Vanatta v. New Jersey Mutual Life Insurance Co.

would have no right to complain if it should be taken to pay losses, even to the extent of depriving the company of means to pay his policy when it should mature. He has no more cause of complaint where the premium is withheld by him on a contract to pay it if needed to pay losses.

The view which I have taken is supported by two cases in Massachusetts, which are precisely in point: Commonwealth v. Mass. Mutual Fire Ins. Co., 112 Mass. 116; S. C., 119 Mass. 45. The case of The Security Life Ins. and Ann. Co., 11 Hun 96, is cited as an adverse decision. The court, indeed, there held that a death claim, due before the insolvency, was not entitled to preference in payment over the claims for return of premium, but the distribution was under the New York statute, and the court took pains to establish the position that the company was not a mutual one, although it provided for participation by policy-holders in the profits of its business. The court says that such participation did not, in that case, have the effect of rendering the policy-holders members of the company in any such sense as to subject them to direct or indirect liability for its losses; but its only effect was to diminish the premiums actually payable upon their policies, and to graduate the amount according to the prosperity and pecuniary success. of the company.

The death claims, including all those in which the death happened before the decree of insolvency, and endowment policy claims which became due before that decree, including all on which all premiums which ever could have been required to be paid had the company continued to be solvent had been paid before the decree, will rank as debts, and the policy-holders will be assessed, if necessary, according to the provision of the charter, for the payment of any deficiency of assets to pay them. Should there be any surplus of assets after payment of the expenses of the trust and the debts, in which are included the before-mentioned death and endowment claims, it will be distributed among the other policy-holders.

Gardner v. Raisbeck.

The claim of offset made by Henry Prinz remains to be considered. According to his statement, he borrowed money, on the security of his bond and mortgage, from the company. It was a condition of making the loan to him, that he should take out a life policy in the company, and he did so accordingly. He has not paid off the bond and mortgage, and it is now held by the receiver. Prinz asks that he may be permitted to offset against the amount of that claim against him, the money paid by him by way of premiums on the policy. Of course there was no agreement, between him and the company, that those premiums should be applied to the payment of the bond and mortgage. They were paid on account of his insurance. The rank of his claim as a policy-holder is as before stated. The fact that he has in his hands assets of the company, cannot entitle him to any advantage over other policy-holders in the same rank, and the fact that he is a debtor of the company, gives him no equity over them. He is not entitled to the offset which he claims, nor to any.

GEORGE W. GARDNER

V.

GILBERT RAISBECK and others.

A bill for an account and payment of the proceeds of five bonds and mortgages, alleged to have been assigned to the defendant through his importunity and fraud, for sale on commission, the proceeds of which the defendant, after sale, appropriated to his own use, dismissed on account of gross discrepancies between the allegations and proofs in this suit, and also in complainant's sworn answer in a suit in another state, touching the same matters; the assignments appearing on their face to have been made bona fide and for value.

Bill for relief. On bill, answer of Raisbeck, replication and proofs.

Gardner v. Raisbeck.

Mr. S. B. Ransom, for complainant.

Mr. Isaac R. Wilson, for Raisbeck.

THE CHANCELLOR.

The bill is filed for an account, and decree for payment thereon, for the amount of five bonds, with their respective accompanying mortgages securing the payment thereof, assigned, according to the bill, by the complainant to Raisbeck, in June, 1871, as his agent, for sale for a commission of ten per centum. These securities were received by the complainant for the purchase-money of property, belonging to his deceased brother John, sold under proceedings in New York for partition thereof among the heirs. One of the mortgages was given by a purchaser at the sale; the others were given by George W. Burrell, on the purchase, by him, from the complainant, after that sale, of part of the property, which was bought in by the latter at the sale for the heirs, under an agreement made by him with them. The complainant alleges, in his bill, that being desirous of obtaining the money for the five mortgages, he was induced by the defendant Charles H. Bertrand, who was his lawyer, to put them in the hands of Raisbeck, who pretended to be a real estate agent, to be sold by him for a commission of ten per cent., and that he accordingly requested Raisbeck to sell them for him; that Raisbeck, who, as well as Bertrand, did business in the city of New York, soon afterwards requested him, in view of the fact that he then lived in Connecticut, to assign the bonds and mortgages to him (Raisbeck) in order that he might have the means of immediately delivering them on sale. The bill states that at the time when the assignment was made, the bonds and mortgages were delivered "punctually" into the hands of Bertrand, to be by him delivered to Raisbeck, and that the complainant then gave Bertrand special instructions not to deliver the assignments and the bonds and mortgages until he had received from Raisbeck full and ample security to the com

Gardner v. Raisbeck.

plainant for them. It further states that, at or about the time when the complainant made the assignments, he asked Bertrand about the security he (the complainant) was to receive from Raisbeck, and Bertrand informed him that he had taken full and adequate security before delivering the assignments and bonds and mortgages, and that he would. see that Raisbeck accounted for and paid over all the money to the complainant. It further alleges, that Raisbeck and the other defendants (Bertrand and Cook) conspired to cheat the complainants out of the mortgages; that Raisbeck collected one of the mortgages (known as the Mowatt mortgage, and for $1,500) and obtained a conveyance of the equity of redemption from Burrell of the property covered by the other four mortgages, and then sold the property, and that he refuses to account for any of the money, and that the complainant has received nothing from him on account of the money due him therefor, except small sums, amounting to about $550 in all, while the mortgages amounted to about $25,500.

The complainant alleges, in the bill, that it was not until after he had made repeated unsuccessful efforts to obtain a satisfactory explanation from Raisbeck and Bertrand that he became suspicious that the business was not being properly conducted, and that he thereupon searched the records of Kings county, in New York, where the mortgaged premises were, and found that Raisbeck had not only purchased the equity of redemption of the Burrell property, but had subsequently sold and disposed of that property to different purchasers.

The bill asks for an answer without oath. Raisbeck alone answered. Testimony was taken on the part of the complainant, but it was only that of himself, his wife and son and solicitor. Raisbeck has put in the record of a suit in the New York supreme court, brought by Charles Gardner, brother of the complainant, against the complainant, Daniel Gardner (his brother), George W. Burrell, Catharine M. Flynn (sister of complainant) and Raisbeck and his

Gardner v. Raisbeck.

wife, in or before July, 1871; and also a bill of accounting, made by the complainant, and sworn to by him, September 23d, 1871, filed, as alleged, in a suit brought by Catharine Flynn against the complainant and his brothers Daniel and Charles.

The testimony on the part of the complainant fails to support the allegations of the bill in material respects. The complainant, indeed, swears that he made the assignments to Raisbeck for the reason given in the bill (to enable him. to deliver the bonds and mortgages on sale), but he testifies that he did not deliver the bonds and mortgages until afterwards, and after unsuccessful applications to him by both Raisbeck and Bertrand for them. He says Bertrand first applied some time during the same summer in which he made the assignment, and asked him for the bonds and mortgages; that he refused to let him have them; that Bertrand said he wanted to use them for a few days, and would return them; that, a day or two afterwards, Bertrand and Raisbeck came together to his house, in Chatham, in this state (to which place he had removed from Connecticut, as he says, at Bertrand's suggestion), and stayed all night; that at first they spoke to him before his wife, and said they wanted the bonds and mortgages; that he made no definite reply; that they then called him out of doors alone, and Raisbeck said: "I want those bonds and mortgages; I can't do without them"; that he did not satisfy Raisbeck, and would not let him have them; that Raisbeck said he wanted to use them, but did not say for what purpose; that he did not get them that day, and the next day they went away without them; that the same day (presumably the last-mentioned day) or the next, Bertrand came again, alone, and stayed all night, and the next morning asked him for the bonds and mortgages, saying that he wanted to use them; that the complainant replied that he would not give them to him, that he, the complainant, had no security for them, and could not let them go out of his hands; that Bertrand then threw back his coat and pointed to his breast