Hanson v. W.L. Blake & Co.

• Decision Date: 03 August 1907
• Docket Number: 24.
• Citation: Hanson v. W.L. Blake & Co., 155 F. 342 (D. Me. 1907)
• Parties: HANSON v. W. L. BLAKE & CO. et al.
• Court: U.S. District Court — District of Maine

155 F. 342

HANSON v. W. L. BLAKE & CO. et al.

No. 24.

United States District Court, D. Maine.

August 3, 1907

George M. Hanson, pro se.

Benjamin Thompson and James H. Gray, for W. L. Blake & Co.

Ashley St. Clair, for Mynia A. Young.

Fred V Pickard, for Arabella Hicks.

Clement B. Donworth and M. M. McKusick, for E. A. Holbrook.

HALE District Judge.

This cause in equity is heard upon bill and answer and proofs. The bill seeks to determine the rights of the trustee in bankruptcy and of several claimants, who are made respondents, in and to certain moneys arising from the sale of the remnants of a sawmill, its machinery, and appliances and from the adjustment of certain fire insurance after the loss by fire of the bankrupt's mill.

Statement of the Case.

It appears from the record that the bankrupt, Ira Hicks, was a resident of Calais, Me. In September, 1901, he entered into an oral agreement with respondent, Edward A. Holbrook, and one Charles A. Hunter, respecting the purchase from them of certain real estate situated at Vanceboro, in this district upon which Hicks then intended to erect a sawmill. Under this agreement, Hicks was to have a mill privilege upon the land of Holbrook and Hunter for the sum of $75. No deed was ever made conveying the property to Hicks. Holbrook testifies that:

'Payment was to be made after he (Hicks) had completed his building, and had run sufficient time so that he could pay for it. The deed was to be given at the completion of payment. The substance was we tried to make it possible for him to pay for it at a time after he had got out of the strain necessary for him in starting, and be able to collect himself and settle. We were not in need of the money and he was.'

He thus describes the land:

'A piece of land on the river with a frontage of between 10 and 15 rods extending back to the line of the old New Brunswick Railroad bed; and we took stakes and drove them at the four points of the four corners that would include the lot of land which he should occupy.'

Hicks immediately commenced to erect a mill building about 30 by 40 feet in size, and an engine house. In this construction work he spent about $6,000. The mill began sawing in February, 1902, and continued until August 24, 1903, when it was burned; and the greater part of the mortgaged property was destroyed. Under an order of the court, the remnants have been sold by the trustee for $225, and that amount is now in the trustee's hands. After Hicks had completed his mill, he obtained insurance upon it and upon the machinery in the sum of $2,500. After the loss, the insurance was adjusted for $2,150. The insurance money arising from the loss has been paid over by the several insurance companies, and that sum is now on deposit under a stipulation assented to by all parties in interest, to await the termination of this suit.

Statement of Claims.

The record shows the following claims:

First. The claim of Mynia A. Young for cash loaned, secured by a mortgage upon the mill property, and by a policy of the Liverpool & London & Globe Insurance Company, for $1,000, in which Mrs. Young is named as beneficiary. The following facts appear in evidence in reference to this claim: On January 7, 1902, Ira Hicks made and delivered to Mrs. Young a mortgage for $600 on the following property, namely: The sawmill building, occupied by said Hicks, on the shore of the St. Croix river, at Vanceboro, Me., two cylinder stave machines, lathe machine, and shingle machine therein, and all shafting, belting, and other running gear. Hicks declined to give Mrs. Young security on the boiler and engine, for the reason that some other person had a claim upon them. As a part of the consideration for the loan, Hicks agreed to take out insurance for the benefit of Mrs. Young, and Melville L. Young, the husband of the mortgagee, testified that that was the only condition upon which the loan was made.

This mortgage was recorded at Vanceboro on January 8, 1902; and, after Hicks' adjudication in bankruptcy, it was also recorded at Calais, the residence of Hicks. The evidence shows that, pursuant to the agreement made at the time of making the loan, Hicks obtained insurance upon the property; and one policy was payable to Mrs. Young.

It also appears from the testimony of Ashley St. Clair, agent for the Liverpool & London & Globe Insurance Company, that this policy at the time of its renewal was also made payable to Mrs. Young, and that the loss under it was adjusted, after the fire, for the sum of $1,000.

Second. W. L. Blake & Co. also make claim to the remnants in the trustee's hands. They claimed to have an equitable lien upon a portion of the insurance money.

The record shows the following facts respecting this claim: On October 22 and December 14, 1901, Hicks entered into agreements with W. L. Blake & Co. for the purchase of certain machinery, such as boiler, engine, steam pump, smokestack, and other personal property, for the equipment of his mill, of the value of $1,350; and the property in question was delivered by Blake & Co. to Hicks, under two Holmes notes, or conditional contracts, which recited, in substance, that the title to the property was to remain in W. L. Blake & Co. until the notes were fully paid. Hicks agreed to obtain insurance for the benefit of Blake & Co. to protect them for such time as the indebtedness remained unpaid. Both of these conditional contracts were recorded in the town clerk's office at Vanceboro, the location of the mill; but neither of them was recorded in Calais, the residence of Hicks. The evidence also shows: That on January 7, 1902, Hicks wrote to Blake & Co. that he had placed insurance upon the property to the amount of $1,000 for their benefit, and again on January 20, 1902, he wrote Blake & Co.:

'I insured the mill in your favor costing me $80 which makes you secure for your debt.'

That on March 9, 1902, he wrote Blake & Co.:

'I have got the mill insured for $1,000 to protect you from loss, which cost me $80.'

That on January 4, 1902, Hicks obtained from Hanson & St. Clair, agents for the Hamburg-Bremen Insurance Company, a policy of insurance in that company which covered the following property:

'Frame steam sawmill building and additions, metal roof, full arch front stationary boiler, 72 in. in diameter and 16 ft. long and all fixtures attached. One plain slide valve crank engine, 14 in. cylinder, 36 in. stroke, 3 1/2 in. new stop motion governor, all oil cups, governor belt, and fixtures with guy wires. Shafting as follows: One main shaft 3 7/16 in. in diameter and 30 ft. long; one 24 in. by 10 in.; one 24 in. by 9 in.; all pipes, fittings, valves, whistle, tube scraper, and other shafting and belting as attached to the mill.

'One No. 3 Deane Steam pump and fixtures.

'Payable to W. L. Blake & Company.'

This policy was sent by Hanson & St. Clair, the agents of the insurance company, to Blake & Co. It remained in the possession of Blake & Co. until July, 1902, when the Hamburg-Bremen Insurance Company withdrew its agency from Hanson & St. Clair. Thereupon Hanson & St. Clair, as agents of that company, wrote to Blake & Co.:

'We have been directed by Hamburg-Bremen Ins. Co. to cancel Hicks risk at Vanceboro. To protect you we have issued policy in L. & L. & G. for same amount, etc. Kindly return to us the policy of the Hamburg that you now hold.'

On July 28, 1902, Hanson & St. Clair substituted for the policy in the Hamburg-Bremen Company a policy in the Liverpool & London & Globe Insurance Company for one year, which covered the identical property mentioned in the Hamburg-Bremen in the same sum, and which was also payable to W. L. Blake & Co. as interest might appear. This policy was also forwarded to Blake & Co. On August 9, 1902, Hanson & St. Clair wrote to Blake & Co.:

'I inclose policy on Hicks mill. Kindly return policy you hold in Hamburg-Bremen.'

On April 13, 1903, Hicks again wrote Blake & Co.:

'You are well secured by insurance which cost $100, so that you might be safe.'

On June 29, 1903, Blake & Co. wrote Hanson & St. Clair:

'We notice, on looking up the Ira Hicks matter, that the insurance expires July 28th. Will you kindly advise us if he has made arrangements to have this renewed.' On June 30, 1903, Blake & Co. wrote Hicks:

'Kindly not overlook the fact that your insurance runs out July 28th. We suppose you have made arrangements with Hanson & St. Clair to renew this.'

On July 2, 1903, Hanson & St. Clair wrote Blake & Co.:

'Replying to your favor of June 30, we have to say that Mr. Hicks has instructed us to renew all insurance as it expires.'

On July 28, 1903, Hanson & St. Clair renewed the policy in the Liverpool & London & Globe Insurance Company for the same amount, covering the same property. This policy did not contain the names of W. L. Blake & Co. as beneficiaries, but contained the words:

'Payable in case of loss to Arabella Hicks as interest may appear.'

The agent testified that the name of Blake & Co. was left out because Hicks came into the office a few days before the policy run out, and told him that he did not want the policy payable to Blake & Co., as he should have them all paid up within a few months, and that this conversation occurred after his firm had written Blake & Co. that Hicks had requested all policies renewed. Hicks stated that, when this policy run out, he changed it to his wife's name, as she had more money in the concern than Blake & Co. No notice of this change was sent to Blake & Co.; and Mr. St. Clair also testified that Mrs. Hicks was not present at the time the policy was renewed. The testimony further shows that Blake &amp Co. did not have any knowledge that the renewal policy issued on the 28th...