Pioneer Life Ins. Co. v. Alliance Life Ins. Co.
| Decision Date | 17 February 1940 |
| Docket Number | Gen. No. 9498. |
| Citation | 25 N.E.2d 831,304 Ill.App. 13 |
| Parties | PIONEER LIFE INS. CO. v. ALLIANCE LIFE INS. CO. |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Peoria County; Henry J. Ingram, Judge.
Action by the Pioneer Life Insurance Company against the Alliance Life Insurance Company upon an indemnity policy of reinsurance. From a judgment for plaintiff, defendant appeals.
Reversed. George Z. Barnes and Geo. W. Hunt, both of Peoria, for appellant.
Poppenhusen, Johnston, Thompson & Raymond and Floyd E. Thompson, all of Chicago, and Clarence W. Heyl, of Peoria, for appellee.
This is a suit brought by the Pioneer Life Insurance Company upon an indemnity policy of reinsurance issued by the Peoria Life Insurance Company on July 12, 1932 in the amount of $24,000 on the life of Joseph Marzano, which policy, plaintiff alleged, was assumed by the defendant. The answer of the defendant admitted that the Peoria Life Insurance Company executed and delivered the reinsurance indemnity policy on July 12, 1932 as alleged but denied that the defendant ever assumed or agreed to carry out the obligation of the Peoria Life Insurance Company to the plaintiff. A trial before the court without a jury resulted in a finding and judgment in favor of the plaintiff and against the defendant for $28,801.83 and costs of suit and the defendant appeals.
The record discloses that prior to October 16, 1931 the Rock-River Valley Insurance Company was an assessment insurance company organized under the laws of this state with its principal office in Rockford. Subsequently its name was changed to the Pioneer Life Insurance Company, appellee herein. On October 16, 1931 it entered into an automatic reinsurance agreement with the Peoria Life Insurance Company of Peoria, hereinafter referred to as the Peoria Life, this agreement, in the insurance business, is spoken of as a treaty for reinsurance. In the instant case, appellee by this treaty, among other things, obligated itself that before applying to any other company for reinsurance upon a standard risk, it would first bind the Peoria Life and the Peoria Life agreed to be automatically bound upon all risks accepted at standard rates by appellee as of the date appellee became bound by virtue of its policy. Appellee also obligated itself to maintain with the Peoria Life such reinsurance so long as the original policy should remain in force. While this treaty was in effect and the parties were operating thereunder, appellee issued its policy of insurance on the life of Joseph Marzano, effective March 26, 1932 by which it agreed to pay his beneficiaries the sum of $25,000. The statute under which appellee was organized limited the amount of insurance which it could carry on one risk to $1,000 and the Peoria Life recognized this fact. On April 25, 1932 appellee submitted its special application for reinsurance of this risk, together with the application for insurance of Dr. Marzano, to appellee, his medical examination and other documents to the Peoria Life and afterward on July 12, 1932 appellee submitted to it a formal application, all as provided by the treaty for reinsurance of October 16, 1931. This application was for reinsurance to the extent of $24,000 and was duly accepted by the Peoria Life and reinsurance granted effective from March 26, 1932 and subject to all the terms and conditions of the application and the treaty for reinsurance. Appellee paid the Peoria Life the premium due it under this reinsurance agreement for the quarter ending December 25, 1933.
On November 15, 1933 Charles V. O'Hern was appointed Receiver of the Peoria Life Insurance Company by the Director of Insurance and on that day he qualified and a decree was rendered by the Circuit Court of Peoria County finding the company insolvent and directing its liquidation by the receiver. At that time the obligations of the Peoria Life to appellee were evidenced by numerous reinsurance policies aggregating $90,294, one of which was the one herein referred to reinsuring appellee on its policy issued upon the life of Dr. Marzano. On November 23, 1933 some of the officers of appellee discussed with the receiver of the Peoria Life its reinsurance in that company and were told by the receiver that he could give them no information regarding the status of their reinsurance in the Peoria Life and that they must decide for themselves what course they should pursue regarding reinsurance of their existing and future business. Thereafter appellee entered into a treaty for reinsurance with the American Central Life Insurance Company of Indianapolis by the provisions of which appellee obligated itself to exclusively reinsure with the American Central Life Insurance Company all of its new business and the American Central Life Insurance Company obligated itself to automatically accept the same and in addition some eighty-eight of the risks formerly reinsured by the Peoria Life were transferred to the American Central Life Insurance Company and accepted by it. This treaty is dated December 11, 1933 and reinsurance agreements were executed by the American Central Life Insurance Company in January, 1934 but there is some evidence to the effect that the treaty was actually signed by the parties on February 27, 1934, however, on January 18, 1934 appellee wrote the receiver of the Peoria Life advising him that it had completed a reinsurance contract with the American Central Life Insurance Company to reinsure the outstanding reinsurance policies as the coverage period expired with the Peoria Life and to cover new business as written. On December 22, 1933 the AmericanCentral Life Insurance Company wrote appellee in connection with some phases of this treaty and among other things said: .
On December 21, 1933, Dr. Marzano died and thereafter appellee paid his beneficiaries the face of his policy. On January 23, 1934 proofs of the death of Dr. Marzano were submitted by appellee to the receiver of the Peoria Life and the receiver, on January 30, 1934, acknowledged the receipt thereof and advised appellee that all death claims were being held in abeyance subject to the further order of court. On March 1, 1934 the American Life Insurance Company assumed $4,000 of the policy issued by appellee to the said Isidor B. Freed, which had formerly been ceded by it to the Peoria Life and the parties to the treaty between appellee and the American Life Insurance Company thereafter carried out their respective obligations for reinsurance under that treaty.
In the liquidation proceedings of the Peoria Company, the Circuit Court of Peoria County, on August 22, 1934, approved the report of the receiver recommending the approval of the proposal of appellant, then known as the Life and Casualty Company of Chicago, for the reinsurance of the business of the Peoria Company. With this decree there was filed the final draft of the contract between appellant and the receiver which was thereafter executed by the respective parties on October 4, 1934 according to the provisions of this decree and duly approved by the Director of Insurance and the Circuit Court. Among other provisions of this contract is the following: ...
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Pioneer Life Ins. Co. v. Alliance Life Ins. Co.
...on an indemnity policy of reinsurance. A judgment for plaintiff was reversed by the Appellate Court for the Second District, 304 Ill.App. 13, 25 N.E.2d 831, and that court granted a certificate of importance and allowed a further appeal by plaintiff. Judgment of the Appellate Court reversed......