Wagner v. Mutual Life Insurance

The reasons of appeal based upon the exceptions to the finding are not in due form. Practice Book, 1908, p. 268, § 9. The record satisfies us that neither of the several exceptions — if made in accordance with our prescribed method — would have furnished valid ground of appeal.

The first and second reasons of appeal raise the point that all of these contracts of loan and the assignment were invalid, since Mr. and Mrs. Wagner were married prior to 1877. The third reason of appeal is that Mr. Wagner's agreement to pay Mrs. Wagner interest on her loans was without consideration, since he was entitled to the income of her personal property. The seventh reason of appeal is that Mr. Wagner had not abandoned his marital rights as to the several items of property of Mrs. Wagner loaned to him, so as to constitute them her sole and separate estate. The eighth and ninth reasons of appeal are intended to be identical with the seventh, with special application to the loan of moneys received from Mrs. Wagner's father's estate, and to the loan of the moneys received by Mr. Wagner for the tort injury to Mrs. Wagner.

The several loans and the conveyance assigning the policy of insurance were made in good faith, upon a valuable consideration, and must, in this equitable action, be enforced, since the terms of the contracts are just, reasonable and certain. Boland v. O'Neil,72 Conn. 217, 44 A. 15; Brown v. Clark, 80 Conn. 419,68 A. 1001; Clarke v. Black, 78 Conn. 467,62 A. 757; Corr's Appeal, 62 Conn. 403, 26 A. 478; Haussman v. Burnham, 59 Conn. 117, 22 A. 1065.

Under the statute of 1849, — applicable to Mr. and Mrs. Wagner, — he was entitled to the possession of all of her personal property and the income therefrom, which was not held as her sole and separate estate. Personal property held as her sole and separate estate was hers to do with as she pleased; she might loan it to her husband and make any contract in relation to it that a stranger could make with his property. Comstock'sAppeal, 55 Conn. 214, 220-222, 10 A. 559;Imlay v. Huntington, 20 Conn. 146.

From the finding it appears that Mrs. Wagner always retained the possession and control of, and collected the income from, her personal property free from the domination and supervision of her husband; and that as to the proceeds of the securities sold and loaned him, and all other loans made, he agreed to repay the same with interest. It is also found that Mr. Wagner always treated the moneys loaned him by Mrs. Wagner, and all of her securities, as her sole and separate estate. The finding makes this property her sole and separate estate.

It also appears from the finding that shortly after the first loan Mr. Wagner agreed to assign to Mrs. Wagner $25,000 of life insurance, to secure to her the payment of the loan made and others which might be made, with interest; and the loans subsequently made were in reliance upon such agreement, and the assignments of policies thereafter made were in fulfillment of this agreement. These acts completely divested the husband of all marital control of these items of her property, and if they were not already the sole and separate property of the wife made them such. Bidwell v. Beckwith,86 Conn. 462, 469, 85 A. 682.

The finding specifically negatives reasons of appeal three and five, that these loans and the assignment were in fraud of creditors and void as to them.

The sixth reason of appeal is that Mrs. Wagner was a mere guarantor of a loan by Mrs. Tousley to Mr. Wagner. If Mrs. Wagner was a mere guarantor, the sum so guaranteed could not be included in the consideration for the assignments, for the reason that the contract of guaranty would be unenforceable, since Mr. and Mrs. Wagner were married prior to April 20th, 1877. Freeman's Appeal, 68 Conn. 533,539, 37 A. 420; National Bank of New England v.Smith, 43 Conn. 327. The finding, however, negatives the claim that the transaction was one of guaranty. It recites that Mr. Wagner had in his possession $2,000 collected by him and belonging to Mrs. Tousley, and that Mrs. Tousley agreed to loan, and did loan, this sum to Mrs. Wagner, and she in turn loaned it to Mr. Wagner. The $2,000 was not in fact paid over to Mrs. Tousley, or by her paid over to Mrs. Wagner, or by Mrs. Wagner paid over to Mr. Wagner. All the parties intended this as a loan to Mrs. Wagner and an absolute cancellation of the debt of Mr. Wagner to Mrs. Tousley. We think the finding is controlling and it follows, as a necessary conclusion from the subordinate facts found, that Mrs. Wagner loaned Mr. Wagner the $2,000, and was not a mere guarantor of his debt. Nor do we think the fact that this sum remained in the physical possession of Mrs. Wagner deprives the transaction, as matter of law, of the effect intended by the parties.

Reason of appeal ten, and a part of nine, are that all claims accruing prior to July 1st, 1906, are within the statute of limitations, and that the assignment of the policy of insurance did not constitute a new promise under General Statutes, § 707, taking the claims out of the statute. The statute was not pleaded, and could not have been, since the several items making up the consideration for the assignment of the policy were not disclosed until the trial. This claim was made in argument in the trial below, and hence is available on appeal. Since Mrs. Wagner loaned these several sums from her sole and separate estate, the statute runs against her, as in the case of a transaction between strangers. This is an equitable action of interpleader, to determine the ownership of the proceeds of an insurance policy which the court finds was assigned as security for the payment of certain debts owed the plaintiff by the assured. At the time of the assignment, unless there had previously been a new promise to pay, these debts were barred. Though the debts were then barred, that defense could not be made subsequent to the assignment of the policy to secure their payment. The giving of security for a debt barred by the statute of limitations, waives the benefit of the statute and operates as an unequivocal acknowledgment of the existence of the debt, from which the law implies a promise to pay the debt. It is an acknowledgment of liability as significant as a part payment of the debt; both acts are alike in character, and equally unequivocal. Merrills v. Swift, 18 Conn. 257, 268; Smith v. Ryan, 66 N.Y. 352, 354; Connecticut Mut. Life Ins.Co. v. Dunscomb, 108 Tenn. 724, 729, 69 S.W. 345;Pollock v. Smith, 107 Ky. 509, 54 S.W. 740; Conway v. Caswell, 121 Ga. 254, 48 S.E. 956; Balch v. Onion, 58 Mass. (4 Cush.) 559; Begue v. St. Marc, 47 La. Ann. 1151, 17 So. 700; 25 Cyc. 1343.

The trial court properly viewed the transaction of the assignment in the light of the facts and circumstances under which it was made. The consideration for the assignment was open to oral proof. It very plainly involved, as the court has found, a recognition of these several loans as present obligations, and constituted an agreement that the policy of insurance should stand as security for their payment, with interest, in accordance with the original agreement, in reliance upon which all but the first of these loans had been made. The assignment was a promise to pay these loans by providing the means for so doing. The giving of the notes were also unequivocal acknowledgments of the entire debt, from which the law would imply a promise to pay the loans.

Reason of appeal eleven is that the presentation by Mrs. Wagner of her claim to the commissioners on the insolvent estate of Mr. Wagner, and its allowance, without notice to them of the security held by her for her claim, was an election by her to receive her claim in that way rather than from the security of this policy assigned to her.

The procedure for a creditor of an insolvent estate who has security for his claim, is that prescribed by General Statutes, § 337. It is his duty upon presenting his claim to the commissioners to notify them of his security, and their duty to allow or disallow the claim, and to find the value of the security and report the same to the Court of Probate; and if they allow such claim, it becomes the duty of the executor, administrator, or trustee, to notify the creditor of the claim allowed and the value of the security found; and, unless within fifteen days after such notice he relinquishes such security, he shall be entitled only to a dividend upon the excess of his claim above the value of his security. The statute does not in terms prescribe the procedure in case he fails to notify the commissioners of his security and fails to make the election prescribed. It does not provide that the presentation of his claim is a waiver of his security. In the absence of a contrary statutory procedure, one who holds security for his debt may pursue his remedy on the debt and on the security at the same time. He will not be permitted, in any case, to obtain more than his debt. If a dividend be paid him, the payment is applied on the debt, and the security is available only for the balance of the debt. If the dividend satisfy the debt, the security is discharged. If the security be first applied to the debt, the dividend will be allowed only upon the part of the debt unsatisfied. Findlay v. Hosmer, 2 Conn. 350,353; Peck v. Harrison, 23 Conn. 118, 122; Lawrence v. Security Co., 56 Conn. 423, 442, 15 A. 406. If payment be secured in part by each method, the total payments will not be permitted to exceed the debt.

Our statute has, to a certain extent, modified these rules. Since the statute made it the duty of Mrs. Wagner to give notice of her security, and, unless she relinquished her security, to apply it to her debt, and then to obtain a dividend from the estate upon the excess of her debt, she should not be permitted, through failure to comply with the statute, to secure a greater benefit than she could obtain by a compliance with the statute. So long as the statute stands, we think she must apply the security to her debt, in the first instance, and then obtain a dividend from the estate only upon the excess of her debt. This remedy, we think, she was entitled to, even though she had given no notice to the commissioners of her security.

In this case the security was more than sufficient to pay her debt, and the judgment of the court properly provides for the cancellation of her claim, as allowed by the commissioners, upon the payment from the proceeds of the security of the amount found due her by the court. The administrator upon Mr. Wagner's estate has no just cause of complaint with the terms of the decree.

The record does not show that the allowance by the commissioners of the plaintiff's claim was accepted as final by the trial court; hence we have no occasion to consider reason of appeal four. Moreover, as we understand the finding, it tends to show that the court found the amount of the claim, and did not accept the allowance of the commissioners as final.

There is no error.

In this opinion the other judges concurred.