Parsons v. John Hancock Mutual Life Insurance

Mr. Justice Shepard delivered the opinion of the Court: Certain instructions given to the jury respecting the existence and binding nature of the alleged agreement between Parsons and Douglas, that were given to the jury on behalf of the plaintiff, were duly excepted to and have been made the grounds of several assignments of error. In the view that we have taken of another question at the very foundation of the case, the questions raised by the foregoing may be passed; and it will be assumed, without, however, deciding, that, in accordance with the verdict, the policy was accepted by Parsons and became binding for the space of one year upon the company by the terms of delivery made by its agent, whether with its knowledge and consent or not. The plaintiff’s own evidence discloses that he was under neither legal nor moral obligation to Parsons on the one hand, or the insurance company upon the other, to pay the premium due by Parsons. It also discloses that he made the payment in the manner indicated without the knowledge even of Parsons, much less his request or consent. In this state of the case the court should have directed the jury to return a verdict for the defendant, the refusal of which has been assigned as error. The form of the plaintiff’s action indicates his apprehension of what is quite clear under the facts stated, namely, that he could not maintain an action of assumpsit against Parsons for money paid, expended, etc, for his use. “ It is a well settled general rule, that no one can be allowed to intrude himself upon another as his surety, and therefore if a man' voluntarily pays the debt of another, without any agreement to that effect with the debtor, he cannot take the place of the creditor, or in any way recover the money so paid of the debtor; because the law does not permit any one man thus, officiously and without solicitation, to intermeddle with the affairs of another.” Winder v. Diffenderfer, 2 Bland, 166, 199. See, also, Stokes v. Lewis, 1 T. R. 20; 2 Gr. Ev. Sec. 114; Ross v. Silverman, 53 N. Y. S. 901; Ross v. Rubin, 54 Idem, 1036; Woods v. Gilson, [269] 17 Ill. 218; Richards Brick v. Co. v. Rothwell, 18 App. D. C. 516, 541. Upon the same principle, the payor, Douglas, could not claim to be tbe equitable assignee of tbe demand of tbe insurance company against Parsons by reason of bis voluntary-payment of tbe premium. Courts of equity uniformly refuse to interpose tbe fiction of equitable assignment by subrogation on bebalf of a mere volunteer and intermeddler. Ætna Life Ins. Co. v. Town of Middleport, 124 U. S. 584; Richards Brick Co. v. Rothwell, 18 App. D. C. 516, 541. By bringing bis action in tbe present form, tbe real plaintiff cannot secure a more advantageous position. What be could not do indirectly by tbe aid of equity, or by direct action of assumpsit at law, be cannot do indirectly at law by suing in tbe name of tbe original creditor for bis use as assignee of tbe demand. To maintain tbe action as assignee of tbe demand it was incumbent upon bim to prove payment with that intent, and a like receipt and acceptance of tbe money by tbe creditor. Tbe plaintiff’s own testimony precludes tbe idea of payment with sucb intent. There is not tbe slightest pretense that be informed bis principal of tbe actual condition of affairs. Evidently tbe insurance company received its thirty per cent of tbe premium due by Parsons in a settlement with its agent upon tbe assumption that tbe premium bad been collected by bim from Parsons. Presumably an insurance company pays tbe enormous commission of seventy per cent of the first year’s premium in contemplation of a bona fide insurance likely to be kept alive from year to year during tbe life of tbe insured; and it is not at all probable that it would have approved an arrangement for tbe chance of carrying Parsons, one year only for the actual sum received. Be this as it may, however, it is clear, that tbe insurance company was not informed of the actual facts at tbe time that it received the thirty per cent of tbe premium as having been paid by Parsons, and that it neither made, nor [270] contemplated making an assignment to Douglas of any demand whatever against Parsons. Douglas, as we have seen, expressly disclaimed making the payment at the request or with the knowledge of Parsons. Evidently he paid over the money as having been collected of Parsons, stimulated by his more than two-thirds interest in the premium and the reasonable expectation, no doubt, that Parsons would pay him as promised before the expiration of the year, namely, May, 1900. Without a full disclosure of the facts of Parsons’ default, of his assumption of the latter’s obligation and payment for his benefit, and the express consent of his principal, the creditor, he could not have acquired a title to the debt due by Parsons. Brice v. Watkins, 30 La. Ann. 21, 23; Kitchell v. Mudgett, 37 Mich. 81, 86; Shinn v. Budd, 14 N. J. Eq. 234, 237; Woods v. Gilson, 17 Ill. 218; Swan v. Patterson, 7 Md. 164, 165, 176. The subsequent formal written assignment made by the insurance company on October 30, 1900, is entitled to no weight whatever. This was made considerably more than a year after the settlement with Douglas, wherein the Parsons premium had been accounted for, and more than six months after the policy had expired by failure to pay or arrange for the second year’s premium. It was clearly an afterthought. The company ran no risk in then fully recognizing the existence of the policy for the year long since expired. Whatever its purpose, it could not relate back to, reopen and change the character of the closed transaction out of which the plaintiff’s claim arose and by the facts of which his rights' must be determined. The decision most strongly relied upon to sustain the judgment below is founded upon a very different state of facts. Gillett v. Insurance Co., 39 Ill. App. 284. In that case the agents made a similar arrangement with a person to whom they delivered a policy of fire insurance, and which they did not cancel for nonpayment of premium. The contract between the company and the agents required [271] the latter to make monthly settlements and bound them expressly to pay all uncollected premiums on outstanding and uncanceled policies; and provided “ that if the agents shall advance premiums which the insured failed to pay, the agents will be subrogated to such rights as the insured had by the terms of the insurance contract to receive the premiums.” An action for a payment made under this contract was clearly maintainable in the name of the insurance company for the use of the agents. The final proposition, on behalf of the appellee, is, that a voluntary payment by a stranger cannot be set up as a defense to an .action by the original creditor. A sufficient answer is, that this is not an action by the original creditor in bar of which the debtor has pleaded payment by a stranger. The insurance company is not suing for a debt due it, but lends its name as nominal plaintiff to the real plaintiff, Douglas, to whom it has attempted an assignment of the debt. His case fails on his own pleading and proof, and not upon a special plea in bar on behalf of the defendant. For the reasons given, we are of the opinion that the court erred in refusing to direct the jury to find a verdict for the defendant; and the judgment will be reversed with costs and the cause remanded for a new trial in conformity with this opinion. It is so ordered. Reversed.