GREY, V. C.
Two suits, one by De Haven Lance and others, executors of William L. Lance, deceased, against Mary S. Bonnell, administratrix of Samuel Bonnell, deceased, and others; the other by the Penn Mutual Life Insurance Company against the parties to the first suit.
These two suits are brought to determine the ownership of two policies of life insurance, or the right to the moneys payable thereon; and, as the basis of the claims of the representatives of William L. Lance (who are complainants) to both policies is the same, the causes have been heard together by agreement of all parties. A large number of points of law have been presented and argued, but the case is controlled almost wholly by the questions of fact. The proofs and exhibits are extremely voluminous, and yet the essential facts which dispose of the causes are within quite a narrow compass. The policy in the Mutual Benefit Life Insurance Company of Newark is No. 61,177, and was issued directly to Samuel Bonnell on the 25th day of November, 1869, for the payment of $10,000 upon the life of William L. Lance, Sr. Another policy (No. 61,176) was issued at the same time, on the same application, as to which no questions are raised, and it is mentioned simply to dismiss it from the case. Mr. Bonnell was the applicant for policy No. 61,177 as a creditor of Lance, stating that he had an interest in Lance's life to the amount of $20,000. Lance was aware that Bonnell was the applicant, and most probably knew that the policy was, on its face, issued to Bonnell absolutely, and not as collateral, for Lance made and signed the required statement as to his age, condition of health, etc. Nothing on the face of the policy or the application therefor in any way indicated that Bonnell's ownership of it was in any way qualified, or that Lance had any interest in it whatever, save that the death of his body was to furnish the occasion for its payment. The Penn Mutual policy for $7,000 was issued on the 10th day of April, 1869, to William L. Lance, Sr., upon his own life, on his own application, and was on the 11th day of April, 1872, assigned by Lance to Bonnell with the assent of the company given on April 25, 1872. This assignment is under seal, expressed to be "for value received," and purports to transfer the policy and all moneys and advantage to come due thereon to Bonnell without any limitation whatever. These were the methods of vesting title in these policies in Bonnell in his lifetime, and they become important in fixing the burden of proof which must be carried by those who assert that these transactions in their inception did not convey to Mr. Bonnell an absolute, but only a qualified, ownership. The Penn Mutual policy was on April 8, 1885, surrendered to the company by the defendant Mrs. Bonnell, administratrix of Bonnell, and a new paid-up policy for $1, 180 upon Lance's life, payable to the estate of Bonnell, was issued to Mrs. Bonnell, in its place. As both the executor of Lance and the administratrix of Bonnell claimed the ownership of this policy, the insurance company filed its bill of interpleader, which was sustained by a decree taken March 10, 1896, and paid the $1, 180, with interest, into this court; and the answer of the executor of Lance asserting his claims to the policy, and of the administratrix of Bonnell asserting hers, are taken to be their interpleadings under that decree, and make one of the issues now under consideration. The Mutual Benefit policy has been adjusted as to loans, etc., made upon it, and ascertained to be worth $7,442.02, which the company declares itself ready to pay to such person as this court shall direct, the executor of Lance having notified the company not to pay the amount due to the representatives of Bonnell. To recover this money the other suit now before the court has been brought by the executors of Lance against the Mutual Benefit Company and the administratrix of Bonnell, claiming that Lance was also the owner of the Mutual Benefit policy. The right of William L. Lance, Sr., to these policies is in both suits alleged to rest upon the same series of facts arising from the dealings between Lance and his sons and Bonnell, and they may, therefore, be considered together. William L. Lance, Sr., in his lifetime, resided, while the events here in detail were happening, near Plymouth, Pa. He was the father of William L. Lance, Jr., and of Walter W. Lance, De Haven Lance, Oscar M. Lance, and Charlesto Lance. They admit the substitution of the later policy for $1, 180, in place of that first issued. The answer proceeds to allege payment of the indebtedness to Bonnell in the same method above recited in the Mutual Benefit suit, and the executors of Lance claim that they are the owners of the policy substituted, and that they should be paid the amount ($1, 180) deposited in court by the Penn Mutual Company in this suit. The answer of the administratrix of Bonnell in the Penn Mutual suit makes the same denials and allegations, and sets up the same defenses of laches, the statute of limitations, the bar of the decree of Union county orphans' court to limit creditors, and the bar of the decree in the Philadelphia equity suit, wherein it was decreed that Bonnell did not hold the Gould property as security, etc., which are above set forth in the Mutual Benefit suit.
D. C. Harrington, for complainants.
John O. H. Pitney and George R. Van Dusen, for defendants.
GREY, V. C. (after stating the facts). There is a reference in each case in the pleadings of the executors of Lance to a conveyance to Bonnell in his lifetime of a tract known as the "Gould and Pringle Lot," but neither the pleadings nor the proofs show any connection between this incident and the transactions touching the life insurance policies, or the Gould tract, the proceeds from which are claimed to have discharged all the indebtedness of the Lances to Bonnell, and thus to have released the policies. This Gould and Pringle lot was first dealt with by an agreement dated October 7, 1869, between William L. Lance, Sr., and Samuel Bonnell, Jr. The former agreed to convey the lot in question to the latter in consideration of $7,500, advanced to Lance by Bonnell. Lance, it was agreed, should "have the same reconveyed to him at any time upon payment of amount of moneys so advanced as above." Bonnell was given by the contract, until he was fully repaid his advances, the privilege of purchasing one-half the property for $6,000. Bonnell made the advance of the $7,500. On October 21, 1809, Lance conveyed the entirety of the Gould and Pringle lot to Bonnell by deed of that date. There is no evidence whatever that the specific advance of the $7,500, the payment of which was, by the agreement, to entitle Lance to a reconveyance, was ever paid by him to Bonnell. A deed is offered, dated February 9, 1874, made by Samuel Bonnell and wife to George B. Bonnell, conveying the Gould and Pringle lot. This deed appears to have been delivered on March 25, 1876, for a letter of that date from Samuel Bonnell to George Bonnell mentions that, "I send you a deed," etc., "which I desire you to hold in trust for Mary S. Bonnell and Mrs. Lance, they to have one-half interest in the property," etc. George accepted the trust, and Samuel gave to William L. Lance, Sr., a memorandum of the same trust, dated July 5, 1876, with an appended declaration by George Bonnell of his acceptance. This declaration was assented to by William L. Lance, Sr., the royalties from the tract were for years divided under it, and the rights of Bonnell and of Lance in this particular piece of land and its profits appear to have been adjusted between William L. Lance, Sr., and Samuel Bonnell, Jr., in their lifetime, in the year 1876, upon a basis which they and those who came after them accepted without question until the suits presently under consideration were begun in 1896. The Gould and Pringle property presents no side which involves any dispute between the parties. The transactions concerning it were not involved in the general account of the parties, but were, in their origin, limited to the advance by Bonnell of the $7,500 to Lance. It is extremely probable, though there is no definite proof of the fact, that this advance was adjusted by the trust settlement securing to Mrs. Bonnell and to Mrs. Lance, each, one-half of the property. Mr. Bonnell, in his letter of July 5, 1876, produced by the Lances, does say that the consideration money "was paid by Mrs. Bonnell and Mrs. Lance," and there is some other testimony which hints at this mode of settlement, but my impression is that, if this were done, it was effected by a novation, or rearrangement of payments, whereby Mrs. Bonnell paid Mr. Bonnell his advance of $7,500, or obtained him to discharge Lance from that indebtedness as consideration for her half of the property, and Mrs. Lance procured her husband to allow her to receive by the declaration of trust the benefit of the other half. Whatever was in fact the ground of the trust settlement, it was final and undisputed. It had no relation whatever to the general business transactions of Lance and Bonnell, and was totally disassociated from the life insurance policies, so far as William L. Lance, Sr., or Samuel Bonnell, Jr., dealt with them, or either of them. There was some testimony which was claimed to show that Mrs. Bonnell obtained the funds wherewith to pay the premiums on the policies after Bonnell's death from the royalties paid her by the trustee of this Gould and Pringle lot. The proof failed to establish the fact, but, in my view, if it were indisputably shown, it would be of no significance, because Mrs. Bonnell was in her own right entitled to the royalties paid her from the Gould and Pringle lot; and William L. Lance, Jr., and all the Lances who claim under him, appear to have accepted that situation for years without question, and she might use the royalty money as she chose.
The frame of the bill, and its statement of the right to relief by having the two policies decreed to be paid to the complainants, is based upon the claim that the policies were put in Bonnell's name, not upon consideracionsinterest in Bonnell, and it is much more reasonable to infer that this single entry charging to Lance's account the premiums due at the time of the assignment was made as part of the bargain between them for the transfer of the policy to Bonnell, to the effect that Lance should be responsible for this, the last, premium falling due while he held the policy, than to assume, without proof, that this entry is evidence contradictory of their expressed bargain made on the same day.
In all the great bulk of testimony submitted in the cause there is but little reference of any kind to the life insurance policies. On October 31, 1870, Bonnell wrote to Lance: "Mr. McCorkle says your policy is good. Now, you will have to pay up this year, so as to keep it good, which I would do [at] once." At this time Lance was the holder of the Penn Mutual policy, which was issued to Lance on April 10, 1809, and afterwards assigned by him to Bonnell on April 11, 1872. If the mention in this letter of "your policy" has any relation to either policy now in dispute (and there is no proof that it has), it must be inferred that it was to the policy in the Penn Mutual, then held by Lance, which Bonnell advises him to "keep good." This incident of proof has, therefore, no significance on the present issues. William L. Lance, Jr., testifies that about 1809 or 1870 Bonnell said to him that they (the Lances) were not shipping enough coal to reduce the debt, and "I have no security to show this thing except the insurance on your father." The time when this conversation took place is not stated with enough certainty to make proof of much value, nor is there anything narrated which indicates that the phrase "insurance on your father" relates to either of the policies now in dispute. The Mutual Benefit policy was the first obtained by Bonnell, and came to him on November 25, 1869, but the conversation which took place in 1869 or 1870 may have been held before he got this policy, and may refer to another insurance. The statement itself is not necessarily inconsistent with an absolute holding by the notice of the insurance referred to, for policies which are absolutely held on the life of a debtor may be fairly described as securities. The admission of Bonnell is too dubious in its character to be of any weight. Joseph Lance testified to a conversation which he overheard in October, 1869, between his father, William L. Lance, Sr., and Mr. Bonnell, just after the Avondale Mine disaster in September, 1869. He swears that Mr. Bonnell, in speaking of the dangers incident to mining, said to William L. Lance, Sr., "You should have insurance on your life; It is a good thing to have for your children," etc. The witness was then a boy of 15. The alleged statements of Mr. Bonnell could not possibly have referred to either of the policies now in dispute, as Mr. Bonnell did not receive the first of them until November 25, 1869, about two months after his alleged statement. Nothing in this conversation identified the matter talked of with the policies the ownership of which is now under consideration. A certificate of acknowledgment of a loan upon the Mutual Benefit policy No. 61,177, which is dated November 25, 1871, signed, "W. L. Lance, per S. Bonnell, Jr.," for $490, in favor of the Mutual Benefit Company, is offered in evidence. This signature is Mr. Bonnell's handwriting, but there is no proof whatever that Lance either arranged the loan, or paid it, or even knew of it, or that his name ever appeared until, on the call of the counsel of the complainant in this suit, the Mutual Benefit Company produced the certificate. Loans were made on both policies in dispute, but they were all to Bonnell, and for his benefit. The foregoing is a short summary of the evidence by which the complainants claim that they show that the written contracts under seal, which vested absolute title to the policies in question in Mr. Bonnell, should be reformed, and held to have passed to him only a qualified interest by way of collateral security.
The proof on the side of the defendants, apart from the written contract which gave Bonnell absolute title, is much stronger to show that his title was complete, and not limited, than the proof offered to overcome the written contract. In point of fact there is no proof whatever that Mr. Lance ever paid any premium or asserted any ownership in these policies after they had come to Mr. Bonnell by a title absolute on its face. If the policies were in truth held by Mr. Bonnell as collateral security for the payment of Lance's debts, then Mr. Lance must have known that fact as to the Mutual Benefit policy since November, 1869, and as to the Penn Mutual policy since April 11, 1872. The complainants' claim is that the policies were to be held by Bonnell until the Lances paid their debt to him, but there is not even a claim that Bonnell contracted to continue payments for the Lances' benefit after their debts were paid. Yet they say, as is hereinafter shown, that all their debts to Bonnell were paid in 1878, and they admit that they set up no claim to the policies when the debt was discharged, but suffered Bonnell to continue to pay the premiums, and on these payments they now claim the benefit The complainant has submitted no proof which is sufficiently weighty to overcome the face of the written contracts, which vested absolute title to the Insurance policies in question in Mr. Bonnell. If this view is erroneous, and the complainants, claiming under William L. Lance, Sr., have shown such proofs, it would still appear to be inequitable to give effect to a claim so stale that no one ever knew it to be formulated or presented during 17 years of hostile feeling between the parties, nor until 10 years after one of the principal actors had died, and a year after the other had been called away. During all this period of quietude the title to both policies stood absolutely in the name of Mr. Bonnell, or his representatives, without challenge, and they spent their moneyby the Lances claimed against his estate, nor were any steps taken to recover the policies. William L. Lance, who is alleged to have made the contract pledging the policies, and under whom the complainants derive their title, was living during all this time, and active in the controversy, but gave no sign that he claimed any interest in them. It was after his death that the first disclosure was made that the Lances asserted rights in these policies. Meanwhile, for more than 23 years, Mr. Bonnell, in his lifetime, and his wife since his death, have paid all the premiums on the policies, have effected loans on them, have surrendered the original Penn Mutual policy, and accepted a substitute, and in fact have paid out an amount of money upon the policies very nearly equal to the sum presently payable upon them. The complainants strenuously insist not only that they shall have the benefit of the policies, but that no allowance shall be made either to Bonnell's estate for any premiums paid by him in his lifetime, or to Mrs. Bonnell for those paid by her since his death. The effect of such a determination would be to give to the Lances the full benefit of the policies, and of the payments of premiums by Mr. Bonnell, though these payments were made at least since 1878, under an open claim of ownership of the policies, and hostile to the present claim of the Lances, and known by them to be so; and also the benefit of Mrs. Bonnell's payments made since Mr. Bonnell's death, notwithstanding no claim or notice of claim to the policies was ever made or given to her in any capacity. Such neglect to take any steps to recover the policies, or even to claim them, extending from 1878 to 1895, while those in possession of them holding by a title absolute on its face were, to the knowledge of the claimants, openly and irretrievably acting as absolute owners, was laches of such a character that it would be inequitable presently to enforce the claimants' rights. There is an attempt to answer this apparent assent of Mr. Lance during his whole life to the unqualified title of Mr. Bonnell to these policies by claiming that no right in the moneys due on the policies could be asserted until the death of Lance. It is true that suits for the money to come due on the policies could be brought only on Lance's death, but such litigation would be against the insurance companies, who would, on Lance's death, come to owe the money, and not against Mr. Bonnell or his representatives, who claimed to own the policies. The laches consisted in the acquiescence in Bonnell's claim and action as absolute owner of the policies for a long period after, it is now claimed by the complainants, William L. Lance was entitled to have the policies delivered to him.
The statute of limitation is also set up by the defendant, and this court is asked to apply it in analogy to the practice in the court of law. The first point to be ascertained on this contention is, when did the complainants' right of action accrue? There can be no doubt that the right of a pledgee in the thing pledged for the payment of a debt ceases as soon as the lien is discharged by the tender or payment of the debt. Lawrence v. Maxwell, 53 N. Y. 19. The complainants claim that the pledge was under a parol contract, that the debt has been fully satisfied by the sales of coal, of lots, and finally of the residue of the Gould tract, by Bonnell. This sale of the residue to the Lehigh & Wilkesbarre Coal Company was made in 1878, as above shown. The lien of Mr. Bonnell on the policies as pledgee, according to the complainants' theory of the case, was, therefore, then discharged, and all his interest in the policies ended. The right of the Lances to recover the pledge was therefore perfect In 1878, upon their own showing. The policies both stood in the name of Bonnell. A suit in equity to compel their reassignment by Bonnell to Lance has, upon this view of the case, been maintainable since February, 1878. Bonnell's attitude both before and since that time has been consistently that of one claiming to be absolute owner, hostile to the Lances, to their knowledge. The suit in Philadelphia set up no claim to these policies, though the proceedings there had show that the Lances claimed to have discharged all their indebtedness to Mr. Bonnell, and the prayer of the bill is for an accounting. A prayer for the retransfer of the policies would have been pertinent to a showing by the accounting that the indebtedness had been discharged, and they thereby released. The Lances contend that no suit could be brought until, by the death of William L. Lance, Sr., the policies had become payable. This, as above shown, is true only as to a suit against the insurance companies to recover the money, but is no answer to justify Lance's omission to demand and sue for the recovery of the policies claimed by him to have been put in pledge. No such suit was brought within six years after the right of William L. Lance, Sr., under whom the complainants' claim had, as he asserted, become complete to recover the policies. No equity is shown against the setting up of the statutory bar applicable in such cases in the law courts. On the contrary, all the facts tend to show that the enforcement of the complainants' claim against the defendant would work an extreme hardship. If the complainants are barred of any right to recover the pledge, they are also barred of any right to recover moneys which long afterwards come to be payable upon it.
The question to which a great part of the proofs and most of the argument has been directed was whether or not Mr. Bonnell received the title to the Gould tract as a security for the payment of the debt the Lances owed him, and for his advances to them, and whether he has in fact been repaid from sales and profits from that property. In my judgment, this point must take but a subordinate place in the determination of this case, as the terms upon which Mr. Bonnell held the titleto the Gould tract can be of little importance, if there was no contract whereby the policies here in question were held by him in pledge for a debt, and redeemable by the application of proceeds from that tract. I have, however, examined the voluminous testimony upon this question, and the arguments of counsel thereon, and the weight of evidence does not sustain the complainant's contention. Mr. Bonnell at all times held, with the knowledge and assent of the Lances, the full legal title to the premises, and claimed to be the absolute owner. The Lances assert an equity under a parol contract which they declare enabled Mr. Bonnell to secure the legal title. The fact is several times proven, though nowhere stated in the pleadings, that in 1870, when the sheriff's sale devested the Lance title, they held but an undivided one-half interest in the Gould tract. Mr. Pettebone, held the other half. He was a heavy, and also an exacting and grasping, creditor of the Lances. They were in great financial difficulties, and threatened with forced liquidation by the sheriffs' sales. Pettebone was always, as to the Lances, a hostile creditor, seeking to force them to pay. Mr. Bonnell was a friendly creditor, who desired to secure his money, but was also willing to delay a sale, if that were possible. Mr. Pettebone's urgency prevented this, and the Lances found that the property would be forced to a judicial sale. It was so sold, and was bid in by Mr. Pettebone for $21,000, who shortly afterwards conveyed it to Mr. Bonnell for $102,000. The Lances claim that by a parol agreement between Pettebone, Bonnell, and themselves this had been prearranged, and that the title was conveyed to Bonnell as security for the payment of their debt to him, and for advances to be made, and, that these being repaid, the property was to be reconveyed to them. The claim that there was any such bargain was, as above shown, overthrown in the Philadelphia suit, and the title of Bonnell was adjudged to be absolute, and not as security. The intimation in the opinion of the supreme court on the appeal, that Bonnell held the balance of money raised from sales, if there was any such balance, as trustee, was not adjudicated, as the decree below in favor of Bonnell, found, at Lance's request, on the merits of the case, was not modified in any way. The weight of the evidence going to show Bonnell to have held either as security or in trust is quite insufficient to establish the Lances' claim. The written contracts of sale all vested absolute title first in Pettebone, and afterwards, by Pettebone's deed, in Bonnell. The interest of the Lances was devested by the sheriff's sale to Pettebone. If he took absolutely, and without agreement to hold as security or in trust, then Bonnell's subsequent acquirement of the title from Pettebone was equally absolute. Pettebone testifies that his title was absolute, that outside of the papers reduced to writing there were no bargains. Mr. Bonnell testifies to the same thing. Mr. Tuthill, Bonnell's book keeper, testifies to a statement made by Bonnell to William L. Lance, Sr., to the same effect, which was, by the latter, accepted without denial. That Mr. Bonnell was well-disposed to the Lances, and willing to be generous, and to deal with them liberally, is apparent all through the proofs. It is the evidence of this disposition of Mr. Bonnell which has led to this litigation. Mr. Bonnell in many ways showed his kindly feelings for the Lances. He permitted them to remain in possession, to mine and ship the coal, and sell lots, for which he executed deeds, but he also turned them out without their resistance, when they disobeyed his orders. The most significant indication of this generous consideration of Bonnell for the Lances is shown in a letter which Bonnell wrote to his counsel, Mr. McClintock, shortly after he had purchased the Gould property, in January, 1871, wherein he declared that he had bought the property to secure his debt against the Lances, and that his voluntary purpose and intention is, if he can sell the property for a sum sufficient to discharge all liens and expenses, and to reimburse him, with interest, and compensation for his time and trouble, to give the balance to the Lances. This letter is really the basis of the Lances' claim, and they insist it was a recognition of a contract by which the conveyance was made to Bonnell for their benefit, and which bound him to account to them, and to reconvey when their debt to him was paid. The letter, in my view, had no such effect. It was written after the conveyance had been made to Mr. Bonnell, which vested the absolute title in him. It does not acknowledge that he had precedently bought under a contract to benefit the Lances, but states his voluntary purpose as to his future action. He testified in the Philadelphia suit that the letter was written without demand or solicitation from anybody; and his counsel, Mr. McClintock, to whom the lettgr was addressed and delivered, corroborates this statement. It was not written or sent to any of the Lances, and they did not even know of its existence for several years. Mr. McClintock's testimony as to the occasion which produced the letter shows its purpose and object. He states that Mr. Bonnell had called upon him on other business, and, "after doing whatever we went to the office to do, he was about leaving, I think the afternoon of that day, he said to me: 'Now, I feel friendly to the Lances. I have bought this property, and, if anything should happen to me, I desire to leave with you a memorandum of what my present voluntary intentions are;'" and then the letter was written, and left with McClintock as Bonnell's counsel. McClintock also testifies that none of the Lances ever asked for the letter, and that he had no idea that they had any knowledge of it whatever. This letter was written almost coincidently with the receipt of the title of the Gould tract by Mr. Bonnell. It was prepared at his own suggestion, without demand; was addressed and delivered, not to the Lances, but to his own counsel.
Not only the letter itself, but the statement made by Bonnell, accompanying its delivery to McClintock, show that it was a purely voluntary declaration on Bonnell's part, originating without any contractual obligation whatever, and given in order that, in case any mishap should come to him, there might be a permanent expression of his kind feeling for and purpose to help the Lances. Every fact which appears to charge Mr. Bonnell with a contractual obligation touching the Gould tract is explicable consistently with this view, and, as the title was held by him by deeds which passed an absolute interest, it must be declared that those who assert that they should be deemed to have conveyed but a limited estate have failed to sustain their allegations. There are some incidents of proof tending to show admissions by Mr. Bonnell that he held this title only as collateral for the payment of the Lances' debt to him, notably the testimony of Mr. Ricketts. The present narration of these admissions is given by Mr. Ricketts 26 years after they were alleged to have been made; and, while he now ascribes them to Mr. Bonnell, yet when a witness in the Philadelphia equity suit, in his testimony given in 1880, only 9 years after the transaction, he testified, "This is the information which the Lances gave me in the absence of Mr. Bonnell and Mr. Pettebone." Mr. Ricketts is undoubtedly fair-minded, but his memory in giving his present testimony is evidently at fault, for his explanation of its variance from that given in 1880, to the effect that he heard these statements not only from the Lances, but also from Mr. Bonnell, is directly contradictory of his evidence in 1880, when he swore, touching these matters, "I don't think Mr. Bonnell ever told me directly anything about the character of the transaction at that time, but the whole tenor and basis of our conversation was that he was Mr. Lance's friend in this transaction." It is unnecessary to prolong this examination of the details of the great volume of testimony on these points, or to consider the other matters disputed between the parties, and argued by counsel with much force and acumen. The complainants have failed, for the reasons above stated, to show a right to the relief they seek, and a decree should be made in the suit regarding the Mutual Benefit policy dismissing their bill, and in the Penn Mutual Case adjudging to the defendant the administratrix of Mr. Bonnell the amount paid in upon the policy.