The sun., 1873-07-11
LAW OF LIFE INSURANCE.
SETTLING INTERESTING AND I'M
PORTANT QUESTIONS.
Decision Of the Court Of Appesis-The Case
ofAiice q. Duiton Against Philip Will
ner-As Equitable and Just Decision.

eeci.ion of the Court Of Appesi.-Tho Case
ofAiice q. Dutton Against Philip Will
ner-As Equitable and Just Decision.
A decision has recently been rendered by
che Court Of Appeals OF this State In the case OF
Alice r. Dutton. administratrix, against Philip
wilmer, involving several interesting and i'm
portant questions In the law Of life insurance.
In the month Of December. 1867, Ormond II.
Dutton, then OF Boston, Mass, afterward one Of
che ministers Of Trinity parish, insured his life
FOR 5000 In the National Life Insurance Com
pany Of Montpeler, VT, and policy No. ,]94 was
issued to him by the company. II agreed
that the premiums to be paid from time to time
on this policy should be payable one-half In cash
and the other half in premium notes-that is to
SAY, the promissory notes OF OrmOnd II. Dutton,
bearing interest from the time OF their date. and
payable to the said COMPANY or its order.
In June, 1893, there were then outstanding
In the hands OF the National Life Insur-
ance Company Mr.. Duttons premium notes
Co the amount Of $977j. He determined
90 surrender his policy to the company to have
n cancelled, az the company had agreed In CON
sideration OF such surrender to return to him
his premium notes then outstanding. To carry
out this arrangement ormond II. Dutton em-
plOyed his brOther-n-law Philip Willner-nOw
Professor of Modern Languages In the Polytech-
mic Institute Of Brookyn-as his agent to sur
The policy was surrendered and cancelled In
June 1853 and the premium notes Of Ormond
III. Dutton were thereupon sent to the com
pany's agent In boston, Mr. Phelps, to be de-
hvered to q. II. Dutton. These notes were
while they were still in the hands Of Phelps, the
company's agent, and yet uncancelled,
Philip wilmer. the defendant IN this case, at the
instigation Of George ID. Dutton an uncle Of
Ormond's, consented to undo ~ much a. he
had previously done in pursuance OF his agency.
of h%ss and sse fs pSS hs se wss e
cordingly done the premium notes were sent
back to the company at Montpelier Vermont,
by Mr.. Phelps their Boston agent, enclosed In
the following letter
hArroS,L SI LIrE I lSsUE,N.. CosrAsy VT.
n u James 4 Phelps. Agent Boston July q, 1857
'DIin Sir Herewith send you c. u. button. notes,
NJ puto9 n Sans tS rfnew s irlends GfSrge D.
uncle and brother'in.law to o IT, D. II you viii renew
See eGI sas b. SS ne ,nh, boso SSs
we'll. represents that O. s a. well as he has been Tor
when he insured Apis. Ut 6C !. assistant editor to
orders 10 the fp.ccpa dnt6 9sae tS% hi. tSf he
sas Dsnene bs ana and M NH ." g oGtSr 6e rory M
n kept up and promptly pad IA future They want 70
par snnuay Please sy %he6Sr Or no you want t Mr
J,mrs T. PHELPS.
A NEW POLICY.
On receipt OF this letter the company issued
and sent new policy to Phelps. dated July %,
1888, which was delivered by Phelps to @. u.
Dutton. The new policy was numbered 1894.
like the original one. 1t was on the life OF
Ormond II. Dutton. and for the same amount
$500. The only difference was that the new
policy was for the benefit II George ID. Dutton
uncle, died in iSi; art, on his death Philip VIII
ner purchased his iutcr . In the policy Of 1868,
which was therenpon ,g;ned 70 wilmer
On the 18th of August, 1877, the second policy
was surrendered, unu one like II in all respects,
save that Il was " for the benefit Of Philip WILL
0rmond II. Dutton, the insured. died IN March.
ICY; During all these years he had never been
told that his life was sti insured for 5000 OF
the Ss97: IS in his premium notes which were re-
tained by the company on the issue Of the
policy OF 1888, SIC. II were paid OF bv dividends
declared ON the insurance on his life for nve
years, from lSO to 1854. The balance OF the
notes. 1855, was paid 10y q. ID. button and
In the month OF August, 1893, the company
paid wilmer 500, the fun AMOUNT Of the
since then three post-nortem dividends have
been paid on the policy to wilmer.
Mrs. Alice Il. Dutton brought an action
against Mr.. wilmer In the Supreme Court Of
King county 70 regooyeT the moneys paid to
the policy issued on her husbands lie. The
case was tried before Judge Gilbert at Special
Term. Jan. "a. 1872. Judge Gilbert decided that
by the surrender and CanCelling of the original
policy Ormond II. Dutton surrendered all his
Interest 10 the policy; that he had no interest in
George Dutton and wilmer did not
q, ,ot as ., 0rmond. agents lin in apPlyins
or In paying premiums, nor did wilmer act
as agent In receiving dividends ON the policy
tnsueu 70 hln' Inc complaint Was dismissed
without costs.
An appeal was taken to the General Term,
and was heard ny Judges j. 4. barnard and Tap
pen, in November last. Judge Happen delivered
the opinion of the court, affirming the judgment
in these words THE Attendant It was Ti" undSmSt-
edly creditor Of Dutton for money loaned.
The defendant wife and Dutton were brother
and sister, and they were the children of Ormond
DuttOn deceased, to whom Ormond II. Dutton
Mas indebted In large sum $500 or $1,000.
the estate realized nothing; hence the
children OF the elder Duttun Obtained moth
ing from the fathers estate, because his
son, the plaintiffs intestotc was so largely
debtor TO the estate and nothing
came Of the debt The defendants wife had
therefore an insurable interest In her brothers
life that il to say, her fathers representatives
could hold Policy on tnat me TO See4re @ the IN
band by novation, therefore had a most sub
stantial Interest 70 be secured 10y such insurance
The case was then carried by Mrs. Alice z.
Dutton to the Court Of Appeals; Judge kapallo
delivered an able and exhaustive opinion, re-
versing the judgment OF the General Term and
ordering new trial To- be had. In this opinion
his view of the case is thus disposed Of: THE
state of the accounts between u. H. Dutton and
the estate of his father, or between him and the
defendants, can have no bearing upon the case
The policy was not pledged for any debt, ana II
any l. due 20 the defendant it il not a lien on
the proceeds OF the policy.
THE JUDGES OPINION,
Judge Rapallo says This policy shows
dpon its face that it was a reissue OF
the original policy No, l3gi. II acknow-
lodges the receipt OF the premium from
o. H.. Dutton; states that he Is the
assured insarcs his NE in the sum Of 5000 for
the benefit uf George ID. Dutton and Philip Will
nor and states that It Is subject 10 all the liabi
ties and entitled to all the benefits of original
policy No. l,3A. The substance of
the whole transaction stripping IL Of immateTill
matter Is, therefore, that the defendant having
undertaken to act az the agent Of q. II. button
for the purpose OF having his policy cancelled and
thus relieving him from further Liabilities for
premiums or on his premium notes, instead OF
so doing, agreed with the company 10 continue
the policy for the benefit OF himself and his as
sociate q. u, Dutton, leaving the premium
notes of q, III. DuttOn in the hands Of the com
pany uncancelled and his prln, Ipal exposed e.
the risk 81 being called upon for their paymen,
In case OF the Insolvency Of the company.
" 1t Is not difiicl1Sto see the ad yantages gained
by the defendant and his associate by making
this use Of the position in which he was placed
by his agency. II he had applied TO the com
pany on his own account for an original insur.
ance upon the life N q. II. button he would
have been Obliged To- pay the increased rate OF
premium resulting from the addition Of up-
WA rd pf Naar I'm hn ana f.f ha IA