Hayner v. American Popular Life Insurance — 36 N.Y. Super. Ct. 211

Majority

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CHARLOTTE HAYNER, Plaintiff and Respondent, v. THE AMERICAN POPULAR LIFE INSURANCE COMPANY, Defendant and Appellant.

Before Barbour, Ch. J., Monell and Van Vorst, JJ.

Decided June 28, 1873.

Headnote

Reargument of an appeal heard at January General Term, 1873, and judgment reversed by decision announced at February Term, 1873, and reported by Jones & Spencer, in vol. 35 Supr. Gt. Repm'ts, 266. This court in this decision followed, and in a measure relied upon, the adjudications of the court in O’Reily v. The Mut. Life Ins. Co., (Abbott’s Rep. [N. S.] 167) and Cohen v. The Same (not reported). The latter case having been reversed in the Court of Appeals, on motion, a reargument of this case was ordered, and upon the hearing the judgment of the court 1 below was affirmed with modifications. By reference to the case as reported, vol. 35, Supr. Ct. Rep. 266, the points decided upon the reargument, and the difference between the respective decisions, will more clearly appear.

Where a life insurance company, without just and legal cause, has simply declared one of its policies to have lapsed and become void by reason of the policy holder’s default, and refuses to have any further dealings with the policy holder, a right of action acrues to the policy holder in equity to have the policy adjudged and decreed to be in life and full force. The policy holder need not wait until a claim or right of action against the company has accrued under the policy by reason of the death of the person whose life is insured thereby.

The judgment of the court below adjudged and decreed the policy to be in full force and effect, etc., etc., and also the following- alternative relief based upon a condition of .the policy, “ or if the plaintiff shall so elect, etc., etc., the defendant shall issue and deliver to the plaintiff an equitable, full paid-up policy, etc.” Held, That the alternative relief granted by the court below was inappropiate and should not have been granted, and that part of the judgment should be reversed.

• Reargument of an appeal from a judgment heard. April General Term, 1873.

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The appeal from the judgment in this case was argued, at the late January General Term (1873). The action was to restore a policy of life insurance, which was claimed by the insurers to have lapsed, by the omission of the insured to pay the stipulated premium within the agreed time. The court at the trial found as a fact, that the forfeiture, by reason of the- non-payment of premium, had been waived, and gave judgment restoring the policy and requiring the defendant to issue to the plaintiff a full paid-up policy.

It appeared that the life insured was .the husband of the plaintiff, who is now living.

The General Term approved of the finding of fact, that the forfeiture had been waived, but differing from the judge below upon the power of the court to give the relief demanded, decided and rendered a decision reversing the judgment. The ground of the decision was that the court could not restore the policy. That until there was a right of action upon the policy (which could not arise until the death of the life insured), the court had not the power to determine the question of waiver.

The General Term, in pronouncing its opinion, followed, and in a measure relied upon, two former adjudications in this court, involving the same questions . (O’Reilly v. The Mut. L. Ins. Co., 2 Abb. [N. S.] 169 ; Cohen u The Same [not reported]). The latter case, (Cohen’s) was taken to the Court'of Appeals, and the judgment of this court was there reversed.

A motion, founded upon such reversal, was ifiade for a reargument of the appeal in this case, and as no order or judgment had been entered upon the decision, the motion was granted.

Upon the reargument, the court was furnished with the printed case in Cohen v. Mutual L. Ins. Co., and a copy of the opinion of the Court of Appeals reversing the judgment of this court.

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Mr. L. R. Marsh, for the plaintiff.

Mr. Geo. Bliss, for the defendant.

In the Cohen case it was alleged that the non-intercourse between 'the South and the North during the war of the rebellion had prevented the payment of the premiums, and by reason of such non-payment the company had declared the policy lapsed and forfeited ; and the relief demanded was, that the policy might be declared valid.

The defendants demurred, alleging a want'of jurisdic-' tion in the court of the subject of the action, and also an insufficient statement of facts to constitute a cause of action.

The demurrer was sustained by the Special and General Terms of this court.

I have looked at the opinion of the Court of Appeals in that case, and find that it fully covers the only ground upon which the decision in this case was put, and must, therefore, be regarded as stare decisis, unless this case can be distinguished by reason of its being against a stock company. In the Cohen case the cor-, poration was mutual, and it is now urged that the right to equitable relief granted in that case proceeded upon the principle that all policy holders in a mutual company were quasi partners in the company, having a joint interest, and thus entitling them at any time to be restored to all their rights as such partners. But the Court of Appeals, in effect, disposed of that question, or sufficiently so to make it proper for -us to hold, that there is no such distinction. Judge Allen, who delivered the opinion of the court, discussed the question of partnership, and rejected it, as applied to a mutual company. Besides, the general ground of the decision is not affected by any such question. That ground is, that it is competent for the court to restore a policy at-

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any time, and "before any liability had been incurred upon it. In that view, it is of no importance what is the nature of the corporation, whether stock or mutual.

So much, therefore, of the judgment as requires and provides for a restoration of the policy must, at least, be affirmed.

Any other questions raised by the appellant are, however, open for examination. Among such'questions not found necessary to^be decided by the late G-eneral Term, was, the appellant’s objection to so much of the judgment as gave to the plaintiff the option to require the defendant to issue to her a full paid-up policy.

The complaint in the action demanded the alternative relief—to restore the policy in all its provisions, or “ that the defendants be compelled to issue to the plaintiff an equitable, paid-up policy, for an amount equal to the true value of the policy, etc.,” and the judgment was, that the policy is, and should be, “in life and in full force and effect, and binding in- all its terms and conditions upon the defendants, etc. ; ” or, if the plaintiff shall so elect, “ the defendants shall deliver to the plaintiff an equitable, full paid up policy, etc.”

The policy contains an agreement by the company, that after payment of any of the premiums the company will give to the assured an equitable, paid-up policy for an amount equal to its true value, etc.

It is not necessary, I think, to inquire what obligation is imposed by the agreement alluded to. It is very probable that when the policy is restored and the plaintiff has regained all her rights under it, that slie will be entitled to enforce the agreement, and to require, if she has complied with the proviso, to have issued to her, a paid-up policy. But I am inclined to think that all she had the right to demand in the action, or the court the right to grant to her, was, that the policy should be restored to vitality. Such restoration would necessarily revive the agreement to issue a paid-up policy, and place

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the plaintiff in a condition to enforce it at the proper time. But I do not think it was appropriate relief in t.liis action, and should not have "been granted. Indeed, I do not see how the questions which are involved in such relief could well be litigated in this action. The proviso in the agreement is, that “ the last payment of premiums due shall not have remained unpaid for more than thirty days.” As the premiums were confessedly all unpaid, and their payment was required "by the judgment to "be made as a condition of restoring the policy, it would seem to me that the proviso was in effect set aside, and the defendants precluded from having a fair litigation over it.

I am in favor, therefore, of reversing so much of the judgment as provides for the issuing of a paid-up policy.

We think the remainder of the judgment sufficient in substance to give the plaintiff all the relief she is entitled to and also to protect the defendants. It requires the payment of all premiums which become due to and including April 27, 1870, with interest, and thereafter a performance by the plaintiff of all the terms and conditions of the policy. A compliance therewith will require payment of all subsequently accrued premiums, with interest.

The effect of this decision is to reverse in part the judgment appealed. We might send it back for another trial. But we prefer to end the litigation in this court by modifying and affirming. The costs are in the discretion of the court, and we cannot disturb the part of the judgment which awards general costs. But the appeal is also from the extra allowance, and it appears that it was granted without notice or motion or papers. Under the authority of Gori v. Smith (6 Robt. 568), and People v. N. Y. Central R. R. Co. (30 How. Pr. R. 149), the order is reviewable, and we think it should be reversed.

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With the modifications mentioned, the judgment should be affirmed, but without costs to either party.

Barbour, Ch. J., and Van Vorst, J., concurred.