Diffenbach v. New York Life Ins. Co.

• Decision Date: 21 February 1884
• Citation: 61 Md. 370
• Parties: CHARLES H. DIFFENBACH and Henry B. Roemer v. THE NEW YORK LIFE INSURANCE COMPANY, August Vogeler and Others. Same v. The Manhattan Life Insurance Company, August Vogeler and Others.
• Court: Maryland Court of Appeals

61 Md. 370

CHARLES H. DIFFENBACH and Henry B. Roemer v. THE NEW YORK LIFE INSURANCE COMPANY, August Vogeler and Others.

Same v. The Manhattan Life Insurance Company, August Vogeler and Others.

Court of Appeals of Maryland

February 21, 1884

The cause was argued before Alvey, C.J., Stone, Miller, and Irving, JJ.

John Prentiss Poe, for the appellants.

When the policies were assigned in 1872, by Moore to Vogeler nothing passed to the latter except sufficient to cover his insurable interest in Moore's life. This interest was nothing more than the amounts paid as premiums, with interest thereon, and any indebtedness of Moore to Vogeler that existed at the date of assignment. Warnock v. Davis, 104 U.S. 775; Page v. Burnstine, 102 U.S. 669; Ins. Co. v. Schaefer, 94 U.S. 457; Cammack v Lewis, 15 Wall. 643.

Upon different occasions, when the question of the disposition of these policies was discussed by the parties to this suit Vogeler being present and being appealed to, said nothing of any claim, except for the premiums that he had paid. When asked by Dr. Moore and Mr. Morrison what objection he could have to the assignment of the policies to Messrs. Morrison and Cross, and the appellants, provided he was secured for the premiums that had been advanced, he said nothing. And not until Dr. Moore was dead, did he set up the claim that he now makes to have this Iowa land debt and the Toel debt paid out of the policies.

Knowing that Vogeler made no claim for anything but the premiums and interest paid by him, the appellants took an assignment of the policies in part payment of Dr. Moore's indebtedness to them, and insist that Vogeler is now estopped from setting up to their prejudice any other claims.

The testimony of the respondent Vogeler, was inadmissible. Moore, the grantor in both assignments, was dead, and Vogeler being a party to the contract or cause of action in issue, and also a party to the record, was not a competent witness on his own behalf. Rev. Code, Art. 70, sec. 2. Miller v. Motter, 35 Md. 432; Johnson v. Heald, 33 Md. 352; Neidig v. Whiteford, 29 Md. 184.

John C. King, for the appellee.

The evidence shows clearly that these policies were issued in October, 1872, and were at once assigned to Mr. August Vogeler, who became the legal assignee of them, and the premiums on them for nine years were paid from his own funds. This bill is not, therefore, an effort to make Mr. Vogeler account for policies of insurance enuring to his benefit, the premiums of which have been paid by the assured, Dr. Moore himself, or from any of Moore's funds, which are thus withdrawn from his estate in prejudice of his creditors. When the premiums of a policy of insurance are paid or are required to be paid by the assured, a trust on the proceeds may arise in favor of his creditors; but where the premiums are paid solely by the assignee of the assured, and from his own funds, it is difficult to see, in the absence of any agreement by the assignor or assured, to pay them, how a court of equity can attach a trust to the proceeds in favor of parties not privy to the transaction or agreement, who have neither paid nor agreed to pay any portion of the premiums, who incurred no risk, and who simply remained quiet and waited for a court of equity to interpose and give them the benefit of a contract to which, as just observed, they are neither parties nor privies. Dr. Moore had, doubtless, an insurable interest in his own life, and an undisputed right to assign his policy. The payment of the premiums is a good consideration for the execution and maintenance of the policies which are by their very terms made payable to the assured, his executors, administrators and assigns. Bliss on Life Ins. sec. 26; Miller v. Ins. Co. 2 E. D. Smith, 268, 290; Ins Co. v. Johnson, 4 Zabr. 576; Baker v. Ins. Co. 43 N.Y. 283; Valton v. Assurance Society, 22 Barb. 9.

This is not a case where an administrator is a party plaintiff or defendant, nor a case, properly speaking, where an original party to a contract or cause of action is dead. On the contrary, it is a case in which the complainants allege that Dr. Moore, their debtor, is deceased. Mr. Vogeler is not a party to their contracts or causes of action; and the contract or cause of action, if any they have, is their claim against Dr. Moore, and not Mr. Vogeler's account with Dr. Moore or with Dr. Moore's administrator. If Dr. Moore owed the complainants nothing, they certainly could recover nothing by proving that he owed Mr. Vogeler nothing.

They sue on their own claims against Dr. Moore, and Mr. Vogeler, as against the complainants, is competent to prove that Dr. Moore, their assignor, under whom they claim, had nothing to assign them, and to offer in evidence the acts and declarations of their grantor whether he be deceased or not. It is not for the complainants to exclude Vogeler's testimony, and to secure for themselves the testimony of Messrs. Morrison and Cross, Dr. Moore's counsel, by making them co-defendants in the case with Mr. Vogeler. Leiter v. Grimes, 35 Md. 434.

Messrs. Morrison and Cross are co-defendants, and are made witnesses by the complainants in their behalf, and as assignees, especially in their own behalf. This testimony will be found but little detrimental to the interest of Mr. Vogeler, giving it even its full effect, and when properly considered, it will be found entitled to very little consideration.

Irving J., delivered the opinion of the court.

These are independent appeals in different cases; but, as they involved the same question, by agreement but one record was sent up, and the cases will be treated as one in this opinion.

The appellants filed their bill, in the Circuit Court of Baltimore City, alleging that in May, 1881, G. A. Moore, late of Baltimore City, deceased, being indebted to them, in large sums of money, under his hand and seal assigned certain policies of insurance on his life, for $5000 each, in the New York Life Insurance Company and in the Manhattan Life Insurance Company of New York, to Robert D. Morrison and E J. D. Cross, to secure them each the sum of $1000, due them respectively, and then to the complainants to secure their claims against him respectively; that in December following the assignor died leaving the policies in full force. The bill further charges, that these assignments were made "subject to the lien of a certain August Vogeler for moneys advanced by him on said policies, or otherwise on account of said Moore." It charges that August Vogeler is not entitled to the whole of the policies, and, that for whatever claim he may have once had, he had accepted, and retained a conveyance of valuable land in Virginia. It charged that the complainants had applied to August Vogeler for a full statement of his claim and its origin, but had been unable to obtain a satisfactory statement thereof. The bill then calls for a full discovery, under oath, and in detail, of "the nature, origin, consideration, and extent of the alleged lien, and what other security or satisfaction he has for said claim," and prays for a decree against the...