Glen v. Hope Mutual Life Insurance — 56 N.Y. 379

Majority

p. 379

Francis W. Glen et al., Respondents, v. The Hope Mutual Life Insurance Company of New York, Appellant.

(Argued April 13, 1874;

decided April 21, 1874.)

Headnote

• The C. L. A.' Co. was an insurer upon the life of H. by three policies, of §5,000 each, each payable in case of his death to plaintiffs. Defendant agreed to reinsure the O. L. A. Co. on all risks on outstanding policies, and to assume all such policies, and to pay to the holders all such sums as the latter company might become liable to pay. Prior to this agreement, the C. L. A. Co. had effected two policies of reinsurance on the life of H., each for $5,000. H. having died, the C. L. A. Co. collected said two policies of reinsurance. In an action upon defendant’s agreement, held, that plaintiffs could maintain the action, and that defendant’s liability was unaffected by the fact of the collection of its. reinsurance by the C. L. A. Co.

Appeal from judgment of the General Term of the Supreme Court, in the fourth judicial department, affirming a judgment in favor of plaintiffs, entered upon a verdict.

This action was brought to recover the amount of three

p. 380

policies of life insurance, upon the life of one Joseph F. Hall, issued by the Craftsmen’s Life Assurance Company, each for the sum of $5,000, payable in case of death, within four years from date, to plaintiffs. The said policies were issued November 11, 1870. On or about November 14, 1870, the Craftsmen’s Life Assurance Company reinsured the life of said Joseph F. Hall, in the Continental Life Insurance Company, and the Equitable Life Assurance Society of the United States, for $5,000 in each. On the 25th of May, 1872, the Craftsmen’s Life Assurance Company entered into an agreement with the defendant, by which the latter agreed with the former, for various valuable considerations, to rein-sure it “ on all risks of the party of the second part (The Craftsmen’s Life Assurance Company), for which policies of the said party of the second part are outstanding at this date, and hereby agrees to assure all such policies and to pay to the holders thereof all such sums as the party of the second part may by force of such policies become liable to pay, including the dividends declared for the year 1872, on premiums not yet due, the liability for death losses to be limited to such deaths as may occur on and after this date.”

Joseph F. Hall died on June 23, 1872. Due notice of his death was furnished to the Craftsmen’s Life Assurance Company. On or about August 16, 1872, the Craftsmen’s Life Assurance Company collected and received from the Equitable Life Assurance Society the sum of $5,000, for reinsurance, and on or about October 3, 1872, it collected and received from the Continental Life Insurance Company, the sum of $5,000. Plaintiffs demanded payment of their three policies from defendant, which was refused. The court directed a verdict for plaintiffs, which was rendered accordingly.

Samuel A. Noyes for the appellant.

A third party cannot sustain an action upon an agreement or promise unless the facts clearly show that it was made for the benefit of such third party. (Ætna Nat. Bk. v. Fourth Nat. Bk., 46 N. Y., 82 ; Garnsey v. Rogers, 47 id., 233; Mellon v. Whipple,

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1 Gray, 317 .) A contract of reinsurance is for the benefit of the insurer and not of the assured. (Hastie v. De Peyster, 3 Cai. R., 191 ; Heckenreth v. Am. Mut. L. Ins. Co., 3 Barb. Ch., 63 .) The promise of one party to another for the benefit of a third party may be revoked at any time before an acceptance by the third party of the provisions in his favor. (Kelly v. Roberts, 40 N. Y., 438 .) The principle laid down in Lawrence v. Fox ( 20 N. Y., 268 ), is founded on, or arises from, the equitable doctrine of subrogation. (King v. Whitely, 10 Paige, 468.)

W. F. Cogswell for the respondents.

Plaintiffs were entitled to recover upon the agreement between the two insurance companies. (Barker v. Bucklin, 2 Den., 45 ; Cooley v. Howe Mfg. Co. [Ct. Apps. not rep.].)

At the date of the agreement between the defendant and the Craftsmen’s- Life Assurance Company, the latter was an insurer upon the life of Joseph F. Hall, by three policies of $5,000 each, payable, in case of his death, to the plaintiffs. By the agreement mentioned, the defendant agreed to reinsure the Craftsmen’s Life Assurance Company on all risks for which its policies were outstanding at that date; and, also, to assume all such policies, and to pay to the holders thereof all such sums as the said company might, by force of such policies, become liable to pay. Subsequently, and on the 23d of June, 1872, Hall died. The Craftsmen’s Company, consequently, became liable to pay all its three policies; and the defendant, by force of its agreement, also became liable for the same amount to the plaintiffs, who demanded payment of the defendant on the 12th of September, 1872.

On the facts thus far stated, it is the settled law that the plaintiffs might maintain their action against the defendant on the three policies which, by its agreement, it had assumed. (Barker v. Bucklin, 2 Denio, 45 ; Lawrence v. Fox, 20 N. Y., 268 ; Burr v. Beers, 24 id., 178; Cooley v. Howe Mach. Co.,

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53 id., 620.) Further facts appeared on which the defendant contended that its liability to the plaintiff was at least diminished.

Before the agreement between the defendant and the Craftsmen’s Company, the latter had effected two policies of reinsurance on the life of Hall, each for $5,000, and in different companies. The Craftsmen’s Company received, on one of these policies of reinsurance, $5,000, on the sixteenth of August, and on the other a similar amount on the third of October following.

We do not- perceive that these facts diminish the liability of the defendant. The two reinsurances were not effected for the benefit of the plaintiffs, and they had no claim to the money paid on those policies to the Craftsmen’s Company. The liability of that company to the plaintiffs, on their three policies issued by it, was unaffected by the fact that it had collected its reinsurance. (Blackstone v. Alemania Fire Ins. Co., 1874, MSS.) This being so, the plaintiffs may still claim under the defendant’s contract with the Craftsmen’s Company. Nothing has transpired which diminishes the liability of the Craftsmen’s Company on those policies, and that liability the defendant has assumed.

Whether the defendant has any right, as against the Craftsmen’s Company, to demand and receive the money paid it on its two reinsurances is not a question now before us for decision, for with that question the plaintiffs have no concern. The payment of those moneys did not inure to the plaintiffs’ benefit, and they had no lien upon or specific right to them, and the fact of such payment did not affect their right to resort to the defendant, under its contract with the Craftsmen’s Company for their benefit.

The judgment must be affirmed.

All concur.

Judgment affirmed.