« ForrigeFortsett »
A POLICY of insurance for the benefit of and payable to the "legal heirs or assigns" of the insured, does not, upon the death of the insured leaving a widow and children, vest any part of the insured amount in the widow, notwithstanding she renounces, in conformity with the statute, the benefit of the bequests and devises made her by will, and elects to take in lieu thereof her dower or legal share in the estate. Under such circumstances the widow is not an "heir," and the amount of the policy is payable to the children. The case of Rawson v. Rawson, 52 Ill. 62, and the case of Richards v. Miller, 62 Ill. 417, explained.
SCHOLFIELD, C. J., delivered the opinion of the
Christian Gauch obtained a policy of insurance, on his life, from the St. Louis Mutual Life Ins. Co., of $5,000, for the benefit of and payable to "his legal heirs or assigns." By his last will and testament, among other bequests, Gauch bequeathed this policy to his children. He died, leaving surviving him a widow and eight children. His widow renounced, in conformity with the provisions of the statute, the benefit of the bequests and devises made her by the will, and elected to take in lieu thereof her dower and legal share in the estate. Two-thirds of the amount due upon the policy were paid to the children of Gauch. The remaining third is claimed both by the widow and the children; and the insurance company filed its bill of interpleader to determine the rights of the respective claimants, and ascertain to whom this balance should be paid.
The court below decreed that the children were entiled to the entire amount called for by the policy, and, consequently, that the unpaid balance due on the policy should be paid to them, and from that decree this appeal is prosecuted by the widow.
Assuming, as is tacitly conceded by the counsel for appellees, that the bequest of the policy by the last will and testament of Gauch, did not operate as a valid assignment to the children, the question to be determined is, does the term "legal heirs," as used in the policy, include the widow? Appellant's counsel refers to Rawson v. Rawson, 52 Ill. 62, and Richards v. Miller, 62 Id. 417, as sustaining the affirmative of the question. In these cases the deceased left no child or children, nor descendants of child or children surviving, and hence the widow in the first case and husband in the last case occupy the relation to the deceased which entitled them to one-half of the real estate
and the whole of the personal estate, upon renouncing the benefits of the bequests and devises of the respective wills. In these cases the husband and wife, respectively, were held to be heirs at law under the existing facts. Had there been a child or children, or descendant of a child or children surviving, however, it is evident it could not have been held they were heirs at law on the ground stated in the opinions, for in that contingency the child or children, or descendants of child or children, would have been entitled to the property subject to the claim of dower in the real estate, and the claim for one-third of the personal property of the surviving husband or wife.
In certain contingencies, brothers, sisters, parents, and even kindred in the remotest degree are heirs at law, but it would be absurd in the extreme to suppose that an individual having children, who should devise and bequeath his property to his legal heirs, intended all his kindred should take. The legal presumption in such cases would clearly be that he intended those to whom the law would give his property real and personal, he dying intestate; and hence it is the actual capacity of inheritance at the time of the death of the owner of the property, and not the fact that a particular person might have inherited from him under a state which did not exist, that determines who is heir. It is plain the widow here did not take as did the parties in Rawson v. Rawson, and Richards v. Miller, supra, becase Gauch left children surviving him and she can not therefore be declared legal heir upon the grounds on which the wife in the one case and the husband in the other, were there so declared.
But reliance is placed by counsel for appellant on this language found in the revised statutes of 1874, in the 4th clause of § 1 chap. 39, entitled Descent. Where there is a widow or surviving husband and also a child or children or descendants of such child or children of the intestate, the widow or surviving husband shall receive as his or her absolute personal estate one-third of all the personal estate of the intestate."
So far as this affects the widow it is of recent enactment. The only new feature in it is that recognizing the same right of the husband in respect to the wife's estate, that the wife has in respect to that of the husband, and this was obviously to harmonize with the statute abolishing tenancy by the curtesy and giving the husband dower in the lands of the deceased wife, the same as the wife has in the lands of the deceased husband. See R. S. 1874, chap. 41, Title Dower, § 1. The provision was first enacted in section 6, of "an act to amend an act concerning wills." Approved Feb. 11th, 1847. Laws of 1847, p. 168. The section then read thus: "The word Dower,' as used in the 46th section of the one hundred and ninth chap. of the revised statutes entitled 'Wills,' shall be construed to include a saving to the widows of persons dying intestate, of one-third of the personal estate forever after the payment of debts." Section 46 of the revised statutes of 1845, which was thus amended, declares how estates of intestates shall descend. R. S. 1845, p. 545.
In Rawson v, Rawson, supra, it was argued that
this amendment repealed so much of the section amended, as gave to the widow of an intestate who left no child or children nor descendants of child or children surviving, one-half of the real and the whole of the personal estate, but this court said: "It is very apparent, we think, that this act is treating of a widow, entitled to dower, not as an heir under the 46th section under which the claim in question is presented. The only subject before the legislature when this amendatory act was passed, was the right of the widow as such. It was not designed to abridge her rights as an heir under the statute of descents; but to enlarge her dower right." If that was the object and effect of the enactment then it can hardly be seriously claimed that the revision of 1874 has changed it.
That it was intended to be used in the same sense in the revision of 1874 is, we think, further obvious from the 10th section of chap. 41 of that revision, entitled "Dower," which provides: "Any devise of land or estate therein, or any other provision made by the will of a deceased wife or husband, shall, unless otherwise expressed in the will, bar the dower of such survivor in the lands of the deceased, unless such survivor shall elect to and does renounce the benefit of such devise or other provision; in which case he or she shall be entitled to dower in the lands, and to one-third of the personal estate after the payment of debts."
Now, this very clearly has no reference whatever to the right of husband or wife as heir to each other, but solely to their right as widow and surviving husband. And this is placed beyond cavil by the 12th section of the same act, which exclusively relates to cases where, under the statutes, the one inherits from the other, and a will has been made. The word "heir" has a technical signification, and we must presume that in the policy the term "legal heirs" was used in its strict and primary sense, there being nothing in the context to show that it was used in any other sense. It was said in Richards v. Miller, supra : 46 The word 'heir,' when uncontrolled by the context, designates the person appointed by law to succeed to the real estate in question in case of intestacy." Referring to 2 Jarman on Wills, 1. "Heir is he who succeeds by descent to lands, tenements, and her ditaments being an estate of inheritance." We know no respectable authority, and venture there is none holding that one entitled to dower, or an interest in the nature of dower, or any allowance of personal property only because of the survivorship of the husband or wife, is held to be included within the legal definition of "heir." Nor is the dictinction between the word "widow" and the word "heir less marked in common parlance. No one having children speaks of his wife in contemplation of her survivorship as his "heir;" but it is believed it is universal that she is referred to as the widow," and the children as "heirs." There is, therefore, no reason, in our opinion, for holding that when Gauch had the words "legal heirs" inserted as the beneficiaries of the policy, he intended his wife.
Parol testimony was admitted on the hearing,
A petition in involuntary bankruptcy was filed against a debtor, but he was not adjudged bankrupt. In that proceeding the creditors by resolution accepted a proposal of the debtor, as follows, to wit: "I, James W. Hewlett, of the city of Baltimore, and State of Maryland, trading under the name and firm of J. Q. Hewlett & Son, respectfully make the following proposition to my creditors, that is to say: The proceedings in bankruptcy now pending in the District Court of the United States for the District of Maryland, are to be suspended, and the said creditors are to receive in full satisfaction and discharge of their claims of every kind whatsoever against me, twenty-five per centum of the amount of said claim, as follows, viz: Three per centum in cash, to be rateably distributed among them, payable ten days after a resolution accepting this offer shall be confirmed by the court, and ratified and ordered to be recorded; and the balance to make up said twenty-five per centum to be paid in money in three equal instalments, in six, twelve and eighteen months from the date of the recording of such resolution, with interest, to be secured by the promissory notes of the said Hewlett, to be delivered to the creditors, their attorneys or assigns, within ten days after the recording of the resolutions as aforesaid. The assets of the bankrupt to be placed in the meantime in the custody of George J. Appold, of the City of Baltimore and State of Maryland; the proceeds of the same when collected to be applied to the payment of the said three per centum, and of the said promissory notes, as and when they shall respectively fall due.'
The debtor paid the three per cent. in cash and
the first installment, but made default in payment of the second installment. The plaintiffs thereupon brought suit to recover the original debt. The defendant pleaded the resolution of composition without averring that he had paid the second installment. The plaintiffs demurred, and upon the demurrer being overruled set up the default in a replication. The defendant demurred to the replication. The plaintiff's were dissentient creditors throughout the whole proceedings in bankruptcy. STEWART, J., delivered the opinion of the court: A petition having been filed against the appellee in bankruptcy, he made a proposition for composition with his creditors, in pursuance of the 17th section of the act of Congress of 1874, chap. 390, to wit: That the proceedings in bankruptcy be suspended, and that they should receive, in full satisfaction and discharge of their claims of every kind against him, twenty-five per cent. of the samethree per cent. in cash payable to-day, after a resolution accepting this offer shall be confirmed by the court and ordered to be recorded, and the balance to be paid in money in three equal installments, in six, twelve and eighteen months from date of recording of such resolution, with interest to be secured by his promissory notes to be delivered to the creditors, their attorneys or assigns, within ten days after the recording of the said resolution; his assets in the meantime to be placed in the custody of George J. Appold, the proceeds of the same, when collected, to be applied to the payment of the said three per cent., and said promissory notes, as they respectively fall due. This proposition was duly accepted by his creditors, at a meeting called for the purpose of considering the same, by resolution to that effect. The appellants, holding his two promissory notes, each for the sum of $1,736.37, being present and voting, and proving their claim in the bankruptcy proceedings. This resolution, acceding to the appellee's proposition, was passed by the court and recorded.
In accordance with the terms of the composition, the appellee paid in cash three per centum of the claims against him, including the appellants', and delivered to his creditors, including the appellants, his promissory notes for twenty-two per cent. of their claims, and transferred to Appold, as required by the resolution, all of his assets of every description, as security for the payment of the promissory notes.
The three per cent. in cash, and first installment under the composition being paid, but the second unpaid, the appellants brought the suit for recovery on the original notes. Under this state of facts disclosed by the pleadings, the substantial question presented for our review is, whether the appellants can maintain this suit for recovery on the original
A preliminary question of practice has been argued by the counsel for the appellants, who insists that the plea of the appellee is defective, because it sets up, as he alleges, three distinct facts, constituting three distinct defenses in one plea, to wit: 1st, the recording of the resolution in bankruptcy. 2d, the fact that the appellants were present and voted; and 3d, the pendency of the proceedings in
bankruptcy. The detail of facts and proceedings, consisting of the averments of the composition and its acceptance, and its performance by the payment in money and delivery of the promissory notes of the appellee to the appellants; the fact of the appellants being present and voting, the recording of the resolution and the pendency of the proceedings in bankruptcy, was necessary to a clear understanding of the defense, and does not come within the scope of the rule against double pleading.
The statement of a multiplicity of facts, constituting the defense and material to its conclusiveness, even if there was surplusage, affords no ground for demurrer on that account. Code, art. 75, secs. 2 and 3. If the appellants can, notwithstanding the facts averred and admitted, collect their claim in this form, the object of the bankrupt law and its amendments, to wit: the discharge of the bankrupt from his debts under the terms provided, and the fair distribution of his assets amongst his creditors, is defeated, the proceedings in bankruptcy are nugatory, and the race for precedence amongst his creditors is open to a general scramble. Not only the federal but the state courts are at their command.
Bankrupt laws, it is well understood, discharge the contract, contra-distinguished from insolvent laws, which only liberate the person. 4 Wheaton, 194. Whilst the bankrupt is going through the process provided for the discharge of his debt under the direction of the only jurisdiction that can discharge these debts, is it possible that the state court can intervene and enable the creditors to pursue their remedies as if no such proceeding had taken place.
The seventeenth section of the act of 1874, chapter 390, provides that, in all cases in bankruptcy, whether an adjudication in bankruptcy shall have been had or not, the creditors of the bankrupt, at a meeting called under the direction of the court, may resolve that a composition, proposed by the debtor, shall be accepted in satisfaction of the debts due them. With some modifications, hereafter referred to, this provision is taken from the 126th section of the English Bankrupt Act of 1867. 32 and 33 Vict., Ch. 7.
Under that statute the creditors of the bankrupt may, without any proceedings in bankruptcy, resolve that a composition shall be accepted in satisfaction of their debts. Without the interven
tion of the court the requisite number of the creditors can determine whether he shall be discharged, and the registrar is to make registry of the resolution, if satisfied, that it passed in pursuance of the statute. Under our law, the composition is an incidental proceeding in bankruptcy. ceedings in the court of bankruptcy commence upon the filing of the petition for an adjudication in bankruptcy, either by the debtor in his own behalf, or by a creditor, against him. Sec. 4991 of the Rev. Stat.
The jurisdiction of that court is exclusive, except where otherwise provided by statute. Page 1, Rev. Stat., Sects. 563, 629, 630, 639, 711, 4972. Sects. 2 and 6, 4979, 5105, 4991, Chap. 390, Sec. 2 of the act of 1874. There is a broad and well
defined distinction between the arrangement of the courts in England, in regard to jurisdiction, and between our federal and state courts. Under the constitution of our courts, growing out of the form of our government, made up of state and federal authority, the bankrupt laws clearly provide for the exclusive jurisdiction of the federal court over matters of bankruptcy. That subject has been by the Constitution confided to the federal authority; when that court has acquired jurisdiction, it is not suspended by the proceeding for a composition. The seventeenth section declares that the provisions of a composition accepted by resolution,shall be binding on all the creditors, and may be enforced by the court in a summary manner, and disobedience punished as a contempt; and if at any time it shall appear to the court that a composition can not proceed without injustice or undue delay, the court may refuse to accept or confirm it, or may set the same aside, and, in either case, the debtor shall be proceeded with as a bankrupt, in conformity with the provisions of the law, and proceedings may be had accordingly. Where that court has jurisdiction of the case and all equities between the parties, with enlarged authority over the parties and subject matter for its final disposition, would it be quite consistent with the orderly administration of justice, especially as provided in regard to the exercise of jurisdiction of the federal and state courts, to say nothing of the limits to be observed between courts exercising a common jurisdiction, for the state courts to interfere and undertake to withdraw the proceeding, whilst in feri, from the court in bankruptcy, where it had its origin and where it may be proceeded with in all its bearings and modifications?
Under the 5105th section of the Revised Statutes, the creditors are prohibited from maintaining any suit at law or in equity for the recovery of their claims against the appellee. In this condition of things it is quite clear the appellants have no right to resort to the courts of the state for the recovery of their claims, nor to invoke their authority for the redress of their alleged grievances. See Miller v. McKensie. 43 Md. 404. The seventeenth section of this amendatory act further provides that the composition shall, subject to the priorities specified in the act, provide for a pro rata payment or satisfaction in money to the credilors. This provision is not in the English statutes, and must have been inserted for a purpose, and there are no English decisions of cases to be referred to, as throwing any light upon the subject. It was intended to have, and does exert, a controlling influence as to the effect and operation of a composition between the bankrupt debtor and his creditors. The creditors have the right to insist upon payment of the composition proposed by the bankrupt in money; if they choose to accept the promissory note of the debtor therefor, (which the learned judge in Reiman and Friedlander, 12 Blatchf. 312, noted might be done), such notes to justify the purposes of the act, must have the same effect as so much money. Otherwise the creditors and bankrupt, by a composition postponing the pay
ment and the failure to meet them, might avoid the operation of the bankrupt law, and, according to the theory of the counsel for the appellants, reinvest the state courts with jurisdiction over the subject matter and parties. Our bankrupt laws, as we understand them, mean by a composition, not the partial, but total satisfaction and discharge of the debt of the bankrupt, when approved by the court. The composition proposed, accepted and performed by payment in money, or promissory notes equivalent thereto, is binding upon the creditors, extinguishes and discharges the debt, and is an effective proceeding to accomplish such result. Miller v. McKensie, 43 Md. 304. The creditors have no right under such circumstances to resort to the state courts for the recovery of their original debts in case the notes are not paid. If the composition is to be held as made partly in money and partly in notes, not considered as money, and the part in money is paid, but the notes are not paid, as in this case, what is to be the effect? As far as paid, is that to operate as a discharge, or does the entirety of the old debt revive, and is the jurisdiction of the court to be divided up? Such can not be the result. The composition must be treated as effective. Some of the English authorities (Edward v. Coombe, L. R. 7, C. P. 519; In re Hatton, Chy. Appls., L. R. 723; but Ex parte Hemingway, 21 L. T. N. S., 278, the other way) construing their statute and the effect to be given to the extraordinary resolution of the creditors for a composition upon the existing debt of the bankrupt, seem to treat it as having the same operation as a voluntary composition deed. The composition, under our statute, depends for its validity upon the resolution passed by the prescribed number of creditors, binding alike on all of them, if their debts are included in the statement filed by the debtor, and finally confirmed by the court. See Walker v. Moore, 122 Mass. 501. In the case of National Bk. v. Porter, 122 Mass. 308, referred to, a material fact distinguishes it from this; there was no compliance on the part of the bankrupt with the terms of the composition.
Guild v. Butler, 122 Maşe. 498, 5 Cent. L. J. 423, also referred to, does not undertake to decide the question involved here. Until the bankrupt performs the terms of the composition, by payment in money or his promissory notes, to be treated as money, the composition is incomplete and ineffectual, but that would not invest the state court with jurisdiction, the remedy must be sought in the bankruptcy court, and the provisions of the statutes point out the mode of redress, and that must be exclusive; but when the bankrupt complies and performs the same by the payment in money, or, as in this case, with money and notes, the composition is an accomplished fact, and the results provided for in the act, necessarily follow.
The creditors having proved their claims in bankruptcy, and agreed to the composition, and the pro rata payment having been made to them by the bankrupt, part in money and part in his promissory notes, to be treated as money, are bound thereby, and have no right to pursue the recovery of their debts through the state courts as
if there was and had been no proceeding in bankruptcy.
NOTE. This case is open to the following observations: 1st. It was an action at common law between citizens of the same state and not "a matter or proceeding in bankruptcy." The state court therefore had jurisdiction over the action, and the bankrupt court never did and never could have jurisdiction over the action. Inasmuch as jurisdiction is simply the power to decide, the state court had the power to decide the legal effect of the proof of debt and resolution in bankruptcy. 2d. The composition took place in an involuntary proceeding, where the debtor never was adjudged bankrupt, and the provisions of the bankrupt law, in regard to the effect of the proof of a debt, did not apply to the case, as was correctly held in Maxwell v. Faxton, 4 B. R, 210. Inasmuch as those provisions merely suspend the right of action, the better doctrine is that even if they did apply the mere proof of the debt can not be pleaded as a bar to the action. Smith v. Dispatch Co., 37 N. J. 60; Brandon Manuf. Co. v. Frazer, 47 Vt. 88. 3d. Congress may provide for a conditional as well as an absolute discharge, just as the President may grant an absolute or conditional pardon. Ex parte Wells, 18 How. 307. Omne majus in se minus continet. By section 5119 of the Revised Statutes, Congress provided for an absolute discharge. The 17th section of the act of June 22d, 1874, merely provides that "the provisions of a composition accepted by such resolution, in pursuance of this section, shall be binding on all the creditors." The provisions of the resolution in this case were such as have always been deemed merely a conditional discharge. Even if Congress could not grant a conditional discharge, the logical sequence would be, not that the conditional discharge is absolute, but that the whole law relating to composition is void. 4th. The promissory notes of the debtor were, by the terms of the resolution, merely given to secure "the payment of the installments, and in this particular the resolution was almost identical with that in Reiman & Friedlander, 12 Blatchf. 562; s. C., 7 Ben. 455. In that case it was said: "Until the whole amount of the notes is actually paid, the debtor is not entitled to his discharge. The delivery of the notes does not of itself cancel the debt." This principle was held in Ex parte Charlton, L. R., 6 Ch. Div. 45, to be in accordance with "common sense, common construction and settled law." The state court should follow this construction of the federal court. 5th. Inasmuch as a discharge deprives a creditor of his right of property, a law relating thereto should be strictly construed. In re Shields, 15 B. R. 532; Ex parte Jones, L. R. 10 Ch. App. 663; This decision disregards this sound canon of statutory construction, and thus thwarts the intention of the legislature and the intention of the parties. When Congress adopted the English statute, it intended to adopt the English decisions as a part of the statute. Tucker v. Oxley, 5 Cranch. 34. When the parties passed the resolution they manifestly intended that nothing but payment should be a discharge. 6th. From these observations it follows that there is a conflict between this case and National Bank v. Porter, 122 Mass. 401. O. F. B.
J. 1. An untrue assertion by a person who is endeavoring to procure goods on credit, that he is not trading with and is not indebted to any other person, is a sufficient false pretense to support an indictment. 2. Where the representations were partly true and partly false, it is not necessary that the selling of the goods should have been induced by the false alone, or that the false should be independent and disconnected from the true; it is sufficient if the false formed a constituent and material part of the inducement, without which the goods would not have been sold. 3. Nor is it necessary that the false pretense should be such as would have deceived, or been likely to deceive, a man of ordinary prudence.
MURDER-INSANITY AS A DEFENSE-DEGREE OF PROOF NECESSARY-EXPERT EVIDENCE.- Pannell v. Com. Supreme Court of Pennsylvania, 5 W. N. 481. Opinion by MERCUR, J. 1. Where a prisoner on trial for murder pleads insanity, the burden of proof is on him to show by satisfactory and clearly preponderating testimony that he really was insane at the time of the homicide, but it is not necessary that the proof of the insanity should be so conclusive as to remove all doubt. 2. In a capital case, even though the general tenor of the charge is correct, if the judge give an instruction on any material question which is likely to be misunderstood by the jury to the disadvantage of the prisoner, a new trial must be granted. 3. It is well settled that the knowledge and experience of medical experts are of great value in questions of insanity, and when competent medical experts have testified intelligently in a case, it is error for the judge in his charge to say: We question very much whether you will realize much, if any, valuable aid from them, in coming to a correct conclusion as regards the responsibility for crime by this prisoner." 4. Where a witness has testified in chief that, having seen the prisoner many times, he never noticed anything which induced a belief in his insanity, it is error to refuse to permit the witness to be asked in cross-examination whether he had ever seen enough of the prisoner to justify an expression of opinion upon his sanity or insanity. 5. Evidence of general opinion of the mental condition of the prisoner in the neighborhood in which he was born, raised and lived for many years, is not admissible to prove insanity. Since, in order to prove insanity which will relieve a prisoner from the guilt of murder, it is not necessary to show that he was a frenzied maniac, but only that he was "not of sound mind," it may be better to ask a witness: "Was the prisoner of sound or unsound mind?" than "Did you or did you not discover anything that led you to think that he was insane?"
EQUITY-SUBROGATION-WHERE ALLOWED-ONE VOLUNTARILY ASSUMING A DEBT NOT ENTITLED TO -RIGHTS OF INTERVENING CREDITORS.-Webster's Appeal. Supreme Court of Pennsylvania. 5 W. N. 486. 1. Subrogation will not arise in favor of a stranger, but only in favor of a party who, on some sort of compulsion, discharges a demand against a common debtor. Subrogation, being founded on principles of general equity, will not be decreed where it would work injustice to the rights of others. 2. A and B were indorsers respectively of two notes drawn by C, holding, as collaterals, judgments confessed by C in their favor. When the note endorsed by A fell due, C went to B (A being absent and taking no part in the transaction) and induced him to endorse a new note to be given in pay. ment of it, promising to procure the assignment of the judgment held by A. Other judgments were obtained against C before this indorsement or assignment was made. Upon distribution of a fund produced by the sheriff's sale of C's real estate under a prior judgment: Held, that B having acted without any request from A was not entitled to subrogation.