Sandmeyer v. Dakota F. & M. Ins. Co.

• Decision Date: 24 November 1891
• Citation: 50 N.W. 353,2 S.D. 346
• Court: South Dakota Supreme Court
• Parties: E.J. SANDMEYER, Plaintiff/Appellant, v. DAKOTA FIRE & MARINE INSURANCE CO., Defendant/Respondent.

2 S.D. 346, 50 NW 353 (1891)

E.J. SANDMEYER,

Plaintiff/Appellant,

v.DAKOTA FIRE & MARINE INSURANCE CO.,

Defendant/Respondent.

South Dakota Supreme Court

Appeal from Circuit Court, Davison County, SD

Hon. D. Haney, Judge

Reversed

Dillon & Preston

Attorneys for appellant.

A. E. Hitchcock

Attorney for respondent.

Opinion filed November 24, 1891

CORSON, J.

This was an action on a fire insurance policy. Verdict and judgment for defendant. On motion of plaintiff a new trial was granted, and from this order the defendant has appealed to this court. On the trial, plaintiff, to prove the issue of ownership of the policy in controversy in this action, which he had alleged in his complaint had been duly assigned to him by one Harrison, to whom the policy was issued, offered in evidence a certain instrument in writing from Harrison to himself, claimed by plaintiff to be an assignment for the benefit of creditors. The document was objected to by defendant for the reason that it shows upon its face that it is not an assignment; that it appears upon the face of the document that the plaintiff is only an agent of the said Harrison; that the plaintiff is not the real party in interest; and that it is incompetent and immaterial. The court sustained the objection, and on motion of defendant's counsel directed a verdict for defendant. Subsequently the court, on motion of plaintiff, granted a new trial on the ground that the court erred in refusing to admit the so-called "assignment" in evidence. As it affirmatively appears from the record that the new trial was granted upon the ground of errors of law occurring at the trial in excluding the said assignment, the only question presented to this court is a legal one. and no question of the discretion of the court below is involved. Smith v. Dragert, 21 NW 46, 61 Wis. 223; Fairbanks v. Holliday, 17 NW 675, 59 Wis. 80. The document offered in evidence is as follows:

"State of Texas, County of Colorado—ss.:

"Whereas, my hospital, house and fixtures, etc., situated in Columbus, Colorado county, Texas, were destroyed by fire on the night of the 12th of September, 1887; and, whereas. I had previous thereto obtained fire insurance on said property in the various companies herein named; and whereas, I am largely indebted to the persons and in the amounts and in the obligations herein named; and whereas, I wish to secure said parties in said indebtedness, and pay the same out of the proceeds of said fire insurance: Know all men by these presents, that I, R. H. Harrison, for and in consideration of the sum of $10.00 to me in hand paid by E. J. Sandmeyer, the receipt of which is acknowledged, and for the consideration stated above, and for the considerations hereinafter stated, have, and by these presents do, transfer and assign to the said E. J. Sandmeyer, for the purpose of securing the following claims due and owing the following parties, the following fire insurance on the above described and named property."

Here follows a description of a number of notes and accounts claimed to be due from Harrison to the persons named, amounting to about $9,000, and a description of 12 insurance policies issued to said Harrison by different insurance companies, amounting to about $15,000, among which is the policy in controversy in this action. The document then proceeds:

"And the said E. J. Sandmeyer is fully authorized and empowered to collect every one and all of said fire policies, and to surrender each and all of them, to receipt in my name for all and any amounts which shall be paid on losses under said policies, and the receipt of said Sandmeyer to said companies shall be binding on me. And the said Sandmeyer shall distribute pro rata among the creditors named above whatever amounts he shall collect or shall be paid on said fire policies; and if the amounts collected shall be sufficient to pay all of said claims, then the said Sandmeyer shall pay them all off, and, if any amount remains he shall pay the same over to me; the assignment of said policies being for the protection of all the named creditors equally in respect to the claims of each. And if only a portion of the losses of said policies be collected, and there be not enough to pay off said debts, the amount collected is to be divided pro rata according to the respective debts. The said companies are in no way to be bound as to the disposition of the funds collected on losses from their respective companies; the receipt of said Sandmeyer being and intended to be a complete protection to them. In witness of which I hereto set my hand, this 20th day of September, 1887.

"R. H. HARRISON. [Signature. ]"

The document was witnessed, acknowledged, accepted in writing by Sandmeyer, and recorded in the office of the clerk of Colorado County, Texas.

No evidence was offered by either party as to the law of Texas upon the subject of assignments, and hence this court will presume that the general law of Texas upon this subject is the same as that of our own state. Buchanan v. Hubbard, (Ind. Sup.) 21 N.E. 538. It will be observed that the instrument does not purport to be made by an insolvent debtor, or to include either all the property or debts of said Harrison, and hence does not constitute an assignment under our statute, or one that will be governed by the statute law of this state relating to assignments by insolvent debtors. If an assignment on its face does not purport to be of all the assignor's property it will be treated as a partial assignment. Seaving v. Brinkerhoff, 5 Johns. Ch. 329; Lentilhon v. Moffit, 1 Edw. Ch. 450; Burrill, Assignm. c. 10, p. 101, note. It is contended by the defendant (1) that the document offered is only a power of attorney, authorizing plaintiff to collect certain insurance policies and pay certain debts; and (2) if not a power of attorney, then it is simply an assignment in the nature of a mortgage to secure certain creditors; and that in neither case is there an absolute transfer of the legal and equitable title to the plaintiff as assignee that will authorize him to maintain this action in his own name. That an assignment for the benefit of creditors that purports to convey to the assignee the absolute legal and equitable title to the assigned property charged with a trust to pay debts constitutes the assignee the "trustee of an express trust," who is authorized by Section 4872, Comp. Laws, to bring an action in his own name, seems to be the settled doctrine of the courts. Pom. Rem. § 178; Bliss Code Pl. § 262; Lewis v. Graham, 4 Abb. Pr. 106; Mill Co. v. Vandall, 1 Minn. 246, (Gill. 195;) Foster v. Brown, 65 Ind. 234; Wheeler v. Hawkins, 101 Ind. 486; Butterfield v. Macomber, 22 How. Pr. 150. And this would be the same, we apprehend, whether the assignment be general or partial. But to have this effect the assignment must convey and transfer the absolute legal and equitable title to the assignee, free from all control of the assignor. It must be an absolute appropriation of the property to the payment of the debts. It must pass both the legal and equitable title to the property absolutely beyond the control of the assignor, except, perhaps, as to the unemployed balance after the payment of the debts, which would naturally revert to the assignor. But when a debtor transfers money or property to a third person to pay to his creditors, without transferring the absolute legal and equitable title, the relation of such third person to the debtor is that of an agent, until the creditor assents to the transaction; and until such consent the debtor may revoke the intended appropriation; and, when collections are to be made by the agent in the name of the debtor, and the business transacted in the debtor's name, the title to the property remains in the debtor, and an action must be brought in the debtor's name. Lazarus v. Swan. (Mass.) 17 N.E. 655; Brockmeyer v. Bank, (Kan.) 19 Pac. Rep. 855; Simonton v. Bank, 24 Minn. 216; Christmas v. Russell, 14 Wall. 70; Comley v. Dazian, 114 N.Y. 161, 21 N.E. 135; Kelly v. Roberts, 40 N.Y. 432; West v. White, (Mich.) 22 NW 217; Witter v. Little, (Iowa...