McKown v. Manhattan Life Ins.

ACHESON, Circuit Judge. The policy of insurance contains a provision for deducting from the insurance money “any indebtedness on account of this policy,” but no other deduction is stipulated for. Therefore the defense to be considered is strictly that of set-off. The decision in Skiles v. Houston, 110 Pa. St. 254, 2 Atl. 30, is not controlling, as the defendant’s counsel argues. The ruling at the trial here complained of was not based wholly on Bosler v. Bank, 4 Pa. St. 32, and other cases in the same line involving the question of the allowance of a set-off where one of the demands was not due at the time of death. The objection to the set-off here claimed goes much deeper, resting on the lack of mutuality in the demands. In the allowance of set-offs' it is a cardinal rule that the demands must be due in the same right. Stuart v. Com., 8 Watts, 74. Hence it was there ruled that, in an action by an administrator to recover a debt due the estate of his intestate, the defendant could not set cf. a debt due him by the administrator for services rendered him in the course of his administration of the estate. So, in an action by an executor against a purchaser at a vendue for the price of goods of the estate sold to him, the defendant cannot set cf. a debt due to him by the decedent. Steel v. Steel, 12 Pa. St. 64. Nor, in a suit against a purchaser at an orphans’ court sale of a decedent’s real estate, to recover the difference, between his bid and the sum realized at a resale caused by his default, can the defendant set cf. a debt due to him by the decedent. Singerly v. Swain’s Adm’rs, 33 Pa. St. 102. By the terms of the policy of life insurance here sued on, the insurance money was payable to the executor or administrator of the insured in 90 days after satisfactory proof of his death. The insured himself .never had any cause of action, and could have had none, under the policy. Nothing was payable to him upon any contingency. The stipulation of the insurance company was to pay, after the death of the insured, to his personal representative. The debt here sued for had no existence in the lifetime of the plaintiff’s testator. It came into existence after his death. It is true that the policy itself was in existence before, but no debt of the company under it arose, or could have arisen, in the lifetime of the plaintiff’s testator. These debts are not due in the same right. One of them is between the plaintiff’s testator and the defendant; the 355 other is between the defendant and the plaintiff', as executrix. Now, at the moment of the death of the insured, the plaintiff, as his executrix, became trustee for all the creditors whose rights to the assets of the estate became fixed. Bosler v. Bank, supra. The decedent’s estate is insolvent, and to allow the set-off here claimed would disturb the course of administration. The motion for a new trial must be overruled.