Hamilton v. M'Coun — 2 N.Y. Super. Ct. 522

Majority

p. 522

Jas. K. Hamilton, Administrator of Oliver G. Kane, deceased, versus William T. M'Coun.

Headnote

One M.'Kibben, having a claim upon a Fire Insurance Company for a loss, put his policy into the hands of the defendant (an attorney and counsel of the court) for collection,—and the defendant gave him a certificate that the policy was in his possession for that purpose. Upon this certificate M'Kibben made an endorsement, authorizing the defendant to hold the policy subject to the order of Kane, and delivered the same to him.

The defendant then commenced a suit on the policy, recovered and received the sum of 1400 dollars thereon, and the intestate gave him a written notice of his claims upon M‘K., which appeared to be, chiefly, for certain no íes drawn by him and endorsed by one Hill.

The defendant, not deeming it prudent to pay over the. money thus received to the administrator of Kane, an action was brought against him by the administrator, to recover the amount collected on the policy.

At the trial, the plaintiff did not produce the notes, and the Judge, holding that there could be no recovery until the notes were produced or accounted for, nonsuited the plaintiff. Held, that the order made by M’Kibben, with the notice to the defendant of the intestate’s claim under that order, created an equitable assignment of M'K.’s cause of action, and that he had a right, prim& facie, to receive the fund without producing the notes. The nonsuit was therefore set aside.

Assumpsit for money had and received by the defendant, belonging to the estate of the intestate. It appeared at the trial, that the intestate had held previously to his decease, certain notes of one MTiibben, amounting to 1475 dollars, which he had paid for MTi.’s benefit; but what had become of the notes, at the time of the intestate’s death, did not distinctly appear.

MTiibben had placed in the hands of the defendant, an attorney and counsel of the court, a policy of insurance for collection, and received of him a certificate in the following words :—“ I “ have taken proofs of Mr. M’Kibben’s loss by the late fire, No. “ 132 Bowery, and have certified to the Brooklyn Fire Insurance “ Company, the amount of his loss to be on stock 3000 dollars, “ and on furniture 300 dollars, and this I believe to be correct “ from the proofs produced before me. The policy remains i

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n my hands to await the answer of the company. (Signed) Wm. “T. M‘Coun, Feb. 14, 1827”

Upon this certificate M’Kibben made the following endorsement:—Wm. T. M'Coun, Esq.—Sir, I hereby authorize you to hold' the policy of insurance expressed in the annexed note, received from you, subject to the order of Oliver G. Kane, Esq., New-York, 15th Feb., 1827. (Signed) Hugh M’Kibben.

The certificate, thus endorsed, was delivered by him to Kane, and the defendant having commenced a suit on the policy, recovered a judgment, the net. proceeds of which, amounted to 1400 dollars.

In the month of June, 1827, Kane gave to the defendant a special written notice and statement of his claim against M’Kibben, amounting in the whole to 1475 dollars.

At the trial of the cause these facts were proved, but the plaintiff did not produce the notes against M‘Kibben, which laid the foundation of the claim of the intestate against him.. The defendant therefore contended, that norecovery could be had, unless the notes were produced, or a satisfactory reason for their non-production was shown, or until further proof was offered as to the debt due from M'Kibben to Kane. The defendant was ready to pay over the money to the person who had the rightful claim to it, but did not wish to assume the responsibility of paying it over to the plaintiff upon this evidence.

The presiding Judge (Hofiman) being of opinion that the notes should be produced, or their non-production accounted for, before the plaintiff could recover, nonsuited him, and a motion was now made to set the nonsuit aside.

Mr. Anthon, for the plaintiff, insisted,

I. That the order on the defendant was a transfer of the policy of insurance to the intestate, and that after notice of such order, the defendant became the agent of the intestate, and finally received the money for his use. The intestate, he contended, in a controversy with such an agent, was not bound to prove the amount of his debt, but had a right to receive the whole sum, being liable to account to the drawer only.

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II. That the plaintiff could only be required to prove, in this suit, to sustain the action, that there was a subsisting debt. That the quantum was entirely unimportant as between these contending parties, and enough was proved on that head for the purposes of this action. Even if the transfer had been entirely gratuitous, the defendant (he said) had no right to question it. The Judge therefore, instead of nonsuiting the plaintiff, ought to have directed a verdict for the amount in the defendant’s hands. [Peyton v. Mallet, 1 Caine’s Rep. 363. 3 John. R. 71.]

Mr. Staples, contra, for the defendant, contended,

that the order did not indicate that any debt was due from M’Kibben to Kane. It was a bare authority, he said, constituting the latter the agent of the former, and this power was subject to revocation at any time. Kane limited his own claim to 1475 dollars, in his notice, whereas M'Kibben’s loss, as indicated by the certificate, exceeded three thousand dollars. It was quite evident, therefore, that the whole amount of the loss was not transferred to Kane, and the evidence did not show that the power was coupled with an interest.

II. The plaintiff was bound to produce the notes or account for their non-production. They were in the hands of the intestate, who, at most, could only have received the order as collateral security for the notes. If this money be paid to the plaintiff what means will M'Kibben have of resisting the payment of the notes, -in a suit upon them ? The defendant is the agent of M>Kibben for the purpose of defending his rights, and the money ought not to be drawn out of the defendant’s hands upon this evidence.

One M‘Kibben, having a policy of insurance, made by the Brooklyn Fire Insurance Company, and a loss having taken place, lodged it in the hands of the defendant, an attorney, for collection. On the 14th of February, 1827, the defendant gave a written certificate that the policy remained in his hands, and on the next day M‘Kibben endorsed, on the certificate, an instrument, by which the defendant was directed to hold the

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policy, subject to the order of Kane. On the 4th of June, 1827, Kane made a written statement of his claim against M'Kibben, which appeared to be, among other things, for the amount of certain notes drawn by him, and endorsed by one Hill. A suit was commenced by the defendant on the policy, and in February, 1829, he received the sum of $1400 as the proceeds of it. The defendant was duly notified of the order made by M'Kibben in favor of -Kime^and of the claims of the latter. This action is now brought by the representative of Kane, to recover the money thus collected by the defendant on the policy.

The Judge, at the trial, held, that the plaintiff could not recover unless he produced or accounted for the non-production of the notes, specified in the statement of the claim of his intestate, and nonsuited him on that ground. A motion is now made to set this nonsuit aside. It seems to me, that the order made by M‘Kibben, with the notice to the defendant of the claim of Kane, under that order, created an equitable assignment of the right of action of M‘Kibben against the Insurance Company. Kane became thereby entitled to the fund, to arise from the action on the policy, as a security for his claim against M‘Kibben. The defendant, from the time he had notice of that order, became, in the prosecution of the suit, the attorney of Kane, and when he received the avails of it, he received them for the use of Kane. Such appears to be the plain import and meaning of the whole transaction, and such is its legal effect, according to the principles of adjudged cases, [Peyton v. Hallet. 1 Caine’s R. 379. M‘Menomy v. Ferres 3. J. R. 83.]

It was intimated, on the argument, that the claims of Kane against M‘Kibben, had been satisfied by the latter, If that fact should appear on a future trial, and it should also appear that the defence in this case, is made at the request and for the benefit of M‘Kibben, it may probably be effectual, as it will then, be shown that the plaintiff has no equitable right to the money as against M'Kibben. But as the case now stands, the defendant having collected the money as the agent or attorney of Kane, cannot question his right to recover it, on the ground that a third

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person who, for any thing that appears, is a stranger to the suit, may have a better claim to it.

Nonsuit set aside.

[F. B. Cutting, Att'y for the plff.