The Indianapolis leader. (Indianapolis, Ind.) 1879-1890, 1881-11-12
OPINIONS
OF the United States Supreme Court, Rela.
tive to Agency Deposits and Life Insur-
ance Policies.

OF the United States Supreme Court, Rela.
| tive to Agency Deposits and Life Insur-
ance Policies.
WASHINGTON, Nov. IA decision of some
importance to banks, Insurance Companies
and all corporations which employ agents,
was rendered in the Supreme Court to-day
in the case of the Central National Bank, of
Baltimore, against the Connecticut Mutual
Life Insurance Company. The litigation
grew out of deposit OF about $ll, 900, made
in the bank above named, by A. H. Dillon,
Jr., General Agent OF the Connecticut Mu-
tual Life Insurance Company, and standing
on the books of said bank in the name of
said Dillon as such ageut 1t appears from
the evidence that Dillon was in the habit of
depositing in the bank TO the credit of his
agency account money belonging to him
personally az we'll a. money collected for
and belonging TO the Insurance Company,
and he drew checks against this agency on
account for his own personal use, as well as
for the remittances which be made the
Company, whose agent he was. In 1873 the
bank discounted for Dillon and his wife
personally, note of SIC, 600, the proceeds of
which Dillon used In certain business
speculations. When this note fell due it
was not paid, and the Bank on the lst of
June, 1874, charged II to billions agency ac-
count The Insurance Company maintained
the undrawn balance of the agency ac.
count, about s11, 900. belonged to them, and
that the bank had no right to satisfy out of
their funds the note given by Dillon to raise
money for their own personal use. The
Company therefore brought suit to recover
from the bank the amount of this un
~ kata ~
In june. 1878, the Court rendered decree
directing the bank to pay the Connecticut
Mutual Life Insurance Company the
amout of the fund, with accrued interest.
The bank thereupon appeals to this Court,
which holds that when against q bank ac-
count designated as one kept by depositor
in fiduciary capacity the bank seeks to
personal obligation, the depositor
known to have been contracted for his
private benefit it (the bank) must be held as
having notice that the fund represented by
the account is not the individual property
of the depositOr. II it is shown to consist in
whole or in part of funds held by him in
trust relation, the Court further holds
Appeals in the case of Kentucky VS.. Hal
lett-that if the money held by the person
in fiduciary capacity, though not as trus-
tee, had been paid by him to his account at
his bankers, the person for whom he holds
the money can follow it, and has charge on
the balance in the bankers hands. even al
though it is mixed with his 1.-THE depositor's)
money; also, that the bank can not be per-
mitted to assert its own claim to the balance
of the agency account as against the equity
of the beneficial owner, when the bank has
notice, either actual or constructive of such
equity. The decree of the Court below is
therefore affirmed. The opinion was by
Justice Matthews. I'D
A decision was also rendered to-day in the
insurance case of Caroline Klein AGAINST the
New York Life Insurance Company, in
which is presented the question whether the
penalty for the future for the non-payment
of premiums expressed in the policy of the
insurance can be enforced in all cases re-
gardless of excuses or reasons which may be
assigned for default. This Court holds that
1t can. That excuses offered for the non-
payment of premium can not be taken into
that the provision for the re-
lease of the Company from liability Oh fail
ure to pay premiums when due Is of the
very essence and Substance of the contract
of q life insurance company, and that to
hold the company to its promise to pay in |
insurance, Notwithstanding the default in |
sured in making punctual payment is to |
destroy the very substance of the contract |
This Court of equity can not do. The de- |
cree Of the Circuit Court is therefore |
affirmed. The opinion was by Justice |
Woods 7