. 6, the effect of an assignment in case of a life policy is to vest the legal interest in the assignee as against personal representatives, credi- tors, and all others, and that the underwriter was exposed to no hazard in the absence of notice except such as would result from his own carelessness, since he could not be compelled to pay without sufficient proof of title, the court proceeds thus a Citing Larkin vs. McMullin, 49 Pa. St., 29; Coates vs. Gerlaoli, 44 Id. 43 ; Mullen vs. Wilson, Id., 413. 124 WHEN CLAIMS OP CREDITORS ARE SUPERIOR. " We have been referred to several cases in English books, for the purpose of showing that, as against the assignees in bank- Tuptcy of the person assured, notice of the prior assignment of a life policy is necessary. These cases proceed upon the con- struction and effect of certain clauses of the bankrupt and insol- vent debtors' acts, which vest in the assignees all the property including securities, such as policies of insurance, that may hap- pen, with the consent and permission of the true owners, to be in the order and disposition of the persons falling under the op- eration of those statutes. These cases, of course, have but little application to the case before us." Upon a motion to reconsider on the ground that the following words were written at t"he foot of the policy: "N. B. If assigned, notice to be. given to the company," the court said : " If the contest here were between the creditors of the assured and the assignee of the policy, we are not prepared to say whether or not these words, introduced as they are, not by way of condition in the body of the policy, but merely as a note at the bottom, would affect the determina- tion of the question. But in the case before us, where the ques- tion is merely between the assignee and the office, the words re- ferred to can have no influence on the decision of the case. The requirement that the company should have notice could have no other object than the protection of the company. * * What might have been the consequence to the assignee, if the money had been paid to the personal representative, or if it had been attached by the creditors before the knowledge of the assign- ment on the part of the company, we need not stop to consider, as neither of these things occurred in the present case." But if, through the imperfection of the assignment, the equi- ties of the case are stronger in favor of the creditor than of the assignee, on the general principles applicable to assignments in *uch cases, the claims of the creditor will prevail. Thus, in the Succession of Bisley, 11 Bob. (La.), 298, the insured had in- dorsed at different dates four several assignments on the back of a, life policy for $5,000— for $1,000 each in favor of different par- ties. Two had been notified to the insurer, and its consent ob- tained, and two had n6t. The policy remained in the possession of the insured until his death. The estate proved insolvent. The executor of insured recognized the validity of the first two WHEN CLAIMS OF CREDITORS ARE SUPERIOR. 125 transfers, but disputed that of the second two. The Probate Court of Louisiana had declared all the transfers invalid as con- tra bonos mores, and giving an undue preference to creditors. This , doctrine was overruled by the Supreme Court of that State, which held that the only question was as to the validity of the transfers, which had not been approved by the company. It said : " It is urged that, as this policy does not contain the ordi- dary clause that no assignment shall take place without the con- sent of the underwriters, but, on the contrary, promises to pay $5,000 to the insured, his executors, administrators, and assigns, no such consent was necessary to render the transfers binding on them. Admitting this to be true as between the assignees and the office, the question yet remains, have these transfers) without notice to the company, before the death of the insured, vested any rights in the opponents, to the prejudice of other creditors ? We see nothing which should take this case out of the general rule laid down in Article 2, 2613, of our Code, that the transferee of a debt or other incorporeal right, is only pos- sessed as regards third persons, after notice has been given to the debtor of the transfer having taken place. The preceding article provides that, in the transfer of debts, rights, or claims on a third person, the delivery takes place between the transfer- rer and the transferee, by the giving up of the title. In this case the policy remained in the possession of the transferrer. No no- tice whatever of the transfers was given to the insurance company, and it is not even shown that such transfers were accepted by the transferees before the death of Eisley. Under these articles of the code, it has been repeatedly and uniformly held that the assignment of a debt vests in the assignee only an inchoate right, and that the assignor is not divested as regards third per- sons until notice be given to the debtor." 6 Still more to the point was the argument of the Supreme Court of Massachusetts, in the case of Palmer vs. Merrill, cited on page 16 of this work. On general principles of law, the court insisted that, in order to protect an assignee against the claims of creditors, there must be such a surrender of the evidence of debt by the .assignor as s hall amount to a renunciation of all e Citing Cox vs. White, 2 La., 425 ; Carlin vs. Dumartrait, 5 Mart., U. S., 21 ; Bainbridge vs. Clay, 4 Id., N. S., 56. 126 PRINCIPLES UNDERLYING THE DECISIONS. power over it in. favor of the assignee. It -was said : " A man cannot by his own act charge a personal chattel, a carriage and horses, for instance, with a lien in favor of a particular creditor, and yet retain the dominion and possession of them till his death, a fortiori, where he retains the memorandum or instrument of transfer of such chattel in his own possession, and under his own control, it seems to us equally impracticable to charge a debt due to him, by an order or memorandum retained in his own possession, purporting to give to a particular creditor an equitable lien by the assignment of such chose in action, without a transfer or delivery of the security by which it is manifested. Such an assignment would not constitute the debtor himself a trustee to the creditors. What trust, then, devolves on the ad- ministrator ? " The principle underlying these decisions is obvi- ous. It was not the mere technicalities observed that controlled the courts, but the equities of the case as well, in which it was sought to divert the property of the insolvent from creditors on the strength of an assignment over which he seemingly retained the power of revocation. It was contrary to the express statute of the State in the one case, and to the spirit of the law in the other, which regards such control by the assignor as a badge of fraud. But when, upon a rehearing, the Supreme Court of Mas- eachusetts learned that the insurers had been notified, and as- sented to the transfer, the possession of the instrument was no longer treated as a badge of fraud, and the assignees were al- lowed to recover. In this same State, it was ruled, in Wakefield vs. Martin, 3 Mass., 558, that an assignment of the policy vests an equitable interest in the assignee without notice to the insur- ers, and a creditor cannot attach it. J. t Bump, who is regarded as the leading authority in this country, in his work on "Fraudulent Conveyances," 2d Edition, 1876, lays down the follow- ing principles pertinent to this subject : "An assignment of a chose in action is subject to the rule which requires a change of possession. In the case of things in action, the usual muniments of title should he conferred upon the grantee. In the case of stocks, the natu- ral and appropriate indication of ownership is the entry upon the stock rec- ord. There is no distinction between prior and subsequent creditors." — Bump, p. 176. " What constitutes a sufficient change of possession must be a question which will vary with circumstances, and what may have been said by the courts on this subject, should be taken with reference to the case then before EXTENT OF CREDITORS' CLAIMS. 127 Whether creditors are entitled to more than the premiums paid after insolvency is a question that has been repeatedly dis- cussed. There are, in reality, three classes of cases to be con- sidered here. The first are those in which the title to the policy vested in the debtor himself until after insolvency, and was sub- sequently assigned to parties not under the protection of a spe- cial statute. In such case it would seem plain that the entire chose in action was subject to creditors in common with other property of the debtor. Such was the decision in the case of Bisley, supra. So in People vs. Phelps, 5 Ins. Law Journal, 885, it was held by the Supreme Court of Illinois, that, if the policy is payable to the " legal representatives " of insured, the them, in relation to the character and situation of the property at the time of the sale." — Bump, p. 147. " As stock, choses in action, and money could not he taken on execution at common law, it has been doubted whether a transfer of such property could be fraudulent. The question is one that relates merely to the remedy as af- fected by the character of the property, and whenever a statute enables a creditor to reach such property, either by attachment or execution, a transfer of it becomes liable to investigation on the ground of fraud. Even independ- ently of such statutory provisions, the better doctrine is that a court of equity, in aid of an execution at law, may, for the purpose of suppressing fraud and enforcing justice, reach property which is not liable to legal process at law."— Bump, p. 236. "At one time there was some question whether creditors could reach property which was paid for by the debtor, when the property was fraudulently con- veyed by the vendor to another. The statute makes all fraudulent convey- ances void, but if such a transfer were void, the title would remain in the grantor, and consequently the creditors could not seize the property. Such a contrivance is manifestly not within the provisions of the statute. It is, however, within the principle of the common law, which will- not permit a debtor to convert his funds, which ought to be applied to pay his debts, to the purchase of property conveyed to another to the prejudice of his creditors. Justice is attained by holding the grantee as a trustee for the injured person, although he did not intend to acquire the property in that character. It may- be considered as settled that property so purchased in the name of another, is liable to the demands of creditors."— Bump, p, 237. "A fraudulent transfer is good as against the grantor, his heirs, executors, administrators, agents, parties claiming under him, and his vendees and grantees." — Bump, p. 438. But in several States executors and administrators are authorized by stat- ute to impeach a fraudulent conveyance when the estate is bankrupt. "A bona.fide purchaser for value, however, without knowledge of the fraud, has a higher equity than creditors, since he has the legal title which the law will not divest to give to another having no higher claims."— Bump, p. 81. 128 WHEN TITLE VESTS IN INSURED. proceeds thereof will be assets in the hands of his executor or administrator/ and subject to the payment of debts, the same as any other personal assets, but a policy may be made payable to his widow or heirs under the 1 law of the State, to the exclu* sion of creditors of insured. In the case of U. B. Mut. Aid Society vs. Grove, 8 Ins. Law Journal, 804, the husband being insolvent, procured the assign- ment of a policy on the life of a stranger with money loaned him by his wife's brother, but took the assignment in his wife's name, and for her benefit. All assessments subsequently accru- ing were paid by the brother. It was held by the Supreme Court of Pennsylvania, that the wife's policy law of that State applied only to policies taken out on the life of the party on whom she was dependent, and that there was evidence for the jury that the assignment was made to the wife to protect it from her husband's creditors. So in the case of Schadd, in the same .State, 8 Ins. Law Journal, 6, where the husband had insured his life for his own benefit, and, by a document purporting to be an assignment, but which was held by the court to be testamentary in its character, undertook to donate it to his wife. It was held that, under the wife's policy law, the burden of proof is on the wife when donee of a policy, to show either an actual assign- ment by clear proof, or that the assignment is without fraud on the creditors ; as the disposition was testamentary, it was not an assignment, and the wife had no equity as against creditors of the husband. In the case of Hathaway vs. Sherman, 3 Ins. Law Journal, 407, the Supreme Court of Maine held that a policy on the life of an -insolvent, under the statutes of that State, was as- sets in the hands of his executor, like his other property, for the payment of his debts, subject only to such limited control over its disposition as the statute allowed to insured in favor of a wife and children. If the policy is payable to the heirs of the husband insured, the mere recital in it that the premiums were paid by the wife, if not true in fact, will not protect it from his creditors. g In Anthracite Coal Ins. Co. vs. Sears., Supreme Court of Massachusetts, it was held that a po licy, assignable by its terms, g Conn. Mut. Life Ins. Co/ va Evan, St. Louis C. A., 1880, 10 Ins. Law Journal, 72. [ $*ft£-E£ POLICIES UNDER STATUTORY LIMITATIONS. 12$ may be reached and applied to a debt while the owner is alive. In Appeal of Elliott's Executors, 50 Pa., 75, it was held that creditors may follow and recover a policy assigned by an insol- vent debtor in trust for his wife. In the absence of any statu- tory provision to the contrary, it may be stated as the general rule that a life policy which is the property of the insolvent at the time of insolvency, is like other personal estate subject in its full amount to the claims of creditors. But a second class of cases arises where such statutory limit- ations, as in the case of wives' policies, interpose to take it out of the rule. Thus a statute of California provided that '• no money, benefit, right, privilege, or immunity accruing, or in any manner whatever growing out of any life insurance on the life of the debtor," should be taken in execution. The Supreme Court of that State, in Briggs vs. McCullough, 26 Cal., 542, held that an endowment was a " life insurance " within the meaning of the act, and exempt. Under the wife's policy law, in several of the States, the husband, even though insolvent, is permitted to assign a policy to his wife, within the limitations imposed by the statute, free of creditors. And such statutes, being regarded as remedial in character, will generally receive a liberal construc- tion in favor of the assignee. The general rule here is that where the policy is under a statute specially designed to protect it from creditors, even when the premiums have been paid in fraud of their rights, the utmost which they can recover is such fraudulent payments, with interest, and the same liberal view has been extended to policies procured for the benefit of dependent ones, on general principles, irrespective of a statute. Such, in- deed, is the principle adopted in many of the statutes themselves. In one of the most recent cases, that of Cole vs. Marple, 10 Ins. Law Journal, the doctrine on this subject was thus laid down by the Supreme Court of Illinois in 1880. The policy on the life of Cole was an endowment payable to himself. After his insol- vency, with the consent of the company, he assigned the policy to his wife, and upon his death this bill was brought by a credi- tor to reach the proceeds. The statute of Illinois provides that a married woman may, in her own name or in the name of any third person, effect an insurance on the life of her husba-nd, free of creditors, but if the premium is paid, with intent to defraud 130 POLICIES UNDER STATUTORY LIMITATIONS. creditors, such premium, with interest, shall inure to the benefit of creditors, subject to the statute of limitations. The question was whether this statute took the policy out of the general rule making such voluntary conveyance voidable at the instance of creditors. The court said : " Whether, under the assignment in this case, suit might have been maintained in the name of Mrs. Cole, is a question which does not properly arise, and it will not be necessary to determine it. But where the assignment was made with the consent of the company, in substance a new insurance was granted to Mrs. Cole. After the assignment was made, it could not be repudiated by Cole or the company, but under the assignment the policy was held by Mrs. Cole, for her sole use and benefit, and although the transaction may not have assumed the form required by the statute, yet the substantial require- ments of the statute were followed, and under a statute of this character, that is all that can be required. At the time the as- signment was made, had Mrs. Cole taken out a new policy on her husband's life in her name, or that of a trustee, it is. not denied that she might have been able to hold the proceeds^ regardless of the creditors of the husband. What is the difference in prin- ciple between taking out a new policy, and having one already in existence assigned with the consent of the company ? We per- ceive no substantial difference, and hence we must hold that Mrs. Cole, under the statute, had a clear right, with the consent of the company, to accept an assignment of the policy." 11 It was further insisted that the assignment was invalid because not acknowledged and recorded under the statute providing that no transfer of goods or chattels between a husband and wife, when living together, should be valid as against third persons, unless such transfer should be in writing, and acknowledged and re- corded. But the court said that, while the words goods and chattels might be held ordinarily to mean all personal property of whatever description, it was never intended to include a chose in action, which would be absurd. The object was to prevent a secret transfer of property from being set up to defeat an execu- h Citing Charter Oak Life Ins. Co. vs. Brant, 47 Mo., 419 ; City F. Ins. Co. vs. Marsli,.45 111., 482 ; Burroughs vs. State Mutual Life Ass. Co., 97 Mass. 359. ' WHEN TITLE IS IN ASSIGNEE. 131 tion. It was further held that the creditors were entitled to re- cover the amount of premiums, with interest, paid during five years of the insolvency preceding, and as to priority in this claim, it was said : " Where property has been fraudulently con- veyed by a person who afterwards dies, such property is not as- sets in the hands of the administrator for general distribution among all the creditors. The administrator cannot file a bill, and reach such property, but a creditor can, and when he ob- tains a lien by filing a bill, and in the end recovers the property, he is justly entitled to be rewarded for his superior diligence, and receive the payment of his debt before other creditors come in." One of the judges, however, dissented, holding that, as the policy was the property of the insolvent, and a gift to his wife, it was not within the statute, and was subject to claims of credi- tors. So, under the Missouri statute, it was held by the United States District Court of Missouri, in the case of Taeger, 5 Ins. Law Journal, 238, that the husbaud might insure the life of any person for. his wife's benefit, and, if insolvent, might withdraw $300 annually from his estate for that purpose, and the policy would be entirely free of creditors ; that any additional value arising from premiums in excess of that amount belongs to his estate, and this will be based-on the surrender value of the poli- cies ; that where the wife has joined the husband in the assign- ment of such policy, and the assignment has been set aside by the bankrupt court, her rights re-attach as if no assignment had been made. J Closely allied with this class of cases are those in which the title to the policy vested in the beneficiary or assignee, either from its inception or prior to the insolvency, irrespective of any statute. It would seem clear, on general principles, that subse- quent insolvency of the debtor should not be allowed to disturb the rights of a vested beneficiary, except so far as concerned the premiums paid after insolvency. The Supreme Court of Indi- i While the prevailing doctrine now seems to he that an insurance in ex- cess of the statutory limits, when not provided for by the statute, exempts only the excess from its protection, it has also been held that the whole policy is thereby taken out of the statute. See Briggs vs. McCullough, 36 Cal., 542- Jacob vs. Ins. Co., 1 Cincin., 519, ante, and cases cited in preceding chapter. 132 WHEN TITLE 18 IN ASSIGNEE. ana, in 1879, in the case of Pence vs. Conn. Mut. Life Ins. Co., 8 Ins. Law Journal, 746, rendered an interesting decision touching the claims of creditois on life policies taken out for the benefit of dependent ones. One of the instructions below was as follows: "The policy of insurance being payable to Melissa C. Makepeace, vested in her alone the absolute ownership of it, and it could not be as- signed or transferred to Corwin or any other person by her hus- band or any other person, without her authority, and an as- signment or delivery of the policy to Corwin by the hus- band of the defendant without her authority, would not bind her in any respect." It was claimed that this instruction was error, beause the evidence showed that the husband was proba- bly insolvent at the inception and during the existence of the policy, and that in such case the wife was not the absolute owner of the policy, but held it merely as quasi trustee for the owner. But the court said that the question of insolvency had been made no part of the issue of the case, and had been neither tried nor decided, and the argument had no application ; what effect, if any, on the title such insolvency would have, it declined to decide. It added : " The procurement of a policy of life insur- ance as a provision for the family of the assured, in the event of his death, and the payment of premiums thereon, by a person insolvent or of limited means, whose wife and family may be de- pendent on him and his labor for the comforts, and even the necessaries of life, are acts ^o be fostered and encouraged by the law. For these acts are not hostile, we think, but in full accord with those provisions of our law which bear upon the rights and duties incident to the family relation. Society cannot be bene- fited by the abject poverty or destitution of any family ; but on the contrary, its welfare or well-being is largely dependent upon the welfare or well-being of each and every family. Unless the acts of a party, in making such provision as was made by James T. Makepeace, in the case now before us, are clearly and grossly fraudulent, we would be very loath to divert such provision, or any part thereof, from the. purpose for which it was intended, and, leaving the widow and the orphan destitute, apply such pro- vision, or a part thereof, to a purpose never contemplated. If, however, which we do not concede, the creditor of the as- PREMIUMS PAID AFTER INSOLVENCY. 133 sured might, in any case, institute and maintain an action for the recovery of any part of the amount of a policy of insurance procured by an insolvent debtor upon his own life for the benefit of his wife or family, upon the ground that the premiums there- for were paid with money which ought to have been applied to the payment of the debt of the assured to such creditor, and that such payment of such premiums by the assured was a fraud upon the rights of such creditor, we are clearly of the opinion that the very utmost which the creditor could possibly recover in such action, would be the aggregate amount of the premiums thus paid. The creditor could not, in any event, derive a profit from or recover aught more than the sums of money actually paid by the debtor in premiums upon a policy of insurance upon his own life, payable to or for the benefit of his wife, or of any membar of his family." This emphatic language of the court would seem to warrant the conclusion that, had the claim of the assignee been actually founded on the insolvency of the insured, an assignment by the husband alone, in which the wife did not join, would not have strengthened his title, unless as evidence of the insolvency. His claim would be no greater than that of any other creditor of the insolvent, and in the absence of manifest fraud on his rights, would not be allowed to prevail ; that, even if it could be shown that the premiums had been paid in fraud of his rights, his re- covery would have been limited to the amount of such payments, the policy itself, charged with such a lien, would still remain the property of the wife. In the case of Bear & Steinberg, 4 Ins. Law Journal, 159, the creditors of a bankrupt firm in Mississippi excepted to the schedules of the firm because policies taken out for the benefit of their wives were not included. But it was held by the United States District Court that the title of such policies was in the wife, and could not be controlled or assigned by the husband. Payments made by the insolvents after insolvency, however, whether so intended or not, were so far fraudulent that the as- signee might recover the amount advanced, with interest, from the wife when the policy matured, and such claim may be sold by the assignee, and will pass the contingent right to the purchaser. In Pullis vs. Kobinson, 7 Ins. Law Journal, 556, the same doc- 134 POLICIES IN THE NAME OF ANOTHEE. * trine was laid down by the tr t. Louis Court of Appeals, in 1878, touching a policy for the benefit of the wife. It was added that, in determining whether a gift was in fraud of creditors, the test was not whether the donor knew himself to be insolvent, but whether he actually was so. Under a Maine statute, it was held by the Supreme Court of that State, in Hathaway vs. Sherman, 3 Ins. Law Journal, 407, that an insolvent could make no testa- mentary disposition of his policy by will except to his widow and children. If he have neither, it becomes a part of the as- sets for the benefit of creditors. In the case of Harrington vs. Traders' Bank, 9 Ins. Law Journal, 122, it was held by the Supreme Court of Tennessee, 1879, in the case of an alleged as signment of a policy taken out by the husband in the name of his wife, which assignment the wife denied, that such a policy is ex- empted under the statute from all claims of creditors, even if the premiums were paid during insolvency. The wording of the act in that State is peculiar, and was claimed to cover only a policy in the name of the husband, but the court held the contrary, as well from the spirit as the strict letter of the act. Where the party takes out a policy when insolvent, in the name of another, independent of any statute, and continues to pay the premiums on it, the rights of the parties are by no means clear. The views of the courts, so far as they have been indicated, seem to be governed by the peculiar circumstances of the case, whether the creditors may claim more than the pre- miums paid, and where the beneficiaries are dependent ones, a disposition to protect such interests as they may have beyond the plain rights of creditors, has been manifest. The Second District Court of New Orleans declared that it is as much the hus- band's duty to insure his life for the benefit of his wife and fam- ily, as to buy food or clothing, and that the creditors have no right to have the proceeds of such a policy applied to their debts.* In the case of Goodrich vs. Treat, 7 Ins. Law Journal, 269, the policy was on the life of the husband in favor of the wife, her heirs, &c. The premiums were paid by the husband some time after the death of the wife. It was claimed that he was insolvent at the inception of the contract, and so contin- k Succession of Hearing, Bliss, 2d Ed., p. 592. See also Succession of Hear- ing, 26 La. An., 326. DISREGARD OF CREDITORS' RIGHTS. 135 ued, and his administrator sought on this ground to recover from the administrator of the wife. It was' held by the Supreme Court of Colorado, in 1877, that the administrator is the mere representative of the insured, and could not avoid contracts on the ground that they were in fraud of creditors. Whatever the rights of creditors, their claims were not before the court. Such a provision was of the most meritorious character, and, as be- tween the representatives, is to be enforced according to the in- tention of the parties. The beneficial interest was in the wife, and belonged to her estate. On the other hand, in Stokes vs. Coffey, 8 Bush., 533, where the facts showed, in the judgment of the court, that policies pro- cured by an insolvent for his wife and his brother were in excess of all necessary requirements, and the premiums were paid in utter disregard of the rights of creditors, it was held that the latter were entitled to recover the proceeds of the policies. It was said : " The change in the policy originally made payable to the husband's representatives, so as to vest the title thereto in the wife, was a voluntary gift or assignment of a portion of the husband's estate, and was void as to his antecedent credi- tors." 1 Concerning two policies originally made payable to the wife, it was said : " These two policies were never held or owned by the husband ; the wife did not receive them from him by con- veyance, assignment, or transfer. The husband's creditors, there- fore, cannot reach the amounts realized on them under the pro- visions of our statute, declaring voluntary assignments, &c, void as to antecedent creditors, nor, indeed, under any statutory enactment. One of these policies was, however, purchased by the debtor with his own means, and to the extent of the amount paid for it, his estate was disabled from paying his debts, and his creditors were injured. * * Voluntary dispositions by a debtor of his estate, whether it is such as can be reached by exe- cution or other legal process, or not, is, by the common law, fraudulent as to existing creditors, unless such dispositions be in the way of reasonable and proper advancements to his children, or a settlement upon his wife, which a clear sense of moral duty requires him to make. Such advancements or settlements, to be upheld against antecedent creditors, must be characterized by 1 Citing Appeal of Elliott's Exr's, 50 Perm., 75 ; 1 Big., «7a. 136 EIGHTS OF ADMINISTRATOR. the utmost good faith. The motives of the husband or father must be pure, and in carrying out a design tolerated by the lib- erality of the law rather than justified by strict morality, he must carefully abstain from any act tending to show a want of due regard for the rights of his creditors." It was further said that the amount of the policies should be limited to such a sum as would be simply sufficient, with economy, to secure the sup- port and education of the family. It was also -held that, in equity, the money might be followed even after conversion, and the stock or other thing into which it was converted, seized in case of fraud. It may be stated as the general doctrine that the administra- tor cannot follow a policy in behalf of creditors, except when authorized to represent them by special statute. The creditors must assert their claims by a creditors' bill. m An interesting decision touching the rights of creditors was rendered by the Supreme Court of Pennsylvania, in 1880, in the case of Estate of Malone, 9 Ins. Law Journal, 767. A life and accident policy had been taken out by the husband, previous to his marriage, and was kept in the safe of the firm. Afterwards the firm became embarrassed, and creditors granted an extension on his representations of ownership. The wife claimed the policy after his death, on the ground that he had given it to her while still living by repeated verbal declarations, though there was no written evidence of assignment or direct evidence of de- livery. Her title was disputed by the firm of which she proved to be a debtor member. On the strength of his declarations, proved by six unimpeached witnesses, and his own acts in send- ing accident payments to his wife, it was held that there was suf- ficient evidence of a valid gift regardless of possession. Under the circumstances, the husband simply retained it as a trustee, without the right to divest her title. It was said : " It is not pretended that, when the poliey was taken out, or when it was so given, he was not perfectly solvent. The gift would have been valid as against existing creditors. It certainly cannot be n* Succession of Hearing and other cases cited ante. In Greenfield vs. Mass. Mut. Life Ins. Co., 47 N. Y., 430, it was held that, under the New York stat- ute, which allows a trustee of an express trust to maintain an action without joining the cestui que trust, an. administratrix of the husband might follow a policy payable to his wife, in behalf of creditors, in ease of insolvency. TITtE OF WIFE AS AGAINST CREDITORS. 137 questioned by subsequent creditors." How far, as against the creditors who had been induced to grant the extension, the wife could assert her title, it was said was a question which could not be considered, since no claim was made by them. The persons who denied her right were the members of the firm, who were not shown to have been misled, or in any way prejudiced, by the misrepresentations of ownership. The gift had taken place several years before the partnership. " It was not in his power to divest the ownership which he had conferred upon her. n He could not have assigned the policy to his firm, and it is not pretended that he at- tempted to do so. It is immaterial, therefore, that the premiums were, in some instances/paid by the firm. Such payments could only make the firm creditor to the amount advanced, and would give no interest in the policy itself." The adjudication in this case well illustrates the principle which seems to control in deter- mining the claims of creditors, viz. : that the party shall prevail with whom rests the superior equity under all the circumstances of the case. The claim of the wife was weakened by the appa- rent imperfection of the assignment. But the case was distin- guished from Trough's Estate, 25 Smith, 115, where there was no evidence whatever of delivery. The claims Of the firm were weaker than those of outside creditors, who had been misled to their possible injury. They were weaker than they would have been if injury had actually been done to themselves. Whether creditors, in any event, could have prevailed against the wife, it would seem, must have depended first on the degree of alleged imperfection in the assignment, and second, on the injury which they were innocently made to suffer in consequence of it. In New York Life Ins. Co. vs. Flack, 3 Md., 341, the delivery of the policy to the representative of the assignee by the assignor, was ,declared;to vest the title in the former as against all persons ex- cept creditors of the assignor. Although wife's policy statutes usually protect the beneficiary against the creditors of the party whose life is insured, and who pays the premiums, that protection is not, it would seem, extend- ed to creditors of the beneficiary, unless the statute so provides, n Citing Ellison vs. Ellison, 6 Ves., 656; Lewin on Trusts, 99, 100; Perry on Trusts, sec. 104; Hill on Trustees, 88; Fortescue vs. Barnett, 3 M. & K 36 ; Grover vs. Grover, 24 Pick., 265. 138 TITLE OF WIFE AS ' AGAINST CSEDITOBS. This was illustrated in the case of Murry vs. Wells, 9 Ins. Law Journal, 649. The policy was for the benefit of the wife. The wife died, and the children united in an assignment to one of their number, who subsequently died, and a paid-up was issued to his administratrix ; the husband insured being still living, the question was whether it was exempt from debts of the estate. The court said : " In our opinion, this case is within the rule of Smedley vs. Felt et al., 43 Iowa, 607. In that case it was held that the avails of a life policy are not exempt from the debts of the wife. The wife, under Code, sec. 1182, is a beneficiary of a policy of insurance on the life of her husband. To the extent of her right, she has the same interest as an assignee of the policy. The children of the assured are likewise beneficiaries. John H. Wells held the policy in this case in his own right as a son and heir of the original beneficiary, and as assignee of his co-heirs. He acquired the same right that his mother held in the policy, and no other or greater. The mother, as the benefi- ciary named in the policy, had no higher right than the wife and children of the assured hold under Code, sec. 1182. * * The object of the statute was to encourage and protect provisions for families by means of insurance upon the life of the head of the families or the person making such provisions. It was not in- tended to exempt the avails of life policies from the debts of the beneficiaries therein." But it was held by the Superior Court of Montreal, in Brossard vs. Massowin, 4 Ins. Law Journal, 395, that, under the Provincial statute, 29 Vict., ch. 17, a policy ef. fected on the life of her husband by a woman holding her goods apart as a public trader, was exempt from her own creditors as well as those of the husband. With the case of Murry vs. Wells, supra, may be contrasted that of Owen vs. Murrin, in the United States Circuit Court of Missouri, 2 Ins. Law Journal, 524. Here the wife had procured a policy on her life, payable to her husband, paying the premiums out of her separate estate. Subsequently the husband was adjudicated a bankrupt, after which two premiums were paid by the wife, when she died, and = In some of the States, however, the exemption is not limited to creditors of the husband, hut is extended to include those of any party procuring the insurance. If the insurance were procured by the wife, it is not clear what would be the effect, but see Owen vs. Murrin, above. CLAIMS OF ASSIGNEE IN BANKRUPTCY. 139 his assignee in bankruptcy claimed the proceeds. The court admitted that, had the policy become a claim prior to the bank- ruptcy, being subject to no statute, the assignee would have been entitled to the proceeds. But to make good his claim, not only must the right to the benefit have existed in the husband at the time of bankruptcy, but must have been of such a nature as to vest in the assignee. It was held that, since the sum in dispute was only secured by the subsequent payments of the wife out of her own bounty, while the assignee made no demand for the policy, nor any offer to pay the premiums, while she was alive, it would be clearly inequitable to allow the creditors to thwart her design. The court said : "I am quite confident that the husband, at the time of his bankruptcy, had no such interest in these policies as to give the assignee the right to retain their proceeds as against the manifest intention and purpose of the wife. Could the assignee, as against the wish of the wife, have said, ' I demand the policy, and intend to keep up the premiums for the benefit of the estate ? ' If it were necessary to answer this question, it would seem that he would have no such right ; and that she could properly say, ' This is a matter of my own, a provision originating in my bounty, one upon which my hus- band's creditors have no claim, and with which they have no right to interfere.' But the assignee took no such steps ; on the contrary, he allowed, or did not prevent the wife from making, the payments which kept the policy alive." It will be noted that, in the case of Murray, the policy was paid-up, and the in- solvent had acquired a complete title" ; the equity in favor of creditors was therefore far stronger than here, where that title, whatever its character, was qualified by the fact that the benefi- cial design had not been fully executed, and the interest of the donor was not at an end. An interesting decision touching the rights of creditors is presented in the case of Newland, United States Circuit Court New York, 7 Bank. Keg., 477. The debtor took out a policy on his life in favor of a creditor for her security, he paying the pre- miums. His assignee in bankruptcy claimed that he was enti- tled to whatever surplus remained of the amouut insured after payment of her debt, that the amount insured covered the debt, and if she shared with others in the bankrupt estate as well, she 140 CLAIMS OP ASSIGNEE IN BANKRUPTCY. would have a surplus ; that she should therefore either surrender her interest in the policy, or her claims against the estate. On the contrary, the creditor insisted that the debtor being alive, the policy had no certain value ; that the debtor, without contra- vening the bankrupt law, might continue to pay premiums out of future acquired property, and that it would not be equitable to require her to deduct more than the cash surrender value from her claims on the estate. This latter was the view taken by the court, and the creditor was allowed to claim for the full amount less the cash value of the policy. Subsequently the creditor kept the policy alive by payments from her own funds. But be- fore a second dividend on the estate had been paid by the as- signee, the bankrupt died, and the question whether the assignee had any further claims on the fund was submitted to the United States Circuit Court of New York, in the matter of Newland, 2 Ins. Law Journal, 860. The court held that, after the creditor commenced paying premiums, the policy became substantially a new security, it not having been surrendered, as was contem- plated ; and when her debt was paid from the policy, she ceased to have further claim on the estate, and any balance from the policy, after allowing her the benefit of premiums paid, should be applied, as far as needed, to reimburse the assignee for the dividend already paid the creditor. In England, a doubt which existed touching the right of creditors to follow a policy has been removed by a statute subjecting choses in action to be taken on execution, and an assignment made by one in extremis while pe- cuniarily embarrassed has been declared void under this stat- ute. 5 In the Montreal Court of Q. B., in Lond. & Lan. Ins. Co. vs. Lampiere, in 1878, it was held that insurance by a creditor in excess of the debt is void only as to such excess in the ab- sence of fraud. In conclusion, it will be observed, from a comparison of these decisions, that, in all doubtful cases, the rights of creditors have been determined very largely according to what appeared to the courts to be the equities of each particular case ; on many points the views entertained have not been harmonious, and' no settled pStokoevs. Cowan, 29 Beav., 637; S. C. 7 Jur. N. S., 901 ; 30 L. J., ch., 882 ; 9 W. E., 801 ; 4 L. T. N. S., 695 ; Dunlop vs. Johnston, 1 L. E. S. C. App., 109 ; Scarf vs. Soulby, 1 Mac. & Gor., 364. STATE INSOLVENT LAWS. 141 conclusion seems to have been reached touching the principles involved. q - 1 Since the repeal of the United States Bankrupt Law, assignments in ease of insolvency are controlled "wholly by the State laws, which are so varied that no satisfactory abstract of them can here be given. About half the States have no insolvent law, and many no assignment laws. Some permit assign- ments with preferences, and others do not. Some of the general principles governing this subject may be stated briefly as follows : The rights of a credi- tor not within the jurisdiction of the State, and who has not voluntarily sub- mitted to such jurisdiction by proving his claims, are not affected by a discharge in insolvency. Assignments with preferences, and providing for a release of the debtor as to those tating the benefit, are valid in the absence of State stat- utes. Involuntary assignments of choses in action situated in other States are not good against attaching creditors in such States, and voluntary assignments are not good in such case against prior attachments, nor against subsequent attachments, unless valid under the laws of the State where the chose in action is situated. CHAPTEE XL LEX LOCI, RIGHT OF ACTION AND WANT OF CONSIDEEATION. Place of Contract, where Domicile of the Company and of the Assignee are -Different. — What Laws Govern — Conflict of Jurisdiction. — Who is the Proper Party to Sue. — Effect of Want of Consideration. Where the assignee or beneficiary of a life policy is a citizen of another State than that which is the domicile of the insuring company, thejquestion has arisen whether the contract is to be governed by the laws of the first State or of the second. The general doctrine is that the original contract is to be governed by the law of the State where it was completed, while the as- signment is to be governed by the law of the State where it was executed, and the remedy by the lex hci. The distinction was well expressed by the U. S. Circuit Court of Mass., in 1879, in Newcomb vs. Mut. Life Ins. Co.,9 Ins.Law Journal, 124, where the validity of an alleged assignment of a policy in a New York company by a married woman residing in Massachusetts, was denied by the assignee. The court said : " It is important to in- quire whether the assignment is to be governed by the law of New York or by that of Massachusetts. Some late cases in this court have decided that the contract in such a policy, as between the original parties, is to be governed by the laws of New York ; but the capacity of this married woman, then residing in Massa- chusetts, to assign this New York policy to another resident of Massachusetts for a loan made here, the insurers being mere PLACE OF CONTRACT. 143 stakeholders in the matter, must be ascertained, I think, by the law affecting married women in .Massachusetts. See Milliken vs. Pratt, 125 Mass., 374 ; Pomeroy vs. Manhattan L. I. Co., 40 .HI, 402. This seems to have been taken for granted in Emerick vs. Coakley, 35 Md., 188, and the other cases cited by the plain- tiff." The late cases referred to were, no doubt, that of Whit- comb vs. Phoenix Mutual Life Ins. Co., 8 Ins. Law Journal, 624, and Desmazes vs. Mut. Benefit Life Ins. Co., 7 Ins. Law Jour- nal, 926, in which it was held that, where the policy was issued fully executed by a company in another State, the mere fact that an agent was required to countersign did not affect the place of contract, so long as that' act was purely ministerial, and had no effect upon the validity of the policy. But the rule is different where the policy acquires validity only upon the act of the agent, as in fire insurance, where the contract is not binding un- til countersigned. In such case, the place where it acquires va- lidity is the place of contract. In Pomeroy vs. Manhattan Life Ins. Co., 40 111., 3;)8, the ap- plication was made in Chicago to a New York company, the policy provided that it should not be binding until countersigned by the agent in Chicago, and the premium paid. The policy was subsequently assigned, and in a dispute touching the validity of the assignment, it was insisted that the policy was not assigna- ble under the laws of New York, and the rights of the parties must be governed by the laws of that State. But it was held that, as the contract was by its terms inchoate until counter- signed in Illinois, it was an Illinois contract, and must be gov- erned by the laws of that State. The position here taken is in apparent antagonism to the more recent decisions in Massachu- setts above cited. But in one of the latter cases, the agent was not required to countersign, he merely delivered the policy, while in the other, the court, looking at the whole tenor of the con- tract, regarded that duty as simply ministerial, the agent being allowed no discretionary power over the contract itself. But a more important fact was that the issue in these latter cases was different. It was not a question of conflicting claims under an alleged assignment, but whether it properly came within the provisions of the non-forfeiture law of Massachusetts, and the 144 PLACE OF CONTKACT. courts apparently regarded the nature of the issue as well in framing their conclusions.* The place of contract may thus depend, in a measure, on the character of the issue involved ; thus in Ruse vs. Mut. Benefit Life Ins. Co., 23 N. Y., 516; 24 N. Y., 653 ; 8 Georgia, 534, it was held that the policy was governed as to the remedy by the lex loci, but its construction and the legal rights flowing from it usually depend on the law of the place where the contract is to be performed, although, where there is anything in the circum- stances to show that the parties had specially in view the law of the place where the contract was made, the latter will gov- ern. 1 " Laws of other States have, in strictness, no force beyond the limits of those States, and contracts under them are enforced rather " as a matter of comity than of strict right. This doctrine ap- plies with special emphasis to assignments. While the general rule is that real property will not pass to the assignee merely through the operation of an assignment outside of the State having jurisdiction of the property, in the case of personal prop- erty it is different, and the general rule is that its alienation by assignment may be regulated and determined according to the laws of the owner's domicile or place of transfer, and in case of insolvency such laws will usually regulate the distribution among a A contrary doctrine, holding that such contracts by companies of other States were within the provision of the Massachusetts non-forfeiture law, was laid down by the Supreme Court of that State, in 1876, in Morris vs. Perm Mu- tual Life Ins. Co., 120 Mass., 503. But the U. S. Circuit Court, in the cases above cited, and in that of Ames vs. Manhattan Life Ins. Co. (.unreported), and again, in 1881, in Smith vs. Mutual Life Ins. Co., 10 Ins. Law Journal, 191, held that the decision of the State court was not binding upon itself, and that such contracts were not within the provisions of the Massachusetts law. b See also Spratley vs. Ins. Co., 4 Ins. Law Journal, 373; Hyde vs. Goode- now, 2 Ben., 124. Where the place of contract has been invoked to invalidate it, the courts havo been disposed to favor such a rule regarding the lex loci as will support the contract. Am. Ins. Co. vs. Cutler, 6 Ins. Law Journal, 660 ; Bowser vs. Lamb, 6 Ins. Law Journal, 891. l'he -decisions concerning lex loci contractus have not been harmonious. See Morris vs. Penn Mutual Life Ins, Co., 6 Ins. Law Journal, 17 ; Shattuck vs. Mut. Life Ins. Co., 7 Ins. Law Journal, 937 ; and other eases' cited in "Annotations," 8 Ins. Law Journal. 629; N. W. Mut. Life Ins. Co. vs. Elliott, U. S. C. C, Oregon, 1880, 10 Ins. Law Journal. - Paine vs. Lester, 44 Conn. INDEPENDENT JURISDICTION. 145 creditors. On this principle, a valid assignment in one State, will operate to convey personal property in every other not al- ready subject to liens, even though the assignment is invalid in such other State. 4 But the foreign law must not interfere with the rights of the citizens of the State where the transfer is sought to be carried into effect, and there is a conflict of opinion how far assignments invalid where sought to be enforced will be permitted there. 6 Nor is the law setfced as to the rights of the . parties in all cases where the place of assignment is not the domicile of the parties or the situs of the property. The cases of Whitbridge vs. Barry, Barry vs. Mutual Life Ins. Co., Barry vs. Equitable Life Ins. Co., and National Life Ins. Co. vs. Barry and Whitridge, 1 cited in an earlier portion of the work, illustrate the conflicting views of the courts on this subject. An assign- ment of various policies was executed by assignors then residing in New York, but originally living, it would seem, in Mary- land, and forwarded to a confidential clerk in Maryland along with the policies for delivery to the assignees in that State. These assignments were held in Maryland to be governed by the law of that State, while in New York the contrary was as- serted. The case of Merrill vs. N. E. Mutual Life Ins. Co. furnishes another illustration of the embarrassment liable to arise through the independent jurisdiction of the courts of different States. The policy in a Massachusetts company issued to a resident of Illinois was delivered by him to a creditor in Massachusetts as security for a debt which remained unpaid at his death. Suit was brought by his administrator in Illinois, and afterwards by the creditor, who was appointed ancillary administrator in Mas- sachusetts. It was held that the principal administrator was en- titled to collect any securities in his possession which are within his jurisdiction, but can do no act for their collection in another d Burrill on Assignments, pp. 360, 362, and oases there cited. e Oliver vs. Townes, 2 Mart., (La. N. S.)- 93; U. S. vs. Bk. of U. S., 8 Rob. (La.), 262 ; Ingraham vs. Geyer, 13 Mass., 146 ; Fall River Iron Works vs. Croade, 15 Pick., 11. But see preceding chapter as to assignments in case of insolvency. f 3 Ins. Law Journal, 74, 80, 234 ; 4 Ins. Law Journal, 20 ; 6 Ins- Law Jour- nal, 160 ; 49 How. Pr., 504. 146 WHO MAY SUE. jurisdiction without being appointed ancillary administrator there. Had the administrator been in possession of the policy, the original suit in Illinois would have been conclusive of the claim. But the legal possession was in the creditor, who was as- signee, not of a part, but of the whole, and therefore his rights as pledgee were never within the jurisdiction of the Illinois court, and the fact of a pending suit there would not prevent re- covery in Massachusetts. The doctrine that the court first ob- taining jurisdiction has the custody of the subject-matter does not apply. Nor does the fac^ that the policy stipulated it should be void in case of assignment without consent affect the ques- tion. That provision, if enforced by the company, would affect equally both contestants, and cannot be invoked by one against the other. Where the court of another State, however, has ac- quired complete jurisdiction, the rule is that the case will be con- tinued to await the decision of such court, which may be successfully pleaded as res judicata in bar of suits else- where. 6 In Eicker et al. vs. Charter Oak Life Ins. Co., 10 Ins. Law Jour- nal, 143, the Minnesota Supreme Conrt said, touching an unau- thorized surrender of a wife's policy by the husband : " Upon the allegations and admissions in the pleadings, it must be presumed that the original policy was made, and its stipulations were to be performed, in the State of Connecticut, where the defendant company was created, organized, and did its business, and hence its legal effect, and the rights and obligations of parties under it, depend upon the laws of that State ; but, as no evidence ap- pears to have been given as to what those laws were, they are to be taken as identical with the common law of this State, inde- pendent of any statute on the subject." The proper party to bring an action on the policy has been a matter of frequent discussion in the courts. In fire insurance the general rule is that the action must be brought in the name of the party with whom the contract was made. But where the company has, expressly or by implication, promised, to respond to the assignee or beneficiary, the suit may properly be brought in the name of the latter, as where the contract shows that it g 103 Mass., 245. See also Lemon vs. Phoenix Mut. Life Ins. Co., ante • Wood vs. Id., ante; Succession of Eisley, ante. WHO MAY SUE. 147 was originally made solely in the interest of the beneficiary, or where the company, by dealing with the assignee, recognizes him as the party to the contract h The life insurance contract is essentially different. The title vests, not in the party effecting the insurance, but in the benefi- ciary, to whom the company usually undertakes to respond. The general rule, therefore, is that the party to whom the policy is, by its terms, payable, is the proper party to maintain an ac- tion at law, unless the policy is under seal. Where the policy is payable, by its terms, to one party for the use or benefit of an- other, though the former is usually the proper party to sue, that right has also been accorded to the latter, especially in States where the requisite authority has been given by statute. , In case of assignment, the assignee may usually sue in his own name, in case the company has expressly or by implication promised to pay him ; otherwise the suit must be in the name of the assignor, except in those States where the requisite statutory authority is given. In equity the general rule is that the assignee may sue in his own name, irrespective of any promise on the part of the insured. But where the legal remedy is adequate and complete, equity will not usually interpose. Such is the general doctrine ; but the question as to right of action is largely controlled by State statutes, and the views of the courts have not been entirely harmonious.- 1 In Burroughs vs. State Mutual Life Ins. Co., 97 Mass., 359, the court declared that the rights of the child of the as- signor could not be set up to defeat a suit by the assignee in the case of a policy payable to the assured and his assigns. The assignment assented to by the insurers transferred the legal title and the right to sue to the assignee, who would hold the proceeds so far as they might inure for the benefit of tli3 child, whose •> Kingsley vs. N. E. Mut. Ins. Co., 8 Cush. (Mass.), 393; Phillips vs. Ins. Co., 10 Cush., 350; Jessup vs. Ins. Co., 3 Hill, 88 ; Blanchard vs. Ins. Co., 33 N. H., 11. J See ante, p- 101; Chitty on Cont. (11 Amer. Ed.), 1359, 1360, and cases there cited; Hogle vs. Guardian Life Ins. Co., 6 Robert, 567; 4 Abb., N. S., 346 ; Campbell vs. N. E. Mut. Life Ins. Co., 98 Mass., 381 ; Hillyard vs. Mut. Ben. L. Ins. Co., 2 Ins. Law Journal, 137 ; Valton vs. Nat. L. F. Ass Co., N. Y., 32 ; Price vs. Phoenix Mut. Life Ins. Co., 2 Ins. Law Journal, 223 ; Bai- ley vs. N. E. Mut. L. Ins. Co., 3 Ins. Law Journal, 442. 148 WHEN POLICY IS UNDER SEAL. rights could be determined either by a bill of interpleader filed by the company, or a suit against the assignee after recovery. To the same effect was Archibald vs. Mutual Life Ins. Co., 38 Wis., 542. In Hogle vs. Guardian Life Ins. Co , 4 Abb. Pr., 346, the assured, to whom the loss was payable under a life policy, was declared to mean the beneficiary, and, were it otherwise, he could maintain the action as the real party in interest. In My- ers vs. Keystone Mutual Life Ins. Co.. 27 Pa. St., 268, it was held that the wife could maintain an action on a policy for her use, notwithstanding there was an executor of insured. So in McComas vs. Covenant Mutual Life Ins. Co., 56 Mo., 573, the policy covenanted to pay the husband, his administrators, etc., but the consideration was expressed to be paid for the use of the wife. It was held that the wife might sue in her own name as the real party in interest without joining the husband as trus- tee, notwithstanding the statute authorized a trustee of an ex- press trust to sue in his own name. In Price vs. Phoenix Mutual Life Ins. Co., 17 Minn., 497, where the policy was payable to the guardian, it was held that the suit was properly brought by a guardian ad litem ; the appointment of a general guardian was unnecessary. On the other hand, in Flynn vs. North America Life Ins. Co., 4 Ins. Law Journal, 77, the insurance was on the life of E. for the benefit of F. The application was signed by E. The premiums were paid by P., and the policy promised to pay him, but the agreement was expressed to be made to and with E., and the policy was under seal. The Supreme Court of Massachu- setts said, in 1874, that " it is well settled that, upon an agree- ment under seal, none but a party to it can maintain an action at law. Whatever, therefore, might have been Flynn's right of ac- tion, if the agreement sued on had been a simple contract, there was no sufficient privity between him and the defendants to maintain an action in his own name upon this policy . k In American Life and Health Ins. Co. vs. Eobertshaw, 26 Penn. St., 189, the insured paid the premiums on a policy for $1,000, effected in the name of a creditor to whom he owed $140. The creditor was k Citing Sanders vs. Filley, 12 Pick., 554 ; Johnson vs. Foster, 12 Mut., 167 ; Millard vs. Baldwin, 3 Gray, 484 ; Northampton vs. Elwell, 4 Gray, 81 ; Dicey on Parties. 101. IN CASE OF BE-INSUBANOE. 149 held entitled to recover the whole, holding the excess above his debt as trustee for the widow of insured. In New York Life Ins. Co. vs. Bonner, 10 Ins. Law Journal, the plaintiff had taken out a policy for the benefit of his wife and children, on which he had paid the premium, and which had always remained in his exclusive possession. The policy lapsed, and was aftewards sur- rendered at an agreed price without the knowledge of the wife. In a suit against the company to recover a balance claimed to be due on the surrender, it was held by the Supreme Court of Nebraska, in 1881, that, under the code in that State, the suit might properly be brought by the party making a contract for the benefit of another, without joining the latter. In Smith vs. Mutual Life Ins. Co., ante, the' suit was brought by the widow of assured as assignee of a policy payable to his personal repre- sentatives, which she had purchased from the administrator un- der a statute of Massachusetts which authorizes purchasers of claims sold by an administrator or executor to sue in their own names. In Lee vs. Fraternal Mutual Ins. Co., 1 Handy, 217, the company had been reinsured by another, the former acting as agent of the latter in issuing policies, and the policy of the rein- surer was assigned by the company to the claimant after judg- ment. It was held that the action might properly be brought against either, but there must be an election. Both cannot be made liable in the same action. In Commonwealth vs. Unity Mutual Life Ass. Co., 117 Mass., 337, the policy stipulated that the consent of the company must be had to an assignment to any other persons than the wife or children, and in the absence of a valid assignment or of surviving wife or children, the amount should revert to the society. The insured, after assign- ing one-half of the policy, died, leaving neither wife nor chil- dren, and it was held that his administrator could not recover the half not assigned. 1 1 The right in general of an assignee who is a total stranger to an original contract to maintain a suit, apart from any statutory authority, has been the subject of much legal controversy. While the majority of American decis- ions have been disposed to favor such a right, in England the weight of authority seems to be opposed to it. Compare Lawrence vs. Fox, 20 N. Y., 268; Hall vs. Marston, 17 Mass., 575; Brewer vs. Dyer, 7 Cush., 337; with 150 WANT OF CONSIDERATION. Want of consideration has not infrequently been treated by the courts as a ground for declaring an assignment invalid, espe- cially where the wife has sought to invalidate the alleged assign- ment of a policy for her benefit. 111 But* an examination of these cases does not support the broad doctrine that the mere absence of a pecuniary consideration, or of its equivalent- in the shape of moral or legal claims of the assignee, will render an assignment void. The more recent doctrine of the courts recognizes the right of a donor to make a free and irrevocable gift irrespective of such consideration. The better doctrine would seem to be that want of consideration will only defeat an assignment when other meritorious grounds exist, or the circumstances are such as would not justify a gift. The right to make such gifts has been repeatedly recognized by the courts in case of life poli- cies. 11 The doctrine was thus laid down by the Supreme Court of Pennsylvania in the case of Malone, in 1880, 9 Ins. Law Jour- nal, 767 : " In equity, under the earlier decisions, an assignment (of a chose in action), without a valuable consideration, was regarded Crow vs. Kogers, 1 Strange, 592 ; Price vs. Eastern, 4 B. & Ad., 443; Butter- field vs. Hartshorn, 7 N. H., 345. Although the distinction does not appear to have been clearly drawn, there are seemingly two classes of cases corresponding to the two views which have been entertained, one in which the promise is purely of the character of a personal agreement between the original parties, and the other in which, from its nature, it may be presumed that such au interest on the part of third par- ties was contemplated as would support a suit. In the latter case there is fre- quently added to the mere relation of creditor and debtor an implied relation of trustee and cestui que trust for such third party, as in Berly vs. Taylor, 5 Hill, 507, where one person delivered a sum of money to another to be paid to a third. In other eases there is a novation, as where the debtor expressly agrees to substitute another creditor for the first. The principle involved in these two classes would seem to sufficiently support the right of action in case of a beneficiary or of an assignee, with the consent of the company. But an assignment, without such consent, must rest rather on an implied contract, and the real question would seem to be whether the quasi-negotiable features of a policy are sufficient to support this view. The general tendency of more recent decisions to extend rather than restrict these features, as well as the character of the contract itself, would seem to favor the right of the assignee to bring suit as the better doctrine. See as to jurisdiction of Court, Rippstein vs. St. Louis Mut. Life Ins. Co., 57 Mo., 86 ; Cohen vs. Mut. Life Ins. Co., 50 N. Y., 610. m See cases cited under " Wives' Policies," ante. n See cases ante under " Wives' Policies." WANT OF CONSIDERATION.. 151 as inoperative ; and it was supposed that a much greater degree of formality was required where a consideration was not want- ing than in the transfer of a chose in possession. Upon this subject, Judge Hare, in his opinion in Bond vs. Bunting, 25 Smith, 213, says: r This course of decision seems to have been well founded in the peculiar doctrines of equity, and the relation which they bore to the common law. It can hardly be vindicated on the broad principles of jurisprudence. It is a general rule that he who owns shall have the power to dispose. The^ws dis- ponendi should not be withheld except for some sufficient cause, and on especial grounds. What if anything the grantor receives as an equivalent concerns him, and not society at large. The right to give is consequently as clearly incident to the right of property as the right to sell. Choses in action are as much within this principle as lands or chattels ; and yet, as they cannot be le- gally assigned, the refusal of equity to aid voluntary transfers rendered it impossible to give a chose in action.' The decision in that case was that a' voluntary assignment of a policy of insur- ance bv a married woman, and without separate acknowledg- ment, was valid in the courts of Pennsylvania, where equity is part of the law."° A distinction may be noted between an ordi- nary assumpsit, where A promises B, in a simple contract, to do or forbear from a certain thing, and the question is whether, in the absence of a valuable consideration, the contract can be en- forced against A, and the assignment or gift of a life policy, where the promissor has already received a valuable considera- tion. In the former, the rule is that the contract cannot be en- forced. In the latter, however, there has been a valid gift, whose very essence is the absence of consideration, a matter in which the promissor has usually no special concern, as was said con- o See also Ashley vs. Ashley, 3 Sim., 149, where a policy assigned for a nominal consideration was afterwards reassigned by the executor of the as- signee for a valuable consideration, and it was held that the title of the sec- ond assignee was good, and a contract by his executor with another party for its sale could be enforced against such party. See also Le Feuvre vs. Sullivan, ante note, under "Eights of Creditors," as to priority of claims in case of nominal consideration. But an assignment without adequate pecuniary con- sideration may be evidence of fraud which will vitiate the transfer. Jones el al vs Keene, 2 Mood. & Bob., 348, and note. See also cases cited under Wives' Policies, ante. In Potter vs. Spilunan, 117 Mass., 322, the plaintiff pro- 152 .WANT OP CONSIDERATION. cerning an insurable interest in iEtna Ins. Co. vs. France, ante, p. 80. But the fact that the policy was a gift, and not procured by the beneficiary for a valuable consideration, has been regarded by several of the courts as a valid argument in support of the doctrine that the rights of the donor in certain cases are not di- vested. See ante under, " Who May Assign," and " Wives' Policies." cured a policy on his life payable to S., on which he had paid all the premiums except one, and S. was ignorant of the transaction. Plaintiff retained posses- sion of the policy, and afterwards desired it made payable to himself, but the company refused without the consent of S. It was held that the court had no power to compel S. to assign the policy. ADDENDUM. The following decisions are also of interest in connection with the subject of assignments. Where' the policy is void as a wager contract, the company is not obliged to refund on cancellation. The risk and inconvenience are sufficient considerations ; Lewis vs. Phoenix Mut. Life Ins. Co., 3 Ins. Law Journal, 123. Where there was an agreement between the insured and the company, that a portion of the premiums should be deferred, and remain a lien on the policy, probably unknown to the assignee, it was held that the assignor was bound to discharge the policy from the incumbrance. Gaitayes vs. Flather, 34 Beav., 387. Unauthorized representations of an agent will not protect a purchaser in good faith against misrepresentations by insured. Knight vs. Mutual Life Ins. Co., Pa. S. C, 1881, NOTE TO PAGE 64. BEFUSAL OP PAYMENT TO ASSIGNEE. The right of the company to refuse payment, without a valid discharge from the legal representative of insured, where the policy has been assigned to a creditor whose debt is less than the amount of insurance, has been a mat- ter of considerable discussion in England. The question seems to have been, not so much whether a court of equity would protect the company in paying to a valid assignee who may enforce payment, but how far for greater security it may insist on a discharge from the representative. In Crossless vs. Glasgow Life Ass. Co., L. E., 4 ch. D., 421, the assured had agreed to assign his policy to secure a debt, and it had been deposited with plaintiff for that purpose, but the writings contemplated in the arrangement had not been executed. It was held by the Master of the Bolls that there had not been even an equitable as- signment, and the company was entitled to proof that the debt equalled the amount of the policy. But in view of the fact that the debt was in excess, it was held that the plaintiff was entitled to the money, and a personal repre- sentative might be dispensed with, and, further, that the company must pay interest on the money, in reliance on Stat. 3 and 4 Wm. IV, C. 42, S. 28, dis-. tinguishing Wolfe vs. Findlay, 6 Ha. On the other band, in Box vs. Prov. Ins. Co. 19 Gr., 48, it was held, under this statute, by the V. Ch., that interest in such cases was not a strict legal right, but a matter of discretion with the court. In Webster vs. Brit. Emp. Mut. Life Ass. Co., 28 W. E., 818, the in- sured had deposited the policy to secure a sum less than the amount of the in- surance but no written assignment had been executed, and no letters of ad- 154 NOTES. ministration taken out, the insured having died intestate and insolvent. It was held by the Master of the Rolls, following the previous decision, that the company could not have safely paid the money without an order of the court, in the absence of a personal representative; nevertheless, it must pay interest. But this latter part was reversed on appeal; interest would only be allowed by way of damages for wrongful detention. The court said of the assignee : "He was not bound to incur the expense of taking out letters of administration, or making himself liable to the responsibility of an administrator ; he was not compelled to do that, and therefore he did not clothe himself with a legal title. But the guilt of default (if it is to be called so) was on his side, because that was not done which it was perfectly clear was open to the person in whose right the plaintiff is suing, namely, at any time to have clothed himself with the legal representation which was required to complete his title.'' So in Fen- ner vs. Mears, 2 W. Bl., 1269, where it was shown that the company had kept the money ready, it was said that, even if the company had used the money, they should not be mulct in interest where they had not been in default. It would appear from these decisions that the better rule in England, as here, is that, in case of reasonable uncertainty, the company will be justified in withholding payment, even though the claimant afterwards establishes his right. It is the duty of the latter to clothe himself with an indisputable title. NOTE B TO PAGE 107. LAPSE AND SUBSTITUTION OP NEW POLICY WITH CONSENT OP COMPANY. An important decision was rendered on this subject by the Supreme Court of Louisiana in March, 1881, just as these pages were passing through the press. The case was that of Pilcher vs. N. Y. Life Ins. Co. et al., 10 Ins. Law Journal. The policy was for the benefit of the wife, and without her consent, but with the consent of the company it was allowed to lapse, and a policy issued payable to the husband's representatives, which was forthwithjassigned for his debts, and reassigned by the assignees to the bank, which received it in good faith. The original assignees knew the facts, however. The com- pany consented to the assignments. It was held that the policy was not a community asset, but the property of the wife, and the husband had no right to dispose of it, citing Succession of Kugler, 23 La. Ann, 455 ; Succession of Hearing, 26 Ann., 326; Succession of Clark, 27 Ann., 267 ; Succession of Bofe- schien, 29 Ann., 714. No opportunity was given to the wife to revive as stipu- lated by the policy, and the new policy was as to her but a continuation of the old. The wife subsequently demanded a recognition of her rights by the company. It was held that the company was estopped by its own act from alleging her neglect at that time to tender the premiums due on a policy already declared forfeited, and that she was entitled to recover the amount less the premiums and interest which had been paid by the assignees. It was further held that the policy, though not negotiable, was assignable, and while the bank could acquire no greater rights than the assignor had, the company, through its knowledge, was estopped from setting up this defense, and was also liable to the bank as a holder in good faith. INDEX AND TABLE OF CASES. INDEX. ACCORD AND SATISFACTION, 58. ADMINISTRATOR, rights of, 136, 145. discharge by, 153. ACTION, right of, 10, 31, 32, 88, 101, 145, 146-149. ASSIGNEE— may maintain suit when, 10, 146-149. distinguished from beneficiary, 14. rights of, 59. who may be, 70-89. company as, 89 relief association as, 89. rights of creditors against. See Cbeditobs. in bankruptcy. See Cbeditobs. ASSIGNMENT— what is, 11-13. requisites to a complete, 17-36, 119. of part interest, 17-20, 30, 31, 32. M must be of the whole, 18. evidence of, 24. distinguished.from will, 28. Form and notice of, 37-47. conditional, 38. what interest passes by, 48-58. by absolute sale, 48. by mortgage or pledge, 49-58. of future contingent benefits. 66, 67. after maturity of claim, 89. by wife. See Wives' Policies, jurisdiction in case of, 142-146. lapse and revival will not cure, 107, Note B, p. 154. ASSIGNOR, who may be, 90-102. must discharge incumbrance. 153. ASSIGNS, promise to pay, 88, 99, 100. BAILMENTS, law of, 49. BANKRUPTCY. See Insolvency. 15'8 INDEX. BENEFICIARY— See Assignob, Assiqnee and Wives' Policies. title in when,' 14, 90. distinguished from assignee, 14. right of action. See Action. CHILDREN, interest of in wives' policies, 108-112. CHOSES IN ACTION, assignability of, 9. transfer of, 10. CONSENT, of company to assignment, 46, 88. CONSIDERATION, want of, 150-152. CONTINGENT BENEFITS, assignment of, 66, 67. CONVERSION, liability in case of, 58. CREDITOR, extent of recovery by, 58, 120, 141. extent of interest, 68. " " " See Interest. interest in wives' policies. See Wives' Policies. rights of, 120-141, 145, 146. effect of notice and possession, 120-126. COMPANY, protection of in case of payment, 59-65, Note A, p. 153. not a trustee, 65. consent of to assignment, 46, 88. as assignee, 89. DELIVERY. See Possession. Legal effect of, 11, 12, 97. what is sufficient, 22, 23. renders writing unnecessary, 39. DIVIDENDS, in case of assignment, 69. DONOR, rights of, 93-99. ■ ENDOWMENT, assignability of, 106, 113-115. title to. See Wives' Policies. ENGLISH DOCTRINE, concerning complete assignment, 34, 35. gambling act, 71. EVIDENCE OF ASSIGNMENT, 24. of assignment, company may demand, 46, 47- FORM OF ASSIGNMENT, 37-39. FORMALITIES, effect of, 25, 27. FRAUD. See Cbeditoes. effect of, 69. possession as badge of, 121. GIFT, completion of, 28, 35, 91-99. want of consideration, 150-152. HEIRS, meaning of, 100, 101. INDEX. 159 HOLDER, for value, 59-61, Note B, p. 154. HUSBAND, lien on -wives' policy by, 89. See Wives' Policies. INSOLVENCY, effect of on assignment, 120-141. State laws concerning, 141. INSURABLE INTEREST. See Interest. INTEREST. See Title. in life insured when necessary, 15. reversionary of wife, 67. extent of in assignment, 67-69. doctrine of as to assignee, 70-89. cessation of, 73. of insured in his own life, 75. in life of relative, 74, 78-80. temporary, 81. LAPSE AND REVIVAL; effect of, 107, Note B, 154. LEX LOCI, 142-146. LIFE POLICY. See Policy. MISTAKES, of law and fact, 65. MORTGAGE, assignment by way of, 49-58. NEGOTIABLE, and non-negotiable instruments distinguished, 10, 11. non-negotiable, effect of, 57. NON-FORFEITURE, law of Massachusetts, 144. NOTICE, English doctrine of, 34, 35. importance of, 40-45. English and American doctrine of, 120-126. PART INTEREST, assignment of, 17-20, 30-32, 125, 126. PARTIES IN INTEREST, real, 99, 100. PAYMENT to assignee by the company, protection in case of, 59-65, Note A, p. 153. PLACE OF CONTRACT, 1 J 2-146. PLEDGE, assignment by way of, 49-58. POLICY. See Wives' Policies. legal nature of, 9. negotiability of, 9-11. life and fire distinguished, 16. construction of as to parties in interest, 99, 100. POSSESSION. See Delivery. legal effect of, 11, 12, 29, 33, 34. lack of, 19-21. English and American doctrine of, 120-126. as evidence of title, 19-101. POWER OF HUSBAND AND WIFE TO ASSIGN, 107-117. 160 INDEX. POWER OF SALE OR SURRENDER, 39. PREMIUMS, payment of by assignee, 53. rights of party paying, 91-99. paid under void assignment, 102. claims of creditors for, 137. PROHIBITION, effect of, 41, 42. PURCHASER, rights of innocent, 59-61. REAL PARTIES IN INTEREST, 99, 100. RECEIPT BY ASSIGNOR, 63. REDEMPTION, right of, 53. RELIEF ASSOCIATIONS as assignees, 89. REPRESENTATIVES, 99-101. RIGHT OF ACTION. See Action. SALE, essentials of in case of personal property, 10. power of, 39. absolute, 48, 56, 57. and re-sale, 55. SURRENDER. See Title and Wives' Policies. power of, 39. as evidence of release, 58. what is necessary to protect company, 59, 65. purchase of policy with a view to, 88. unauthorized, 89. TITLE. See Intebest, Wives' Policies, Assignor, Assignee. to policy in beneficiary, 14, 90. proofs of, 62. in whom it vests, 90-102. TRUSTEES, duties of, 64. WAGER CONTRACTS, 72, 153. WILL DISTINGUISHED FROM ASSIGNMENT, 28. WIFE, power of to assign, 107-119. power of over separate estate, 118. WIVES' POLICIES, 103-119. assignment in bar of reversionary interest, 67. title to. See Title. provisions of statutes, 103-105, 118. rights of creditors against, 127-141. jurisdiction, 142. TABLE OF CASES. Adams vs. Brackett's Ex'rs, 5 Met., 280 97 Addison on Contracts 12, 13 Mima, Ins. Co. vs. Schaeffer, 5 Ins. Law Journal, 257 15 ■3Stna Life Ins. Co. vs. France, 91 U. S. E. S. C, 512.. 73, 78, 99, 152 Alwyn vs. Witty, 30 L. J. Ch., 860 34 Ames vs. Manhattan Life Ins. Co. (unreported) 144 Am pr. Ins. Co. vs. Henley, 60 Ind. 515 74 Amer. Ins. Co. vs. Cutler, 6 Ins. Law Journal, 660 144 Amer. L. & H. Ins. Co. vs. Bob- ertshaw, 26 Pa. St., 189 148 Anderson vs. Van Allen, 12 John., 343 46 Anderson vs. Butterly, 8 Ins. Law Journal, 79 106, 107 Anthracite Ins. Co. vs. Sears, Mass. S. C 68,128 Archibald vs. Mut. Life Ins. Co., 38 Wis., 542 100, 109 145 Ashley vs. Ashley, 3 Sim., 149.... 151 Bailey vs. N. E. Mut. L. Ins. Co., 3 Ins. Law Journal, 412 ..101, 147 Bainbridge vs. Clay, 4 Mart. N. S.,5ff. 125 Baker vs. Young, 47 Mo., 453.67, 109 Baker vs. Union Mut. Ins. Co., 43 N. Y.,.283 106 Ballon vs. Gile, Wis. S. C, 10 Ins. Law Journal, 200 99 Barry vs. Equitable Life Ins. Co., 4 Ins. Law Journal, 920 60,92,106,107,145 Barry vs. Mutual L. Ins. Co., 3 Ins. Law Journal, 74 ; 49 How. Pr., 504 106, 107, 145 Bartlett vs. Pierson, 29 Me., 9 43 Barney vs. Griffin, 2 Comst., 365. 65 Bates vs. Equitable Ins. Co., 10 Wall, 33 14 Bateman on Com. Law 51 Bean vs. Simpson, 16 Me., 49 47 Bear vs. Steinburg, 4 Ins. Law Journal, 159 101, 133 Belcher vs. Campbell, 8 Q. B., 1, 11 46 Bellamv vs. Bellamy's Adm., 6 Flor.,6 48 Bell vs. Lond. and N. W. E. Co., 15 Beav., 548 46 Berly ve. Taylor, 5 Hill, 507 150 Bevin vs. Conn. Mut. Life Ins. Co., 23Conn., 244 ..., 75 Bigelow vs. Wilson, 1 Pick., 485. . 12 Bishop vs. Holman, 10 Conn., 444. 44 Blanchardvs. Ins. Co.,33N.H.,ll. 147 Bliss on Life Insurance 106 Bodle vs. Chenango County Mut. Ins. Co., 1 Comst. (N. Y.), 53. 32 Bofeschien, Succession of, 29 La., Ann., 714 154 Bond vs. Ins. Co., 9 Phila., 149... 117 Bond vs. Bunting, 28 Sm., 210 ; 25 Sm., 213 119, 151 Bowser vs. Lamb, 6 Ins. Law Journal, 891 144 Box vs. Prov. Ins. Co., 19 Gr., 48. 153 Brett, ex parte 38 Brealey vs Collins, You. 317 69 Brewer vs. Dyer, 7 Cush., H37 149 Bridgemann vs. Green, Wilmer, 64 27 Brit. Com. Ins. Co. vs. Magee, Cooke & Ale, 182 71 Briggs vs. McCullough, 26 Cal., 542 129, 131 Broadwell vs. Howard, 77 111. ,305. 11 Brown vs. Me. Bank, 11 Mass., 158 45 Brown vs. Savage, 4 Drew, 1020. 47 Brown vs. Dewoy, 1 Sandy, Chy. E., 56; 2 Barb., 28 56 162 TABLE OF CASES. Brooks et al. vs. "WMte, 2 Met., 283.. 58 Brooks vs. Phoenix Mut. Life Ins. Co., 8 Ins. Law Journal, 740. 89 Bromlej;, in re, 13 Sim., 475 121 Brunswick Sav. Inst. vs. Ins. Co., 8 Ins. Law Journal, 120. 13 Brundige vs. Poor, 2 Gill & John., 1 27 Bruce vs. Garden, 8 L. E. Eq. Cas., 430 ; 5 L. Eep. Ch. Ap., 82. . . 68 Brummer vs. Cohn, 9 Ins. Law Journal, 160 106 Buffalo Steam Engine Works vs. Ins. Co., 17 N. Y,, 401 14 Bump's Fraudulent Conveyances. 126 Bunyon on Insurance 107 Burrill on Assignments 45, 48, 145 Burridge vs. Row, 1 Y. & C. C. C, 183 34 Burroughs vs. State Mut. L. Ins. Co., 97 Mass., 359.102, 115, 130,147 Bush vs. Lathrop, 22 N. T., 335. . 13 Butterfield vs. Hartshorn, 7 N. H., - 345 150 Caldwell vs. Hartruple & Co., 20 P. F. S.,74 32 Campbell vs. N. E. Ins. Co., 98 Mass., 381 42, 84, 99, 101, 147 Cammack vs. Lewis, 15 Wall., 643 15,73, 75, 78, 81, 86 Carlin vs. Damartrait, 5 Mart. U. S.,21 125 Central Bank of Frederick vs. Copeland, 18 Md., 210 27 Charter Oak Life Ins. Co. vs. Smith, 7 Ins. Law Journal, 718 59 Charter Oak Life Ins. Co. vs. Brant, 47 Mo., 419. .67, 73, 118, 130 Chapin vs. Fellows, 36 Conn., 132, 61, 91, 107, 110, 111 Chapman vs. Chapman, 13 Beav., 308 34 Chapman's Adm'x vs. Turner, 1 Call'sE., 280 56 Chesley vs. Taylor, 3 Gill, 257. . . . 25 Chitty on Contracts 31, 38, 101, 147 Chisholm vs. Nat. Cap. Life Ins. Co., 52 Mo., 213 74 Chowne vs. Bay lis, 31 Beav., 351. 34, 120 City F. Ins. Co. vs. Marsh, 45 111., 482 130 City Five Cents Savings Bank vs. Ins. Co. , 122 Mass. , 165 14 Clark, Succession of, 27 La. Ann., 26 , 154 Clark vs. Durand, 12 Wis., 223.. 93, 94 Clark vs. Allen, 11 E. I. , 441 86 Clodfeldter vs. Cox., 1 Sneed, 330, 339 '.... 45 Coates vs. Gerlach, 44 Pa. Stat., 43 123 Cohen vs. Mut. Life Ins. Co., 50 N. Y., 610 150 Cole vs. Marple, 10 Ins. Law Journal, 47 118, 129 Colville vs. Geddes, ex parte, IMont., 110 „ 44 Commonwealth vs. Unity Mut. L. Ass. Co., 117 Mass., 337 149 Comstock vs. Farmem, 2 Mass., 95 43 Conard vs. Atlantic Ins. Co., 1 Pet., 386, 449.... 11, 120 Continental Ins. Co. vs. Heilman & Cox, 9 Ins. Law Journal, 91 14 Conway's Exr's vs. Alexander, 7 Cranch.,218 56 Conover vs. Mut. Ins. Co., 1 Comst., 290 88 Continental Ins. Co. vs. Palmer, 42 Conn., 60 96,'lll Conn. Mut. Life Ins. Co. vs. Schaf- fer, 6 Ins. Law Journal, 883, 71, 73, 78, 80 Conn. Mut. Life Ins. Co. vs. Bur- roughs, 34 Conn. , 305 61, 102, 110, 111, 113 Conn. Mut. Life Ins. Co. vs. Ry- an, 10 Ins. Law Journal, 72.. 112, 128 Cook vs. Black, 1 Hare, Ch. 390 35, 121 Courtenay vs. Wright, 2 Giff., 337 68 Courtney vs. Ferrers, 1 Sim., 137. 69 Coverdale vs. Wilder, 17 Pick., 181 48 Cox vs. White, 2 La., 425 125 Crawford vs. Hunter, 8 T. E., 14. 71 Crocker vs. Whitney, 10 MaBS., 316 13 Crocker vs. Ford, 25 L. J., Ch. 552 62 Crossless vs. Glasgow L. Ass. Co., L. E., 4ch. D.,421 153 Crow vs. Eogers, 1 Strange, 592 . . 150 Cummingsvs. Fullman, 13Vt.,434 44 Cunningham vs. Smith's Adm'r, 7Pa. St.,450 85 Dalby vs. Ind. & Lond. Life Ass. Co., 18 Jur., 1024 71 Dalby vs. Ins. Co., 15 C. B., 365.. 82 Dando's Appeal (Pa. S. C, 1880).. 118 Darling vs. Eogers, 22 Wend. , 483 . 48 Davis vs. Calvert, 5 Gill. & John., 259 .*... 27 Davison vs. Cole, 16 Whason, 54. 25 Davenport vs. Woodbridge, 8 Greenly 17 47 Dearie vs. Hale, 3 Buss., 1, 24 34 TABLE OP OASES. 163 De Conge vs. Elliott, 23 N. J. Eq., 486 100 Defaur vs. Life Ass. Co., 25 Beav., 599 35, 131 Deitrich vs. Mad. Relief Ass., 8 Ins. Law Journal, 70 89 Desmazes vs. Mut. Ben. L. Ins. Co., 7 Ins. Law Journal, 926 . 143 Despard vs. Walbridge, 15 N. Y., 374 55 Dicey on Parties 148 Drury vs. Foster, 2 Wall., S. C. Eep.,24 25 Drysdale vs. Piggott, 8 De 6. M. &G 68 Dungan, Adm'x, vs. Mut. Benefit Life Ins Co., 3 Ins. Law Jour- nal, 106, and 7 Ins. Law Jour- nal, 171 12,24, 50, 89 Dunckleevs. MiU Co., 23 N. H., 245 44 Dunlop vs. Johnston, ]L. E., S. C. App ". 109 Dutton vs. Wilner, 52 N. y., 312.. 101 Duvall vs. G-oodson, 9 Ins. Law Journal, 101 99 Dyson vs. Morris, 1 Hare, 413, 425 53 Eadie vs. Slimmon, 26 N. Y, 9.. . 67, 69, 95, 105 East Lewisburgh L. & M. Co. vs. Marsh, 27 .Pittsburgh L. J., 178 67 Edgerton vs. Thomas, 5 Selden,40. 25 Edington vs. Harper, 3 J. J. Mar- shall, 354 56 Edmunds vs. Jones, 1 My., and Cr., 226 35 Edwards on Bailments 51 Edwards vs. Scott, 1 M. & Q., 962 46 Edwards vs. Martin, 1 L. E. Eq., 121; 13 L. T. (N. S.), 236.... 34, 47, 121 Ellis on Insurance 39, 44 Ellison vs. Ellison, 6 Ves., 656... 137 Elliott's Executors, Appeal of, 50 Pa., 75 129,135 Emerick vs. Coakley, 35 Md., 188- 68, 109, 143 England vs. Lord Tredegar, 1 L. E. Eq. Cas., 344 62 Equitable Life Ass. Soc. vs. Pat- terson, 41 Ga., 338 117 Estate of Malone (Penn. S. C, 1880) 26 Evers vs. Life Association, 4 Ins. Law Journal, 593 75, 114 Exchange Bank vs. Eice, 107 Mass., 37 88 Expressman's Aid Society vs. Lewis etal 112 Fall River Iron Works vs. Croade, 15 Pick., 11 145 Fenner vs. Mears, 2 W. B1.J1269.. 154 Field vs. City of New York, 6 N. Y 179 32 67 Filon vs. Knowles (Phila. C. P., ' 1875) 57 Firemen's Ins. Co. vs. Heming- way, 8 Ins. Law Journal, 520 38 Flagg vs. Mann, 14 Pick., 467 56 Floyer vs. Lavington, 1 P. Wm.'s, 278 56 Flynn vs North Am. L. Ins. Co., 115 Mass., -149 148 Fogg vs. Middlesex Ins. Co., 10 Cush., 346 .14, 16 Foote vs. Ins, Co., 119 Mass., 259. 14 Fortesque vs. Barnett, 3 M. & K., 36 35, 95,137 Foster vs. Gile, 10 Ins. Law Jour- nal, 194 94 Fowler vs. Butterlv, 9 Ins. Law Journal, 329 20, 92, 106 France vs. ..Etna Life Ins. Co., 2 Ins. Law Journal, 657 60, 73 Fraternal Mut. Life Ins. Co. vs. Applegate, 7 Ohio St., 292.89, 116 Franklin Life Ins. Co. vs. Hazard, 41 Ind., 116 14, 75, 83 Franklin Life Ins. Co. vs. Lefton, 5JInd., 330 14, 82 Freme vs. Brade, 2 De G. & J., 582 68 Freeman vs. Fulton F. Ins. Co., 38Barb.,247 75 Fryer vs. Eishel et itx., 3 Norris, 421 119 Gaitayes vs. Flather, 34 Beav., 387 153 Gale vs. Lewis, 9 Q. B. , 742 46 Gambs vs. Covenant Mut. Life Ins. Co., 50 Mo., 44 75, 93, 112 Getchell vs. Maney (Me. S. C, 1879) 31 Gibson vs. Stevens, 8 How., 384.. 11 Gilbert vs. Sutliff, 3 Ohio N.^S. ,129 65 Gilly vs. Burley, 22 Beav., 619.. . 69 Glover vs. Payne, 19 Wend., 518. 56 Goodrich vs. Treat (Col. S. C, 1877) 96, 134 Gosling vs. Coldwell (Tenn. S. C., 1878) 95, 100 Gottleib vs. Cranch, 4 De G. M. & G., 440 68 Gould vs. Emerson, 99 Mass., 154, 95, 102, 116 GrovervB. Grover, 24 Pick, 265.. 137 Greenfield vs. Mass. Mut. Life Ins. Co., 47 N. Y, 430. ...101, 136 Grosvenor vs. Atlantic Ins. Co., 17 N. Y., 391 14, 21 164 TABLE OF OASES. Guardian Mut. Life Ins. Co. vs. Hogan, 80 111. ,35 .73, 75 Hackett vs. Martin, 8 Greenl., 77 46 Hagenia vs. Basly, 14 Ves., 273.. 27 Hale vs. Dock Co., 29 Wis., 482.. 11 Hale vs. Mechanics' Ins. Co., 6 Gray, 172 14 Hall vs. Marston, 17 Mass., 575... 149 Hall vs. Robinson, 2 Comst., 293. 12 Hall vs. Dorchester Mut. Ins. Co., HMass.,53 46 Harper's Appeal, 11 P. F. Smith, 315 57 Harris vs. Bradley, 2 Dill. , 285 . . . 11 Hartford F. Ins. Co. vs. Daven- port (Mich. S. C. , 1877) 31 Hart vs. Ten Eyck, 2 John., ch. Dec, 100 53 Harrington vs. Traders' Bank, 9 Ins. Law Journal, 122 134 Harrisorv vs. McConkey, 1 Md., Ch. Dec, 34 68, 95 Haskell vs. Hilton, 30 Me., 419. . . 12 Hastings vs. Westchester F. Ins. Co., 7 Ins. Law Journal, 434 14 Hathaway vs. Sherman, 3 , Ins. Law Journal, 407 116, 128, 134 Hearing, Succession of, ' 26 La. An,, 326 117,136, 154 Hebdon vs. West, 3 B. & S., 579. . 71 Hencken vs. U. S. Life Ins. Co., 9 Ins. Law Journal, 912 65 Herrick vs. National Life Ins. Co., (U. S. C. C, Vt.) 61, 89, 114 Hibblewhite vs. McMerine, 6 Mns. and W., 200 25 Hill on Trustees 65 Hillyard vs. Mut. Ben. L. Ins. Co., 25 N.J. L.,415 101,147 Hipnell vs. Knight, 1 Y. & Coll. Ex. Cas., 415, 416 53 I vs. T. M. &T. F. Ins. Co., 8N.T.,416 55 Hoglevs. Guardian L. Ins. Co., 6 Robert, 567; 4 Abb., N. S., 346 .....147, 148 Holman vs. Grant, 8 Paige, 243. . . 56 Holmes vs. Rice (Mich. S. C, 1881) .' 91 Holland vs. Smith, 6 Esp., 11 68 Hollabird vs. Atlantic Mut. Life Ins. Co. , 2 Dillon, 166 ....... . 117 Hope vs. Bolen, 58 N. Y. , 380 55 Horn vs. Keteltas, 46 N. Y., 605.. 55 Horton vs. Bufflngton, 105 Mass., 400....: .' .' 8 8 How vs. Union Mut. Life Ins. Co., 9 Ins. Law Journal, 177 56 Howard vs. Harris, 3 Eq. L. Cas., 605,606,625-6-7 53 Hoyt vs. N. Y. Life Ins. Co., 3 Bosw., 440 73 Hoyle vs. Guardian Life Ins. Co. , 6 Robertson, 567 99 Hulme vs. Tenant, 1 Lead. Cas. Eq.. (4 An. Ed.), 679 109 Hutchings vs. Miner, 46 N. Y., 456 92 Hutson vs. Merrifield, 51 Ind., 24 68, 83 Hyde vs. Goodenow, 2 Ben., 124.. 144 Ingraham vs. Geyer, 13 Mass., 146 145 Ins. Co. vs. Applegate, 7 Ohio St., 292 95 Ins. Co. vs. Burroughs, 34 Conn., 305 ,..'- 95 Ins. Co. vs. Robertshaw, 23 Pa. St. Rep 58 Jacob vs. Ins. Co., 1 Cincin., 519 131 Jaques vs. Weeks, 7 Wall. , 261 . . . 53 Jenkins vs. Brewster, 14 Mass., 294 43 Jessel vs. Williamsburgh City Ins. Co.,3Hill,88 88 Jessup vs. Ins. Co., 3 Hill., 88 147 Johnson vs. Johnson, 15 Jur., 714. 69 Johnson vs. Swire, 3 Giff. , 194. ... 68 Johnson vs. Bloodgood, 1 John., Ch.,51 47 Johnson vs. Foster, 12 Met., 167.. 148 Jones vs. Consol. Invest. Ass. Co., 26Beav., 256.- 35, 121 Jones vs. Keene, 2 Mood. & Rob., 348 69,151 Jones vs. Wither, 13 Mass., 304. .. 43 Kekewich vs. Manning, 1 De G. Mac. &G., 176 35 Kelley vs. Caplice, 9 Ins. Law Journal, 834 62 Keller vs. Gaylor, 40 Conn., 303, 101, 117 Kent vs. Somerville, 7 Gill. & John., 265 25 Kent's Commentaries ._ 51, 75 Kensington, ex parte, 2 V. "&. B., 79 34 Ky. Mas. Mut. Ins. Co. vs. Mil- ler's Adm'r, 13 Bush., 494.. 99, 100 Kerman vs Howard, 23 Wis., 108 92.93,94 Kingsley vs. N. E. Mut. Ins. Co., 8 Cush. (Mass. ), 393 147 Knickerbocker Life Ins. Co. vs. Weitz, 99Mass., 157 102, 114 Knight vs. Mut. Life Ins. Co., (Pa. S. C, 1881.) 153 Knox vs. Turner, 5 L. J., Ch. Ap., 517 68 Kugler, Succession of, 23 La. Ann., 455 100,154 TABLE OF CASES. 165 Landrum vs. Knowles, 22 N. J. Eq.,594 66,92,93,97 Langston, ex parte, 17 Ves., 227... 34 Larkin vs. McMullin, 49 Pa. St.,. T 29-- -, . 123 Laughun vs. Fairbanks, 8 Mo., T 367 .' 44 Lawrence vs. Fox. 20 N. Y., 268.. 149 Lea vs. Hinton, 5 De G. M.& G. 68 Lee vs. Fraternal Mut. Ins. Co., 1 Handy, 217 * 149 Lees vs, 'Whiteley, L. R. En., 143 ■........' 43 -Le Feuvre Vs. Sullivan, 10 Moore's PC. C, 1 121, 152 Leitch vs. Wells, 48 N. Y 25 Lemon vs. Phcenix Mut. Life Ins. Co., 38 Conn.. 294 .... 15, 20, 69, 73, 92, 102, 146 Leonard vs. Eagle L. & H. Ins. Co., 4 Liv. Law Mag., 282 73 Lewin on Trusts, 99, 100 137 Lewis vs. Phoenix Mut. Life Ins. Co., 39 Conn., 101 75,153 Lickbarrow vs. Mason, 1 Smith's Lead. Cas., pt. 2, p. 1147 11 Libby vs. Libby, 37 Me., 359 117 Littlefield vs. Smith, 17 Me., 327. 45 London & Lan. Ins. Co. vs. Lam- piere (Montreal Court Q. B., 1878) 140 Longuet vs. Sea wen, 1 Ves., sec. 402 56 Loomis vs. Loomis, 26 Vt., 198... 43 Loomis vs. Rusk (N. Y. C. A., 1874) 60 Loomis vs. Eagle L. & H. Ins. Co., 6 Gray, 396 72, 73, 80, 82 Loos vs. John Hancock L. Ins. Co., 41 Mo., 538 101 Loring vs. Manufacturers' Ins. Co., 8 Gray, 29 14 Lord vs. Dall, 12 Mass., 145 72, 73, 75, 82, 86 Loveredge vs. Cooper, 3 Russ., 10 44 Lowell vs. B. &L. R. R. Co., 23 Pick., 32 88 Magawley's Trust, 5 De G. & S.,1 35 Malone, Estate of, 9 Ins. Law Journal, 767 92, 136, 150 Mallory vs. Travelers' Ins Co, 47 47 N. Y.,52 14, 15, 20, 92 Martin vs. Franklin F. Ins. Co., 9 Vroom, 140 13, 85, 91 Marcus vs. St. Louis Mut. Life Ins. Co., 68 N. Y., 625... 28, 39, 41 Matthews -vs. Sheehan, 7 Ins. Law Journal, 36 54 Maugham vs. Ridley, 8 L. T. N. S.,309 34 Maury vs. Home Life Ins. Co., 9 R I-, 346 75,76 May on Insurance 75 McComas vs. Covenant Mut. L.Ins. Co., 56 Mo., 573 148 McCord vs. Noy'es, 3 Bradf, 139.. 68, 95, 101 McFadden vs. Jenkins, 1 Phil., 153 35 McGowan vs. Smith, 269 L. J., Ch. 8 ' 46 McKenty vs. Universal Life Ins. Co., 3. Ins. Law Journal, 385 58 McKee vs. Ins. Co., 28 Mo., 383 .. 75 McNeil vs. Tenth Ward Nat. Bank, 46 N. Y, 329 25 Merrill vs. N. E. Mut. L. Ins. Co. 145 Meux vs. Bell, I Hare, 73 46 Millard vs. Baldwin, 3 Gray, 484. 148 Miller vs. Eagle L. & H. Ins. Co. 2E. D. Smith, 268 73, 76 Milliken vs. Pratt, 125 Mass., 374. 143 Missouri Valley Life Ins. Co. vs. Sturges, 6 Ins. Law Journal, 337 84 Mitchell vs. Union L. Ins. Co., 45 Me., 104 73, 75 Moore vs. Wesley, 4 E. & B., 243. 34, 121 Moorland vs. Isaac, 20 Beav., 389 68 Morrell vs. Trenton Mut. L. & F. Ins. Co. , 10 Cush. ,282 73 Morris vs. Penn. Mut. Life, 120 Mass., 503 144 Mowry vs. Home Ins. Co., 9 R. I. 86 Mullen vs. Wilson, 44 Pa. St., 413 : 123 Murry vs. Wells, 9 Ins. Law Jour- nal, 649 138 Mutual Protection Ins. Co. vs. Hamilton, 5 Sneed, 269 40, 45, 62, 123 Myers vs. Keystone L. Ins. Co., 27 Pa., 268..-. 99 Myers vs. Meinrath, 105 Mass., 366 88,148 National Life Ins. Co. vs. Barry, 3 Ins. Law Journal, 234 25, 145 National Life Ins. Co. vs. Whit- ridge, 3 Ins. Law Journal, 234 108,145 Neale vs. Molineux, 2 C. & K., 672 ' 35, 120 Nesmith vs. Drum, 8 W. & S., 9. . 37 Now York Life Ins. Co. vs. Flack, 3Md., 341 41, 88, 100, 137 New York Life Ins. Co. vs. Bon- ner, 10 Ins. Law Journal 149 Newcomb vs. Mut. Life Ins. Co. , 9 Ins. Law Jour., 124.33, 100,108,142 166 TABLE OF CASES. Newland, Case of, 7 Bank Reg. 139, 140 Northampton vs. El-well, 4 Gray, 81.... 148 North Brit. Ins. Co. vs. Hallett, 7 Jur.,N. 8., 1263 , 46, 68 Northwestern Mut. Life Ins. Co. vs. Roth, 8 Ins. Law Journal, 74... 59 Northwestern Mut. L. Ins. Co. vs. Elliott (U. S. C. C, Oregon, 1880i, 10 Ins. Law Journal, 144 Norwood vs. Guerdon, 111. S. C . . . 68 Nuer vs. Schenok, 3 Hill, 5228 45 Oliver vs. Townes, 2 Mart. (La. N. S.),93 145 Osborne, re Baker, ex parte, 1 Glyn &James,207 _ 4t Page vs. Burnstine (S. C. Dist. Col., 1877)..... 57 Paine vs. Lester, 41 Conn 144 Palmer vs. Merrill, 6 Cush. (Mass. ) , 282 17,30, 125 Parsons on Contracts .13, 51 Parkhurst vs. Dickerson, 21 Pick., 310 43 Parkes vs. Bott, 9 Sim., 388 69 Penn. Mut. Relief Ass'n vs. Fol- mer (Pa. S. C, 1878) 100 Pence vs. Conn. Mut. Life Ins. Co., 8 Ins. Law Journal, 746. 22, 101, 110, 132 People vs.. Bindley (Pa. S. C, 1879) 66 People vs. Phelps, 5 Ins. Law Journal, 885 100.127 Perry on Trusts 65, 137 Phillips vs. Ins. Co., 10 Cush., 350 147 Phcenix Mut. Life vs. Durham, 8 Ins. Law Journal, 178 110 Phcenix Mut. Life Ins. Co. vs. Bai- ley, 13 Wall., 61K 73, 82 Piedmont &. Arlington Life Ins. Co. vs. McLean, 9 Ins. Law Journal.261 43 Pomeroy vs. Manhattan Life Ins. Co. , 40 Ill. ; 398 30, 115, 143 Potter vs. Spillman, 117 Mass., 322 151 Pratt vs. Adams, 7 Paige, 615 65 Price vs. Phoenix Ins. Co. , 17 Minn. 497... 91, 147,148 Prince of Wales Ins. Co. vs. Pal- mer, 25 Beav., 605 , 71 Pritchard vs. Merch. & T. Mutual Life Ins. Soc, 3 C. B. (U. 8.), 662 54 Provident Life Ins. Co. vs. Baum, 29Ind., 236 15, 83 Price' vs. Easton, 4 B. & Ad., 443. 150 Prud. Ass. Co. vs. Thomas, 3 L. R.,Ch. Ap.,74 62 Pullis vs. Robinson, 7, Ins. Law Journal, 556 118, 133 Quigley vs. Mut. Life Ins. Co., U. S. C. C, Ohio, 4 Am. Law Record 90 Rawls vs. Amer. Mut. Ins. Co., 27 N. Y., 282.. 14, 16, 21, 58, 73, 82, 86 Reilly vs. Demestre (N. Y. S. C, 1878) : 38 Reitz's Appeal, 14 P. F. Smith, 165.... : 57 Ricker vs. Charter Oak Life Ins. Co., i Minn., 101... 94, 96, 122, 146 Richardson vs. Richardson, 3 L. R. Eq. Cas., 686 35 Richardsons, Succession of, 14 La. Ann., 1 30 Rickenbacker vs. Zimmerman, 8 Ins. Law Journal, 423 91 Ripstein vs. St. Louis Mut. L. Ins. Co., 57 Mo., 86 150 Risley, Succession of, 11 Rob., La., 298 29,45,124,146 Rison vs. Wilkinson, 3 Sneed, 565.. 95, 109, 110 Rivers vs. Gregg, 5 Rich. Eq., 274 91 Robson vs. Swart, 14 Minn., 370.. 11 Roberts vs. Edwards. 9 Jur., U. S., 1219 69 Roberts vs. Roberts, 64 N. C, 695 117 Robinson vs. < Duval, 9 Ins. Law Journal, 897 95,101 Robinson vs>. Mut. Ben. Life Ins. Co., 9 Ins. Law Journal, 73.. 106 Roe vs. Mutual Life Ins. Co., (N. Y. S. C.) 116 Rupert vs. Ins. Co., 7 Robert., 155 92, 116 Ruple vs. Bindley (Pa. S. C, 1879) 32, 36 Ruse vs. Mut. Ben. L. Ins. Co., 23 N. Y., 516 ; 21 N. Y, 653 ; 8 Ga., 5:t4 75,83,144 Russell's Policy, 15 L. R. Eq., 26 ; 27 L. T. (N. S.), 706 ... 120 Ryall vs. Rawles, 1 Ves., 367.... 34, 44 St. John vs. Am. Mut. Life Ins. Co., 13 N. Y., 31; 2. Duer, 419 28,30,86 Sampson vs. Shaw, 10 1. Mass., 150 88 Sanders vs. Filley, 12 Pick., 554.. 148 Scarf vs. Soulby, 1 Mae. & Gor., 364 140 Schadd,. Case of, 8 Ins. Law Jour- nal, 5 28, 128 TABLE OP OASES. 167 Schermerhorn vs. Talman, 4 Kern. (N. Y.), 93 ." 88 Scott vs. Roose, 1 Longf. &Town., 54 71 Second National Bank vs. Wall-' . bridge, 19 Ohio St., 311 11 Secorvs. Dalton (N. Y. S. C.).... 106 Sharpless vs. Welch, 4 Dal., 279. . 37 Shaw vs. Merchants' Nat. Bank (U. S. S. C, 1879) 60 Shannon vs. Nugent, 1 Hayes, 536 . 71 - Shattuck vs. Mut. L. Ins. Co., 7 Ins. Law Journal, 937 141 Shilling vs. Accidental Death Ins. Co., 2 H. & N.,42 71 Shriver vs. Lawborne, 12 Md , 174 25 Sias vs. Ins. Co. , 9 Ins. Law Jour- nal, 166 14 Simpson vs. Accidental Death Ins. Co., 2 C. B. (N. S.), 257 54 Singleton vs. St. Louis Mut. Life Ins. Co. , 5 Ins. Law Journal, 576 72, 73 Smedley vs. Felt et al., 43 Iowa, 607 138 Smith vs. Smith, 2 C. & M., 231 . . 46 Smith vs. Kerr, 41 Scot. Jur., 460 118 Smith vs. Ins. Co., 120 Mass., 90. . 14 Smith vs. Mut. Life Ins. Co., 10 Ins. Law Journal, 191 144 Soper vs. Fry (Mich. S. C, 1878). 91 Spratley vs. Ins. Co., 4 Ins. Law Journal, 373 144 Spering's Appeal, 10 P. F. Smith, 199 57 Spring vs. So. Car. Ins. Co., 8 Wheat., 2ti8 45, 146 State Mut. F. Ins. Co. vs. Rob- erts, 31 Pa. St., 438 14 Stevens vs. Warren, 101 Mass., 564 42,73,75, 84 Stewart & Duffy vs. Firemen's Ins. Co., 9 Ins. Law Journal, 838 - - - 64 Stewart vs. Cockerell, 8 L. R. Eq., 607 121 Stillwell vs. Mutual Life Ins. Co. , 7 Ins. Law Journal, 44.. 61, 8S, 106 Story on Contracts 45 Story on Equity 46, 51 Story on Bailments 51 Story Eq. Jur 53 Stokoe vs. Cowan, 29 Beav., 638; S. C. 7 Jur. N. S-, 901 ; 30 L. J. ch. 882; 9 W. R.. 801; 4 L. T.N. S.,695 34, 140 Stokes vs. Coffey, 8 Bush., 533. .. 135 Strickland vs. Turner, 8 Exch., 208 69 Stright, ex parte, 2 Dea. & Chit., 314 46 Styan, in re, 1 Phill. Ch. ,105 ,34 Summers vs. U. S. Ann. & F. Co., 13 La. Ann. , 504 73 Sutherland vs. Old Dominion Ins. Co., 8 Ins. Law Journal, 181. 74 Swan vs. Snow, 11 Allen, 224 116 Swift vs. Railway. Pass., &c, Ben. Ass'n, 10 Ins. Law Jour- nal, 53 38, 97 Swick vs. Home Life Ins. Co., 2 Dill., 161 73,75,76 Tabor vs. Mich. Mut. Life Ins. Co., 10 Ins. Law Journal, 97 65 Tenness vs. N. W. Mut. Life Ins. Co., 9 Ins. Law Journal, 191. 114 Thompson vs. Dominey, J 4 M. & W., 403 11 Thompson vs. Am. Tont., &c, Ins. Co., 46 N. Y, 675 106 Thompson vs. Speirs, 13 Sim., 469 121 Trager vs. La. Eq. Life Ins. Co., 9 Ins. Law Journal, bl7 96 Trenton Mut. L. & T. Ins. Co. vs. Johnson, 4 Zab, 576.72, 74, 82, 86 Tristonvs Hardy, 14 Beav., 232.. 68 Trough, Estate of, 8 Philad. R., 214; 25 Smith, 115 ....28, 12a, 137 Trotter vs. Blocker, 6 Porter, 2(i9 65 Tucker vs. Wilson, 1 P. Wm.'s, /61 53 Turner vs. Harvey, Jac, 169 69 Turner vs. Quincy Ins. Co., 109 Mass., 573 14 U. S. vs. Bk. of U. S., 8 Rob. (La. i, 262 145 U. S. vs. Buford, 3 Pet. ,30 12 U. S. vs. Sturges, 1 Paine, 525 ... . 46 U. B. Mut. Aid Society vs. Grove, 8 Ins. Law Journal, 804.. 118, 128 Universal Life Ins. Co. vs. Cog- bill, 30Grat, 72 93 Valton vs. National Loan Fund L. Ass. Soc, 23 Barb., 9.73,n5, 147 Van Duzen vs. Howe, 21 N. Y, 534 25 Vanbuskirk vs. Ins. Co., 14 Conu., 141 45 Wainwright vs. Bland, 1 Mood. & Rob., 481 71 Wakefield vs. Martin, 3 Mass., 558 126 Want vs. Blunt., 12 East., 183. .. 54 Ward vs. Audland, 8 Beav., 201.. 35 Warren vs. Copelin, 4 Met., 594.. 45 Wason vs. Colburn, 99 Mass., 442 190 Webb's Policy, 15 W. R.. 529 121 168 TABLE OF CASES. Webster vs. Brit. Emp. Mut. Life Ass. Co., 28 W. E., 818 153 Wells vs. Archer, 10 S. & E.. 412. 34 West vs. Eeed, 2 Hare, Ch., 261 .35, 120 West Branch Ins. Co. vs. Helfen- stein, 40 Pa. St., 289 89 Wharf vs. Howell, 5 Binney, 499. 56 Wheeler vs. Peerless, 6 Ins. Law Journal, 560 57,89 Whiteomb vs. Phoenix Mut. Life 8 Ins. Law Journal, 624 143 White vs. Vermont Co., 21 How., 575 25 White vs. Penn. Mut. L. Ins. Co.. 8 Ins. Law Journal, 78 61, 89 Whitbridge vs. Mut. L. Ins. Co., 3 Ins. Law Journal, 80 107 Whitridge vs. Barry, 6 Ins. Law- Journal, 160 69, 108, M4 Whitbread, ex parte, 19 Ves., 209.. 34 Wills vs. Twambly, 13 Mass., 204. 13 Williams vs. Thorpe 2 Sim. , 257 . . . 44 Williams vs. Corson, 2 Tenn., Ch. 269 95, 99,109 Wilson vs. Lawrence (N. Y. S. C, 1878) 106 Wilson vs. Life Ass'n of Am., 6 Ins. Law Journal, 240 113 Winter vs. Easum, 2 De G. J. & S., 272 117 Winchester vs. Stebbins, 16 Gray, 52 117 Wolfe vs. Findlay, 6 Ha 153 Wood vs. Phcenix Ins. Co., 7 Ins. Law Journal, 629 29, 123, 146 Wood vs. Eutland Mutual Ins. Co., 31 Vt., 552 32 Yaeger et al. vs. Yaeger,5 Ins. Law Journal, 238 113 Young vs. North 111. Coal and Iron Co, (U. S. C. C, HI., 1880) 38 Date Due I < I Library Burea iCat. No. 1137 kf 1181 a8 h66 Author I Hine, Charles Cole l Title Law of assignments of life policies.