A

Penn. Mutual Life Insurance Company v. Crane.

CTION on promissory note. The opinion states the case. The defendant had judgement below.

J. Hopkins, for plaintiff.

W. 8. B. Hopkins and D. Manning, Jr., for defendant.

DEVENS, J. This is an action to recover the amount of a promissory note made by the defendant, and payable to the order of the plaintiff. The answer sets up two defenses: First, that the delivery of the note was conditional only; and that it was to be returned in case the local board of directors for the management of the affairs of this company should not be organized, which local board was to be composed of twenty members of the company residing in the county of Worcester, insured in the plaintiff company in the sum of $10,000 each, and including certain persons named. Second, that false representations, among others that Edward P. Pevey, Emerson P. Knight and Charles B. Pratt would become and had agreed to become members of the local board of directors, were fraudulently and falsely made to the defendant by the plaintiff's agent to induce him to become a member of this board; that he was induced to give his note and accept a policy of insurance in the company under the promise that his note should be returned in case said local board should not be organized. The answer further avers, that when the representations that Pevey, Knight and Pratt had been secured as members of the local board, or had agreed to become such, were discovered by him to have been fraudulently made, he thereupon offered to give up the policy issued to him, and demanded the return of his note, which had been obtained from him by such false and fraudulent representations.

Upon giving the note in suit, on November 20, the defendant had received from the plaintiff a receipt of the same date for the payment of the premium for a policy to be issued by the plaintiff, and it was added, "this payment will be returned by the undersigned if the policy should not be issued or local board of directors organized by the company." At some time thereafter, apparently upon November 23, the defendant received a policy, and gave an acknowledgment of a loan from the company of $115.54, being a part of the premium, and declared to be a lien upon his policy. Afterward, on December 12, 1880, according to the testimony on

Penn. Mutual Life Insurance Company v. Crane.

behalf of the plaintiff, the defendant signed an agreement preparatory to the organization of the proposed "local board."

Upon the offer of the evidence on behalf of the defendant, after the plaintiff had proved the note, the presiding justice, against the exception of the plaintiff, ruled that representations made to the defendant that certain persons known to him had agreed to become members of the local board of directors, and had already been secured as such, were such material representations, as if fraudulently made, and relied on by the defendant as an inducement to the making of the note, would constitute a defense under so much of the answer as contained an allegation of fraud; and admitted evidence to show this. This was correct. As the scheme proposed to the defendant was, that having himself taken a policy of insurance in the plaintiff company, he should be associated with others in a local board of directors who were to have charge of the plaintiff's investments in Worcester county, and to be interested in the business of the company to a certain extent, it was certainly important for the defendant to ascertain who were to be associated with him in this enterprise. Knowledge upon this subject might make the entire difference with him whether he would embark in it by giving his note and taking out his policy. If it were fraudulently represented that certain persons had agreed to compose a part of this board, with whom for any reason, whether personal acquaintance, a high opinion of their character, credit or capacity, he was willing to be associated, and he had consented to such association, it would be unjust that he should by such an agreement be compelled to associate himself with other and different persons.. If induced to give his note upon such fraudulent representation, as a portion of his contribution to the, enterprise itself, or to the company with which it was connected, it would afford him a good ground of defense thereto while in the hands of him who had thus obtained it.

The contention of the plaintiff is, that this ruling took from the jury the right to say whether a material fraud had been committed on the part of the plaintiff, by limiting its decision simply to the inquiry whether these representations had been falsely and fraudulently made, so that the defendant had been induced thereby to give the note in suit. But it was not for the jury to determine what was the responsibility incurred by the plaintiff, if its representations were fraudulent and false, nor what was their bearing upon

Thayer v. Finnegan.

the contract. The construction of an oral as well as of a written contract is for the court, which is to determine, when there is no question as to its terms, what is its legal effect upon the duties and liabilities of the parties. Its interpretation and construction involve the determination of the rights and liabilities which it creates. Short v. Woodward, 13 Gray, 86; Pratt v. Langden, 12 Allen, 544; Globe Works v. Wright, 106 Mass. 207.

The plaintiff contends, on the authority of Lindenaux v. Desborough, 8 B. & C. 586, and Huguenin v. Rayley, 6 Taunt. 186, that the question whether the fraud was material or otherwise was a question of fact for the jury. This is a misapplication of these and kindred cases in the law of insurance, where it has been held that whether facts concealed or misrepresented increased the risk assumed by the insurer was to be determined by the jury. In such cases, it is always determined by the court, upon consideration of the contract, what is the character of the concealment or misrepresentation of facts which will invalidate the contract, and for the jury only to ascertain whether, within the definition thus given, there has been a material concealment or misrepresentation of them. In the case at bar, it was for the jury to decide whether the false and fraudulent statements alleged were made, and for the court to determine their effect upon the contract. Evidence was therefore properly admitted to prove these representations to have been made by the plaintiff's agents, and also that they were false and fraudulent.

[Omitting minor points.]

Exceptions overruled.

THAYER V. FINNEGAN.

(134 Mass. 68.)

Will -- legacy, when charged.

A testatrix appointed her eldest son executor, and gave him all her property, he to pay her debts and the school and college expenses of her younger son, making no other provision for the younger son. Her personal property amounted to $20, and her real estate to $1,500. Held, that the legacy was a charge on the real estate.

A

Thayer v. Finnegan.

CTION against a surety on a bond. The head-note and opinion

show the facts.

H. C. Hartwell and J. H. McMahon, for plaintiff.

G. A. Torrey, for defendant.

C. ALLEN, J. The question whether the legacy to John F. Coleman, of the expenses of his education, was a charge upon the real estate, depends upon the intention of the testatrix, as gathered from an examination of the whole of her will, in view of the existing circumstances. Particular facts have often been declared to be especially significant, as indicating such intention, and sometimes, indeed, a rule has been laid down in terms apparently absolute. Thus it is said in Hopkins on Wills, 294, that "if legacies are given generally, and the residue of the real and personal estate is afterward given in one mass, the legacies are a charge on the residuary real as well as the personal estate." This rule is founded on the decisions in Greville v. Browne, 7 H. L. Cas. 689, 696, 697; Francis v. Clemow, Kay, 435; Harris v. Watkins, id. 438; Wheeler v. Howell, 3 Kay & Johns. 198, 203; Cole v. Turner, 4 Russ. 376; and earlier English cases. It is adopted in terms in Corwine v. Corwine, 9 C. E. Green, 579; and it also finds more or less confirmation in other American cases. See Lewis v. Darling, 16 How. 1, 10; Adams v. Brackett, 5 Metc. 280; Downman v. Rust, 6 Rand. 587, 591; Davis's Appeal, 83 Penn. St. 348, 353; 2 Perry on Trusts, § 570.

So where the devisee of real estate is appointed executor, and is expressly directed to pay legacies, it has been considered as sufficient to show an intention that the land should be charged. Preston v. Preston, 2 Jur. (N. S.) 1040; Dover v. Gregory, 10 Sim. 393; Henvell v. Whitaker, 3 Russ. 343; 2 Jarm. Wills. (5th Am. ed., by Bigelow), 595, 596, and cases cited. This also has been considered as a significant indication of such intention in this country. Van Winkle v. Houten, 2 Green Ch. 172, 191; 2 Perry on Trusts, § 570.

So where the devisee of real estate, though not appointed executor, is positively directed to pay legacies, especially if such direction is contained in the same sentence with the devise, or appears to be given in consideration thereof, it has been held sufficient to create a charge on the real estate. Sands v. Champlin, 1

Thayer v. Finnegan.

Story, 376; Merrill v. Bickford, 65 Me. 118; Luckett v. White, 10 Gill & J. 480; Bank v. Donaldson, 6 Penn. St. 179; Harris v. Fly, 7 Paige, 421. If no other provision is made in the will for the payment of the legacies, this is considered to add to the strength of the presumption. Bevan v. Cooper, 72 N. Y. 317. Significance has also been attached to the fact that there was no personal property which the testator could have thought sufficient for their payment; though it may be open to question how far this consideration ought to be taken into account. Paxson v. Potts, 2 Green Ch. 313, 321; Wallace v. Wallace, 3 Foster, 149, 156. So also where all the personal property is otherwise disposed of. Bevan v. Cooper, ubi supra.

The fact that the legacies are given to the testator's wife or children has been thought entitled to much consideration. Van. Winkle v. Houten, Bevan v. Cooper, ubi supra. And in Sands v. Champlin, Mr. Justice Story lays peculiar stress on the circumstance, that the testator was making a provision for his widow, to be furnished annually. "His intention,” he says, was to have a fund for the security of the payment durante viduitate, which can only be by construing the will as making the legacies a charge on the estate." 1 Story, 383, 386. See also Leavitt v. Wooster, 14 N. H. 550, 562; 2 Jarm. Wills (5th Am. ed.), 582, and Bigelow's note.

In considering cases arising in other jurisdictions, the different systems which may there prevail in respect to the statutory liability of real estate for the payment of debts and legacies must not be overlooked; and language which is merely declaratory of the doctrine that real estate generally will, from certain phraseology, be held subject to the payment of legacies, in such sense that it will be the duty of the executor to obtain leave to sell real estate for that purpose, may not have direct application to the question now before us. But looking at the present case with a view to ascertain the probable intention of the testatrix, we find that the legatee was her son. He was at school and preparing to enter college. The legacy was for the purpose of paying the expenses of his education until he should be through college, and was of course to be paid from time to time, extending over a period probably of some years. The devisee was appointed executor, and to him the whole property, both real and personal, was given. The direction to pay the expenses of John's education was contained in the same sentence with