Insurance Company v. Brune Assignee

• Citation: 96 U.S. 588,24 L.Ed. 737
• Parties: INSURANCE COMPANY v. BRUNE'S ASSIGNEE
• Decision Date: 01 October 1877
• Court: United States Supreme Court

96 U.S. 588

24 L.Ed. 737

INSURANCE COMPANY v. BRUNE'S ASSIGNEE.

October Term, 1877

APPEAL from the Circuit Court of the United States for the District of Maryland.

The facts are stated in the opinion of the court.

Mr. Henry E. Davies and Mr. Edward O. Hinckley for the appellant. Mr. F. W. Brune and Mr. J. M. Harris, contra.

MR. JUSTICE STRONG delivered the opinion of the court.

This was a bill by the Mutual Life Insurance Company of New York for an injunction upon Horatio L. Whitridge, assignee of William H. Brune, enjoining him against further prosecuting two actions at law which he had commenced in the Circuit Court of the United States for the District of Maryland, against the complainant, upon two policies of insurance issued by it, in the name of William H. Brune, the 18th of January, 1872, on the life of John S. Barry; one for $20,000, and the other for $5,000.

The material averments of the bill are the following:——

1. That the complainant, a New York corporation, on the 11th of January, 1867, issued a policy of life insurance to Rosalie C. Barry, wife of John S. Barry, for $20,000, on the life of her husband; and on the 9th of December, 1870, issued to her a second policy, on the same life, insuring $5,000.

2. That the premiums were regularly paid until December, 1871, and January, 1872.

3. That about the latter part of December, 1871, and the beginning of January, 1872, an agreement was made between Mrs. Barry, Mr. Barry, and Mr. Brune, for the assignment or transfer of the policies to the latter, and that in pursuance of the agreement, and in accordance with a mode of proceeding before used by the complainant in cases of insurance on the lives of married women, the policies were permitted, with the consent of all parties interested, except the complainant, to lapse,—that is to say, to become forfeited,—with the intent, however, to have the same renewed or reissued in Brune's name.

4. That, as evidence of such intention, Brune (as whose assignee Whitridge, the defendant, claimed) united with John S. Barry in signing a paper called 'a declaration to be made and signed in case of issuing new policy after lapse,' dated Dec. 16, 1871, referring to and adopting the original application made by Mrs. Barry for insurance, dated Dec. 9, 1870, and signed by her; that he also united with Mr. Barry in signing another paper, dated Jan. 12, 1872, adopting Mrs. Barry's original application for insurance, dated Jan. 11, 1867.

5. That Mr. Barry did not undergo a new medical examination; that no other applications were made for the two insurances (upon which the suits were brought) than those made by Mrs. Barry in 1867 and 1870, and so, as aforesaid, adopted by Mr. Brune; and that thereupon the two policies issued to Mrs. Barry were surrendered and cancelled.

6. That, at the time when the original policies issued to Mr. Barry were cancelled, two others for the same amount, on the life of the said John S. Barry, were substituted therefor: that they were issued to William H. Brune with like premiums and having the same numbers as those of the cancelled policies; differing only in the fact that the premiums were made payable semi-annually, instead of annually as theretofore, and that Brune paid up the premiums that had before fallen due and that remained unpaid.

7. That in February, 1872, Brune assigned these policies to Whitridge (Harris being now substituted as Brune's assignee or trustee in place of Whitridge).

8. That John S. Barry died in March, 1872.

9. That shortly after, or about April 4, 1872, Mrs. Barry filed, in the Supreme Court for the city and county of New York, her bill of complaint against the complainant in this bill, and against both Brune and Whitridge, in which she alleged substantially what is hereinbefore set forth, and also complained that the novation of the policies, or the lapsing and reissue as aforesaid, was without her consent; that it was done after her signing some paper by reason of certain persuasions of her husband when he was embarrassed in business and disturbed in mind; that she did not act voluntarily and freely; that Brune acquired no rights under the said new policies, nor did Whitridge by the assignment to him; and she prayed the company might be enjoined against paying to Whitridge the amounts due thereon.

The bill and proceedings in the New York case were filed, and made a part of the present complainant's bill.

10. That, as appeared in those proceedings, pursuant to an agreement of the parties and an order of the court, this complainant, the insurance company, deposited the sums named in the two policies in a trust company, to the credit of the case; and the court ordered that the complainant should be discharged, and that the action should be discontinued as to it.

11. That, notwithstanding the agreement and order and the payment, Whitridge, the defendant, had afterwards, in September, 1872, brought two suits on the two new policies in the Circuit Court of the United States for the District of Maryland, the same suits the prosecution of which the complainant sought by this bill to have enjoined.

12. That the prosecution of these suits, if successful, would result in compelling the complainant to pay the same policies twice, and might give to Whitridge double payment.

Most of the material averments of this bill were admitted by the answer. It averred, in addition, that the original policies were assigned to Brune as collateral securities for loans Brune had made to Mr. Barry, and that the permitted lapse and the issue of the new policies were intended only to make the assignment effective. It denied, however, that the new policies were in substitution for the policies surrendered, and asserted that they were separate and new contracts. It admitted the execution of the agreement or stipulation in the New York case; but alleged that it was without Brune's knowledge or consent, and alleged also that it was not intended to surrender or affect in any way the right of the defendant under the two policies issued to Brune and assigned to him.

Such was the case when it came on for hearing; the parties having agreed that Mrs. Barry's bill of complaint might be read, as also...