159 N.W. 97 | N.D. | 1916
Lead Opinion
. This is an action brought by A. E. Hecker, the trustee in bankruptcy of Bose M. Geiger, bankrupt, to recover from the Commercial State Bank of Carrington, North Dakota, the proceeds of an insurance policy which was collected by the bank and applied to the payment of debts owing to it by the bankrupt. The case was tried to the court without a jury, and from a judgment in favor of the defendant and dismissing the action, the plaintiff appeals.
According to the findings of fact, which are in no way controverted by the appellant, on or about the 21st of September, 1911, and continuously thereafter until on or about January 3d, 1913, the defendant, Bose M. Geiger, conducted and operated a retail millinery business in the city of Carrington, North Dakota. On or about September 21st, 1911, she procured through the defendant, The Commercial State Bank of Carrington, a policy of fire insurance in the standard form on her stock and store fixtures, and which policy remained in the possession of the defendant bank, which paid the premium thereon and charged the same against her account. Later, and on or about March 12th, 1912, the said Bose M. Geiger borrowed from the defendant bank the sum of $190, and gave her promissory note therefor. This note was ■signed by other persons as security. Erom that date and until September, 1912, the said Bose M. Geiger borrowed from the defendant bank additional sums of money, amounting in all to the sum of $650. At the time of making the first loan of $190, before mentioned, the said Bose M. Geiger deposited the policy of insurance before mentioned with the defendant bank under an oral agreement that it should be held as collateral security for the payment of the indebtedness due from her to the defendant, as evidenced by said promissory notes, and that in the event of the loss by fire of the property insured by such policy, the defendant bank -should collect from the insurance company the amount of such policy and deduct therefrom the amount of the indebtedness to it. Later, and on or about September 21st, 1912, the policy above set forth expired, but there was issued to the said Bose M. Geiger a renewal policy in the same form, and which policy was deposited by the said Bose M. Geiger with the defendant bank under the same terms ■and conditions as the prior one, and which policy was retained in the possession of the defendant bank in accordance with the said agreement. Later, and on or about January 3d, 1913, the property insured was
The first proposition which is urged by the plaintiff and appellant is that the oral agreement made by Rose M. Geiger and the defendant bank on March 12th, 1912, together with the deposit of the policy, did not constitute a pledge, and this for the reason-that a policy of fire insurance may not be pledged orally, but only by a written instrument duly executed. Appellant, however, concedes that if the policy of fire insurance and its proceeds were properly and legally pledged on March 12th, 1912, and on September 21st, 1912, the date of the deposit of the renewal policy, he was properly defeated in the trial court, and his appeal should be dismissed. Plaintiff and appellant maintains in short that a policy of fire insurance is merely a chose in action, and that a chose in action cannot be pledged by on oral agreement merely.
We believe that there is no merit in this contention. It is true that
A pledge is both an assignment and a transfer of possession. Oral proof of the assignment of the claim against the insurance company was certainly permissible. The formal written assignment which was made after the adjudication in bankruptcy was merely in furtherance of the original agreement. The insurance company made no defense on the ground of the illegality of the pledge, nor that in the first place there was no written assignment nor written agreement of pledging. It could have paid the claim and acknowledge the liability under the contract of insurance and the assignment of the right under the contract to the defendant bank, and this without any formal delivery or pledge of the policy to the bank whatever.
But plaintiff contends that the defendant bank did not have an insurable interest in the property covered by the policy, and that therefore any attempt to pledge or assign to it the rights under such policy was void. He cites the following sections of the Compiled Laws of 1913:
“Section 7471. The sole object of insurance is the indemnity of the insured and if he has no insurable interest the contract is void.”
“Section 6466. Every interest in the property, or any relation thereto, or liability in respect thereof of such a nature that a contemplated peril might directly damnify the insured is an insurable interest.”
These sections, however, do not support his contentions. The creditor bank had certainly an interest in the property which was of such a nature that a contemplated peril might directly damnify it. It is self-evident that a bank which loans money on the credit of an established and running business has an interest in the matter as to whether the' assets of that business are consumed by fire. See May, Ins. 2d.
Nor is there any merit in appellant’s last point “that the oral agreement between Hose M. Geiger and respondent was ineffective for that it was not complete, as something more remained to be done to enable it to be carried into effect; to wit, a destruction of the property insured by fire and the execution of a written assignment following such destruction, and therefore it was in fact no more than an agreement for a pledge or assignment of the policy in the event of loss, and as such it must date from the date of the execution of the assignment and be construed as of that date; to wit, January 3d, 1913; and that date being within four months of Hose M. Geiger’s adjudication in bankruptcy, such transaction was voidable in the suit of the trustee, appellant herein.”
We have examined the cases cited by counsel for appellant and have no fault to find with the statements therein made that “a mortgage or transfer of his property by an insolvent debtor within four months of the filing of a petition in bankruptcy against him, which otherwise constitutes a voidable preference, is not deprived of that character or made valid by the fact that it was executed in performance of a contract to do so made more than four months before the filing of the petition.” See Cross, J., in Tilt v. Citizens’ Trust Co. 191 Fed. 449, quoting from Re Great Western Mfg. Co. 81 C. C. A. 341, 152 Fed. 123, 127. Nor have we any quarrel to make with the decision in Eagan v. Donovan, 189 Fed. 138, 146, wherein a debtor in 1904, under an oral agreement not to record the same, deposited with his creditor deeds to his property, and, in 1909, the deeds were recorded within four months of the filing of petitions in bankruptcy, and wherein it was said that
The judgment of the District Court is affirmed.
Rehearing
On Petition for a Rehearing
Counsel for appellant files a petition for a rehearing in which, among other matters, he lays stress upon the provisions of § 6467 of the Compiled Laws of 1913, which we neglected to mention in the original opinion, and which provides that “an insurable interest in property may consist in: 1. An existing interest. 2. An inchoate interest founded on an existing interest; or 3. An expectancy coupled with an existing interest in that out of which the expectancy arises.”
We merely refer to this fact to make it clear that the section was not overlooked, and that its perusal does not in any way lead us to modify our former opinion or the construction that we have given to § 6466 of the Compiled Laws of 1913. The petition for a rehearing is denied.