Insurance Company v. Harris

• Decision Date: 01 October 1877
• Citation: 24 L.Ed. 959,97 U.S. 331
• Parties: INSURANCE COMPANY v. HARRIS
• Court: U.S. Supreme Court

97 U.S. 331

24 L.Ed. 959

INSURANCE COMPANY v. HARRIS.

October Term, 1877

ERROR to the Circuit Court of the United States for the District of Maryland.

On the 9th of September, 1872, two actions were brought by the assignee of William H. Brune, against The Mutual Life Insurance Company of New York, on two policies issued by it in January of that year, in the name of said Brune, on the life of John S. Barry. Barry died in March, 1872. By consent, the actions were consolidated and tried together. The defendant pleaded the general issue; and the parties agreed that either of them might offer in evidence any matter that would be admissible if it had been specially pleaded, and leave was subsequently granted the defendant to file a plea of puis darrein continuance. There was also an agreement which provided for the admission of certain papers and records, and stipulated that any further proceedings in a then pending suit, commenced April 4, 1872, in the Supreme Court for the city and county of New York, by Rosalie C. Barry, widow of said John, against said company, said Brune and his assignee, which either party should deem material, might be filed as a part of the agreement, at any time before the trial. The matter involved in that suit, and the decree which was rendered therein by the said court Nov. 26, 1873, are set out in the opinion of this court.

The issue was, by stipulation, submitted for trial to the court. On the 25th of November the plaintiff below stated his case; but, before any evidence was given, further action in the premises was postponed until the 29th of that month, when the defendant, before the plaintiff had submitted any evidence, filed with the clerk of the court a duly certified transcript of said decree.

On the trial, the defendant asked leave to set up the matter of that suit and decree by way of plea, or put it in evidence, under the agreement; but the court refused the leave, and the defendant excepted.

Judgment was rendered in favor of the plaintiff for the amount of the policies; and the defendant sued out this writ, and assigned for error that the court below erred: 1, in its refusal to grant the leave asked for; and, 2, in rendering judgment for the plaintiff upon the agreed statement of facts.

Whitridge, the original assignee, having died, Harris, the defendant in error, was substituted in his stead.

Mr. Edward Otis Hinkley and Mr. Henry E. Davies for the plaintiff in error.

Mr. J. Morrison Harris and Mr. F. W. Brune, contra.

MR. JUSTICE STRONG delivered the opinion of the court.

The first assignment of error is that the Circuit Court refused to allow the matter of the decree of interpleader in the New York case, which is mentioned at the end of the first bill of exceptions, to be set up in any manner, either by way of plea or in evidence. To understand this assignment, it is necessary to observe carefully what the New York case was. It was a bill filed on the 4th of April, 1872, in the Supreme Court of New York, wherein Rosalie C. Barry was complainant, and The Mutual Life Insurance Company, together with William H. Brune and Horatio L. Whitridge, were defendants. The bill averred, in substance and effect, that two policies of insurance, one for $20,000 and the other for $5,000, on the life of John S. Barry, the complainant's husband, dated Jan. 18, 1872, issued by the insurance company to Brune, belonged in equity to her; that they were substitutes for or continuations of policies the company had previously issued to her, upon which she had paid the premiums for a number of years, and which, by the compulsion and misrepresentations of her husband, she had been induced to assign to Brune without any consideration; that afterwards Brune arranged to have the policies surrendered, and those of Jan. 18, 1872 (which are the same as those upon which the present suit has been brought), issued to him in lieu of the surrendered ones; that this arrangement was carried out; that the new policies were issued bearing the same numbers as those of the old, calling for the same premiums, insuring the same amounts; that no consideration was paid for them other than the surrender; that the premiums were paid as of the times when they were due on the surrendered policies; that such payment was made principally by the application on account thereof, without her knowledge or consent, of the cash value of the dividends to which she was entitled in virtue of the former policies issued to her, and with which she had been credited by the company. The bill also charged that Brune paid in money only the difference between such cash value of her dividends and the aggregate amount of the annual premiums, and that the cash was furnished to him, at his request, by the complainant's husband, on her account. The prayers of the bill were that the insurers should be enjoined against making any payment of such insurance to Brune or to Whitridge (who claimed some right as assignee of Brune), and that payment to her should be decreed. She also prayed that it might be adjudged she had not parted with or been divested of her rights under said policies, and that the defendants, Brune and Whitridge, might be decreed to have acquired no right or interest therein.

On the 27th of June next following, Brune filed an answer, and at the same time Whitridge also answered. In neither answer was there a denial of most of the averments of the bill. Brune denied that Mrs. Barry's assignments were involuntary and claimed that the first policies were taken by him as collateral securities for loans which he had made to her husband; that if the assignments were improperly made, it was without his knowledge or belief; asserted that he had assigned the substituted policies to Whitridge, and insisted that the court should decree a dismissal of the complainant's bill, and should give judgment in favor of Whitridge's right to collect the sums due under the policies. The answer of Whitridge was similar in substance.

Subsequently the company put in an answer to Mrs. Barry's bill, accompanying it with a petition for an interpleader. The answer conceded the company's liability to pay the sums due upon the policies (those issued to Brune, and the same as those in suit in the present case); averred readiness to pay to the person or persons lawfully entitled to receive payment, and to whom payment could be made with safety; and offered to pay into court. The petition prayed that the company might be permitted thus to pay; that thereupon it might be discharged; and that Brune, Whitridge, and Mrs. Barry might be ordered to interplead.

The case in the Supreme Court of New York, therefore, though not strictly a bill of interpleader, was in effect that, and more. It was in the nature of such a bill, and was, under the practice of that State, a proper proceeding to determine the rights of the parties. Badeau v. Rogers, 2 Paige (N. Y.), 209. Brune and Whitridge, as well as Mrs. Barry and the company, were parties to it, and all of them appeared and pleaded. The court thus had complete jurisdiction alike of the insuring company, of Whitridge, Brune, and Mrs. Barry, the persons claiming as assured by the policies, and also of the subject,—the liability of the company to the claimants.

On the twenty-sixth day of November, 1873, a decree was entered in the case, which was a final determination of the rights of...