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spent about $6,000. The mill began sawing in February, 1902, and continued until August 24, 1903, when it was burned; and the greater part of the mortgaged property was destroyed. Under an order of the court, the remnants have been sold by the trustee for $225, and that amount is now in the trustee's hands. After Hicks had completed his mill, he obtained insurance upon it and upon the machinery in the sum of $2,500. After the loss, the insurance was adjusted for $2,150. The insurance money arising from the loss has been paid over by the several insurance companies, and that sum is now on deposit under a stipulation assented to by all parties in interest, to await the termination of this suit.
Statement of Claims. The record shows the following claims :
First. The claim of Mynia A. Young for cash loaned, secured by a mortgage upon the mill property, and by a policy of the Liverpool & London & Globe Insurance Company, for $1,000, in which Mrs. Young is named as beneficiary. The following facts appear in evidence in reference to this claim: On January 7, 1902, Ira Hicks made and delivered to Mrs. Young a mortgage for $600 on the following property, namely: The sawmill building, occupied by said Hicks, on the shore of the St. Croix river, at Vanceboro, Me., two cylinder stave machines, lathe machine, and shingle machine therein, and all shafting, belting, and other running gear. Hicks declined to give Mrs. Young security on the boiler and engine, for the reason that some other person had a claim upon them. As a part of the consideration for the loan, Hicks agreed to take out insurance for the benefit of Mrs. Young, and Melville L. Young, the husband of the mortgagee, testified that that was the only condition upon which the loan was made.
This mortgage was recorded at Vanceboro on January 8, 1902; and, after Hicks' adjudication in bankruptcy, it was also recorded at Calais, the residence of Hicks. The evidence shows that, pursuant to the agreement made at the time of making the loan, Hicks obtained insurance upon the property; and one policy was payable to Mrs. Young
It also appears from the testimony of Ashley St. Clair, agent for the Liverpool & London & Globe Insurance Company, that this policy at the time of its renewal was also made payable to Mrs. Young, and that the loss under it was adjusted, after the fire, for the sum of $1,000.
Second. W. L. Blake & Co. also make claim to the remnants in the trustee's hands. They claimed to have an equitable lien upon a portion of the insurance money.
The record shows the following facts respecting this claim: On October 22 and December 14, 1901, Hicks entered into agreements with W. L. Blake & Co. for the purchase of certain machinery, such as boiler, engine, steam pump, smokestack, and other personal property, for the equipment of his mill, of the value of $1,350; and the property in question was delivered by Blake & Co. to Hicks, under two Holmes notes, or conditional contracts, which recited, in substance, that the title to the property was to remain in W. L. Blake & Co. until the notes were fully paid. Hicks agreed to obtain insurance for the benefit of Blake & Co. to protect them for such time as the indebtedness remained unpaid. Both of these conditional contracts were recorded in the town clerk's office at Vanceboro, the location of the mill; but neither of them was recorded in Calais, the residence of Hicks. The evidence also shows: That on January 7, 1902, Hicks wrote to Blake & Co. that he had placed insurance upon the property to the amount of $1,000 for their benefit, and again on January 20, 1902, he wrote Blake & Co.:
"I insured the mill in your favor costing me $80 which makes you secure for your debt."
That on March 9, 1902, he wrote Blake & Co.:
“I have got the mill insured for $1,000 to protect you from loss, which cost me $80."
That on January 4, 1902, Hicks obtained from Hanson & St. Clair, agents for the Hamburg-Bremen Insurance Company, a policy of insurance in that company which covered the following property:
"Frame steam sawmill building and additions, metal roof, full arch front stationary boiler, 72 in. in diameter and 16 ft. long and all fixtures attached. One plain slide valve crank engine, 14 in. cylinder, 36 in. stroke, 342 in, new stop motion governor, all oil cups, governor belt, and fixtures with guy wires. Shafting as follows: One main shaft 37/16 in. in diameter and 30 ft. long; one 24 in. by 10 in.; one 24 in. by 9 in.; all pipes, fittings, valves, whistle, tube scraper, and other shafting and belting as attached to the mill.
"One No. 3 Deane Steam pump and fixtures. "Payable to W. L. Blake & Company."
This policy was sent by Hanson & St. Clair, the agents of the insurance company, to Blake & Co. It remained in the possession of Blake & Co. until July, 1902, when the Hamburg-Bremen Insurance Company withdrew its agency from Hanson & St. Clair. Thereupon Hanson & St. Clair, as agents of that company, wrote to Blake & Co.:
“We have been directed by Hamburg-Bremen Ins. Co. to cancel Hicks risk at Vanceboro. To protect you we have issued policy in L. & L. & G. for same amount, etc. Kindly return to us the policy of the Hamburg that you now hold.”
On July 28, 1902, Hanson & St. Clair substituted for the policy in the Hamburg-Bremen Company a policy in the Liverpool & London & Globe Insurance Company for one year, which covered the identical property mentioned in the Hamburg-Bremen in the same sum, and which was also payable to W. L. Blake & Co. as interest might appear. This policy was also forwarded to Blake & Co. On August 9, 1902, Hanson & St. Clair wrote to Blake & Co.:
"I inclose policy on Hicks mill. Kindly return policy you hold in HamburgBremen."
On April 13, 1903, Hicks again wrote Blake & Co.:
"You are well secured by insurance which cost $100, so that you might be Bafe."
On June 29, 1903, Blake & Co. wrote Hanson & St. Clair :
"We notice, on looking up the Ira Hicks matter, that the insurance expires July 28th. Will you kindly advise us if he has made arrangements to have this renewed."
On June 30, 1903, Blake & Co. wrote Hicks:
“Kindly not overlok the fact that your insurance runs out July 28th. We suppose you have made arrangements with Hanson & St. Clair to renew this."
On July 2, 1903, Hanson & St. Clair wrote Blake & Co.:
“Replying to your favor of June 30, we have to say that Mr. Hicks has instructed us to renew all insurance as it expires."
On July 28, 1903, Hanson & St. Clair renewed the policy in the Liverpool & London & Globe Insurance Company for the same amount, covering the same property. This policy did not contain the names of W. L. Blake & Co. as beneficiaries, but contained the words:
“Payable in case of loss to Arabella Hicks as interest may appear.”
The agent testified that the name of Blake & Co. was left out because Hicks came into the office a few days before the policy run out, and told him that he did not want the policy payable to Blake & Co., as he should have them all paid up within a few months, and that this conversation occurred after his firm had written Blake & Co. that Hicks had requested all policies renewed. Hicks states that, when this policy run out, he changed it to his wife's name, as she had more money in the concern than Blake & Co. No notice of this change was sent to Blake & Co.; and Mr. St. Clair also testified that Mrs. Hicks was not present at the time the policy was renewed. The testimony further shows that Blake & Co. did not have any knowledge that the renewal policy issued on the 28th day of July, by the Liverpool & London & Globe Insurance Company, was not issued as agreed, namely, making them beneficiaries, until the receipt of a letter from Hanson & St. Clair, dated August 24, 1903, as follows:
“The Hicks mill at Vanceboro burned Sunday morning. Looking at the policy register, I see his wife's name is substituted for yours. As she has no mortgage interest this will not affect your lien, but you should give the statute notice. As we understand the arrangement between you and Mr. Hicks, your claim was regarded as a mortgage. Kindly send amount of claim and bill of sale, and we will see that notice is given."
The loss under this policy in the Liverpool & London & Globe was adjusted at the sum of $650.
Third. Arabella Hicks, the wife of Ira Hicks, claimed the insurance received from the Liverpool & London & Globe Insurance Company, which was originally made payable to Blake & Co., and also the insurance received from the Capital Insurance Company. The evidence shows that in November, 1901, she loaned her husband $1,000, and on February 15, 1902, she made a further loan of $500, for which she took his notes, payable two years after date, and the moneys so received by Hicks were used in his business. There is no evidence that there was ever any agreement to insure for her benefit, or that she should have any security for either of the loans so made by her. Mrs. Hicks, however, testified that the insurance policy in the Liverpool & London & Globe was changed to her name to secure her against loss, and that the assignment made on August 25, 1903, of the claim against the Capital Fire Insurance Company, due and owing Hicks by reason of the loss which occurred on the 23d day of that month, was made to protect her for the moneys which she had let her husband have, and he thought she ought to be secured, and that her husband told her about it, and that she saw and read the policy over. The bankrupt himself testified that, when the policy in the Liverpool & London & Globe expired, he had it changed to his wife's name, because she had more money in his business than Blake & Co. did, that his wife had no mortgage or security on the mill property, and Mr. St. Clair, the agent of the insurance companies, stated that Hicks wanted the policies made payable to his wife, and that this talk occurred after he (St. Clair) had written Blake & Co. that Hicks had requested the policies to be renewed. It also appears that none of the parties to whom the policies were made payable were present when the renewals were issued.
Fourth. Edward A. Holbrook also made claim to the proceeds in the hands of the trustee, and sought to enforce an equitable lien upon all of the insurance money by virtue of the statutes of Maine giving a mortgagee of real estate a lien upon insurance placed thereon by the mortgagor, and further claimed that he was entitled to an equitable lien on the insurance moneys by reason of a promise to insure for his benefit upon the part of Hicks. The evidence shows that on February 25, 1902, Hicks gave Holbrook two notes for $250 in consideration of advances; that on the 21st day of March, 1902, Hicks was indebted to Holbrook for more than $2,000, and that, on that date, he gave Holbrook six notes of $250 each; that on the same day, namely, March 21, 1902, Hicks made and delivered a mortgage to Holbrook to secure the payment of the eight notes. The property described in the mortgage is as follows:
"The mill building and all machinery thereto connected, comprising a steam mill plant with its complement of shafting, two stave machines complete, one shingle machine complete, the boiler and engine, together with any and all machinery belting and outfit for operating, now in said mill, all situated in said Vanceboro, on lot of land bargained for of the said E. A. Holbrook and Chas. A. Hunter, lying west side of St. Croix river, north of Maine Central Ry, and east of old line of New Brunswick Ry.”
The condition of the mortgage was that Hicks should pay Holbrook $2,000 in several notes maturing at various times, the last of them at seven months, with interest at the rate of 6 per cent. per annum, payable annually. The mortgage was recorded in the town clerk's office at Vanceboro on March 21, 1902, and in the registry of deeds for Washington county on March 24, 1902. After the adjudication of Hicks as a bankrupt, it was recorded in the city clerk's office in Calais on January 30, 1904. The only interest which Hicks had in any of the real estate was that which has already been alluded to in my statement of the case, namely, the oral agreement to purchase, but without any deed or writings conveying the property. Mr. Holbrook testified that he had no knowledge or intimation that there was any incumbrance on any of the property put into the mill. The evidence does not show that anything was said at the time of giving the mortgage to Holbrook respecting any insurance to secure him. But Mr. Holbrook testified that he told Hicks, after the giving of the mortgage, that:
"We wanted him to protect us by the assignment of the policy. He was going to have it done. *
Some months later he said he had not done so, but would.”
Holbrook testified that he never had in his possession any policy of insurance on the property.
In respect to other insurance, the testimony is that in addition to the policies of insurance already mentioned, on May 1, 1903, the bankrupt obtained a policy in the Capital Insurance Company insuring him for a term of one year from the 1st of May, 1903, to the 1st of May, 1904, as follows:
"$150.00 on his frame steam sawmill building and additions with metal roof. $250.00 on his two cylinder stave machines, including saws, shafting, belting, gearing pulleys and connections. $50.00 on his lath machine contained there. in, including saws, shafting, belting, gearing, pulleys and connections. All the above property is situated at Vanceboro, Maine, on the bank of the St. Croix River sixty rods north of the railroad bridge and is occupied by the assured for sawing green lumber into staves, laths and shingles. Other insurance permitted. Lightning clause attached. $50.00 on shingle machine contained therein."
This policy was not made payable to anybody, and had no connection with the others, but it covered part of the same property covered by the policy originally payable to Blake & Co., the loss under this policy was adjusted for the sum of $500, and that this is the insurance covered by the assignment from Ira Hicks to Arabella Hicks, dated August 25, 1903.
1. In considering the claim of Mynia A. Young, it is necessary to pass upon her rights under the mortgage to the fund derived from the sale of the remnants of the mortgaged property, and to consider also her rights under the insurance policy.
(a) Has she a claim under her mortgage? It
appears by the testimony that the mortgage was made January 17, 1902, and was recorded at Vanceboro January 8, 1902; that the bankrupt at the date of the giving of the mortgages, and at all times thereafter, was a resident of Calais; that, after the adjudication in bankruptcy, it was also recorded in Calais on February 18, 1904; that the petition of the bankrupt was filed December 2, 1903, and he was adjudged a bankrupt December 5, 1903. Section 1 of chapter 93 of the Revised Statutes of Maine provides:
"No mortgage of personal property is valid against any other person than the parties thereto, unless possession of such property is delivered to, and retained by, the mortgagee, or the mortgage is recorded by the clerk of the city, town or plantation organized for any purpose, in which the mortgagor resides when the mortgage is given."
Section 67a of the bankrupt act of July 1, 1898 (30 Stat. 564, c. 541 [U. S. Comp. St. 1901, p. 3149]), provides :
“Claims which for want of record or for other reasons would not have been valid liens as against the claims of the creditors of the bankrupt shall not be liens against his estate."
Section 70a of the bankrupt act provides:
"The trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or suecessors, if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation