National Mut. Ins. Co. v. Home Ben. Soc. of New York

• Decision Date: 27 May 1897
• Docket Number: 413
• Citation: 181 Pa. 443,37 A. 519
• Parties: The National Mutual Insurance Company, to the use of Julia O'Brien, v. The Home Benefit Society of New York, Appellant
• Court: Pennsylvania Supreme Court

37 A. 519

181 Pa. 443

The National Mutual Insurance Company, to the use of Julia O'Brien, v. The Home Benefit Society of New York, Appellant

No. 413

Supreme Court of Pennsylvania

May 27, 1897

Argued February 15, 1897

Appeal, No. 413, Jan. T., 1896, by defendant, from judgment of C.P. Schuylkill Co., Jan. T., 1895, No. 233, on verdict for plaintiff. Affirmed.

Assumpsit on a policy of life insurance. Before BECHTEL, J.

At the trial it appeared that on June 17, 1892, the National Mutual Insurance Company of New York issued a policy of insurance for $5,000 upon the life of Edward O'Brien, the use plaintiff's husband. On March 28, 1894, the National Mutual Insurance Company of New York entered into a contract with the Home Benefit Society by which it was provided that the National Mutual Insurance Company of New York should "transfer, or cause to be transferred, to the best of its ability, the membership of said National Mutual Insurance Company," to the Home Benefit Society, and that the latter should "reinsure said members on the basis of their original applications to said National Mutual Insurance Company on an execution of a satisfactory transfer application to said Home Benefit Society; it being further agreed that said transferred members shall be rated at the same amounts, with premiums payable on the same basis, as they are now paying in said National Mutual Insurance Company."

The New York statute relating to insurance companies doing business upon the cooperative or assessment plan reinsuring their risks, is as follows:

"No such corporation organized under the laws of this state shall transfer its risks to or reinsure them in any other corporation unless the contract of transfer or reinsurance is first submitted to and approved by a two-thirds vote of a meeting of the insured called to consider the same, of which meeting a written or printed notice shall be mailed to each member, certificate holder or policy holder at least thirty days before the day fixed for such meeting. If such transfer or reinsurance shall be approved, every member, certificate holder or policy holder of the corporation who shall file with the secretary thereof, within ten days after the meeting, a written notice of his preference to be transferred to some other corporation than that named in the contract shall be accorded all the rights and privileges, if any, in aid of such transfer, as would have been accorded under the terms of such contract, had he been transferred to the corporation named therein."

On April 17, 1894, a quarterly premium of $77.25 became due by O'Brien, and later in the month he sent this amount to the Home Benefit Society. A transfer application was sent to him which he filled out stating in it that he had recently had an attack of pneumonia, but that his health was fair at the time he signed the application. His check was returned to him, and a demand made upon him that he should be examined by the physician of the Home Benefit Society. O'Brien refused to undergo another medical examination, and did not pay the next quarterly instalment due on July 17. He died on August 15, 1894.

The court charged in part as follows:

There is nothing in the contract which gives to the medical director the right to determine whether or not the application for transfer shall be regarded as satisfactory unless it is to be found in the language "upon execution of satisfactory transfer application to said Home Benefit Society." The defendant, through its counsel, declares it does not claim the right to subject members applying for transfer to a medical examination, but to require satisfactory transfer applications; and we will say there is nothing in the contract giving to the defendant in express language the right to require members of the National Mutual Insurance Company to submit to a medical examination. [There is nothing in this contract to indicate what shall be regarded as a satisfactory transfer application; nor is there anything in the contract to indicate in what respect it is to be satisfactory, whether as to its form or as to the age of the applicant, or the condition of health of the applicant,] but it provides for reinsurance on the basis of the original application to said National Mutual Insurance Company, and that the transferred member shall be rated at the same amounts, with premiums payable the same dates as they were paying in the National Mutual Insurance Company.

In view of this language of the act of the state of New York "If such transfer or reinsurance shall be approved every member, certificate holder or policy holder of the corporation who shall file with the secretary thereof within ten days after the meeting a written notice of his preference to be transferred to some other corporation than that named in the contract, shall be accorded all the rights and privileges, if any, in aid of such transfer as would have been accorded under the terms of such contract had he been transferred to the corporation therein named," every member was required to indicate by notice in writing his determination as to whether he would be transferred to the defendant or some other company, and neither of the parties to the contract in evidence before you could direct to which company he or they should be transferred.

The plaintiff claims that Edward O'Brien did by writing indicate to the defendant company his determination to be transferred to it under the contract in evidence. [We prefer, therefore, to submit to you the question of whether or not this application or writing of Edward O'Brien to the defendant society was the execution of a satisfactory transfer application to said Home Benefit Society, and was intended by him to be such, rather than to give to you binding instruction upon this branch of the case, saying to you, if you find it was, then the plaintiff has in this respect made out her claim; and if you believe the testimony relating to the death of Edward O'Brien, and that Julia O'Brien is his wife, is living, we think the plaintiff would be entitled to your verdict, and we so instruct you.] If you find that the transfer application was not such satisfactory transfer application as is required, then the plaintiff has failed to make out her claim, and would not be entitled to your verdict, and if you so find you should render a verdict for defendant.

[If you find for the plaintiff, she would be entitled to the amount of the policy with legal interest from the time it became due and payable under its terms up to this date, and you must name the amount in your verdict. By that we mean if you find for the plaintiff you must say we find for the plaintiff for so much, not leaving any calculation to be made when you present your verdict here.]

Verdict and judgment for plaintiff for $5,045. Defendant appealed.

Errors assigned among others were (5, 7, 8) above instructions, quoting them.

The judgment, subject to the above direction, is affirmed.

John G. Johnson, with him Nicholas Heblich and Edmund Luis Mooney, for appellant. -- There could have been no recovery in the suit originally brought, upon the statement therein filed, by Julia O'Brien, against the corporation defendant: Adams v. Kuehn, 119 Pa. 76; Delp v. Brewing Co., 123 Pa. 51; Torrens v. Campbell, 74 Pa. 470; Bellas v. Fagely, 19 Pa. 273; White v. Thielens, 106 Pa. 176; Hind v. Holdship, 2 Watts, 105; Shoemaker v. King, 40 Pa. 107; Freeman v. Penna. R. Co. 173 Pa. 274.

It was error to allow the jury to find, under the contracts and the evidence, that a satisfactory transfer application had been executed.

The...