Charter Oak Life Insurance v. Smith

Lyon, J. A creditor who holds notes or other obligations for the payment of money, assigned to him by his debtor as collateral security, is bound to use reasonable diligence to collect such collaterals when they fall due. If he neglects to do so — if he unreasonably delays to talce the necessary steps W enforce payment thereof at maturity,— and a loss results from such neglect and delay, he must bear the loss. In this case .the fire insurance company remained solvent for one month after the insurance money became due and payable; and it is a fair inference from the testimony, that the plaintiff could have realized the money at any time by calling on that company for it. Had the insurance company required the signature of Mr. Smith to a receipt for the money, the evidence is undisputed that he was ready and willing to give it at all times. He so testifies, and his conduct throughout the whole transaction convinces us that he testifies truly. That the loss of the money resulted from such delay, cannot be doubted. "We are of the opinion that this delay of the plaintiff for a month to collect the sum due on the policy, prima faeie is negligence, and that the plaintiff is chargeable with the resulting loss, unless Mr. Smith requested, consented to, or in some manner caused the delay. "We find no evidence in the case that Mr. Smith ever requested the plaintiff to allow the money to remain uncollected, or that he consented thereto. Indeed, the case seems barren of proof that he was ever consulted on the subject, or that he knew, until about the time the fire company failed, that the plaintiff had not collected the money. All that he said or did during the negotiations for retaining the money, or for a re-loan of it, seems entirely consistent with the theory that he supposed the plaintiff had made or would make the collection. [332] It may be remarked in tbis connection, that the legal right to the insurance money was in the plaintiff, and, on presentation to the fire company of the policy, and the bond of Mr. Smith, showing the present interest of the plaintiff in the policy, it would have been the duty of the insurer to pay the loss to the plaintiff. The burden was upon the defendants to prove the negligence of the plaintiff (Plant. M. Co. v. Falvey, 20 Wis., 200), and they proved a prima faeie case. To avoid the effect of such proof, the burden was cast upon the plaintiff to show some valid excuse for its failure to collect the money. This the plaintiff sought to do by attempting to show that it was induced by the acts of Mr. Smith to leave the money uncollected. An extended review of the testimony which it is claimed tends to show an excuse for such failure, would be a profitless task. Most of it is merely inferential, and we have already indicated wherein it falls short of proving a valid excuse for the plaintiff’s failure to collect the money. The least that can be said is, that there is not a preponderance of evidence that Mr. Smith was in any manner responsible for the delay. We cannot, therefore, disturb the finding of the court in that behalf, or the judgment based upon it. By the Court. — Judgment affirmed.