In re St. Paul German Insurance

Canty, J. The St. Paul German Insurance Company issued a policy of insurance to appellant insuring his property against loss by fire for one year from September 22, 1891. Thereafter, on November 17, 1891, a loss occurred. Thereafter, on April 14, 1892, the [166] company, being insolvent, made an assignment, under tbe insolvency law of this state, for the benefit of its creditors, to J. F. Franzen. The policy of insurance contained a provision requiring the insured to commence any suit or proceeding to enforce any claim for loss within one year from the time of the loss. The appellant did not file its claim for such loss with such assignee within one year from the time of the loss, or until November 28, 1892. For this reason the court below held that the claim was barred by the limitation provided in the contract, and that appellant could not recover, and he appeals to this court. It is urged by respondent that because the statute of limitations continued to run against this claim as a personal liability of the insolvent, and, as against it, was barred before this claim was filed with the assignee, it ceased to be a claim against his assigned estate. We do not agree with respondent. We are of the opinion that the conditions requiring the bringing of an action on this claim within the year was waived by the insurer by providing a fund for the payment of the claim, to the extent of that fund. We cannot see why such conditions in an insurance policy cannot be waived by the insurer as well as other conditions in it. This provision is intended for the protection of the insurer when he disputes the claim, and can hardly apply when he has provided a fund for its payment, at least to the extent of that fund. If A. is indebted to B., and, a short time before the statute of limitations runs on the debt, A. transfers property to C., to be by him disposed of, and the proceeds applied on the debt, will this not interrupt the running of the statute, at least as to this fund? On well-settled principles, it will, and B. can charge 0. as trustee after the time the statute would have run were it not for the creation of the trust. Payment of money into court in a suit on a debt takes the debt out of the statute of limitations as to the money so paid into court. Long v. Greenville, 3 Barn. & C. 10. Such an assignment for the benefit of creditors is for the benefit of all creditors whose claims are not barred by the statute of limitations at the date of the assignment, and, if not then barred, are not barred afterwards during the pend-ency of the proceedings. In re Leiman, 32 Md. 225. See, also, [167] Minot v. Thacher, 7 Metc. (Mass.) 48; 2 Wood, Lim. (2d Ed.) § 202. TMs rule lias also been applied by the Federal courts in bankruptcy proceeding's, under the United States Statutes. Bump, Bankr. (10th Ed.) 581. The order appealed from should be reversed. So ordered. Mitchell and Bock, JJ., took no part. (Opinion published 59 N. W. 996.)