Landreth v. First Nat. Bank of Philadelphia

• Decision Date: 22 March 1943
• Docket Number: 247
• Citation: 31 A.2d 161,346 Pa. 551
• Parties: Landreth v. First National Bank of Philadelphia, Appellant
• Court: Pennsylvania Supreme Court

31 A.2d 161

346 Pa. 551

Landreth v. First National Bank of Philadelphia, Appellant

No. 247

Supreme Court of Pennsylvania

March 22, 1943

January 6, 1943, Argued

Appeal, No. 247, Jan. T., 1942, from judgment of C.P. No. 3 Phila. Co., Dec. T., 1941, No. 3236, in case of Margaret M Landreth v. The First National Bank of Philadelphia. Judgment affirmed.

Assumpsit.

Rule for judgment for want of a sufficient affidavit of defense made absolute, opinion by MacNEILLE, P.J. Defendant appealed.

Judgment affirmed.

Wm. Barclay Lex, with him Hepburn & Norris, for appellant.

Symington P. Landreth, Jr., with him Bertram P. Rambo, of Rambo, Rambo & Knox, for appellee.

Before MAXEY, C.J.; DREW, LINN, STERN, PATTERSON, PARKER and STEARNE, JJ.

OPINION

MR. JUSTICE PARKER:

Burnet Landreth, Jr., borrowed from defendant bank $507.30 and pledged as collateral an insurance policy on his life, in Metropolitan Life Insurance Company, for $10,000. The policy on the death of insured was payable to his wife, Margaret M. Landreth, if then living, otherwise to his two children. The insured and beneficiaries made an assignment general in form on a blank furnished by the insurance company. At the same time they executed a paper prepared by the bank setting forth the conditions of the pledge.

Mr. Landreth died on October 4, 1941, and the sum of $10,150.90 was paid by the insurance company to the bank. The bank then appropriated $507.30 to the payment of decedent's note and applied the balance on account of notes of D. Landreth Seed Company approximating $120,000, for the payment of which Burnet Landreth, Jr., had become surety by two written agreements. The notes of the seed company were not due at the time of the death of Burnet Landreth, Jr.

The legal representatives of Burnet Landreth, Jr., tendered to the bank payment of the note for $507.30, and his widow brought this action to recover from the bank the balance received from the insurance company. The court below entered judgment against defendant for want of a sufficient affidavit of defense. Defendant has appealed. The judgment must be affirmed.

The rights of the parties are fixed by the writings which passed between them. The dispute arises from different interpretations of two contemporaneous papers fixing the terms of the pledge. The general assignment deposited with the insurance company authorized the payment of the policy to the bank. The contemporaneous paper was entitled "Agreement Regarding Life Insurance". It set forth that the general assignment did not "fully express the purposes for which it has [had] been made" and then provided, inter alia: "Now, therefore, it is hereby agreed as follows: 1. Said assignment shall secure all indebtedness of any of the undersigned to the Bank as existing at the date of the death of the insured or at any time prior thereto. . . . 3. Any balance remaining after said indebtedness has been fully paid shall be paid by the Bank to the party or parties who would have been entitled to receive such amount from said insurance company had said assignment not been executed. No party interested in said policy shall, on account of the application of any of the proceeds of said policy on said indebtedness, have the right to contribution or reimbursement from any party or to be subrogated to the rights of the Bank in any other collateral."

"A writing is interpreted as a whole and all writings forming part of the same transaction are interpreted together": Restatement, Contracts § 235 (c). So considering the agreements, the wife had an inchoate right in the policy liable to divestiture by her death before the insured or by change of beneficiary. The very words of paragraph 3 so provide, for when the bank was paid she was to remain in the same position as if the assignment had not been made. The proceeds did not constitute an asset of the estate of Burnet Landreth, Jr.: Newman v. Newman, 328 Pa. 552, 554, 196 A. 30. We are therefore dealing with a pledge of the plaintiff for a debt of her husband. This must be recognized in interpreting the contract. The pledge was to secure "indebtedness of any of the undersigned to the Bank as existing at the date of the death of the insured or at...