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Receivers
trust-in money
recovered by
receivers.

(20 F. (2d) 48.)

in equity, and that from that time the receivers became and thereafter were the trustees of and for one-half of the amount they received on account of these claims for the refund; (2) that the proceedings in the court of equity below, whereby after Geddes had labored faithfully for more than four years to perform his part of the contract, had rendered services without which nothing could ever have been realized from the Dock Company's claims for refunds, had satisfactorily performed his part of his contract and had reached a point where he had secured a tentative agreement of compromise and settlement with the railroad company, he was prevented from completing his work, without paying or securing to Geddes or enabling him to secure any compensation for his services, although the fruits of them paid to the receivers by the railroad company were $5,430.78, were in violation or disregard of the rules and practice in equity; those rules and that practice required that justice and fair compensation in view of his contract and his services should be secured and paid to him, Kellogg v. Winchell, 51 App. D. C. 17, 16 A.L.R. 1159, 273 Fed. 746, and cases there cited and cases cited above; (3) that the amount of compensation which under the facts and circumstances of this case, in view of the contract, the equitable lien, the trust and the services of Geddes thereunder, ought to be paid to him by the receiver, is 50 per cent or onehalf of the entire amount the railroad company paid to the receivers on account of the claims for the refunds. Wylie v. Coxe, 15 How. 415, 416, 420, 14 L. ed. 753-755; Barnes v. Alexander, 232 U. S. 117, 121, 123, 58 L. ed. 530, 533, 534, 34 Sup. Ct. Rep. 276.

The master and the court below cited to sustain the opposite view of this case: Trist v. Child (Burke v. Child) 21 Wall. 441, 22 L. ed. 623; Christmas v. Russell, 14 Wall. 69, 20 L. ed. 762; Wright v. Ellison, 1

Wall. 16, 17 L. ed. 555; and other cases, which we have examined. But, upon consideration, like the Circuit Court of Appeals of the Third Circuit, in American Surety Co. v. Finletter, 274 Fed. 156, and Judge Kennamer in United States Fidelity & G. Co. v. Bristow (D. C.) 4 F. (2d) 810, "We are inclined rather to the views of the same court [the Supreme Court] expressed in Ingersoll v. Coram, 211 U. S. 335, 53 L. ed. 208, 29 Sup. Ct. Rep. 92, accepting the rule stated in Walker v. Brown, 165 U. S. 654, 41 L. ed. 865, 17 Sup. Ct. Rep. 453, to the effect that an express executory contract in writing, whereby the contracting parties sufficiently indicate an intention to make some particular property or fund, therein described or identified, a security for a debt or other obligation, creates an equitable lien on the property so indicated." Our attention has also been called to the opinion of Judge Schoonmaker in Re George Walter & Sons (D. C.) 8 F. (2d) 269. But that opinion is not in point, is not applicable to the facts of the case in hand or persuasive as to the order or decree that ought to be made in this case, for Judge Schoonmaker said: "There is no provision in the contract that this commission is to be paid out of the particular fund recovered, nor is there any provision in the contract assigning to the Board of Trade any part of the moneys received."

The court below in its opinion expressed the opinion that Geddes' contract would have created an equitable lien on any moneys recovered by him and paid to the Coal & Dock Company, but because he had not made such recovery at the time the receivers were appointed. he was not entitled to an equitable lien upon the fruits of his contract and of his effective services under it when the fruits thereof were subsequently paid to the receivers. The answer to this view of the case is found in the opinions and decisions of the courts on this subject heretofore cited and in the contract itself.

That contract was in writing. It read: "We agree to pay George E. Geddes fifty (50) per cent of any refunds received by us from overcharges on freight bills delivered to him for auditing; this to be his only compensation." That contract bound the Dock Company and its successors in interest to pay to

Contracts-for sharing of refund-construc

tion.

Geddes one-half of any refunds reIceived by it or them from overcharges on freight bills delivered to and audited by him. It did not bind it to deliver to him any freight bills, it did not bind it to collect the refunds under the audited freight bills or to employ attorneys or agents to sue for or press those claims. All it bound the Dock Company to do was to pay onehalf of any refunds it received from the overcharges on the audited bills if and when it received such refunds by whomsoever or by whatsoever means or services it might get them. On the other hand that contract did not bind Mr. Geddes to do anything but audit the overcharges. It did not place any other condition upon the agreement that the Dock Company would pay to him one-half of the refunds derived from the claims for overcharges on the freight bills delivered to him. The contract is free from ambiguity, clear, plain. It is in writing, signed by the parties. No evidence was offered to modify or deny it. In such a state of a case Mr. Justice Mitchell of the Supreme Court of Minnesota admirably stated the applicable law in Thompson v. Libby, 34 Minn. 374, 377, 26 N. W. 2, in these words:

"The only criterion of the completeness of the written contract as a full expression of the agreement of the parties is the writing itself. If it imports on its face to be a complete expression of the whole agreement-that is, contains such language as imports a complete legal obligation-it is to be presumed that the parties have introduced into it every material item and term."

Chief Justice Fuller in Seitz v. Brewers' Refrigerating Mach. Co.

141 U. S. 510, 517, 35 L. ed. 837, 840, 12 Sup. Ct. Rep. 46, 48, delivering the opinion of the Supreme Court, said: "And when the writing itself upon its face is couched in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties, and the extent and manner of their undertaking, were reduced to writing." Cold Blast Transp. Co. v. Kansas City Bolt & Nut Co. 52 C. C. A. 25, 114 Fed. 80; Union Selling Co. v. Jones, 57 L.R.A. 696, 63 C. C. A. 224, 128 Fed. 674; Silver King Coalition Mines Co. v. Silver King Consol. Min. Co. 122 C. C. A. 402, 204 Fed. 173, Ann. Cas. 1918B, 571; Sioux Falls Nat. Bank v. Klaveness (C. C. A. 8th) 264 Fed. 42; Century Electric Co. v. Detroit Copper & Brass Rolling Mills (C. C. A. 8th) 264 Fed. 51; El Dorado Ref. Co. v. Lientz (C. C. A. 8th) 7 F. (2d) 818.

Counsel for the receiver (one of the receivers having resigned since the payment) argue that the contract was revocable at any time before it was completely performed, that it was revoked by the appointment of the receivers and that thereafter Mr. Geddes had no equitable lien and the receipt by the receivers of the fruits of the contract did not charge his half of these fruits in the receiver's hands with any trust or lien in his favor. But, the receivership did not revoke, avoid or modify the contract, the equitable lien, or the trust. The receivers took the property of the insolvent subject to the contract, to Geddes' performance of his part of it, to his equitable lien on one-half of its fruits, and the receivers held Geddes' half of these fruits after they received them in trust for him. The receivers when appointed had no higher or better title or right in the claims for the refunds or their proceeds than the Dock Company had. The principles, rules and practice in equity forbade the revocation of the contract or the destruction of the equi

(20 F. (2d) 48.)

table lien and right of Geddes to compensation for his services until full compensation therefor should be paid to him. No such compensation was made and when the fruits of his contract and services came to the receivers, the latter became trustees of one-half of them for Mr. Geddes.

In our opinion the order from which the appeal in this case was taken should be reversed and this

case should be remanded to the court below with instructions to cause the receiver to pay to Mr. Geddes $2,715.39 and interest thereon at 6 per cent from the time when the receivers received the $5,430.78.

Petition for writ of certiorari denied by the Supreme Court of the United States November 21, 1927, - U. S., 72 L. ed. (Adv. 212), 48 Sup. Ct. Rep. 117.

ANNOTATION.

Contract for compensation other than that of attorney on basis of share in or percentage of property or fund as creating an equitable lien.

[Liens, § 4.]

As shown by the title, the annotation does not include contracts for compensation of attorneys. Generally as to the charging lien of an attorney, see 2 R. C. L. 1069 et seq.

Even in the absence of an express contract, a lien based upon the fundamental maxims of equity may be implied and declared by courts of chancery out of general considerations of right and justice as applied to the relations of the parties and the circumstances of their dealings. 17 R. C. L. 605.

An extensive examination of the authorities, however, has disclosed but one case other than the reported case (GEDDES V. REEVES COAL & Dock Co. ante, 282) dealing with the specific point now under annotation. held in the GEDDES CASE that an

It was

agreement by a coal company to pay an auditor 50 per cent of any refunds obtained by it from overcharges on freight bills delivered to him for auditing gave the auditor an equitable lien on the refunds paid to the coal company or its receiver.

In Valdes v. Larrinaga (1914) 233 U. S. 705, 58 L. ed. 1163, 34 Sup. Ct. Rep. 750, it was held that a contract whereby one of the contracting parties was to receive a 10 per cent interest in a concession for helping to secure it, and for aiding in the plans, projects, and technical matters, gave him an equitable interest in the concession to the extent of securing his share of the profits, if any, and one which attached to those profits specifically if, and when, they came into being. W. S. C.

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(N. D., 215 N. W. 93.)

Insurance, § 729 - disability duration.

1. The provision in a paragraph in an insurance policy, viz., "will pay to the life beneficiary the sum of $10 for each thousand dollars of the sum insured, and will pay the same sum on the same day of every month there

Headnotes by BURKE, J.

54 A.L.R.-19.

after during the lifetime, and during such disability of the insured," qualifies the other provisions in the paragraph, and, under settled law for the construction of insurance policies, the insured is entitled to recover the indemnity during the entire period of his disability, whether it be for life, for years, or for months, and, if he recovers his health, the indemnity

ceases.

[See annotation on this question beginning on page 294.]

Insurance, § 603 - proofs

by physician.

notice

2. In an action on an insurance policy, when the record shows that the doctor who attended the insured after an accident corresponded with the insurance company, and reported the condition of the insured to said company, such correspondence and re

ports are sufficient proof of injury to the insurance company.

Insurance, § 423 recovery of premium.

3. An insurance premium may be recovered, if paid during a year when the insured was disabled, and the insurance company not entitled to such premium under the policy.

APPEAL by defendant from a judgment of the District Court for Foster County (Jansonius, J.) in favor of plaintiff in an action brought to recover the amount alleged to be due on a life insurance policy. Affirmed.

The facts are stated in the opinion Messrs. Lawrence, Murphy, & Nilles, for appellant:

The evidence is not sufficient to establish that the plaintiff was totally and permanently disabled within the meaning of the policy of insurance.

14 R. C. L. 932; Hurley v. Bankers L. Ins. Co. 198 Iowa, 1129, 37 A.L.R. 146, 199 N. W. 343; Ginell v. Prudential Ins. Co. 237 N. Y. 554, 143 N. E. 740; Penn Mut. L. Ins. Co. v. Milton, 40 A.L.R. 1387, note.

Messrs. C. W. Burnham and Lemke & Weaver for respondent.

Burke, J., delivered the opinion of the court:

The plaintiff, a farmer, 46 years of age, on the 11th day of February, 1920, applied for and received from the defendant company an insurance policy containing the following provision, viz.: "Six months after proof is received at the home office of the company that the insured has become wholly, continuously and permanently disabled and will for life be unable to perform any work or conduct any business for compensation or profit, or has met with the irrevocable loss of the entire sight of both eyes, or the total and permanent loss by removal or disease of the use of both hands or of both feet, or of such loss of one hand and one foot, all from causes originating after the delivery of

of the court.

this policy, the company will, if all premiums previously due have been paid, waive the payment of all premiums falling due thereafter during such disability, and if such disability was sustained before the insured attained the age of 60 years, the company will pay to the life beneficiary the sum of ten dollars for each thousand dollars of the sum insured and will pay the same sum on the same day of every month thereafter during the lifetime and during such disability of the insured."

On August 22, 1924, the plaintiff was thrown from a horse, breaking three of his ribs near the spine. On March 28, 1925, he undertook to ride on a cart attached to a harrow and drive a team of horses hitched to the harrow. A strap coming loose on the harness, he stopped, went around in front to adjust the strap, when the team started up, and, not being able to get out of the way, he fell and broke his leg. About six weeks before the trial, the plaintiff again fell, and broke a leg. The plaintiff had been continuously under the care of the doctor from the time of the first injury until the time of the trial, and claimed at that time that he was still suffering from pain resulting from the first accident. He said: "I have a continual

(N. D. —, 215 N. W. 93.)

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pain in my back and side, and can- 5 of the policy quoted herein, not work since the first accident." The doctor who attended him from the first accident until the time of the trial stated that in his opinion the injuries were permanent. He was on crutches at the time of the trial, on account of breaking a leg six weeks before. On being questioned about the second injury he says: "I had another injury later than that, that caused me to assume the crutch; I was using a cane a little while this year; I could not get around very good, and I stumbled and fell and broke a bone here about six weeks ago.'

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The doctor testified that he thought that he would have the use of his leg as soon as the third break was fixed up. For the defendant, two doctors testified in effect that in their opinion the injuries were not permanent.

The court made findings of fact and conclusions of law favorable to the plaintiff, and, from a judgment thereon, the defendant appeals, specifying as error:

(1) "That prior to the commencement of the action no proof of any kind was submitted to the defendant company of any alleged total and permanent disability as required by the terms of the policy."

(2) "That the evidence is not sufficient to establish that the plaintiff was totally and permanently disabled within the meaning of the policy of insurance."

(3) "That the court erred in including in the judgment and permitting recovery for total and permanent disability from the date thereof and also permitting recovery of the premium paid by the plaintiff thereafter contrary to the terms of the policy, which prescribed that such benefits do not accrue until six months after satisfactory proof of such claim of total and permanent disability is submitted to the company, and that there is no evidence to establish that the plaintiff in fact paid any such premium for which recovery was allowed."

The term "proof," as used in

does not mean absolute conclusive proof of permanent disability of the insured. It means some evidence or notice to the company that the insured has been injured, and the company then has six months to investigate and determine whether or not the disability is permanent within the meaning of the policy. If the proof furnished must be conclusive the company would need no time for investigation, but could commence paying the indemnity at once; and it follows that upon any notice to the company of a permanent injury to the insured, it is the duty of the company to begin its investigation at once so that the insured may have the indemnity if he is entitled to it under the policy.

The appellant does not contend that it did not receive such notice; the contention is that there is nothing in the record to show that there was ever any notice to the company, and, on the other hand, it is the contention of the respondent that the question of notice was not raised in the lower court, that the record does contain evidence of notice to the company, and that appellant cannot raise the question for the first time in the appellate court. The record does not show that the question was raised in the trial court, and it does show some evidence of notice to the company.

On

On page 8 of the transcript in the cross-examination of the plaintiff, he is asked if he did not write to the company in November, 1925, and he says, "Yes, I believe I remember that; that was on Sunday." page 9 of the transcript, he is asked this question: "These various letters you wrote to the company, were they written by yourself or some one else?" Answer: "By myself." It is apparent from this testimony that the respondent wrote various letters to the company, other than the one written at Devils Lake in November, 1925.

On page 21 of the record, the doctor who treated respondent on crossexamination is asked: "What

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