Throughout the United States,' approved March It was clearly a case of mixed pecuniary in 2, 1867, having been brought to a hearing be-terest and personal friendship. Lewis was, an fore this court, after hearing E. N. Taft, Esq., had been for some time, in embarrassed circum and G. A. Seixas, in behalf of said creditors, stances; Cammack was his friend, to whom h respectively, and E. More of counsel for said frequently applied for help, and who, as bankrupt, it is ordered and adjudged that the friend and creditor, suggested that Lew said order, entered in the said district court, should obtain a policy upon his life. declaring the said John Thompson, bankrupt, discharged from all his debts as aforesaid, be, and the same hereby is, in all things, affirmed. (Signed) L. B. WOODRUFF, Circuit Judge." Whether, if appeals had been taken from the district court and prosecuted in the circuit court, and if the circuit court had heard and The appellant also advanced $50, to pay th decided them, an appeal would lie to this court, premium upon another policy for $2,500 upc need not now be determined, for we have no the life of John E. Lewis, in the Massach such case before us. The present, being ap-setts Mutual Life Insurance Company, peals from a decision made by the circuit court which the appellant had no interest. in the exercise of its supervisory jurisdiction, cannot be entertained. The appeals are dismissed. 643*] *CHRISTOPHER CAMMACK, JR., Appt., บ. MARGARET F. LEWIS. (See S. C. 15 Wall. 643-649.) As security to the extent of $100, such a co tract would have proved the appellant void understanding, but, when connected with h warm personal friendship towards Lewis, an a fair provision for his widow out of the pr ceeds, it is such a contract as men may mak and courts approve. The insurance for $3,000 was made by Joh E. Lewis in his own name, and he assigned to said Cammack, upon the terms above state There seems to be no reason why he should n give or convey the benefit of his interest to ar other whom he might select. 20 N. Y. 32. The assured had the same legal right to giv devise or sell his interest in the policy as any other personal property belonging to hir St. John v. Ins. Co. 13 N. Y. 31; Ashley Ashley, 3 Sim. 149, Valton v. Ins. Soc. Barb. 9; St. John v. Ins. Co. 2 Duer, 419. It was a sale by J E. Lewis to said Camma Wagering policy, what is assignment of re-in writing, as fully appears by the assignme covery of advances-recovery by executrix. 1. A policy on the life of another for $3,000, to cover a debt of $70, is a mere wagering policy; notwithstanding the person procuring the policy was only to get $2,000 out of $3,000, and the pol-8 icy was taken out in the name of the one whose life was insured and assigned by him to the person so procuring it, and the former executed a note to the latter for $3,000, which was without consideration. of the policy, the due-bill for $3,000, and t A transfer of the policy by consent of t company is a new and independent contra with transferee. 7 Barb. 573; 5 N. Y. 405; 3 Met. 69; Barb. 254; 5 Fost. 207. 2. The person procuring the insurance can only hold the policy as security for what the one whose life was insured owed him when it was asAs to the effect and validity of contra signed, and such advances as he might afterwards where one is insured and another pays the p make on account of it; and the assignment of themium, see, Clark v. Durand, 12 Wis. 223. policy to him was only valid to that extent. 3. The administratrix of the person whose life was insured may recover of the person procuring the insurance, the amount of the insurance less such debt and advances, after such amount has been paid by the company to the latter. There is no evidence of fraud and it is po tively denied in the answer. Parker v. Phetteplace, 675. Wall. 684, 17 L. Messrs, A. McCallum and Thos. J. D rant, for appellee: 4. The receipt by the wife, of one third of the Insurance money, in pursuance of an agreement made when the policy was taken out, does not conIclude her as a settlement of the matter, so as to The decree was right in treating the assig prevent her when afterwards appointed adminis- ment of the policy to Cammack as a mere tratrix of the assured, from recovering the bal-curity. The appellant himself treated it as ance of the same. Argued Apr. 9, 1873. Decided Apr. 28, 1873. District of Columbia. security. He retained the overdue note for $ in his possession unsatisfied, and the accou for $26.35, as an open account, until he h collected the proceeds of the policy of insura and re-imbursed himself therefrom. The signment could not, therefore, have been giv The bill in this case was filed in the court be-in payment of the indebtedness, because low by the appellee, to recover a balance alleged to be due her from the receipts of a certain policy of life insurance. A decree having been entered in her favor, the defendant took an appeal in this court. The case is stated by the court. Messrs. T. T. Crittenden, F. P. Stanton and W. S. Cox, for appellant: Did Cammack hold the policy of insurance as a mere security for the indebtedness of John E. Lewis, or as owner by virtue of valid contract made for a valuable consideration? debt was not, in fact, paid by the assignme but out of the fund secured by the assignme The assignment must have been given as lateral security, the act of the appellant in taining the evidence of the debt in his own p session unsatisfied, until marked "Satisfied the proceeds of the policy, shows that he so c sidered it. Cammack's claim is against all c science: for he avers that Lewis only owed about $100, for which he claims about $2,0 for his friendly act (?) in securing him against loss, To constitute a bona fide purchaser for a valuable consideration, the sale must be for a new consideration, and the transfer of property merely as a new security for old debts and liabilities, without extinguishment or surrender of such debts, or of the old security thereof, is not sufficient. Morse v. Godfrey, 3 Story, 365. If the transaction as set up by Caminack be true, then, so far as he was concerned, it was a sheer wagering policy, and probably a fraud on the insurance company. To procure a policy for $3,000 to cover a debt of $70 is of itself a mere "wager. The disproportion be- [*648 tween the real interest of the creditor and the amount to be received by him deprives it of all pretense to be a bona fide effort to secure the debt, and the strength of this proposition is not diminished by the fact that Cammack was only to get $2,000 out of the $3,000; nor is it weakened by the fact that the policy was taken out in the name of Lewis and assigned by him to Cammack. This view of the subject receives to Cammack for the precise amount of the risk in the policy, which, if Cammack's account be true, was without consideration, and could only have been intended for some purpose of deception; probably to impose on the insurance company. A insured his life for $2,000, and made two payments on the same. He then assigned the policy to B as security for a debt, and B thereafter paid the premiums regularly until the death of A, and then collected the insurance. He claimed the right to the whole amount of this money. A's widow and children also claimed the whole, disputing the legality of the assign-confirmation from the note executed by Lewis ment. Held, that the assignment was legal; but that B was entitled to no more than was sufficient to pay the debt of A and re-imburse B in the amount of premiums paid; and the rest belonged to the widow and children. Rison v. Wilkerson, 3 Sneed, 565. Mr. Justice Miller delivered the opinion of the court: This is an appeal from a decree in equity of the supreme court of the District of Columbia, in favor of Margaret F. Lewis, against appellant Cammack. The facts, as far as they can be gathered from the bill, answer and depositions, are substantially these: John E. Lewis, the husband of complainant, who sued as his administratrix, being indebted to Cammack in the sum of $70, and being in bad health procured, at Cammack's suggestion, an insurance of his life in the New Jersey Mutual Life Insurance Company, for $3,000. Cammack paid the premium for the first year, and took an assignment of the policy from Lewis to himself. Under these circumstances, we think that Cammack could, in equity and good conscience, only hold the policy as security for what Lewis owed him when it was assigned, and such advances as he might afterwards make on account of it, and that the assignment of the policy to him was only valid to that extent. Whether Lewis was a participant in the fraud does not fully appear. Such conversations of his as are proved tend to show that he looked upon Cammack as a friend, to whom he was willing to trust the policy assigned, and that he never supposed more would be claimed by Cammack than what he owed him. It is also probable that he believed he would survive the life of the policy, and with the single exception of the note for $3,000, given by him without consideration, there is nothing proved against He also took from Lewis a note for $3,000, at and with his fair dealing. At all events, we do him inconsistent with that view of the matter, the same time, which he admits was without any consideration; and he had Lewis's note, not see such evidence on his part of a corrupt which he kept for $70 indebtedness really due. transaction, as to forbid the court from doing Lewis died before the expiration of the first justice between his administratrix and Camyear, and Cammack collected from the insur-mack, after the amount secured by the policy ance company the $3,000, and paid over to com- has been paid by the company to the latter. plainant one third of that sum, less the amount of the premium paid by him, and another small account which he had against Lewis. The present suit is brought to recover the remainder of the $3,000; and the court be low, holding that Cammack held the policy under the assignment as a mere security for what Lewis owed him, decreed that he should pay over the balance, after deducting that small sum, and he appeals from that decree. Cammack alleges that the policy was taken out under an agreement between Lewis and himself, that he should pay the premiums for the seven years the policy was to run, and in consideration of those payments and what Lewis owed him, he should, in the event of Lewis's death during the life of the policy, receive two thirds of the amount of the policy, and pay over the other third to Lewis's wife or his heirs. In support of this there is produced among Lewis's papers, found after his death, an instrument signed by Cammack, in which he agrees to pay to the wife of Lewis $1,000 in the event of his death, and of that sum being received by him on the policy above mentioned. The receipt of the one third of the insurance money by complainant does not, we think, under all the circumstances of the case, conclude her as a settlement of the matter in dispute. It is obvious that she was ignorant of the full ex tent of her rights; that she acted hastily and without due consideration, and was [*649 largely influenced by the advice of Mr. Chandlee, who had been her husband's friend and adviser, and who was prompted to do what he did by Cammack, while in ignorance of many of the facts of the case. Besides, the bill in this case, as appears on its face, is brought by her as administratrix, and the receipt by her of the one third paid on the policy was before any administrator had been appointed. If she has a right to recover all the $3,000 as administratrix, it could not be defeated by her receipt of $1,000, paid to her in her own right before any administration had been taken out on Lewis's estate. On the whole, we are of opinion that the decree of the Supreme Court should be affirmed, and it is so ordered. MERCHANTS' MUTUAL INSURANCE COM-| to between the parties Dec. 31, previous to PANY OF NEW ORLEANS, Plff. in Err., 3. Parol testimony is not admissible to show that a parol contract of insurance was made before a loss accrued, where the written contract was executed, delivered and paid for afterwards. 4. Where the terms of the contract were reduced to writing, signed by one party and accepted by the other when the premium was paid, neither party can abandon that instrument as of no value in ascertaining what the contract was, and resort to the verbal negotiations which were preliminary to its executior for that purpose. 5. All previous negotiations and verbal statements are merged and excluded when the parties assent to a written instrument as expressing the [No. 144.] agreement. Com. Mut. Ins. Co. v. Union Mut. Ins. Co. 19 How. 318, 15 L. ed. 636; Tayloe v. Ins. Co. 9 How. 390; First Bapt. Ch. v. Ins. Co. 19 N. Y. 305, 28 N. Y. 153. But in this case, the plaintiff had a complete written contract, made Jan. 15, upon a written application for insurance made on that day, and by a policy bearing date on that day, delivered thereafter. It is impossible to admit parol evidence of antecedent negotiations between the same parties, complete or incomplete, for a contract in the same premises. The executed and consummated policy of Jan. 15, 1870, supersedes and occupies the ground of all previous parol negotiations. The fact that the contract of insurance, made Jan. 15, is void from the fraud of the assured in concealing the loss, does not make it any the less the written contract of the parties, and of that date, nor affect its efficacy, under the rules of evidence to exclude parol evidence of a prior contract. Mr. T. J. Durant, for defendants in error: The evidence was not offered in the court below to contradict the written statement, as the bill of exceptions states, but to show the cir cumstances under which it was made, and to show to what state of facts it really referred. by explaining that the instrument, made Jan. 15, only put in writing what had been agreed NOTE.-Validity of oral contract for insurance -see note, 22 L. R. A. 768 which date in fact the policy related back. Corporations may contract by parol, and an agreement to issue a policy is as binding as the instrument itself. Bk. v. Patterson, 7 Cranch, 305; Hamilton v. Ins. Co. 5 Pa. 344: Com. Mut. Ins. Co. v. Union Mut. Ins. Co. 19 How. 318, 15 L. ed. 636. The payment of the premium Dec. 31, when the agreement to insure was made, was not essential; it could be paid at any time. See 19 How. supra. The plaintiffs in the court below relied upon an agreement to insure, made Dec. 31, 1869, and they had a right to offer evidence to prove it. If, then, the case was tried by the court alone, or by the court and jury, either way, the judgment should be affirmed. Plaintiff's below filed with their petition two policies of insurance on said vessel, the second of which was issued as a renewal of the original insurance, and the petitioner sets forth that. though the second or renewal policy is dated the 15th day of January, A. D. 1870, it insures the vessel from the date of the expiration of the first policy, namely: from the first day of January, A. D. 1870, and was issued by reason of a verbal contract or agreement to renew, made on the 31st of December, 1869. On the trial it appeared that the plaintiffs, when they renewed the policy of the 15th of January, and paid the premium for insurance, knew that the vessel was lost, and that the defendant had no such knowledge or information. It is obvious from that statement, that no action could be sustained on the policy, and that, in point of fact, the taking of such a policy and causing the defendant to sign it under such circumstances, was a fraud. To avoid the consequences of this nullity of the written instrument, plaintiffs rely upon the fact that the execution of the policy was but carrying into effect an agreement made before the loss of the vessel. The plaintiffs offered in evidence the deposition of their agent, which gave an account of conversations had by him in reference to a renewal of the insurance, with some one in the defendant's office. The defendant objected to this testimony, on the ground that there was a written contract of insurance between the parties for the same amount of insurance for the same amount of premium on the same object insured, the vessel called Sailor Boy, by the same plaintiffs as insured, and defendants as the insurers, for the same space of time, to wit: from the first day of January, 1871, to the 31st of March. 1871; that the plaintiffs had no right to contradict this written application aforesaid, by proof of a previous verbal contract; that the plaintiffs' right of action, if any, was on the written application and contract aforesaid; and that they could not ignore the said written contract, to fall back on an alleged previous verbal contract of the same tenor and purport; that the evidence, showing that when said written contract was executed, the plaintiffs and their agents were aware of the fact of the previous loss and abandonment of The Sailor Boy, said written application and policy were not binding in law, but were, nevertheless, a contract of the parties subject to be gainsaid by proper allegation and proof of fraud. The plaintiffs could not ignore the written contract. But the court ruled as follows: the plaintiffs put their entire case upon a verbal con667] tract to renew the insurance made, as they allege, on the 31st day of December, eight days before the loss. They admit that when they sent for the written policy, on the 15th of January, they knew of the loss, and that they could not recover on the written policy standing by itself; but they say that the real contract was made on the 31st of December, and that they had a right to go to the jury on that issue, and overruled the objection and admitted the testimony. Undoubtedly a valid verbal contract for insurance may be made, and when it is relied on, and is unembarrassed by any written contract for the same insurance, it can be proved and become the foundation of a recovery as in all other cases where contracts may be made either by parol or in writing. But it is also true that when there is a written contract of insurance it must have the same effect as the adopted mode of expressing what the contract is, that it has in other classes of contract, and must have the same effect in excluding parol testimony in its application to it, that other written instruments have. is to contradict and vary the terms of the policy in a matter material to the contract, which we understand to be opposed to the rule on that subject in the law of Louisiana as well as at the common law. We think it equally clear, that the terms of the contract having been reduced to writing, signed by one party and accepted by the other at the time the premium of insurance was paid, neither party can abandon that instrument, as of no value in ascertaining what the contract was, and resort to the verbal negotiations which were preliminary to its execution, for that purpose. The doctrine is too well settled that all previous negotiations and verbal statements are merged and excluded when [*671 the parties assent to a written instrument as expressing the agreement. And it is hardly necessary to say, that the party who has destroyed the validity of that contract by his own fraud, cannot for that reason treat it as if it had never been made, and recover on the verbal statements made before its execution. We may add that, as the only testimony offered to prove this parol contract, was the deposition of a single witness, made part of the bill of exceptions, we do not see in that deposition sufficient evidence of a completed contract, of an agreement assented to by both parties at any one time, to be submitted to a jury, even if the written contract had never been executed. The judgment of the Circuit Court is, therefore, reversed, with directions to grant a new trial. President, etc., Claimant, Appt., v. WASHINGTON H. RESPASS et al. Counsel for defendants in error here, relies THE STEAMER LUCILLE, James A. Garey, on two propositions, namely: that the policy, 670*] though executed *January 15th, is really but the expression of verbal contract, made the 31st day of December previous, and that the loss of the vessel between those two dates does not invalidate the contract, though known to the insured and kept secret from the insurers; and secondly, that they can abandon the written contract altogether and recover on the parol contract. We do not think that either of these propositions is sound. Whatever may have been the precise facts concerning the negotiations for a renewal of the insurance previous to the execution of the policy, they evidently had reference to a written contract, to be made by the company. When the company came to make this instrument, they were entitled to the information which plaintiffs had of the loss of the vessel. If, then, they had made the policy, it would have bound them, and no questions would have been raised of the validity of the instrument or of fraud practised by the insured. On the other hand, if they had refused to make a policy, no injury would have been done to the plaintiffs, and they would then have stood on their parol contract if they had one, and did not need a policy procured by fraudulent concealment of a material fact at the time it was executed and the premium paid. To permit the plaintiffs, therefore, to prove by parol that the contract of insurance was actually made before the loss occurred, though executed and delivered and paid for afterward, (See S. C., "The Lucille," 15 Wall. 676-681.) Fault of sailing vessel, when does not excuse collision by steamer-rules of navigation— steamer, when answerable for damages. 1. Fault on the part of the sailing vessel at the moment preceding a collision does not absolve a steamer which has suffered herself and a sailing vessel to get into such dangerous proximity as to cause inevitable 'arm and confusion, and collision as a consequen 2. A schooner meeting a steamer, approaching her on a parallel or nearly a parallel line, ought to keep on her course. 3. A steamer, approaching a sailing vessel, is bound to keep out of her way, and to allow her a Whatever is necfree and unobstructed passage. essary for this, it is her duty to do. 4. If the sailing vessel does not change her course so as to embarrass the steamer and render it difficult for her to avoid a collision, the steamer alone is answerable for the damages of a collision, if there is one. [No. 216.] Argued Apr. 10, 1873. Decided Apr. 28, 1873. APPEAL from the Circuit Court of the United States for the District of Maryland. The libel in this case was filed by the appellees, in the district court of the United States in and for the district of Maryland, to recover NOTE. Collision; rights of steam and sailing vessels with reference to each other, and in passing and meeting see note to St. John v. Paine, 13 L. ed. U. S. 537. Rules for avoiding collision-see notes, 14 L. ed. U. S. 69, 28 C. C. A. 532, 29 C. C. A. 368. for the loss of a schooner. A decree having | been entered in their favor and affirmed upon appeal by the circuit court, the claimants of the libeled steamer took a further appeal to this court. The libel was promptly filed Jan. 2, 1869, and the decree of the district court rendered March 12 of the same year. Ever since that time these appellees have been delayed by successive appeals. The decree of the district court did not provide in terms that it should bear interest, nor did the decree of affirmance in the cir pellees are in danger of losing the large amount of interest, and they submit their claim for protection to the equity of this tribunal. The case is fully stated by the court. Mr. Wm. S. Waters, for appellant: Those on The Lucille state that The Cham-cuit court. Under these circumstances, the appion changed her course, and came under the bow of The Lucille. This is a consistent theory, and it is the only mode in which the collision was possible. To accomplish this, only one change of course on the part of the schooner was necessary. If the wind had more force than those on The Champion represented it, and blew as those on The Lucille stated, this facilitated the movement. The weight of the direct testimony sustains the theory of the appellant. The captain of the schooner Sterling stated, after the collision, both to Captain Harrington and to Courtney, that he had put his helm up just before the collision. This would have affected the result according to the theory of the appellant. This evidence is not contradicted. The witnesses on the steamer were all looking directly at the schooner, and noted her change of course, and in order to avoid her, the helm of the steamer was put a-port. The allegation of the libel, that the schooner expected the steamer would pass her on the starboard side, is inconsistent with the statements of those on the schooner as to the relative positions of the vessels. It shows the direction of their fears, however, and the movement they would be likely to make to avoid danger. The captain of the schooner was a boy of between eighteen and nineteen years of age. It is natural that in the darkness of the night, he should have made this move, obeying the impulse of his fear. He had the impression (a false one, evidently) that the steamer was to pass on the starboard side, and made the movement to facilitate it. This confusion is the more probable, when it is considered that he never saw the steamer until she was half a mile off, and but three minutes before the collision. The steamer is guilty of no breach of the regulation for preventing collisions. She had all her lights up; had a proper lookout; and the schooner was narrowly watched from the time she was two miles off until she had changed her course. Those on both vessels show that the vessels were not proceeding in such direction as to involve risk of collision. There was, therefore, no necessity for observing the provisions required by articles 15 and 16 of the Sailing Regulations. The two decrees of the courts below are manifestly against the law and admitted facts of the case, and this court will not, under such circumstances, hesitate to reverse them. The Ariadne, 13 Wall. 475, 20 L. ed. 542. Messrs. Wm. Shepard Bryan and T. A. Seth, for appellees: All the facts bring this case within the rule laid down in The Carroll, 8 Wall. 302, 19 L. ed. 392, and The Fannie, 11 Wall. 238, 20 L. ed. 114. The appellees respectfully ask the court to allow them such interest, by way of additional damages, as may compensate them for the delay they have sustained in this case. The collision took place Dec. 20, 1868. Mr. Justice Hunt delivered the opinion of the court: The libel in this case was filed against the steamer Lucille, to recover damage for the total loss of the schooner Champion, by a collision with the steamer in the Chesapeake Bay. The principles of law applicable to the case are well settled. They are not disputed by either party. In the case of The Carroll, 8 Wall. 302, 19 L. ed. 392, it is thus laid down: "Nautical rules require that where a steamship and sailing vessel are approaching each other from opposite directions, or on intersecting lines, the steamship, from the moment the sailing vessel is seen, shall watch with the highest diligence her course and movements, so as to be able to adopt such timely means of precaution as will necessarily prevent the two boats from coming in contact. Fault on the part of the sailing vessel at the moment preceding a collision does not absolve a steamer which has suffered herself and a sailing vessel to get in such dangerous proximity as to cause inevitable alarm and confusion, and collision as a consequence. The steamer, as having committed a far greater fault in allowing such proximity to be brought about, is chargeable with all the damages resulting from a collision." The rule laid down in the case of The Fannie, 11 Wall. 238, 20 L. ed. 114, is still more applicable to the case before us. It was held that a schooner meeting a steamer approaching her on a parallel line, with the difference of half a point in the course of the two, ought to have kept on her course; that a steamer *ap- [*680 proaching a sailing vessel is bound to keep out of her way, and to allow her a free and unobstructed passage. Whatever is necessary for this it is her duty to do, and to avoid whatever obstructs or endangers the sailing vessel in her course. If, therefore, the sailing vessel does not change her course so as to embarrass the steamer, and render it difficult for her to avoid a collision, the steamer alone is answerable for the damage of a collision, if there is one. The collision between The Lucille and The Champion occurred about one o'clock A. M., on the 20th of December, 1868, and about five miles from the shore. The Champion was sailing up the bay, on a course of north by west, with a very light breeze from the southeast. The Lucille was sailing down the bay, with a course south by east half east, at about seven or eight miles an hour. When the steamer's men first saw the schooner the vessels were about two miles apart. The vessels, it will be observed, were on courses nearly parallel. The half point of difference tended to a convergence. Upon this state of facts the duty of the sailing vessel was to continue upon her course, |