Aetna Ins. Co. v. Smith

• Decision Date: 08 April 1918
• Docket Number: 19903
• Citation: 78 So. 289,117 Miss. 327
• Parties: AETNA INSURANCE COMPANY v. SMITH, MCKINNON & SON
• Court: Mississippi Supreme Court

78 So. 289

117 Miss. 327

AETNA INSURANCE COMPANY v. SMITH, MCKINNON & SON

No. 19903

Supreme Court of Mississippi

April 8, 1918

Division A

APPEAL from the circuit court of Choctaw county, HON. H. H. RODGERS Judge.

Suit by Smith, McKinnon & Son against the Aetna Insurance Company. From a judgment for plaintiff, defendant appeals.

The facts are fully stated in the opinion of the court.

Judgment affirmed.

McLaurin & Arminstead, for appellant.

I refer the court to the copy of my brief in the Palatine Insurance Company case as to a discussion of the third proposition mentioned in the additional briefs requested.

As to the first proposition: "Was the assignment of the policy to Sanderson absolute or for the purpose of securing payment to him of the debt due him by appellee? We insist that this assignment was absolute. It speaks for itself and needs no explanation or aid of interpretation, and, unquestionably in a court of law under the practice in Mississippi it cannot be avoided by parol testimony nor can any conditions be added to this assignment by the interested testimony of the appellee in order to maintain this suit.

We think that this is made perfectly sure by section 717 of the Code of 1906. This section and the decisions thereunder settle the proposition that an assignor in writing of a chose in action cannot sue in his own name, but the suit must be brought, if at all, in the name of the assignee. This has been repeatedly held by our court and it would seem useless to cite authorities, but we refer the court to the case of Beck v. Rosser, 68 Miss. 72, and Nickles v Dillard, 73 Miss. 803.

The supreme court of Mississippi has held that the person to whom a claim for damages for an injury to personal property has been assigned in writing, cannot sue thereon in his own name. Chicago R. R. Co. v. Packwood, 59 Miss. 280.

Even an equitable holder of a chose in action to whom a written assignment is not made cannot sue in his own name. Lowenburg v. Jones, 56 Miss. 688.

A bailor whose warehouse receipts are pledged cannot maintain replevin or trover either in his own name or for the use of the pledgee. Selleck v. Compress Co., 72 Miss. 1019.

The assignee may sue in his own name if the assignment be in writing though another may possess a beneficial interest in the money due. Jenkins v. Sherman, 77 Miss. 884.

We insist therefore, that as the assignment in this case is in writing complete in itself, that no oral testimony can be received to qualify the assignment, and the assignment is absolute on its face. Allen v. The Bank, 72 Miss 549; Lumber Co. v. Lumber Co., 71 Miss. 944; Chicago Bldg., etc., Co. v. Higginbotham, 29 So. 79 (not officially reported); Jordan v. Neal, 33 So. 17 (not officially reported); Columbia Star Milling Co. v. Russel Co., 89 Miss. Cocke v. Blackbourn, 58 Miss. 537; Baum v. Lynn, 72 Miss. 932.

Second proposition submitted by the court: "Does the assignment of a policy for the purpose only of securing the payment of a debt due the assignee come within the prohibition against assignment contained in the policy?"

If the assignment shows on its face that it was made as "collateral security" some of the courts hold that it does not, but this view is unsound, for it certainly affects the moral hazard. In the case of Ins. Co. v. Boyce, 114 Miss. 165, the court held that a mortgagee might pledge as "collateral security," the policy in which he had an independent contract, without violating the "mortgage clause" but on page 172 the distinction between "delivery" money, and "written transfer" is clearly drawn.

The third proposition in reference to the waiver of additional insurance is answered by the copy of our brief attached hereto, as counsel for appellee already have a copy of this brief in the Palatine Insurance Company case sent them by us, we are sending only the copy of the brief written in response to propositions one and two in the court's suggestion.

The court will observe that the copy of the brief was written in response to the suggestion of error filed by counsel for appellee in the suit against the Palatine Insurance Company wherein the same claim of waiver in reference to additional insurance was set up.

Dunn & Patterson and Vardaman & Vardaman, for appellee.

There was never any delivery within the contemplation of the law. What is a delivery? "Before either party is bound, the proposition of one of them must be accepted by the other exactly as proposed. There must be a meeting of the minds on the same thing, and this is true of insurance as of other contracts."

N. Y. Life Ins. Co. v. McIntosh, 86 Miss. 236, and see the same authority cited in our original brief in this case. Would Sanders have had the right to keep this policy, when he had not complied with the term under which it had been sent to him, to wit, the taking of it to the insurance company and having the, mortgagee clause or the notation made on it. The evidence is that it was given to him for this specific and only purpose, and to hold that it was delivered to the man when he had not complied with, nor had he attempted to comply, nor does he claim that he complied with the very purpose of the delivery to him, it seems to us, would abrogate and annul all the law that has been written on the subject of the delivery of instruments and what it takes to constitute a delivery.

As to the point made by counsel that there is an additional rule at law that prevents the appellee in this case from testifying to any facts qualifying the absolute assignment of the policy sued on, and that is under the rule often announced by this court that in a court at law in Mississippi a party may not be heard to testify to any facts qualifying or adding to a writing or in any manner varying the terms of a written contract except in cases of fraud, etc.

First, the testimony in this case went to the matter of the execution of the instrument and it is universally held without qualification, so far as we are advised, that the question of delivery and the execution of an instrument can always be inquired into; that is to say, the question of the validity of the instrument, or whether in fact it was a binding instrument and the rule of parole evidence, etc., has no bearing upon this case, and the rule as to the purpose for which an instrument was delivered being one of the essential parts of the document, to wit, delivery, can always be inquired into.

Does this assignment of a policy for the purpose only of securing the payment of a debt due the assignee come within the prohibition against assignments contained in the policy?

It is admitted by counsel for appellants that some of the courts hold that assignments as collateral security does not come within the prohibition. He then proceeds to state that the view is unsound, but the courts of many jurisdictions hold that assignments as collateral security do not come within the prohibition in the policy.

This transaction between Prof. Sanderson and Smith, McKinnon & Co. had all the elements of a collateral undertaking. First, there was a debt due from Smith, McKinnon & Co. to Prof. Sanderson; second, there was a deed of trust to secure the debt; third, there is no testimony whatever of the extinguishment of any debt by the transfer of the policy; fourth, there is the specific statement of the two witnesses that it was sent to him as a collateral undertaking collateral to the main debt; fifth, there is the statement of the transaction that it was to be taken to the insurance company and the insertion by the insurance company of a clause payable in case of fire as the interest of the mortgagee might appear, which was never complied with on the part of Sanderson, and, therefore, the undertaking never went into effect. There was no sale of the premises to Sanderson; Sanderson never had anything to do with the property, save that he had a mortgage on it. It had no element of an absolute assignment of the policy to Sanderson and McKinnon.

The first authorities in the counsel for the appellant's brief, Beck v. Rosser and the list of cases following that, only decide in those specific cases on the question of how to bring the suit. The first Beck v. Rosser, 68 Miss. 72, being a case where one man sued for the use of another, and where the usee did not appear in court at all, and where the other was shown to have absolutely transferred an open account. The court held in that case that a suit brought in the name of the original owner of the open account for the use of the man to whom it had been transferred, was not the proper way to bring the suit.

On the third proposition: Was the provision against additional insurance waived according to the testimony of appellee at the time the policy sued on was issued? McKinnon knew that the policy was already insured in another company for the sum of five hundred dollars. Home Ins. Co. v. Gibson, 72 Miss. 58; Liverpool & C. Ins. Co. v. Farnsworth, 72 Miss. 555; Phoenix Ins. Company v. Randle, 81 Miss. 720; Miss. Home Ins. Co. v. Stevens, 93 Miss. 439; Georgia Home Ins. Co. v. Stein, 72 Miss. 943; Western Assur. Co. v. Phelps, 77 Miss. 625; So. Ins. Co. v. Stewart, 30 So. 755, not officially reported; Rivara v. Queen's Ins. Co., 62 Miss. 720.

On the question as to whether the provision prohibitory of assignments of the policy is applicable to collateral undertakings, we cite Whiting v. Burkhardt, (1901), 52 L. R. A. 788.

The distinction is plainly and fully pointed out in Fogg v Middlesex Mut. F. Ins. Co., 10 Cush. 337, 346; Phillips v. Merrimack Mut. F. Ins. Co., 10 Cush. 350, 353; Mutual Life. Ins. Co. v. Allen, 138 Mass. 24, 28, 29, 58 Am. Rep. 245; Merrill v. Colonial Mut. F. Ins. Co., 169 Mass. 10, 13, 14, 47 N.E. 439; See, also, 2 Cooley's...