New York Life Ins. v. Smith

HAWLEY, District Judge (after stating the facts). The position and contention of the plaintiff in error is somewhat novel and peculiar. It admits its liability on the policy, but denies the right of the defendant in error to recover, unless Dr. Murphy is made a party to the action, on the ground that, unless he is made a party, it is liable to be twice compelled to pay the policy. Instead of paying the money due on the policy into court, and having notices served on all parties claiming the money or any part thereof, and asking that such parties be compelled to appear and present their claims, • so that the court may decide their respective rights, it assumes the position of a partisan as between the respective claimants; and in its answer, as a defense to this action, alleges, after stating the facts as to the assignment of the policy, “that the said John B. Murphy is the owner of said policy and is entitled to the money due thereon; * * * that the plaintiff is not the real party in interest in this action”; and prays for judgment for its costs. It is earnestly argued by the plaintiff in error that J. B. Murphy is an indispensable party as a defendant, and that this action cannot be maintained without his being made a party, and that, in the event that he could not be brought within the jurisdiction of the court, the action should be dismissed. Ergo, if this position is sound, the same objection could be made to any action brought by Murphy, and the insurance company would go Scot-free, and obtain a judgment in both cases for its costs. Nevertheless, if the law casts upon the defendant in error the burden of procuring the presence of Murphy, it would be her misfortune if she has not or could not do so. We are of opinion that the law imposes upon her no such burden. For the sake of the argument, it may be admitted that, if this was a suit in equity to determine the rights of the respective claimants, it could not be maintained without bringing them all before the court. It may likewise be admitted that, if Dr. Murphy had made any application, he would have been granted the right to intervene and assert his rights, if any he had, to any portion of the moneys due upon the policy, and that in either of these events the respective rights of Mrs. Smith and of Dr. Murphy might have been heard, litigated, and determined herein. This is not, however, a suit in equity. It is simply an action at law to recover the amount due-on a policy of insurance. There is an essential difference between the practice at law and in equity in determining who are proper and necessary parties to the litigation. Mahr v. Society, 127 N. Y. 460, 462, 28 N. E. 391; 1 Pom. Eq. Jur. 114; Fost. Fed. Prac. § 4. Under the pleadings, the insurance company took upon itself the burden of proving that Dr. Murphy had the legal right to recover from it the amount of money due upon the policy, but the evidence fails to establish such right. It is not shown that the policy of insurance was ever delivered to him; that he ever made any demand for its delivery; that he ever made any demand upon the insurance company for the payment of the money due upon said policy; that he ever brought any suit to recover the money, or took any legal steps whatever to assert any [697] right to the policy or any part of the money due thereon. It affirmatively appears that the time within which actions could be commenced against the insurance company, under the terms and conditions of the policy, has long since expired. The policy was an. executory contract,—a chose in action,—available only as a legal contract to Dr. Smith and his personal representatives. The sale or assignment thereof, as made by Dr. Smith, did not vest any such interest therein in Murphy, either legal or equitable, as would authorize him to bring and maintain an action thereon against the insurance company. To constitute such an assignment, “two things must concur: First, the party holding the chose in action must, by some significant act, express Ms intention that the assignee shall have the debt or right in question, and, according to the nature and circumstances of the case, deliver to the assignee, or to some person for his use, the security, if there be one, bond, deed, note, or written agreement upon which the debt or chose in action arises; and, secondly, the transfer shall be of the whole and entire debt or obligation in which the chose in action consists, and, as far as practicable, place the assignee in the condition of the assignor, so as to enable the assignee to recover the full debt due, and to give a good and valid discharge to the party liable.” Palmer v. Merrill, 6 Cush. 286. See, also, Holyoke v. Insurance Co., 22 Hun, 77; 2 May, Ins. § 389. Under the decisions of the supreme court in the state of Illinois, it is evident that Murphy could not bring an action there in his own name. In Insurance Co. v. Ludwig, 103 Ill. 312, the court said: “Policies of insurance are but dioses in action, and governed by ilie same principles applicable to dioses in action in general. They are assignable in equity only; and, in this state and in others where the strict mies of the common law prevail, courts ol: law will not recognize the assignment, so as to allow the assignee to sue on the policy in his own name. Insurance Co. v. Wetmore, 32 Ill. 221; Insurance Co. v. Hervey, 34 Ill. 62: Insurance Co. v. Robinson, 98 Ill. 324; Bliss, Ins. § 325; May, Ins. § 377; Jessel v. Insurance Co., 3 Hill, 88.” The policy is personal property, and was in the state of California. The issuance of letters of administration to Mrs. Smith in California was legal. She had the possession of the policy, and was entitled to recover the money due thereon. The law is well settled that the administratrix in California, as against the Jennings Trust Company or any other administrator in any other state, is entitled to recover the money from the insurance company. Insurance Co. v. Woodworth, 111 U. S. 138, 4 Sup. Ct. 364; Holyoke v. Insurance Co., supra; Morrisson v. Insurance Co., 57 Hun, 99, 10 N. Y. Supp. 445; Stevens v. Gaylord, 11 Mass. 262. The views already expressed are deemed conclusive of this case, and render it unnecessary to review other assignments of error that appear in the record. Upon the facts, we are of opinion that the defendant in error is clearly entitled to the judgment which she obtained against the plaintiff in error. The judgment of the circuit court is affirmed, with costs.