National Mut. Aid Society v. Lupold

• Decision Date: 04 October 1882
• Citation: 101 Pa. 111
• Parties: National Mutual Aid Society <I>versus</I> Lupold.
• Court: Pennsylvania Supreme Court

101 Pa. 111

National Mutual Aid Society versus Lupold.

Supreme Court of Pennsylvania.

May 30, 1882.

October 4, 1882.

May 30th 1882.

Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY, STERRETT and GREEN, JJ.

ERROR to the Court of Common Pleas of Dauphin county: Of May Term 1882, No. 69.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Hall & Jordan, for the plaintiff in error.—The corporation had no legal power to insure for the benefit of one not a relative of the members, nor did it do so. Such a contract would have amounted to a wagering contract, and would have been invalid: Mutual Benefit Association v. Hoyt, 13 Cent. L. J. 112; Warnock v. Davis, 25 Alb. L. J. 292; Cammack v. Lewis, 15 Wall. 643; Insurance Co. v. Hogan, 80 Ill. 35; Insurance Co. v. Sturges, 18 Kans. 93; Pritchet v. Insurance Co., 3 Yeates 458; De Bolle v. Pennsylvania Insurance Co., 4 Whart. 68.

The facts show that the insurance was really intended, from the first, entirely for plaintiff's benefit, and that the act of Sarah M. Snyder in taking out the policy was merely colorable. The law cannot be in this manner evaded: Hine & Nichols on Assignments 75.

Plaintiff being not a party to the original contract of insurance, cannot sue thereon: Flynn v. N. A. Life Ins. Co., 115 Mass. 449; Saunders v. Filley, 12 Pick. 554; Johnson v. Foster, 12 Metc. 167; Millard v. Baldwin, 3 Gray 484; Northampton v. Elwell, 4 Gray 81; De Bolle v. Penn. Ins. Co., 4 Whart. 67; Frankem v. Trimble, 5 Barr 520; Waterhouse v. Insurance Co., 69 Me. 409.

Plaintiff is not entitled to sue in his own name, as assignee, by virtue of the provisions of the Act of March 14th 1873, because the company defendant is not an insurance company: Commonwealth v. National Mutual Aid Association, 13 Norris 481.

Then, again, the certificates sued on expressly prohibited any assignment or transfer thereof, except by the consent of the company endorsed thereon; and it was not even alleged or pretended, much less proved, that any such assent or endorsement had ever been obtained, or even asked for. That an assignee can acquire no right of action in such case is established by the following authorities: Ferree v. Insurance Co., 17 P. F. S. 373; Insurance Co. v. Hebard, 10 Reporter 443; 37 Leg. Int. 348; Stevens v. Warren, 101 Mass. 564; Unity Mut. Life Assurance Association v. Dugan, 118 Mass. 219; Hine & Nichols on Ass. 84.

J. C. McAlarney, for the defendant in error.—Sarah M. Snyder made the applications for the insurance, the certificates were issued to her, and that she had an interest in her own life, which she could insure with the money of Isaac Lupold if she choose, and then assign the policies to him, will not now be questioned in the courts of Pennsylvania. In the language of C. J. SHARSWOOD: "If he was willing to insure himself with their money, and then assign the policy to them, there is no principle of law which can prevent such a transaction:" Cunningham v. Smith's Adm's, 20 P. F. S. 458; Clark v. Allen, 11 R. I. 441; IIine & Nichols, Life Insurance Assignments 85.

She could insure her own life, and present the policy as a gift to Isaac Lupold: Am. L. & H. Ins. Co. v. Robertshaw, 2 Casey 189.

The defendant below was an insurance company: State v. Mutual Protection Society, 26 Ohio St. 19; Commonwealth v. Wetherbee, 105 Mass. 149. Plaintiff was therefore entitled to sue in his own name by virtue of the provisions of the act of April 4th 1873.

The direction of the company as to the manner in which the assignment of their certificates is to be made is not part of the conditions, and the violation of which does not affect the validity of the certificate or assignment, there being no penalty attached. For where an assignment is simply prohibited without consent, no penalty attached, a violation of the prohibition does not affect the validity of the policy or of the assignment: Hine & Nichol's Law of Assignments of Life Ins. 41; Marcus v. St. Louis M. L. Ins. Co., 6 Ins. Law Journal 186.

But the assignments in this case are relieved from any difficulty from want of consent, if necessary, as the company ratified and confirmed them by demanding and receiving assessments from Isaac Lupold, the plaintiff, after they had in their possession the evidence of their assignment to him and his claim upon the corporation.

By demanding and receiving assessments, they waived the right to avoid, and must stand upon it: Cumberland Val. In. P. Co. v. Mitchell, 12 Wright 374.

Mr. Justice STERRETT delivered the opinion of the court, October 4th 1882.

The charter of the plaintiff in error, adopting the statute of the state of Ohio under which it was organized, declares, "The purpose of the association shall be the mutual protection and relief of its members, and for the payment of stipulated sums of money to the families and heirs of deceased members," and provides that "if a member dies within the period named in his certificate the amount shall be payable to his legal heirs, or any person designated in the certificate or by his will." In these particulars the certificates of membership or contracts of insurance on which the suit was brought conform to the charter; and, among other things, it is expressly declared therein that each certificate is issued by the association and accepted by the assured upon certain specified conditions, one of which is that it "may be assigned and transferred only by and...