Aultman v. McConnell

• Decision Date: 20 April 1888
• Citation: 34 F. 724
• Parties: AULTMAN et al. v. McCONNELL et al.
• Court: U.S. District Court — Southern District of Iowa

34 F. 724

AULTMAN et al. v. McCONNELL et al.

United States Circuit Court, S.D. Iowa, Western Division.

April 20, 1888

Stone &amp Sims, for plaintiff.

Sapp &amp Pusey, for intervenor.

SHIRAS J.

In 1886, James McConnell was the owner of a store building in the town of Harlan, Iowa, upon which held a policy of insurance in the Pennsylvania Fire Insurance Company, for the sum of $700. Joseph G. Peirce held a mortgage on the property as security for a debt due him from McConnell. In August 1886, the premises were destroyed by fire, and on the 11th of that month McConnell executed a written assignment of the policy to Peirce, as additional security to him. This assignment was not indorsed on the policy, which was at the date of the assignment in McConnell's safe in the ruins of the burned building. Notice of the assignment of the policy was given to the agent of the insurance company. Subsequently McConnell placed this policy with others in the hands of an attorney, with instructions to collect the policies, and apply the proceeds in payment of a debt due from him to Aultman, Miller & Co., plaintiffs herein. An agent of the plaintiffs visited Harlan for the purpose of settling the account between the firm and McConnell. At that time he endeavored to procure an assignment of the policy in the Pennsylvania Insurance Company, but McConnell refused to sign it, although he did transfer to plaintiffs the other policies on the property. Thereupon plaintiffs brought suit against McConnell by attachment, and garnished the attorney, in whose hands the policy had been placed, and also the agent of the insurance company. The company paid the amount due upon the policy into court, and, Joseph G. Peirce having intervened in the action, the question for determination is, which of the parties, Aultman, Miller & Co., or Joseph G. Peirce, is entitled to the money in the registry of the court.

The evidence fails to show that McConnell in fact made a legal transfer of the policy of insurance to Aultman, Miller & Co. When the policies were handed to the attorney with instructions to collect the same and apply the proceeds, the attorney was not in fact acting for the plaintiffs. True, he had and was acting for Aultman, Miller & Co. in making collections, but it does not appear that he had any authority touching this claim. It was a voluntary act on part of McConnell in handing the policies to him, and the acceptance of them by the attorney did not in any way bind the plaintiffs. If the attorney had the next day presented the policies for payment to the company, and received the money and had then appropriated it to his own use, or it had been stolen from him, the loss would have fallen on McConnell, and not on the plaintiffs. It must be held that the policy in the hands of the attorney had not been assigned or transferred to the plaintiffs, and the acts of the parties at the time show that such was their understanding. The agent endeavored to procure an assignment of this with the other policies, but McConnell refused to give it, and thereupon a garnishment was served on the attorney. The rights of the parties must therefore be determined by the effect to be given to this...