Jones v. New York Life Ins. Co.

• Decision Date: 18 October 1897
• Docket Number: 828
• Citation: 50 P. 620,15 Utah 522
• Court: Utah Supreme Court
• Parties: RICY H. JONES, APPELLANT, v. THE NEW YORK LIFE INS. COMPANY ET AL., RESPONDENTS

50 P. 620

15 Utah 522

RICY H. JONES, APPELLANT, v. THE NEW YORK LIFE INS. COMPANY ET AL., RESPONDENTS

No. 828

Supreme Court of Utah

October 18, 1897

Appeal from the Second district court, Box Elder county. C. H. Hart Judge.

Action by R. H. Jones against the New York Life Insurance Company to secure the amount of an insurance policy issued to plaintiff's brother, Lewis H. Jones, deceased. B. H Jones, the administrator of the estate of Lewis H. Jones, was made defendant, and the company upon paying the policy to the clerk of the court was discharged. Judgment for defendant B H. Jones. Plaintiff appeals.

Affirmed.

R. H. Jones and Moyle, Zane & Costigan, for appellant.

As the title to the chose in action (personal chattel) passed by the assignment of the policy, it becomes a chattel mortgage.

"A mortgage of personal property passes the present legal title in the property itself to the mortgagee subject to be re-vested in the mortgagor, his heirs or assigns, upon the performance by him or them of an express condition subsequent." * * * "On breach of condition the title becomes absolute at law in the mortgagee." Jones, Chattel Mort. p.--; 8 Johns. 96; Cook v. Lion Fire Ins. Co., 67 Cal. 370; Heyland v. Badger, 35 Cal. 411.

Where the insured assigns a policy which he has effected on his own life (payable to himself, his administrators or assigns) to his creditor, and the assignment admits value received and the insured at the time does not obligate himself to pay the premiums, and the assignee pays them, such an assignment under the law is an absolute sale and transfer (and can not be security), and the assignee who maintains the policy and keeps it alive by paying the premiums can hold all that he can recover on the policy after the death of the deceased and is not liable to the representatives, either in a suit to have a trust declared and enforced, or for money had and received, or for a bill of accounting, or for any other form of action, much less is he liable in an action brought upon a fiction like that of the adverse party in this case to have the assignment cancelled on the theory that there was an imaginary $ 100 debt which was never paid.

The following cases cite this principle of law, in the order of its development, in England and America: Godsel v. Webb, 15 Eng. Ch. Rep. 100, year 1837; Gottlieb v. Granch, 53 Eng. Ch. Rep. 439-450, year 1853; Knox v. Turner, Lawyer's Rep. 5 Ch. 515; Lee v. Hinton, 54 Eng. Ch. Rep. 823, year 1854; Bevin v. Conn. Mut. L. Ins. Co., 33 Conn. 244, year 1854; Freme v. Brade, 59 Eng. Rep. 582, year 1858; Grant v. Kline, 115 Penn. St. Rep. 685; Grant v. Kline, 9 A. 150, year 1887; Amick v. Butler, 60 Am. Rep. 722, year 1887; Rittler v. Smith, 2 Lawyer's Rep. Anno. 845, year 1889; Hine & Nichols Life Ins. 75; Bliss on L. Ins. 524; Ray on Contractual Limitations, p. 38.

E. M. Allison, for respondent.

The plaintiff asked for an assignment of the policy under certain conditions, and now seeks to ratify and retain the assignment but to repudiate the conditions under which it was made. This he will not be permitted to do. Whittemore v. Cope, 11 Utah 344; Brown v. Parsons, 10 Utah 223; Clay Co. v. Harvey, 9 Utah 497.

Then the plaintiff never withdrew nor revoked his offer to accept the assignment upon the conditions named, either before or after the assignment was executed and delivered. While an unaccepted offer is not binding upon the party making it, yet after acceptance, the contract is complete and the offer cannot then be revoked. Clark Cont., 46 et seq.; 3 Am. and Eng. Ency of Law (1st Ed.) 850, and cases cited.

The legal representatives of the debtor are entitled to the balance. Pomeroy v. Life Ins. Co., 40 Ill. 398; Warnock v. Davis, 104 U.S. 775; Cammack v. Lewis, 82 U.S. 643; Gilman v. Curtis, 4 P. 1094.

BARTCH, J. ZANE, C. J., and MINER, J., concur.

OPINION

BARTCH, J.:

This action was commenced against the defendant life insurance company to recover the sum of $ 1,500 on one of its policies, issued by the company to L. H. Jones. The insured assigned the policy to his brother, the appellant. The defendant company answered that B. H. Jones and R. D. Jones each claimed the insurance money, as administrator of the estate of L. H. Jones, deceased; that it was ignorant of the respective rights of the claimants, and not in collusion with either of them,--and asked that it be permitted to pay the money into court, and to be thence discharged. Thereupon, by order of the court, the money was so paid, the company discharged, and B. H. Jones and R. D. Jones were substituted as defendants, and given 10 days to file their pleadings to the complaint. Then B. H. Jones, as administrator of the estate of the deceased, filed an answer and cross complaint alleging, in substance, that the policy of insurance was assigned to the plaintiff by the insured for the purpose of securing a debt then due from the latter to the former, and that at the time of the assignment it was agreed between them that upon the payment of the debt the policy should be "assigned back," and returned to the insured. On information and belief it was alleged that before the death of the deceased, which is stated to have occurred August 26, 1894, the debt was fully paid and discharged. It was also alleged that the defendant B. H. Jones was the duly appointed, qualified, and acting administrator of the defendant's estate. After amendment of the cross complaint in accordance with the ruling of the court on a demurrer thereto, the plaintiff in his pleading admitted the assignment of the policy by the insured to him, but denied that it was made for the security of any debt, alleging that the assignment was intended as an absolute sale and unconditional transfer of the policy, and among other things, denied that there was any agreement to assign back the policy, or that the debt had been paid before or after the death of the insured. The plaintiff's affirmative allegations in answer to the complaint of the interpleader were answered by specific denials. At the trial it was held that the assignment of the policy was made and accepted as security for the debt due the plaintiff from the insured, and judgment entered awarding the plaintiff $ 542.57 out of the fund in the hands of the court, and the defendant, as administrator of the estate, $ 1,012.43. This appeal is from the judgment.

It may be observed at the outset that many of the errors assigned and much of the matter--indeed the major portion of it--contained in the brief filed in behalf of the plaintiff, are so foreign to the real controversy in the case as to merit no serious consideration at our hands, not even though all the abstract propositions of law contained therein have been discussed, regardless of their application, in the brief of the respondent. Notwithstanding all the questions argued in their brief, and the numerous assignments of error, many of them absolutely frivolous, counsel for the appellant declare that "the vital question involved in the case" is, "Was the assignment of this policy in legal effect an absolute sale and transfer?" And this is conceded to be the essentially important question by counsel for the respondent. Clearly, the decisive point is here indicated, which is whether the assignment was made and intended by the insured, and received and accepted by the appellant, as an absolute transfer of the policy, or as security for the debt due the latter from the former. What the intention of the parties was, and the effect in law of the assignment, must be determined from the assignment itself, and from the understanding of the parties prior to and at the time of its execution, as shown by their writings, acts, and conduct. It appears that the policy was issued to the insured on June 20, 1890, and that he paid the premium for that year. The next year the insured was out of the state, and wrote his brother, the appellant, two letters concerning the insurance, in one of which, dated July 19, 1891, he said, "I wish you would pay my yearly dues on my insurance policy for this year, if you can, so as it will not be forfeited;" and in the other, of July 28th of the same year, "I don't know I will be able to send my money to pay my insurance within 20 days, but I will if I can; so, if you can pay it for me, I will remunerate you for so doing." In compliance with these requests the appellant paid the premium in part for the year 1891, as appears from the seventh finding of fact, and also paid it at his own instance for the year 1892, as is shown by the eighth finding. It seems that various transactions occurred between the appellant and insured from the date of the last letter above quoted to July 14, 1893; but the record fails to show any intention of the insured to permanently part with his policy, although the appellant claims to have had it in his possession. Nor does the following letter written by the appellant on the last-named date contain any statement which ought to have indicated to the insured that the assignment was to be an absolute transfer of the insurance policy. It reads as follows: "Brigham City, Utah, July 14, 1893. Mr. L. H. Jones, 226 East F Street, Salt Lake City, Utah--Dear Bro.: In looking over my checks, I find that I paid the premium on your insurance policy for 1891, while you were in California, as well as for the last year,--1892. This makes over $ 80, with interest on these two payments, as the extent of the lien...