Spring v. South Carolina Insurance Company
21 U.S. 268

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U.S. Supreme Court

Spring v. South Carolina Insurance Company, 21 U.S. 8 Wheat. 268 268 (1823)

Spring v. South Carolina Insurance Company

21 U.S. (8 Wheat.) 268

Syllabus

An insolvent debtor has a right to prefer one creditor to another in payment by an assignment bona fide made, and no subsequent attachment or subsequently acquired lien will avoid the assignment.

Such an assignment may include choses in action, as a policy of insurance, and will entitle the assignee to receive from the underwriters the amount insured in case of a loss. It is not necessary that the assignment should be accompanied by an actual delivery of the policy.

Upon a bill of interpleader filed by underwriters against the different creditors of an insolvent debtor, claiming the fund proceeding from an insurance made for account of the debtor, some on the ground of special liens and others under the assignment, the rights of the respective parties will be determined. But on such a bill, those of the co-defendants who fail in establishing any right to the fund are not entitled to an account from the defendant whose claims are allowed of the amount and origin of those claims.

On a bill of interpleader, the plaintiffs are in general entitled to their costs out of the fund. Where the money is not brought into court, they must pay interest upon it.

An insurance broker is entitled to a lien on the policy for premiums paid by him on account of his principal, and though he parts with the possession, if the policy afterwards comes into his hands again, his lien is revived unless the manner of his parting with it manifests his intention to abandon the lien. In such a case, an intermediate assignee takes cum onere.

But in the case of other liens acquired on the policy, if it be assigned bona fide for a valuable consideration while out of the possession of the person acquiring the lien, and afterwards return into his hands, the lien does not revive as against the assignee.

Evidence that a subscribing witness to a deed had been diligently inquired after, having gone to sea and been absent for four years without having been heard from, is sufficient to let in secondary proof of his handwriting.

Page 21 U. S. 269

This was a bill of interpleader filed by the South Carolina Insurance Company in the court below on 25 April, 1816, against the appellants and Gray & Pindar, William Lindsay, and John Haslett, praying that they might file their answers and interplead so that it might be determined to whom the proceeds of a certain policy of insurance should be paid. It appeared by the pleadings and the evidence in the cause that this policy had been made on 6 May, 1811, by the respondents, the South Carolina Insurance Company, upon a vessel called the Abigail Ann, then lying at Savannah, on a voyage to Dublin or a port in St. George's Channel for account of John H. Dearborne and the respondents, Gray & Pindar, the latter of whom were merchants residing at Charleston, South Carolina, and at that time part owners of the ship, but on 27 May, 1811, sold their interest therein

Page 21 U. S. 270

to Dearborne. On 5 July, 1811, the vessel sailed on the voyage insured. It appeared that the respondent, Lindsay, as the agent of the parties, had procured this policy to be underwritten. It also appeared that Lindsay had delivered the policy to Gray & Pindar, for the use of Gray & Pindar and Dearborne, without at the same time expressly claiming any lien upon it.

After the sailing of the Abigail Ann, Dearborne and Gray & Pindar jointly purchased and loaded another ship called the Levi Dearborne, of which vessel and cargo Dearborne owned two-thirds and Gray & Pindar one-third. In September, 1811, this vessel sailed from Savannah for Europe, and Dearborne went in her. Before sailing, D. had drawn bills on England, some of which were endorsed and negotiated by Lindsay, which were returned protested for nonacceptance, and Lindsay was compelled to pay them. Haslett also made advances to Dearborne and took his bills on England, secured by a bottomry bond on the ship Levi Dearborne. These bills also returned protested.

Before Dearborne left Savannah, certain misunderstanding arose between him and Gray & Pindar which it was agreed should be referred to arbitrators. On 21 September, 1811, the arbitrators and one Harford, as umpire, awarded that Gray & Pindar should execute a bill of sale of the ship Abigail Ann to Dearborne and deliver to him the policy of insurance thereon without unnecessary delay. Before he sailed, Dearborne directed Harford to transmit to his wife, in the

Page 21 U. S. 271

District of Maine, to the care of Seth Spring & Sons, the bill of sale and policy of insurance which had been thus awarded to him. The policy was subsequently sent by Harford to Lindsay, to be put in suit against the South Carolina Insurance Company.

The ship Levi Dearborne was obliged to put into New York by stress of weather, and there Dearborne, on 28 October, 1811, made an assignment of the Abigail Ann and of his interest in the ship Levi Dearborne and of the policies upon both vessels, to S. Spring & Sons, to secure the payment of a debt due by Dearborne to them, amounting to about $16,000. The handwriting of Dearborne and of the subscribing witness to the deed of assignment were both proved, and one Maria Teubner, who testified to that of the subscribing witness, swore that she was one of his creditors and had taken pains to obtain information of where he was, but without success. The last account of him was that he had entered on board of an American privateer during the last war, and had not been heard of for four years. The assignment was made subject to pay out of the cargo of the Abigail Ann, if it reached the hands of his correspondents in England, certain bills which he had drawn on them in the confidence that they would be paid out of the cargo of the Levi Dearborne. Nothing was realized from that vessel and cargo, and the Abigail Ann was lost at sea. An action was brought upon the policy on the Abigail Ann in the names of Dearborne and Gray & Pindar

Page 21 U. S. 272

against the South Carolina Insurance Company, and judgment obtained against the latter in 1815 for the sum of $9,800. Dearborne died in March, 1813. On 24 February, 1812, Lindsay, on the return of the bills endorsed by him, issued an attachment under the laws of South Carolina against Dearborne, who was then absent from that state, and served a copy upon the South Carolina Insurance Company. On 21 May, 1812, Haslett also issued an attachment against Dearborne and served a copy on the South Carolina Insurance Company. No appearance was entered for Dearborne in these attachment suits, and judgment was obtained on Lindsay's on 19 April, 1813, and on Haslett's on 10 June, 1815.

At the hearing in the court below, after the depositions and regularly proved exhibits in the cause had been read, an order signed by Harford, as agent for Dearborne, and S. Spring & Sons, on Lindsay, in favor of Haslett, was read in evidence, without notice to the appellants, or an order for its being read at the hearing.

The circuit court decreed that the demand of Lindsay should be first satisfied and paid out of the fund; that of Gray & Pindar next; that of S. Spring & Sons next; that Haslett was entitled to the surplus, if any; and that S. Spring & Sons should account and prove their claims against Dearborne either by filing a cross-bill or by answering upon interrogatories.

From this decree an appeal was taken by S. Spring & Company to this Court.

Page 21 U. S. 282

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