Ellis v. Kreutzinger

• Decision Date: 31 October 1858
• Citation: 27 Mo. 311
• Parties: ELLIS et al., Appellants, v. KREUTZINGER, et al., Respondents.
• Court: Missouri Supreme Court

27 Mo. 311

ELLIS et al., Appellants,

v.KREUTZINGER, et al., Respondents.

Supreme Court of Missouri.

October Term, 1858.

1. The deposit of a policy of insurance with a creditor of the assured as a security for the debt, gives such creditor a lien upon the proceeds of the policy, a lien binding upon the assured, the insurer and upon all who, with notice of such lien, take an interest in the policy from the assured.

2. The clause in a policy which prohibits an assignment of the policy without the consent in writing of the insurance company, does not apply to a deposit of the policy by way of pledge.

Appeal from St. Louis Court of Common Pleas.

One Kreutzinger was indebted to the firm of Ellis & Cavender, as a security for which said firm held a mortgage on his stock of goods. Kreutzinger also delivered to said firm, as a security for said indebtedness, a policy of insurance on said stock of goods, executed in his favor by the St. Louis Mutual Fire and Marine Insurance Company of St. Louis. Said Kreutzinger was also indebted to the firm of Douglass, Gazzam & Co. and to that of Fallenstein & Gauss. The goods were lost by fire. After the loss, an assignment of the policy was made upon the books of the company to one Meyer in trust for the two firms last named. This assignment, it is contended by plaintiffs, was made with notice, on the part of the company, the trustee, and the cestui que trust, of the rights of plaintiffs and in fraud of those rights. The company paid the loss to Meyer, who appropriated the sum received in payment of the debts due the firms of Douglass, Gazzam & Co. and of Fallenstein & Gauss. The plaintiffs pray for judgment against Kreutzinger for the debt due them, and that the other defendants be required to refund and pay over to plaintiffs the sums received by them on the policy.

The plaintiffs asked, and the court refused, the following declaration of law: “If the court is satisfied from the evidence that the defendant Kreutzinger deposited the policy in question with the plaintiffs in pledge for the further security of an existing indebtedness from him to them; that at the time of such deposit an indebtedness existed, and still subsists, unpaid from said Kreutzinger to the plaintiffs to the amount claimed by them, and that said defendant Meyer, as trustee of said firms of Douglass, Gazzam & Co. and Fallenstein & Gauss, at the time of the payment of the proceeds of said policy to him as such trustee, had notice of such pledge, then the plaintiffs are entitled to recover of said firms the amount of such indebtedness, not exceeding the amounts received by them, to be contributed and refunded by said firms in the proportion of the amounts received by them respectively out of the proceeds of said policy; and, further, if said Meyer, at the time of the payment of said proceeds to him as aforesaid, had knowledge that the said policy was in some way charged or affected in the hands of the plaintiffs, that is constructive notice of all the facts and instruments to a knowledge of which he might have been led by an inquiry after such charge or circumstances affecting the policy.”

The court gave the following instruction at the instance of defendants: “If the assignment of the policy of insurance read in evidence was made to Meyer to secure debts due by Kreutzinger to Douglass, Gazzam & Co. and Fallenstein & Gauss, and no notice given to the insurance company or said Meyer of any other assignment of said policy to any other person or persons, and that said Meyer, before the bringing of this suit, paid over the proceeds to the creditors of said Kreutzinger, then the plaintiffs cannot recover.”

The court found for the defendants.

N. Holmes, for appellants.

I. The deposit of a policy of insurance in pledge for the security of a debt gives a lien in equity on the proceeds of the policy as against the assured making the deposit, and all persons claiming the fund under him...