Manhattan Life Ins. Co. v. Cohen

• Decision Date: 31 May 1911
• Citation: 139 S.W. 51
• Parties: MANHATTAN LIFE INS. CO. v. COHEN.<SMALL><SUP>†</SUP></SMALL>
• Court: Texas Court of Appeals

139 S.W. 51

MANHATTAN LIFE INS. CO. v. COHEN.^†

Court of Civil Appeals of Texas. San Antonio.

May 31, 1911.

Rehearing Denied June 21, 1911.

Appeal from District Court, Harris County; Chas. E. Ashe, Judge.

Action by David Cohen, as executor, against the Manhattan Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

W. J. Moroney, for appellant. Hunt, Myer & Teagle, for appellee.

NEILL, J.

David Cohen, as executor of the estate of Jacob Cohen, deceased, brought this suit against the Manhattan Life Insurance Company of New York, to cover principal and interest alleged to be due on two life insurance policies for $3,750 each, issued by said company on the life of Jacob Cohen. The plaintiff also prayed for statutory damages and attorney's fees.

In its answer the defendant averred that the insured, Jacob Cohen, borrowed $875 from it on the policies and then sold them to J. H. Hilsman of Atlanta, Ga., for $460, and that the insurance company had paid to Hilsman their face values, less the amount of the loans it had made thereon.

The suit was tried without a jury; and the court, holding that the assignment of the policies to Hilsman was void, refused to give credit for the $460 paid by Hilsman to the insured as the consideration for such assignment, and rendered judgment in favor of plaintiff for the face value of the policies, less the sums lent the insured by defendant company, which was for $5,750, with interest thereon at the rate of 6 per cent. per annum from June 10, 1908, total $6,459.17, for $690 statutory damages, and $700 attorney's fees, with interest at the rate of 6 per cent. per annum from date of judgment.

Conclusions of Fact.

It was agreed between the parties that certain facts should be considered as established and undisputed, but that either party should have the right to offer on the trial any legal and competent evidence, not in conflict with such agreement, and subject to objections, if any, as may be made, and that the parties might amend their pleadings to conform to the agreement as they should deem proper; but that in rendering judgment proper legal effect should be given the facts set out in the agreement, whether sufficiently pleaded or not. These are the facts comprehended by the agreement:

(1) On April 7, 1893, Jacob Cohen resided in Galveston county, Tex., and the Manhattan Life Insurance Company was then, and still is, a life insurance corporation duly incorporated under the laws of the state of New York. On said date (April 7, 1893) it was doing a life insurance business in Texas under a proper license. It was not doing or licensed to do business in Texas when this suit was filed on May 15, 1908, but about July 1, 1908, it was again licensed to do and is now doing business in Texas as a life insurance company.

(2) On April 7, 1893, said insurance company issued to Jacob Cohen two policies of insurance on his life for $3,750 each, payable, in case of his death, and subject to the various provisions therein stated, to his executors, administrators, or assigns. Said policies were numbered, respectively, 84,873 and 84,874. A copy of said policy No. 84,873, with a subsequent indorsement, is attached to the first amended original answer of said insurance company, marked "Exhibit A," and the same is made a part of this agreement, and it is hereby referred to for greater particularity. Said policy No. 84,874 was for the same amount and of like date, tenor, and effect, and the same was indorsed in like manner. Said indorsements were authentic, valid, and in accordance with the facts.

(3) Jacob Cohen died in Harris county, Tex., on October 11, 1907. Said policies were in full force and effect, subject to whatever rights the insurance company had under the loans thereon, as hereinafter stated, and also subject to whatever rights J. H. Hilsman may have had under the facts hereinafter stated and as may be proved on the trial hereof. Jacob Cohen was a resident of Bexar county, Tex., at the time of his death.

(4) Jacob Cohen left a will appointing David Cohen independent executor of his estate. Prior to the institution of this suit, said will was duly probated in Galveston county, Tex., and said David Cohen duly qualified and is now acting as independent executor of said estate.

(5) Prior to July 15, 1907, said Jacob Cohen borrowed from said insurance company two sums of $875 each, each sum being secured by a pledge of said policies, and at the time of Jacob Cohen's death there was due said insurance company, on both of said policies, the sum of $1,750, which sum, it is agreed, was a valid charge against said policies and a proper credit on the amount of the same, said amount being $3,750 each, or a total of $7,500; the balance owing by said insurance company on both policies at the date of said Jacob Cohen's death being $5,750.

(6) By instruments, dated July 15, 1907, said Jacob Cohen purported to assign said policies to J. H. Hilsman. A copy of the assignment of said policy No. 84,873 is attached to said amended answer, marked "Exhibit B," and the same is made a part of this agreement, and is hereby referred to for greater particularity. The assignment of policy No. 84,874 was of the same date and of like tenor and effect. In connection with said purported assignments, said Jacob Cohen also executed to said J. H. Hilsman an order on said life insurance company to deliver said policies upon the payment of said $1,750 loan. A copy of said order is attached to said answer, marked "Exhibit B." At the time of said purported assignment, Jacob Cohen resided in San Antonio, Tex., J. H. Hilsman in Atlanta, Ga., and Hilsman had an agent in San Antonio, Tex., through whom the negotiations for the transaction were begun, and the transaction definitely agreed upon; the agreement being that Hilsman would pay Jacob Cohen $460 for his equity in said policies.

After the agreement was made, a correspondence by wire and letter took place between Hilsman, from Atlanta, Ga., and Cohen, at San Antonio, Tex., in regard to the form and manner of formally executing the transfer and assignment of the policies thus agreed upon. The letters of the parties to one another of this correspondence are copied in and made a part of the agreement; but they cover too much space to incorporate them in these conclusions, and we do not deem it essential to a correct solution of any question involved that it should be done.

We deem it sufficient to say that, in accordance with said agreement and directions of Hilsman given in the correspondence, on July 15, 1907, said Jacob Cohen signed and acknowledged the purported agreements and signed an order on the insurance company, and attached the same to a blank draft on Hilsman for $460, and deposited said draft in San Antonio for collection, and the same was paid by Hilsman on presentation to him in Atlanta, Ga., on July 19, 1907, and said assignment and order were then and there delivered to Hilsman with said draft. Hilsman was not related to Jacob Cohen, nor was Cohen in debt to him, unless it should be by reason of the facts above stated, nor did Hilsman have any interest in the life of said Cohen other than this transaction.

(7) Said Jacob Cohen, Hilsman, and his agent were engaged in speculative transactions, and said assignments were made as a part of and in connection with a certain transaction in what is commonly called "cotton futures," the money being paid to and received and used by Jacob Cohen to speculate in future prices of cotton, without its being contemplated that there would be actual delivery thereof, or bargain and sale, the said Hilsman or his agent being interested in the transaction, and the purpose of the transaction being known by all the parties, which purpose was carried into effect, through said agency of J. H. Hilsman; he being engaged in the brokerage business.

(8) On April 10, 1908, the insurance company received from both claimants, Hilsman and David Cohen, executor, proofs of death in proper form, to which no objection was made. Each claimant objected to the insurance company paying the other. Hilsman advised the insurance company that he claimed the right to receive the face of the policies, less said $1,750 loan. Plaintiff, David Cohen, executor, advised the insurance company that he also claimed the right to receive the face value of said policies, less the amount of said loan, on the ground that Hilsman had no insurable interest, that the assignments to him were illegal and void for that reason, and also for the reason that said assignments were a part of a gaming transaction, as herein set out. The insurance company admitted liability for the face of the policies, less the amount of said loans, and offered to pay the same to the joint order of the rival claimants, or to pay the money into court if the matter could be so arranged that the parties would appear and interplead in a court of competent jurisdiction, where any judgment that might be rendered would fully protect the insurance company from double liability. Said claimants failing to reach any agreement, on May 6, 1908, Hilsman gave said insurance company a satisfactory indemnity bond, and the insurance company paid to Hilsman the sum of $5,750, being the full face of said policies, less the amount of said loans, and said policies where thereupon receipted in full by Hilsman and surrendered to the insurance company. Before paying said policies to Hilsman, the insurance company had notice that plaintiff, David Cohen, executor, claimed that said assignments were invalid, as aforesaid, and that plaintiff was entitled to recover thereon, but the payment was made because the insurance company was advised that Hilsman was entitled to collect the same, and that in any event the aforesaid indemnity bond would protect it, and because it was advised that it was not practicable to secure a determination of the controversy in a suit where the court would have...