Providence County Bank v. Benson

Dewey J.

delivered the opinion of the Court. The only question in the present case is, which of two contending claimants has the better legal right to receive of the Manufacturers’ Mutual Fire Insurance Company the avails of a policy effected at that office, the supposed'trustees waiving all objections as to their own liability to pay the same, and merely raising the point which of these parties may legally demand the payment thereof from them.

- The policy, in its terms, purports to be solely for the benefit of the Millville Manufacturing Company, this being the copartnership name of the principal defendants, Benson and others. If the case rested here, of course the trustees would be clearly chargeable in the suit in favor of the plaintiffs. The defence taken by Whitney, who claims this money in the hands of the insurance company, is put on two grounds :

1. That Benson and others, who procured the insurance, were acting as his agents and in his behalf, and that in law it is to be holden as made for his benefit, and maybe enforced by him in his own name.

2. That if the policy was so made, that the legal interest in the same was in Benson and others, yet inasmuch as it was effected for the benefit of Whitney, and in pursuance of an agreement with him by Benson & Co., and notice had been given to Whitney previously to the loss, that such insurance had been effected for his benefit, it was an equitable assignment of the policy to Whitney to secure him in case of loss of the property by fire, and as such assignee, he should be protected against this trustee process.

It becomes material to consider in whom was the legal property in the stock insured, at the time the insurance was effected. The counsel for Whitney contend, that the contract as to the wool between Whitney and Benson, was a mere executory agreement, and the property would only pass to Benson and others upon payment for the wool in the manner stipulated in the written contract; while the plaintiffs contend, that the contract was an executed one, and the property immediately upon delivery vested in Benson and others.

It seems to the Court, that applying the principles of law as they have been ruled in several cases, to the terms of this contract, the effect of it must be taken to be, that the property in the wool remained in Whitney, and that he might well have insured in his own name his interest in the wool. It was not, however, thus insured, but the policy was issued in the name of the Millville Manufacturing Company. This, it is said, being the act of an agent, although in his own name, will enure to the benefit of the principal. Admitting the general doctrine to be, that an insurance effected by an agent in his own name would be legally available to the principal in his own right, it may still be questionable whether the present insurance was not procured by the agency of a party having a more direct interest in the property and in the policy than that of a mere agent, and whether it was not taken for such a term of time and under such circumstances as might render it a valid policy to cover for the defendants other risks than that of the stock of Whitney.

In the view the Court have taken of this case, however, we have not considered it necessary to decide whether an action might be maintained by Whitney in his own name upon this policy. If the policy was effected by the defendants, and the legal interest was' originally in them, so that it might have been properly the subject of a trustee process, yet it is also true, that if the debtor has, previous to the service of the trustee process, in good faith assigned his interest or right to a third person,' although such assignment is not effectual at law so far as to authorize the assignee to maintain an action in his own name, it may be a good assignment in equity, and one which a court of law will protect. Such assignments are now recognised by statute as a good bar to an attachment by the trustee process, and provision is made to enable the assignee to come in, and by proof sustain the validity of his assignment, and thus defeat the trustee process.

We are, then, brought to the inquiry, whether there was an equitable lien on this policy acquired by Whitney before the service of the trustee process.

Upon recurring to the facts, it appears that Whitney made a contract with Benson and others in relation to the wool, the effect of which was, that Whitney still retained an interest in the same during the process of manufacturing it. Benson agreed to procure an insurance on the same for the benefit of Whitney, and he testifies that he effected this policy in pursuance’of that agreement, and for that object. After the making of the policy, and before the loss, and before the service of the writ in this case, Benson informed Whitney that he had effected an insurance for his benefit, pursuant to the stipulation he had entered into with him. Here was, therefore, an express understanding and agreement between these two parties, that this insurance was to enure to the benefit of Whitney, and it seems to us that whether the policy was so made as to authorize Whitney to maintain an action in his own name or not, he is clearly shown to have had an equitable interest in it which is equivalent to that of an assignee of a chose in action, and is sufficient to enable him to hold the avails of the same as against this trustee process, instituted for the benefit of an attaching creditor.

Trustees discharged.