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Rauber v. Mutual Life Ins.

141 N.Y.S. 997 Court N.Y. App. Div. Decision date 1913-04-30 English

Delivered by LAMBERT, J.

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p. 997
(156 App. Div. 446.)
RAUBER v. MUTUAL LIFE INS. CO. OF NEW YORK.
(Supreme Court, Appellate Division, Fourth Department.
April 30, 1913.)

Headnote

1. Insurance (§ 339[2] )—Life Insurance—Occupation—“Engage.”
A warranty in a life policy that insured would not “engage” in any of the extrahazardous “occupations” or employments named, including that of retailing intoxicating liquors, was violated by ownership of an
p. 998
interest in a retail liquor business, though insured did not physically participate in the business.
[Ed. Note.—For other cases, see Insurance, Cent. Dig. § 879; Dec. Dig § 339.*
Fór other definitions, see Words and Phrases, yol. 3, pp. 2392-2394; vol. 8, pp. 7749-7751.]
2. 'Insurance (§ 665*)—Life Insurance—Actions—Sufficiency of Evidence.
Evidence in an action on a life insurance policy, which warranted that insured would not engage in the extrahazardous occupation of retailing intoxicating liquors, held, not to show, that insured transferred all of his title and interest in a retail liquor business, which was acquired by him,
[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 1555, 1707-1728; Dec. Dig. § 665.[2] ]
Appeal from Trial Term, Monroe County.
Action by John S. Rauber against the Mutual Life Insurance Company of New York. From a judgment for plaintiff, and an order denying a motion for a new trial, defendant appeals. Reversed, and new trial granted-.
Argued before McLENNAN, P. J., and KRUSE, ROBSON, FOOTE, and LAMBERT, JJ.
Frederick L. Allen, of New York City, for appellant.
George E. Warner, of Rochester, for respondent.

This is an action upon three life insurance policies. These policies were issued in 1908, after physical examination of the insured, Charles Rauber, and after premiums paid. The applications contained the following agreement:

“I hereby warrant and agree that during the period of one year following the date of issue of the contract of insurance, for which application is hereby made, I will not engage in any of the following extrahazardous occupations or employments: Retailing intoxicating liquors, * * * unless written permission is expressly granted by the company.”

Prior to April 25, 1910, the plaintiff as a member of a copartnership had been engaged in the wholesale and retail liquor business in Rochester. He was guardian of the insured, his brother, and through such relationship became indebted to him. On that day, in- satisfaction of such indebtedness, he transferred to the insured a one-ninth interest in such liquor business, both wholesale and retail. This business was conducted in two departments, but both in the same building. May 24, 1910, for violation by insured of the warranty above quoted, the defendant canceled the policies of insurance and gave notice thereof to both the insured and to the plaintiff, the beneficiary. June' 24, 1910, the insured entered into a contract in writing with the appellant for the reinstatement of such policies of insurance. Such contract recited the issuance of the policies in the first instance, the breach of the agreement by insured, his cessation from such retail business, and contained a new agreement upon his part that he should not, at any time during the continuance of such policies or any of them, “engage in the extrahazardous occupation or employment of retailing intoxicating liquors,” and provided thaf

p. 999
such policies should immediately become null and void in case such agreement was violated. The respondent, at the same time, in writing, acquiesced in such agreement, and such policies of insurance were then .reinstated. April 11, 1911, the appellant^ again canceled these policies, and a week later the insured died. Timely proofs of death were made and upon the refusal of the appellant to pay this action was brought.

Respondent contends that no notice was given him of the second attempted cancellation of such policies, and no criticism is made of the jury verdict in that particular. Thé defense urged is that the insured, in violation of the agreement of June 24, 1910, continued to engage in the retail liquor business, thereby rendering the policies void. Much evidence was given pro and con as to the physical participation in such business by the insured, and the evidence is sufficient to sustain the verdict in that particular. It is urged, however, that the proof demonstrates that the insured continued to own an interest in such retail liquor business, and that such ownership thereof by him violated the above-quoted clause of the agreement of June 24th.

[1] This presents the interesting legal question as to whether such ownership is sufficient to vitiate the policies, in the absence of physical participation in the business. A very similar situation was presented in the case of Graves v. Knights of Maccabees of the World, 199 N. Y. 397 , 92 N. E. 792 , 139 Am. St. Rep. 912 . While the forfeiture clause there involved is somewhat differently worded, yet in that case the court construed the words “engage” and “occupation,” both of which are used in the forfeiture clause under consideration in a broad sense, so as to include one who, although not physically participating, owns an interest in the business. I regard that case as decisive that if- Charles Rauber, the insured, continued to own an interest in this retail liquor business, then there can be no recovery in this action.

The trial court refused to charge, at respondent’s request, that the forfeiture clause in the agreement of June 24th contemplated only physical participation, and submitted to the jury the question" of fact as to whether there had been participation, physical or otherwise. As before noted, the proof is conclusive that on April 24, 1910, the insured did own a one-ninth interest in this business. The sole evidence of any change in such ownership comes from the respondent himself. He testified that the insured was engaged physically in and about the wholesale branch of the business; that the insured was drawing wages and at the same time, with his wages, drew what he pleased from the cash of the concern, and that such'excess above the wages was charged against his interest as a matter of bookkeeping; that at the time of insured’s death such interest had been fully paid for, except the sum of $469 and some cents, and paid in that manner. The witness characterizes the transaction as being “on the installment plan,” and says that payment was being thus made in order to make the burden light for the other members of the former firm.

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It is upon the legal effect of this situation that the plaintiff’s right to recover depends. If, in fact, at the time of the reinstatement of the policies, the interest that the insured had in the retail business. ^ was conveyed to the other members, and the drawing of. money by the insured evidences merely a system of deferred payment therefor, then the judgment should be affirmed. If, on the other hand, the conclusion follows that title to insured’s interest passed to the other members only as fast as paid for, so that at the time of his death the insured still owned an interest in this business, there can be no recovery.

[2] The proof as to the transfer of insured’s interest is unsatisfactory and, in my judgment, is insufficient to show that insured had parted with all his title in this business. While, perhaps, a formal transfer of his interest, by written instrument, would not be required, yet, it appearing that in April, 1910, he did own an interest, it must be made to appear by more conclusive proof than is presented by this record that he ceased to own such interest, before there can be recovery. It is true that the agreement of June 24, 1910, recites the fact that Charles Rauber, the insured, has ceased to be engaged in retailing liquor. That recital, perhaps, lends color to respondent’s contention that, at that time, the insured parted with his interest in the business. It has, however, little probative force.

Upon this phase of the case the jury verdict is contrary to the weight of evidence, and the judgment and order appealed from must be reversed, and a new trial granted, with costs to the appellant to abide the event. All concur.

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