Home Ins. Co. v. Shultz
| Decision Date | 27 March 1888 |
| Citation | 30 Mo.App. 91 |
| Parties | HOME INSURANCE COMPANY, Appellant, v. DANIEL H. SHULTZ, Respondent. |
| Court | Missouri Court of Appeals |
APPEAL from the Lewis Circuit Court, HON. BEN. E. TURNER, Judge.
Affirmed.
BLAIR & MARCHAND and J. E. THOMPSON, for the appellant: If plaintiff had the legal possession of the note, of which there can be no doubt, it had the right to sue and maintain this action for the collection of the same. As between the American Insurance Company and the Home Insurance Company the Home was the legal owner in law and in fact. From every view of the case the Home Insurance Company is the real party in interest, and it alone can sue on the note. Rev. Stat sec. 3462; Webb & Hepp v. Morgan, 14 Mo. 428; Williams & Yeatman v. Whitlock, 14 Mo. 552; Boeka v. Nuella, 28 Mo. 180; Beattie v Lett, 28 Mo. 596; Bennett v. Pound, 28 Mo. 598. Ultra vires by a corporation is no defence to a note sued on by such corporation. City v. Gas Light Co., 70 Mo. 69; Drug Co. v. Robinson, 81 Mo. 18; City v. Gas Co., 5 Mo.App. 484; Drug Co. v. Robinson, 10 Mo.App. 588; State to use v. Heman, 7 Mo.App. 420; Bank v. Hunt, 76 Mo. 439; Hovelman v. Railroad, 79 Mo. 632. Though the charter of a corporation be subject to forfeiture by the state, a defendant in a suit by such corporation cannot avail himself of such liability to forfeiture as a defence. Savings Institution v. Board, 75 Mo. 408.
CLAY & RAY and ANDERSON & SCHOFIELD, for the respondent: The instrument sued on is one of the " premium notes" of the American Insurance Company and constituted a part of its capital stock by express legislative charter provision. It was part of a trust fund that the law consecrated to the indemnity of policyholders and could not be diverted to any ulterior purpose. Stillwell v. Craig, 58 Mo. 24, 31; Bartlett v. Drew, 57 N.Y. 587; Hastings v. Drew, 76 N.Y. 9, 16; Trust Co. v. Miller, 33 N.J.Eq. 155, 163; Chouteau, Harrison & Valle v. Dean, 7 Mo.App. 210, 214; McGinnis v. Barnes, 23 Mo.App. 413, 416; Relfe v. Ins. Co., 10 Mo.App. 150. No authority existed or could exist in said American Insurance Company, its directors, officers, or agents to transfer, assign, or dispose of said premium notes, or any of them. Appellant is, therefore, not the legal holder nor owner of the note in suit and his action must fail. Stillwell v. Craig, 58 Mo. 24; Black v. Canal Co., 7 C. E. Green, 130, 399; Commonwealth v. Smith, 10 Allen (Mass.) 448; Richardson v. Sibley, 11 Allen (Mass.) 65; Trust Co. v. Miller, 33 N.J.Eq. 155; Price v. Ins. Co., 3 Mo.App. 262, 270; Barden v. Ins. Co., 3 Mo.App. 248, 253; City v. Gaslight Co., 70 Mo. 69; Morawetz on Corp. (1 Ed.) chap. 7, sec. 490; Relfe v. Ins. Co., 10 Mo.App. 150. Even if the contract had been admitted and considered in evidence it discovers by its own terms an intolerable attempt to dispose of its assets and capital stock and shift its liabilities to another company. All the acts connected with such attempted assignment and transfer were against public policy, ultra vires, and void. Bissel v. Railroad, 22 N.Y. 258, 284. There was ample evidence in support of the issue on the part of the respondent. This court will not review the record to determine where the preponderance of evidence lies. Gould v. Smith, 48 Mo. 43; Douglas v. Orr, 58 Mo. 573; McHugh v. Meyer, 61 Mo. 334.
This is an action on a non-negotiable instrument, designated as a " " premium note," executed by the respondent to the American Insurance Company, for the sum of sixty-two dollars, payable in four annual instalments of fifteen dollars and fifty cents each, on the first day of April, 1884, 1885, 1886, and 1887. It was given for the premium for a policy of insurance executed by said American Insurance Company bearing even date with said note, April 2, 1883, insuring the respondent against loss or damage by fire to dwelling, furniture, barn, livestock, farm machinery, etc., to the amount of three thousand dollars, for the term of five years from April 2, 1883, to April 2, 1888.
The American Insurance Company was a corporation organized and existing under a special legislative charter, granted by the legislature of the state of Illinois, by an act approved February 15, 1855, and several subsequent acts amendatory thereof. Under said charter and its amendments the American Insurance Company was authorized to receive premium notes in payment of premiums for risks underwritten by it, and the instrument sued on is one of such notes; the instalment of premium for the first year covered by the policy having been paid in cash at or before the time of making the note.
Section ten of the original charter provides in respect of such premium notes as follows:
" The cash premiums received by the said company for risks in lieu of premium notes, and the cash premiums received in addition to the premium notes, shall be applied in payment of losses and expenses before any assignment shall be made upon the said premium notes, and the said cash premium, together with the premium notes, shall constitute the capital stock of this company."
By section two of the act amendatory of said charter, approved February 16, 1885, the company, " for the better security of policy-holders," was authorized to receive a guarantee capital not to exceed five hundred thousand dollars. Whether such additional or guarantee capital, or any part thereof, was ever subscribed or secured in the manner in said section provided, the evidence in this case does not disclose, but whether subscribed or not, such guarantee capital could in no event be liable for losses except when the cash premiums, instalment, and premium notes were insufficient to pay the same, in consequence of the following provision in said section two: " Such guarantee capital shall be liable for losses and expenses of the said company whenever the cash premium, instalment, and premium notes are insufficient to pay the same."
On the thirty-first day of December, 1883, and before the first year of insurance under said policy had expired, for which the cash premium had been paid by respondent, and before the first instalment of said premium note had become due, Charles C. Currier, secretary of the American Insurance Company, attempted to transfer and deliver to the Home Insurance Company, a New York corporation, and appellant herein, all the instalment notes owned and held by the American Insurance Company, and taken for premiums on all risks existing under outstanding policies in force on said day.
By virtue of this attempted transfer and delivery, the instalment note sued on passed into the hands of the plaintiff corporation. The defendant declining to be transferred to the Home Insurance Company, and deeming the disposition by the American Insurance Company of its capital and business a total loss of indemnity against fire under the...
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