Empire Life Insurance v. Mason

Lumpkin, J. It appears from Jones’s own statement that he undertook to defraud the insurance company, whose agent he was, by issuing and reporting a policy as new business, which he subsequently said was really issued as a substitute for the one involved in this case, thus getting the commission on issuing a new policy; and further that, after the death of the insured, he obtained a transfer [146] of this policy at a cheap rate and, through himself or his assignee, sought to collect the full amount. This he únblushingly set forth in a letter to the company. He filed no answer to the charge of fraud. According to the evidence, he undoubtedly swindled a confiding negro woman, whom he induced to believe that the policy was not valid and would be contested, and obtained from her, as the administratrix of the insured, a transfer to him, under the guise of being a compromise, paying her about one sixth of the value of the policy. But “the best laid schemes o’ mice and men gang aft agely,” and Jones’s double-dealing was discovered by the accident of the company’s sending an installment (the policy was payable in installments) directly to the administratrix instead of to its agent. The plaintiff instituted an equitable action to cancel the transfers and to recover from the company the amount of the policy, less what she had received, and from the agent and his assignee the amounts which they had received, after deducting what had been paid to her for the policy, which they declined to accept in rescission. The verdict for the plaintiff against the company was the just and proper result, under the evidence, and no good reason is shown for setting it aside. The assignee filed a separate motion for a new trial; and it will be dealt with separately. 1. There was a demurrer, but it was without merit, and was rightly overruled. 2-4. It was contended that the company relied on the transfer of the policy by the plaintiff to Jones, and an order later obtained from the ordinary, and that there was nothing to put the company on notice of any fraud. It admitted in its answer that until after this suit was brought it considered the policy good, and that it received a copy of the order of the ordinary. An administrator must have authority in order to sell the property of the estate. Civil Code, § 4039. There is no law which empowers an ordinary to grant an ex parte order ratifying a previous illegal transfer of an insurance policy’on the life of the deceased, under a private sale, by an administratrix, and thus to validate it. The order of the ordinary did not purport on its face to authorize a sale, but rather a compromise of a doubtful or disputed claim, under the Civil Code, §§ 4004-4006. While it used the words “compromise and assign” and referred to approving “the settlement so made,” there was nothing to “compromise” between Jones as an individual and the [147] administratrix. He obtained from her by fraudulent representa-, tions a transfer to him, naming him also as her attorney in fact, on October 12, 1907. In January thereafter he procured, with her assent and in her name, an order to allow a “compromise” and approve a “settlement,” and thus sought to make valid the illegal transfer, under the guise of a compromise. The transaction carried on its face notice of its illegality. The company must have known that if there was anything about the policy to compromise, it was between the company and the policyholder, and that it was no “compromise” for its agent to buy the policy for himself at a small amount and collect it in full. Its letters in the record show that it appreciated the fact that the administratrix had no power to make a private sale, and that there must be a valid transfer, duly authorized ; and it knew what sort of authority there was. It was contended that the judgment of the ordinary was binding. If the order should be treated as an attempt to ratify and make valid the previous illegal transfer, as above stated, there is no such power in the ordinary or his court. The fact that the court of ordinary is one of general jurisdiction as to certain matters gives no power to pass any such order. If the order should be treated as authority for the administratrix to compromise a doubtful and contested claim against the company, this has never been done. An authority to compromise does not have to be revoked or set aside in order to attack a previous private transfer procured by fraud. 5. It was argued that the plaintiff put the matter in the hands of an attorney, who, in response to a suggestion of the company’s attorneys that he might enjoin the company from making further payments, wrote a letter stating that he did not see any way to enjoin the company from so doing. No action was pending. Such an opinion was not an agreement within the scope of the general powers of an attorney to make, so as to bind his client. The attorney had no implied power to consent to give away his client’s property by agreeing that one installment might be paid to the person who had obtained the transfer by fraud, in order not to embarrass him. The company had been put on notice of Jones’s fraudulent procedure. The somewhat despondent view taken by the attorney first employed by the plaintiff did not operate as an estoppel on his client, or at least can not be declared to have done so as matter of law. When she was advised of his opinion and unwillingness to [148] proceed, she promptly employed other counsel, who took a more hopeful view and one more in accord with the law. When the company had notice of the facts, it acted at its peril. If there was doubt, it could have filed a petition in the nature of a bill of inter-pleader. Merely suggesting an injunction would not relieve it. 6. It was claimed that the plaintiff entered into a scheme with the agent of the company to defraud the latter. But it does not appear from the evidence how the company was to be defrauded. The application for the policies (the second showing on its face that the other policy was of force and not superseded), the receipts for payments of premiums on this one, the deduction by the company from the first payment made after the death of the insured of an unpaid premium, and its entire conduct show conclusively that the policy was valid and in force. What fraud did the plaintiff undertake to perpetrate upon it except to get money to which she was entitled? Jones’s language, like his conduct, was not free from indirection. But no fraud' or attempted fraud by the plaintiff was shown. 7. It is needless to take up separately the grounds of the motion for a new trial filed by the company. Some, of the charges, especially as to collaterally attacking a judgment for fraud, may not have been correct, but none of them show any reason for a reversal, under the evidence. Judgment affirmed. All the Justices concur.