Dungan v. Mutual Benefit Life Insurance

.Miller, J., delivered the opinion of the Court. This is an action of trover to recover damages for the conversion, of a life insurance policy for $5000, issued by the appellee, (the defendant below) upon the life of Francis D. Dungan, payable on his death to his wife Elizabeth W. Dungan. The suit was brought on the ²⁴⁹ 28th of June, 1866, by Dungan and wife, both of whom died during its pendency, and it was revived on the 15th of January, 1872, in the name of the wife’s administratrix. At the trial, after the evidence on the part of the plaintiff was closed, the Court instructed the jury that upon that evidence if believed by them, the plaintiffs had not at the time of the institution of this suit, the legal title to the policy of insurance and therefore cannot' recover in trover.

Unless there be material error in this instruction the judgment must be affirmed. The law which it embodies is not disputed. To sustain trover, the plaintiff must show a legal title; he must have property, general or special, and actual possession or the right to immediate possession at the time of the conversion. The conceded facts upon which we presume this instruction was based, are substantially as follows : The policy (No. 9238,) was issued on the 17th of June, 1861, and by its terms it insures the life of Dungan to the amount of $5000, in consideration of an annual premium of $245 to be paid on the 17th day of June, in every year during its continuance ; the amount insured is to be paid to his wife, Elizabeth W. Dungan, or assigns, within ninety days after due notice and proof of his death: in case of failure to pay the premiums on or before the several days limited for their payment, the company shall not be liable for the payment of the sum insured or any part thereof and the policy shall cease and determine, and in such case all previous payments made thereon, and all profits shall be forfeited to the Company; and if assigned, written notice shall be given to the Company and their assent thereto obtained.

On the 17th of June, 1862, Dungan and wile executed the following assignment of this policy to William P. Webb : “Assignment of policy No. 9238. In the Mutual Benefit Life Insurance Company — Life of Francis D. Dungan.’’ ²⁵⁰ “Eor value received, we d.o hereby assign, transfer and set over unto Wm. P. Webb, his heirs or assigns the above named policy of insurance, and all sum or sums of money, interest, benefit and advantage whatsoever, now due or hereafter to arise or to be had, or made by virtue thereof, to have and to hold unto the said Wm. P. Webb, his heirs or assigns.

In witness whereof, we have hereunto set our hands and seals the seventeenth day of June, one thousand eight hundred and sixty-two. E. W. Dunsan, [seal.] Francis D. Dun&an, [seal.]” “Signed, sealed and delivered in the presence of John W. Mortimer.” Upon the execution of this assignment the policy was delivered to Webb, and at the same time he gave to the assignors the following receipt : “ Baltimore, June 17th 1862. “Received of Mrs. E. W. Dungan and Mr. F. D. Dungan, an assignment of policy No. 9238, in the Mutual Benefit Life Insurance Company of N. J., Life of F. D. Dungan — as security for the prompt payment at maturity of their note at four months from date, amounting to two hundred and twenty ^5,, dollars; said assignment to be null and void upon the payment of said note at its maturity; otherwise to continue for sole use of W. P. Webb. W. P. Webb.” The note referred to in this receipt is a note dated the 17th of June, 1862 for $220.25, payable four months after date, to the order of Webb, and signed E. W. Dungan, per Francis D. Dungan, and also with the name of the latter upon the back of it. This note was not paid at maturity nor has it ever been paid.

Notice in writing of this ²⁵¹ assignment, though not of the receipt, was given to the Company by Webb, on the 17th of December, 1862, and on the following day the Company returned to him their written assent to it, subject to the conditions of the policy. On the 28th of November, 1865, Webb surrendered the policy to the Company and received therefor the sum of $1248 51, he having paid the 'premiums thereon up to that date. On these admitted facts it is insisted on the part of the appellee that this assignment and accompanying receipt constitute either a conditional sale and transfer of the policy, which became absolute and irrevocable, both at law and in equity, upon failure to pay the noteat maturity, or a mortgage of it, and in either event there was no legal title in the plaintiff's to support trover. On the other hand the appellant’s counsel contend that the transaction was merely a pledge or deposit of the policy as collateral security for the payment of the note, and hence under the law of bailments, title “to maintain trover,” remained in the bailors.

The legal result in each case cannot be subject of dispute; in the one case the legal title passes to the vendee or mortgagee, and in the other the general title remains in the pledgors. The difference between a pledge and a mortgage of goods or dioses in adion is said to be marked and easily understood, but it is sometimes in practice very difficult to determine whether a particular contract is the one or the other. The general distinction is that in a mortgage the title is conveyed with a condition of defeasance, that is to say, a condition rendering the conveyance void on the payment of a certain sum of money on or before a day agreed upon ; while in a pledge the goods bailed are deposited as a collateral security, and only a special property is transferred to the bailee, the general title in the meanwhile, remaining with the bailor. The difference has also been well stated thus: “A mortgage is a pledge and more; for it is an absolute ²⁵² pledge to become an absolute interest if not redeemed at a certain time.

A pledge is a deposit of personal effects, not to be taken back but on payment of a certain sum,