55 N.Y.S. 29 | N.Y. App. Div. | 1898
This action was brought to recover damages for the alleged conversion by the defendants’ testator of a policy of life insurance, pledged hy the plaintiffs’ assignor as collateral security to a loan .made by the testator, Charles Bauer, on the 16th of July, 1890, to Rosa Lisner (the plaintiffs’ assignor) and George Lisner, her husband, the latter being also the assured mentioned in the policy of •insurance pledged. When the loan was made, Rosa and George Lisner delivered to Charles Bauer an instrument dated July 15, 1890, by which they transferred and set over to him all their right, title and interest in and to a certain policy of life insurance issued by the Mutual Life Insurance Company of New York on the life •of George Lisner, and in the same instrument they constituted ■Charles Bauer their lawful attorney to take all proceedings neces* ■ sary for the recovery and collection of any sums that might fall due under the policy. They also, at the same time, made and delivered to Charles Bauer their promissory note by which they promised to pay, five months after date, to their own order, $1,100 at 120 Broadway, New York city. In connection with, and annexed to, this note was an instrument signed by Rosa Lisner and George Lisner, in which they declared that they had deposited with Charles Bauer, .as collateral security for the note, policy No. 137,484 of the Mutual Life Insurance Company of New York on the life of' George Lis.ner, and that in case of the nonperformance of the terms contained in the note, or in case of the failure of the subscribers to pay any ■ and all premiums, premium notes or interest on premium notes, ■coming due or which may be a lien on the above-named policy dur
Neither the principal nor the interest was paid on June 10, 1893, and the Lisners thereafter and.prior to the 1st of July, 1893, had conversations and negotiations. with Charles Bauer and with Ms brother Louis Bauer respecting further indulgence upon the note. In all that -was said and done by Louis Bauer from the beginning to the end of the transactions with the Lisners, he was the representative and agent of Charles Bauer, and Ms authority to bind Charles Bauer is in no way questioned. - It appears that Charles Bauer left for Europe about the 1st of July, 1893, and returned on the 6th of . October, 1893. During his absence, many interviews were had between Rosa Lisner and Louis Bauer respecting the payment of the loan and the redemption of the security. There- is a conflict between the testimony of Rosa Lisner and Louis Bauer as to the substance-of those interviews, but both parties agree that they related not only to -an extension of the time of payment of the nóte, but that they speci'fi- ' cally referred to the disposition to be made of the policy of life-insurance. The determinant facts of the case may be' taken u-p for consideration as óf the date of-September 27, 1893, when a letter signed “ Chas. Bauér, S.,” was sent to Rosa Lisner, which, is as. follows: '-.
*529 “ Some time since you informed me that your brother-in-law was going to take care of the loans on the policies of your husband’s life. So much time having elapsed, I beg to inquire if it'is still his intention to do so. If not, I wish you would make arrangements with some one else to take up these loans, as my parties now insist on either the principle* or interest.
“ Very truly yours,
“(Signed) CHARLES BAUER, S.”
That letter was written by one Solms, a clerk of Charles Bauer, and, as Solms swears, in the ordinary course of his business and employment. It will thus be perceived that, at the date of that letter, it was known that Rosa Lisner was making efforts to procure money for the payment of the loan and that no time was fixed for its payment. Subsequently to that date, and about the 7th of October, 1893, Rosa Lisner had a further conversation with Louis Bauer concerning the loan and the policy. It was about the seventh of October, the day after Charles Bauer returned from Europe, and she and one of her daughters state that they also had conversations with Charles Bauer on the same subject after his return. The rights of' the parties to this action depend very largely upon what was said in those conversations. ■ There is no doubt that they related to the policy of insurance pledged as collateral and what should be done with it and not merely to an extension of the time of payment of the loan. Louis Bauer swears that he stated to Mrs. Lisner and her daughter that, unless the loan were paid off the first business day before the twelfth of October, the' collateral would positively be disposed of; and that they said that, was fair, if they did not pay the note by. that time to “ go ahead and sell out the collateral.” The Lisners, on the contrary, swear that nothing was said about the first business day before the twelfth of October, nor was any date fixed at which the collateral might be surrendered. They also testify that the money to pay the loan was expected from Mr. A. Lisner of Washington, a brother of George Lisner, and that Mrs. Lisner stated to Charles Bauer that if he were reluctant to wait, or could not wait longer, she would sell a policy of life insurance belonging to
On the 13th of October, 1893, Louis Bauer surrendered the policy of the Mutual Life Insurance Company and received therefor $1,494. A few days after that, upon receiving information that the policy had been surrendered, Mrs. Lisner called upon' Charles Bauer and protested against the act of Louis Bauer in surrendering the policy. Efforts were made to have it reinstated- by the Mutual Company, but that company refused to do so in consequence of the precarious state of the health of the assured. He died some six months afterwards.
There is evidence that Charles Bauer, in October, after the surrender of the policy, declared that'Louis had surrendered it knowing that Charles had promised to wait, and suggested that efforts be made to have the policy reinstated by the company, and that Charles Bauer admitted that he promised Mrs. Lisner to wait until Mr. Lisner of Washington could remit the money. This conversation, it is true, related to the payment of interest and not principal, but it will be observed that in the letter -of September 27, 1893, what was required was the payment of either principal or interest. Upon the foregoing state of facts, the question is whether there was a wrongful conversion of the policy of life insurance.
Notwithstanding the assignment, dated - July 15, 1890, of that policy, the relations existing between Bauer and Mrs. Lisner were only those of pledgor and pledgee, and, under ordinary circumstances, before the collateral security could be resorted to, notice of sale would have been necessary. The right to redeem the pledge at common law was one that could be cut off in no other way. The effect of a default in payment of the debt would give to a pledgee a right to sell, but the forfeiture could not accrue without notice.of sale. (Patchin v. Pierce, 12 Wend. 61; Bryan v. Baldwin, 52 N. Y. 232; Stearns v. Marsh, 4 Den. 227; Millikin v. Dehon, 10
That was.the situation of this policy of insurance at the time it was surrendered by Louis Bauer. The understanding, as the jury must have found it to be, was not merely one extending the time of payment, but the parties were expressly dealing with the preservation of Mrs. Lisnér’s right to redeem the security; and we think, on the whole evidence, that the jury was justified in finding that there was a parol consent to waive, equivalent to a' modification of the right of Bauer to resort immediately and without notice to the surrender of the policy for the payment of the debt. Thus, there is established by the evidence and the finding of the jury thereupon, that there was a waiver of the right to forfeit the policy, and we have to consider the legal effect of that waiver. The contention is made that it was ineffectual to operate any change in the rights of Bauer, because no consideration passed to support the waiver. It is not necessary to decide in this case whether a new consideration would be required to support a mere promise to extend the time of payment of the loan. That is not the question here. Suing to recover upon a loan is one thing; the right to resort to a forfeiture
We are of the opinion that there was a waiver of the right to surrender the policy based upon the continued efforts of Mrs. Lisner to get the money from her brother-in-law in Washington, or the prevention of her disposing of the Connecticut company policy, and the application of its proceeds to the payment of Bauer’s loan. There is no question of tender involved in this case. The pledgee sold the property notwithstanding, the waiver, and there was no direct tender to him necessary. (Stearns v. Marsh, 4 Den. 227).
The only remaining question is as to the measure of damages. The appellant’s contention is that the surrender value of the policy is all that could be recovered. .Undoubtedly the general rule in
The judgment and order appealed from should be affirmed, with costs.
Barrett, Rttmset and O’Brien, JJ., concurred.
Judgment and order affirmed, with costs.
Sic.