GLEASON 'Lt. FIRST NAT ·
FIRST NAT. BANK. OF LAPEER.
(Circuit Oourt, E. D. Michigan.
October 16, 1882.)
In an action for moner had and received" the defendant may avail himself of any defense showing that, equitably, he is entitled to retain the money all against the plaintiff.
INsuRANCE-POLIOY PAYABLE TO OREDlTOR-PURCllA.8E AT EXEcunoN BALB.
Where the owner of property caused it to be insured, and made the poliCies payable to a creditor, who subsequently brought suit against the owner for debt secured by the policies, obtained judgment, levied an execution. upon the property insured, and bought it in upon the sheriff's sale, and shortly after the sale, the property was burned, and the creditor received the proceeds of· the insurance, it was held that, while the purchas!'of the property was technically an extinguishment of the debt secured by the policies, yet that the creditor was equitably entitled to retain the 'proceeds of the insurance, but must credit the same upon the amount of his bid, in case the debtor saw ofit to redeem.
On motion for aNew Trial. This was an action for money had and received. The fa.cts were that one Alexander Mair, the plaintiff's assignor, had borrowed ,money olthe bank to the amount of $5,000, and had given his note therefor, secured by five policies of insurance upon certain mill property, to the amount of such note. Subsequently he became further indebted to the bank, a suit was begun for the entire indebtedness, judgment on cogJwvit obtained, and execution issued On the Same day. The execution was in due time returned satisfied by a sale of .all of Mair's property, including the mill. upon which the aforesaid policies of insurance had been underwritten,the bank being the purAbout two months after the sale upon execution, tb,e mill burned, and th,e bank collected. the money upon these policies of insurance, which had been fnade payable to the bartle. This suit.was brought by the assignee of Mair to recover the amount collected by the bank. Upon this state of facts the court charged that, while technically the purchase of the mill property by the bank for the full amount of the judgment was anextingllishment of the debt for which the policies were given, yet that eqllitablythe bank was entitled to the money representing the value of its mill, ano. directed a verdict for the defendant. C. D. Joslin, for plaintiff. Mr. Williams; for defendant. BROWN,D. J., 'J;"he action for 'money had and received is an equitable action, and, as Mr. Greenleaf says, (vol. 2, § 117,) "may ill
general be proved by any legal evidence showing the defendant has received or obtained possession of the money of the plaintiff, which, in equity and good conscience, he ought to pay over to the plaintiff. · lit .. But if the defendant has any legal or eq uitable lien on the money, or any right of cross-action upon the same transaction, the plaintiff can onl)' recover the balance after satisfying such counterdemand." In Eddy v. Smith, 488, it is said that the same principle which allows the plaintiff in an action of assumpsit to l'ecover what ex aqua et bono he is entitled to, operates in favor of the defendant when. called upon to tliernoney.. If he. can show the lletter equity, he will be permitted to retain it. This was a case where the pm'chaser of an equity of redemption demanded from a mortgagee the surplus remaining in his hands after satisfying the mort'gage and expenses of a saJe, and the mortgagee showed that subsequent to the mortgage he obtained a judgment against the mortgageor, which was a lien upon the land, at the time of the transfer of the equity of red'emption, to an amount equal to the surplus; and it was held, in an action of Qssump.sit by the purchaser agai.nst the mortgagee, that he was not entitled to recover such surplus. See, also, Moses v. Macferlan, 2 Burr. 1010. We do not dispute plaintiff's contention that a policy of insurance is a personal contract; that a mortgageor and. a mortgagee, or other owner and lienholder, have separate insurable interests, and that the right of subrogation does not exist as between them. If the mortgagcor insures the mortgaged property in his own name and it is burned, the money belongs to him and not to the mortgagee, though the latter may thereby lose his whole debt. Leading cases upon this point are: Columbian Ins. Co. v. Lawrence, 10 Pet. 507; Carpenter v. Provident TVa,.shin,gton Ins. Co. 16 Pet. 495,-in which it was held tha.t the mortgagee had no claim to the benefit of a policy of insurance underwritten for the mortgageor . McDmald v. Adm'r of Black, 20 Ohio, 18.5, was a case where a. . policy effected by a mortgageor contained the words "for whom it may concern," but it was held that the mortgagee could not claim the benefit of insurance if at the time the mortgage had not become absolute at law by failure to pay the money. In PlYJn/jton v. Ins. Co. 43 Vt. 497, a person having acquired title by levy of an execution upon premises insured by the execution debtor, . was held 'not entitled to the proceeds of the policy in case of loss by
GLEASON V. FIRST. NAT. BANK OF LAPEER.
fire. I had occasion to apply the same principle to a. case where the owner of a vessel, injured by collision, sought to recover from the owners of the vessel in fault, which had been sunk by the collision, the amount of certain policies of imurance underwritten upon her. The Peshtigo, 9 Cent. Law J. 285. On examining the law in this case I became entirely satisfied -that libelant's lien upon the vessel for his damages not attach to her policies of insurance, for the reason that the policies were written for the benefit of the owners and ' not for that of the creditors of the vessel. A moment's consideration, however, will show there is but a slight. analogy between these cases and the one under consideration. Here the policies were originally made payable to the defendant for its secnrity, and until its debt was actually paid defendant had a right to the proceeds of the policy. Had ..the property burned before sale upon execution, tae amount realized from the policies would have belonged to the defendant, by virtue ofjheirassignme,nt to him. He ought 'position becaus'e his title had been not to be placed in 'a upon execuchanged from that of a creditor to that of tion, with a right of redemption reserved to' the debtor. It is true that the purchase of the prO'perty upon execution was· a technical extinguishment of the debt, or, rather, a satisfaction of the execution which represented it, but it was so only upon the theory that thl. defendant became thereby the owner of the pr9pl;lrty, or a lienholder to the amount of its purchase money. It has always been held that if a sheriff levy upon and'sell lands not belonging to the execution debtor, the court will require the moueys to be refunded, the return of the sheriff corrected, and a new execution to be issued for the unpaid portion of the judgment. Ad.triM v. Parmeler, 5 Cow. 280; Tudor v. Taylor, 26 Vt. 444; Warner v. Helme, 1 Gilman, 220; Zeigler v. McCormick, 14 Reporter, 440. If in this case the loss had occurred before the sale, defendant would have recovered the amount of the policies as payee thereof, and would have bid just so much less for the property a8 was represented by the amount so recovered; but as the mill was burned after the sale, defendant was entitled to the money as the payee of the policy, and the plaintiff was entitled to a credit of this amount upon the amount of the bid, in case he saw fit to redeem. A different rule would work a manifest injustice, and hold out a strong inducement to the destruction of the property. It would, in short, take $4,500, the amount of the policies, from the defendant's vaults, and put it into the plaintiff's pocket; in other v.13,no.13-46
words, plaintiff would' have paid hia debt, and recovered back the money used in paying The case of Mickles v. Rochester City Bank, 11 Paige, 119, is in point. It was held in, this case that where a judgment creditor of a. corporation insured its real estate in the joint names of himself and the corporation, and the property was .afterwards sold under his judg. ment and bid in by him, and after such sale the property was par· tially destroyed by fire, and the ,property was not redeemed, from the sale, he was entitled to the money received from the insurance compa.ny on account of such 10s8. It seems to me entirely clear that the plaintjff has no right to the money sought to be recovered. The motion must therefore be denied.
THE RAILROAD TAX CA.8ES. COUNTY 011' SAN
(Uircuit Oourt, D. Oalijornia.
CONSTITUTIONAL LAWS-EQUAL PROTECTION 011' THE LAWS-TAXATION.
The fourteenth amendment of the constitution, in declaring that no state within its jurisdiction the" equal protection of the shall deny to any laws," imposes a limitation upon the exercise of all the powers of the state which can touch the individual or his property, including among them that of taxation.
SAME-B<rRDENS TO BE EQUALLY IMPOSED-UNEQUAL TAXATION lNHffiITED.
The" equal protection of the laws" to anyone implies not only that he has a right to resort, on the same terms with others, to the courts of the country for the security of his, person and property, the prevention and redress of wrongs, and the enforcement of contracts; but also that he is exempt, from any greater burdens or charges than such as are equally imposed upon all others under like circumstances. This equal protection forbids unequal exactions of an! kind, and among them that of unequal taxation.
3, SAME-UNIFORMITY IN TAXATION-RULE 011', CONSTRUED.
Uniformity in taxation requires uniformity in the mode of assessment as well as in the rate of percentage charged.
ApPLIES TO ARTIFICIAL AS WELL AS NATURAL PERSONS.
By the thirteenth article of the constitution of Cnlifornia, "a mortgage, deed of trust, contract, or other obligation by which a debt is secured, is treated, for the purposes of assessment and taxation, as an interest in the property affected there. by;" amI, "except 'as to and other quasi public corporations?" the value of the property affected, less the value of the security, is to be assessed and taxed to its owner, and the value of the security is to be assessed and taxed to its holder. Section 4. But by the same article" the franchise, road-way, road-bed, rails, and rolling stock of all railroads operated :u mOJ'e one county" are