Fed. Life Ins. Co. v. Arnold

• Decision Date: 12 January 1910
• Docket Number: No. 6,662.,6,662.
• Citation: 90 N.E. 493,46 Ind.App. 114
• Parties: FEDERAL LIFE INS. CO. v. ARNOLD.
• Court: Indiana Appellate Court

46 Ind.App. 114

90 N.E. 493

FEDERAL LIFE INS. CO.

v.ARNOLD.

No. 6,662.¹

Appellate Court of Indiana, Division No. 2.

Jan. 12, 1910.

Appeal from Circuit Court, Pike County; E. A. Ely, Judge.

Action by Agnes Arnold against the Federal Life Insurance Company. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

C. A. Atkinson, L. R. Whitecomb, J. W. Wilson, and J. W. Brumfield, for appellant. E. P. Richardson and A. H. Taylor, for appellee.

RABB, P. J.

The Model Life Insurance Company was an Indiana corporation, organizedunder the act of March 9, 1897 (Laws 1897, p. 318, c. 195). The Federal Life Insurance Company is an Illinois corporation. On the 6th day of February, 1900, the Model Insurance Company issued a policy of insurance on the life of Alfred H. Arnold, naming appellee as the beneficiary therein. This policy was issued by the company in consideration of an annual premium, to be paid by the assured, of $24.95. The policy of insurance stipulated that upon the payment of five annual premiums the insurance contracted for should extend 6 years and 242 days, provided that upon the payment of the fifth annual premium no indebtedness existed against the policy. The assured paid five annual premiums to the company, the last of which was paid February 5, 1904. On the 12th of March, 1904, the Model Life Insurance Company and the Federal Life Insurance Company entered into a contract, by which the Federal Life Insurance Company took over to itself all the assets of the Model Company, and undertook to reinsure the policy holders of the Model Company, in accordance with the provisions of the contract entered into between the two companies, subject to the ratification of the members, and thereupon issued to the policy holders of the Model Company certificates purporting to evidence such contract of reinsurance, one of which certificates was issued to the assured, Alfred H. Arnold, and accepted by him. The assured, Alfred H. Arnold, died after this contract was entered into, and before the lapse of the 6 years and 242 days from the issuance of the policy of insurance on his life by the Model Company. This action was brought against appellant upon the policy issued by the Model Company to the assured, and the certificate issued by the appellant to the policy holder. Appellant's demurrer to the complaint was overruled, and an answer in four paragraphs filed. Appellee's demurrer to the second, third and fourth paragraphs was sustained. There was a trial had, resulting in a finding in favor of appellee. Appellant's motion for a new trial was overruled, and judgment rendered on the finding, in favor of appellee.

The grounds here urged for a reversal are all presented on the ruling made by the court upon appellant's demurrer to the complaint, and appellee's demurrer to the several paragraphs of answer. It is first urged that the complaint is insufficient for the reason that it shows that the contract of reinsurance upon which it is asserted appellant's liability is fixed is in writing, and that neither the contract nor a copy of the same is made a part of the complaint. This point is decided adverse to the appellant's contention by the Supreme Court in the recent case of Federal Life Insurance Company v. Kerr (decided October 15, 1909), reported in 89 N. E. 398, in which the court holds, with reference to the identical contract of reinsurance here involved, that the appellant's liability is fixed and measured by the policy issued by the Model Company, whose assets it took over to itself, and whose risks it assumed to reinsure, and that it was not competent for the two companies, by contract between themselves, to minimize the insurance originally contracted for, by the Model; that the statute authorizing a reinsurance by the original insuring company means a reinsurance of the identical risks contracted for in the original policy.

It is further insisted that the complaint fails to affirmatively show that a liability existed as measured by the terms of the policy issued by the Model Company, for the reason that the terms of this policy only created a liability beyond the period of the payment of the annual premiums, upon the express condition that no indebtedness existed against the policy, and that the complaint fails to affirmatively show that such condition existed. This point is not seriously pressed upon our consideration, and presumably not much relied upon by the appellant.

It is averred in the complaint that the assured and the plaintiff have duly performed all of the conditions of the policy of insurance on their part to be performed. In the face of this averment, we think it devolved upon the appellant to show by way of answer any fact that would defeat a recovery upon the policy.

The second paragraph of appellant's answer to the complaint avers that the Model Life Insurance Company was organized under the act of March 9, 1897, and that it had no power to contract for extended insurance, because it was authorized to transact insurance business on the assessment plan. The question discussed under this assignment of error properly arises upon the demurrer to the complaint, as the complaint affirmatively shows that the Model Company was organized and doing business under the act in question, and the averment in the answer that the company had no authority to issue the policy for extended insurance is a mere conclusion of law. If the policy sued upon, showing, as it does...