Federal Life Insurance v. Barnett

• Decision Date: 17 December 1919
• Docket Number: 10,001
• Citation: 125 N.E. 522,71 Ind.App. 613
• Parties: FEDERAL LIFE INSURANCE COMPANY v. BARNETT, ADMINISTRATRIX
• Court: Indiana Appellate Court

125 N.E. 522

71 Ind.App. 613

FEDERAL LIFE INSURANCE COMPANY v. BARNETT, ADMINISTRATRIX

No. 10,001

Court of Appeals of Indiana

December 17, 1919

From Cass Circuit Court J. P. Wason, Special Judge.

Action by Roxie E. Barnett, administratrix of the estate of George E. Barnett, deceased, against the Federal Life Insurance Company. From a judgment for plaintiff, the defendant appeals.

Reversed.

C. A Atkinson and Long, Yarlott & Souder, for appellant.

William L. Barnum, Jr., and Joseph M. Rabb, for appellee.

OPINION

MCMAHAN, J.

The Model Life Insurance Company, hereinafter called the Model organized and doing business on the assessment plan under Acts 1897 p. 318, § 4739 et seq. Burns 1914, issued a policy of insurance for $ 2,500 on the life of George E. Barnett, November 7, 1901. This is an action by appellee, as administratrix of his estate, against appellant on said policy. The amended complaint, hereinafter referred to as the complaint, upon which this case was tried, after alleging the incorporation of the Model and the issuance of said policy, a copy of which was attached to and made a part of said complaint by exhibit, alleged: "That the said George E. Barnett in all things fully observed, kept, performed and fulfilled all and singular, the things which were on his part to be observed, performed and fulfilled, according to the conditions, form and effect of said policy of insurance up to and including February 16 A.D. 1908;" that on March 12, 1904, pursuant to a certain transaction between the Model and appellant, the Model transferred to appellant all of its property and outstanding insurance risks, including that upon the life of George E. Barnett and, in consideration of such transaction and transfer, appellant assumed and agreed to perform each and every obligation and promise theretofore made by the Model to its members; that George E. Barnett died on February 16, 1908; that the Model ceased to exist and ceased to have or maintain any office in the city of Indianapolis from and after March 12, 1904; that proof of the death of said insured could not be furnished to the Model as was required by said policy; that appellee in February, 1910, notified appellant of the death of said insured and requested blanks and instructions as to making of proofs of loss under said policy--No. 5299--but that appellant refused to furnish the blanks, and denied that the policy was of any force or validity; that appellant was a nonresident corporation of the State of Indiana at the time of the death of the insured, and, from that time to the bringing of this action, had no office or place of business in Indiana to the knowledge of appellee; that prior to February, 1910, she had no knowledge of the location of appellant's office or place of business, and for that reason was unable to give appellant notice of the death of said insured before February, 1910; that, upon learning the address and place of business of appellant, she promptly notified it of the death of the insured.

Appellant filed a motion to make this complaint more specific by requiring appellee to state whether or not the transaction of March 12, 1904, between the Model and appellant was in writing, and to set forth whether the alleged assumption and agreement by appellant to perform the obligations of the Model was in writing, and, if in writing, to set out the terms and conditions of such assumption. This motion being overruled, appellant filed its demurrer for want of facts. The grounds specified in the memorandum being: (1) That the complaint does not state the facts concerning the transfer to appellant; the nature, extent and character of the consideration for such transfer, assumption and agreement, but mere legal conclusions; (2) that no proof of the death of the insured was furnished within one year after the death of the insured as required by the policy sued on, and that the complaint failed to show performance by the appellee of the conditions precedent to entitle her to maintain this action.

The demurrer being overruled, appellant filed an answer in five paragraphs, the first of which was a general denial.

The second admitted that appellee was the administratrix of the estate of the insured; that appellant was a corporation organized and existing under the laws of the State of Illinois, and engaged in life insurance business; that on November 7, 1901, and continuously to March 12, 1904, the Model was a mutual life insurance company; that on November 7, 1901, George E. Barnett became a member of said Model, on which date the Model issued to him a policy of insurance for $ 2,500 for an annual premium of $ 90.35, and that it believed that the copy attached to the complaint was a correct copy of the policy, but it denied that the insured fulfilled the obligations on his part according to the terms of the policy. It also alleged that on March 12, 1904, the Model and appellant entered into a written contract of reinsurance under the terms of which appellant reinsured the policies of the Model then outstanding on the lives of the then living policy-holders, and that the obligations assumed by appellant as to said policies and policy-holders were assumed subject to and in accordance with the terms of said reinsurance contract and not otherwise; that the policy sued on was one of the policies so reinsured by appellant; that, under and pursuant to the terms of said reinsurance contract, appellant issued and delivered to said Barnett its reinsurance policy dated March 12, 1904, which reinsurance policy was in March, 1904, received, accepted and retained by said Barnett, and which reinsurance policy became, and was, a part of the contract of insurance between the appellant and the insured.

After admitting that the insured, George E. Barnett, died on February 16, 1908, it alleged that the president and the secretary of the Model at the time when the policy sued on was issued continued to be such president and secretary from that time to March 12, 1904, and that no persons were elected by said Model to succeed such persons subsequently to said date; that, when said policy was issued both the president and the secretary resided in the city of Indianapolis, and continued to reside therein up to and subsequently to 1910; that they continued as president and secretary of the Model after March 12, 1904, for the purpose of service of summons and notice and for the purpose of having proofs of death furnished to said Model; that appellee never made any attempt to ascertain the whereabouts of the president and the secretary, or either of them, and never made any attempt or offer to furnish proofs of the death of said insured to said Model or to appellant for more than one year after the death of said insured; that appellant had an office in the business part of the city of Indianapolis continuously from March, 1904, to 1912. That the policy sued on provided, among other things, as follows:

"Within one year after the death of the insured, the company must be furnished at its office in the City of Indianapolis with proof of death which shall comprise satisfactory statements establishing the validity of the claim, and said lapse of time before filing such proof shall be a conclusive bar to any recovery hereon."

That no notice was ever given to the Model of the death of the insured, and that no notice of his death was given to appellant until more than two years after his death; that appellee by reasonable diligence could have located and ascertained the address in Indianapolis of the president and the secretary of the Model prior to the expiration of one year from the death of the insured, but that she made no attempt to do so, or to notify the Model of said death; that appellee had knowledge of the reinsurance policy issued by appellant to the insured within one year from the death of the insured, and that the said reinsurance policy showed on its face the location and post office address of appellant; that the annual premium on said policy became due and payable November 7, 1904, and that it was not paid, by reason of which said policy lapsed.

A copy of the reinsurance contract between appellant and the Model and a copy of the reinsurance policy issued by appellant to the insured were attached to and made a part of this paragraph of answer. The third and fourth paragraphs of answer were stricken out on motion of appellee and are therefore omitted. Appellee filed a reply in two paragraphs. The first paragraph admits that the Model and the appellant entered into the written contract as alleged in appellant's answer, and alleges that said contract was entered into by said companies without the knowledge or consent of the insured; that, when so entered into, the Model was in possession of cash, bonds and notes of the aggregate value of $ 50,000, held by it for the benefit of its policy-holders; that the annual premium charged by appellant of a person the age of insured for a policy like the one issued to him by the Model was greatly in excess of what he was required to pay the Model and that, by the terms of said reinsurance contract, the appellant was privileged to charge against the policy held by the insured the same annual premium charged by it against like policies issued by it, and also to charge a large sum to constitute a reserve fund, which should be deducted from any amount due the beneficiary on the death of the insured; that said insured had no knowledge of the said provisions and did not consent thereto; that the Model prior to November, 1904, delivered all of its assets to appellant, abandoned its office in the city of Indianapolis, denuded itself of all means to meet these obligations, ceased to transact business, and never thereafter maintained an...