Sol. Elgutter v. Mutual Reserve Fund Life Association

• Decision Date: 01 June 1900
• Docket Number: 13,311
• Court: Louisiana Supreme Court
• Parties: SOL. ELGUTTER v. MUTUAL RESERVE FUND LIFE ASSOCIATION

28 So. 289

52 La.Ann. 1733

SOL. ELGUTTER v. MUTUAL RESERVE FUND LIFE ASSOCIATION

No. 13,311

Supreme Court of Louisiana

June 1, 1900

Rehearing refused.

APPEAL from the Civil District Court, Parish of Orleans -- Ellis, J.

Lazarus & Luce, for Plaintiff, Appellee.

Denegre Blair & Denegre, for Defendant, Appellant.

OPINION

BREAUX, J.

This is an action brought by Sol. Elgutter, the plaintiff, to have a policy of insurance reinstated and declared in full force and effect, and to compel the defendant to accept the premiums unpaid. There was a judgment in the District Court in favor of plaintiff, from which defendant appeals.

The plaintiff alleges that in 1892, the defendant issued a policy of insurance on the life of Herman Aronsohn for three thousand dollars, which was assigned by the insured to him petitioner. The certificate of insurance declares, among other things, that premiums shall be paid within the designated time specified in the policy and that whether or not the insured receives the notice mentioned in the certificate, it shall be a condition precedent to the continuance of the policy, that a sum equal to the amount "of the last preceding mortuary premium and dues paid shall be paid said association within thirty days of the first week day of the month when due, and any deficiency in said amount shall be paid upon the demand of the association". If there is default in the payment of premiums, the policy "shall expire and become null and void, and the payments previously made are forfeited." It appears that the amount of the mortuary premiums and dues payable on the first day of February, 1896, or thirty days thereafter, was not paid, and it is, in consequence, claimed by the defendant insurance company that the policy thereby became null and void.

Regarding notice, petitioner avers that the defendant association failed to give him notice of the mortuary premiums and dues which were due February 1st, 1896, or thirty days thereafter; that on March 9th, 1896, he, through a representative, tendered to the agent of the defendant in New Orleans, the amount of the premium and dues, which was refused, and that since that time he has always been ready, to the knowledge of the association, to pay all his indebtedness to it, but that the defendant persistently refuses to accept payment; that under the terms of the policy, the company should have given him notice of the premiums and dues which he owed on February 1st, 1896, by addressing it to Newellton, in the parish of Tensas. Petitioner further avers that he was formerly domiciled in the city of New Orleans, where he received his notices and paid his premiums and dues; that in 1896 he left this city and took up his residence at Newellton; that the agent in New Orleans, whose duty it was to give notices, and to collect premiums, knew of his change of residence and address; that for the premiums and dues previous to February 1st, 1896, the defendant company, through its agent, mailed his notices to Newellton, instructing him to remit the amount called for, to the company in New York, and this he did, as directed, all except the last premium, which, owing to a want of notice, escaped his attention.

The defendant filed an exception of no cause of action. While this exception was pending, Herman Aronsohn, the insured, who had assigned his certificate to Elgutter, the plaintiff, intervened in the suit and adopted all the averments made by the plaintiff. He alleges that he was interested in having the indebtedness, upon which the assignment was made, paid at the maturity of the policy, and was, therefore, interested in having the policy reinstated; that it had been the custom of the defendant to give the plaintiff notice of the payment of the mortuary premiums and dues; that payments had always been demanded of plaintiff, and that the defendant company had looked to the plaintiff, and not to him, intervenor, knowing that he, plaintiff, had agreed to pay the premiums and dues.

The exception of no cause of action, filed by the defendant, as mentioned above, was overruled; and in due time, defendant filed his answer admitting the execution of the policy and its assignment, as alleged, but denying that the contract was an existing contract, as it had become null and void through failure of plaintiff to make payment of premiums and dues as required. Defendant's position further, is that it had given notice to Aronsohn, the insured, and that Elgutter was not entitled to notice.

The evidence shows that the defendant is a corporation organized under the laws of the State of New York, its business being that of insuring the lives of its members upon the co-operative assessment plan; that on the first week-day of the months stated in the policy, its Board of Directors made assessments upon the entire membership for such sums as it deemed sufficient to meet the existing claims of death; that any member failing to receive notice of this assessment held himself bound to notify the home office of said failure and that a failure to pay the assessment forfeits his membership; but, that, as made evident by the charter, the Executive Committee of the Association has the power to reinstate a delinquent member, at any time, within one year, for a good cause, and payment of all the delinquent dues and assessments. The record shows that in June, 1892, the policy previously issued to Aronsohn was assigned to Elgutter, plaintiff, to secure an indebtedness of the former to the latter. The defendant was duly notified of the assignment, and endorsed its consent on the assignment. The assignee, plaintiff, paid, as he stated and avers, the premiums up to and including that of February, 1896. The contract of insurance between the parties provides that "all notices addressed to a member or other person designated by said member at the last postoffice address appearing on the books of the association shall be deemed sufficient notice." (Italics ours.)

In February, 1896, plaintiff received no notice from the association. The evidence discloses that a notice was mailed from the office in New York to the insured, Aronsohn, in New Orleans, and no notice was given to plaintiff, Elgutter, holder of the policy.

The premium was not paid on March 2nd, 1896, and, in consequence, the defendant company declared the policy forfeited. On the 9th of March, 1896, plaintiff offered to pay the delinquent premium, which same the company refused to accept. Plaintiff, as before stated, sues to compel the defendant to accept premiums and reinstate the policy. We will, in our opinion, consider other facts having bearing upon the issues presented.

We do not think that the exception of no cause of action should be sustained, for the reason that plaintiff had an actionable interest in the policy he held, and the intervenor was interested in keeping the policy alive. One is properly plaintiff, and the other intervenor. The contract and the negotiations had created a privity between the plaintiff and the intervenor. Both are interested in sustaining the right claimed and the defendant is liable to both. It follows that the exception falls. Plaintiff had a substantial right, as assignee of the policy, and was interested in preventing its forfeiture. C.P. 15.

We now take up for decision plaintiff's claim that no notice was given of the amount due by him on his policy on March 2nd 1896. This contention is pressed upon our attention by plaintiff, who insists that he was entitled to notice as beneficiary. It is undoubtedly true that the assignment was made to plaintiff with the consent of the defendant company, as alleged. The policy is dated May 17th, 1892. The day after it was issued, the State of New York enacted a law in relation to insurance companies, prohibiting the forfeiture of policies unless notice "at the place where it should be paid, and the person to whom the same is payable shall be duly addressed and mailed to the person whose life is insured, or the assignee of the policy (if notice of the assignment has been given to the corporation) at his or her last known postoffice address by an officer of the corporation, or person appointed by it to collect such premium at least fifteen, and not more than forty-five days prior to the day when the same...