Dubrutz v. Bank of Visalia

This was an action by the widow to recover from the bank $2,840 which had been paid to the bank on a life insurance policy on the life of Edward R. DuBrutz. Judgment was for the plaintiff. The appeal is from the judgment, and from an order denying defendant's motion for a new trial. The policy was originally for $5,000, and *Page 203 was made payable to Sarah J. DuBrutz upon the death of her husband, Edward R. DuBrutz. The husband was indebted to the Bank of Visalia, and to secure such indebtedness and future advances these spouses joined in assignment of the policy to said bank. This assignment was made December 21, 1898. On the thirteenth day of November, 1901, on failure of assured to pay the premiums this policy was by the company changed into a paid-up policy for $2,840, without the knowledge or consent of either husband or wife. The date of the last check drawn by DuBrutz on and paid by said bank was February 28, 1901, marked paid March 1, 1901, and his indebtedness to said bank at that date was $3,982.26. On August 14, 1902, the bank credited DuBrutz's account with the amount of the paid-up policy, to wit: $2,840.00. DuBrutz died May 17, 1904, and the bank thereupon collected the $2,840.00 from the life insurance company.

The contention of respondent is that the statute of limitations of two years had run in favor of DuBrutz in his account with that bank prior to the commencement of this action. The last item of the account was March 1, 1901, and the action was commenced on October 5, 1904. That the account in the bank being balanced on February 28, 1901, and a statement thereof rendered, the account became an account stated and the statute began to run from that date.

Appellant contends that DuBrutz's indebtedness to the bank was founded on written instruments, to wit, the checks he drew upon the bank and which the bank paid.

There is still another contention of plaintiff and that is that the paid-up policy was not the policy assigned. But we think this latter objection not well taken. In the written assignment, the assignors, DuBrutz and his wife say: "Do hereby assign said policy, and all our, and each of our, rights thereunder." One of their rights under said policy was to have a paid-up policy issued in lieu thereof. The written assignment continues: "and all benefits accrued or to accrue under and by virtue of the terms, covenants or conditions thereof, to the Bank of Visalia." This carried with it the assignment of the benefits to accrue under the paid-up policy as well as those under the original policy. Continuing further the assignment provides: "and hereby authorize said Bank of Visalia to receive, collect and receipt for any money or thing of value which is now or may become due by virtue *Page 204 of said policy or the terms, covenants or conditions thereof, as fully and completely as we, or either of us, might or could do if this assignment had not been made." This assignment, couched in the terms it is, we think gave the bank power to apply for and receive a paid-up policy in lieu of the original. The policy was taken out December 7, 1886. Payments had been made up to November 5, 1901, and the premium then due was not paid. Premiums had therefore been paid for more than three years, and under the terms of the policy the life insurance company was bound to issue a paid-up policy. Under the assignment the bank might have paid the premium and kept the policy alive for the full amount of $5,000, but it chose not to do so. The paid-up policy for $2,840 is dated November 13, 1901, and presumably was issued on that day, but seems from the uncontradicted evidence of the cashier of the said bank that it was not received at the bank until August 14, 1902, and on that date the sum of $2,840, the amount named in said paid-up policy was placed to the credit of DuBrutz's account leaving a balance then due of $1,142.26, which balance was charged to profit and loss and the account closed. This paid-up policy represented a promise to pay a fixed, definite sum to become due and payable at the death of the insured, but the bank chose to treat it as so much money. At the most the plaintiff had a right to have paid to her any balance of the $2,840 which might exist at the death of her husband after paying his account in full at the bank, for the bank had a statutory lien on the policy in addition to the assignment for security. Section 3054: "A banker has a general lien, dependent upon possession, upon all property in his hands belonging to a customer, for the balance due to him from such customer in the course of his business."