Pilcher v. New York Life Insurance

The opinion of the Court was delivered by Levy, J. Mrs. A. M. Pilcher and the Louisiana National Bank instituted separate suits against the New York Life Insurance Company in which each plaintiff seeks to recover of said company the sum of -ten thousand dollars, the amount alleged to be due on the policy No. 10,034 issued on the Life of Mason Pilcher. These separate suits were ■consolidated and tried together in the Fifth District Court of the parish — 323 — •of Orleans, and there was judgment in favor of Mrs. Pilcher for $8997 05 •and against the Louisiana National Bank, dismissing the bank’s suit at its costs. The New York Life Insurance Company and the Louisiana National Bank have both appealed. The appellee, Mrs. Pilcher, in hef •answer to the appeal prays for amendment of the judgment in her ■favor, and that she be decreed to recover of the New York Life Insurance Company ten thousand dollars, interest and costs. In her petition, Mrs. Pilcher alleges that in the year 1854 the life of her husband, Mason Piloher, was insured by the New York Life Insurance Company for her benefit; that a policy, No. 10,034, was issued in her favor for said sum, and the premiums thereon were duly paid to ■ J une, 1871, when the said Mason Pilcher and said N. Y. Life Insurance ■Company agreed between themselves, and without her consent, that the «said policy should lapse for the non-payment of a premium, and then •made another written instrument, which they called a new policy, bear- j ing the same number as the one issued in 1854, but made in favor of or for the benefit of Mason Pilcher, instead of herself; that all this was ■concerted by Mason Pilcher, the Insurance Company, and Johnson & 'Goodrich, merchants in New Orleans, to whom Mr. Pilcher was indebted, in order that the policy might be pledged to said mercantile firm, all which, as above stated, was done. She alleges that this was a ■device to take her property to secure her husband’s debts ; that the policy belonged to her, and could not be destroyed without her consent; that the original policy lives, and is operating notwithstanding, and the ■death of her husband having taken place, the Insurance Company has •■become indebted to her in the sum of ten thousand dollars. She made-'the Insurance Company and the Louisiana National Bank parties to her ■suits, and prayed for judgment decreeing that the Louisiana National Bank has no right, title or interest in said insurance money; that said Ináurance Company be decreed to pay said sum to her. For answer to this petition the Louisiana National Bank set forth that it had acquired ■the policy of insurance, No. 10,034, issued on 5th July, 1871, by pledge ■and assignment from the firm of Johnson & Goodrich, in good faith, on -the 12th of March, 1874; that said firm had acquired said policy in good faith from Mason Pilcher on the 24th of July, 1871; denied that Mrs. Pilcher had any claim, right, title or interest in said policy; averred that ¡said bank had, since the assignment of 12th March, 1874, paid the sum of $2208 32 in payment of premiums on said policy, and prayed that the Insurance Company be condemned to pay the amount of the policy to the bank; but if the court should decree that the amount of said policy ■was due to Mrs. Pilcher, the bank should recover, and there should be paid to it out of said policy the sum of $2208 32 premiums’ paid by it as aforesaid. — 324 — The Insurance Company filed exceptions to both these suits on the-ground oí prematurity and insufficiency, alleged that it was unable to decide to which of the plaintiffs the payment of the policy was due; admitted the execution of the policy for $10,000 on the life of Mason? Pilcher, that it held the premium note of the Louisiana National Bank,, amounting with interest to $1002 95, which amount it claimed it was-entitled to compensate; that deducting this last mentioned sum, there? remained a balance due on the policy of $8997 05, which balance it tendered and deposited in court subject to the further orders and decrees-of the court, and prayed that it might be discharged of all liability in. respect of said policy, and discharged of all costs. The amount thus-tendered was by order of the court specially deposited in the Canal Bank in the City of New Orleans, subject to the final judgment of the-court. The evidence discloses the following facts: the policy No. 10,034, issued in 1854 on the life of Mason Pilcher, was for the use of Mrs. Pilcher; in other words, she was named therein and acknowledged and-accepted by the company as the beneficiary. In June, 1871, this policy,, by agreement between Mason Pilcher arid the Insurance Company, was-allowed to lapse for the purpose of having a policy issued in its steady making the heirs or assigns of Mason Pilcher the beneficiaries. This-last-mentioned policy was dated the fifth of July, 1871, and was made payable to Mason Pilcher’s representatives. This was done without the knowledge or consent of Mrs. Pilcher. The policy dated July 5th, 1871,. was assigned on the 24th of July, 1871, by Mason Pilcher to Johnson. & Goodrich, on the 23rd of March, 1874, by Johnson & Goodrich to J. H. Oglesby (President of the Louisiana National Bank) and on the 14th. of July, 1877, by Oglesby to the Louisiana National Bank, all these assignments were duly notified to the Insurance Company and acknowledged by the company. On the 14th of October, in the year 1878, Mason Pilcher died. We shall first consider the claim of Mrs. Pilcher to be paid the amount of the policy issued in 1854. We think that the right to the policy vested in Mrs. Pilcher, th e wife and beneficiary, and she could not be divested of that right without her consent, by her husband or the insurer, except by failure to comply with the requirements of the policy. We are of opinion, also, that the husband had not the right to dispose of the policy and that it could not be regarded as a community asset. This Court has, in repeated decisions, held these views. In Succession of Kugler, 23 An. 455, the Court said: “ We think the right of the widow and children to the policy existed before the death, and that the liability of the Insurance Company became fixed and exigible by the-death of the insured.” And in 26 An. 326, Succession of Hearing, this — 325 — -doctrine is reaffirmed, and also in 27 An. 269, Succession of Clark. In Succession of Bofenschen, 29 An. 714, it was held, substantially, that -the proceeds oí a policy of life insurance taken out by the husband in favor of his wife, do not become a part of the community, but belong •exclusively to her and her heirs. These decisions, considered together, we think, effectually dispose of the question as to the right of the ■husband to the control of the policy as community property. If on the •death of the husband it could not enter into the commuity, but should ’be treated as the separate and exclusive property of the wife and •children, its character must have been the same during his lifetime. If-•then Mrs. Pilcher had a vested right to the policy for her sole and exclusive benefit, how was'she affected by the agreement of her husband -•and the Insurance Company, whereby it was sought, without her knowledge and consent, virtually, to continue in force the policy issued in her ■■name and for her benefit, but to change the beneficiary therein. The basis, indeed the 'consideration of the policy of 5th of July, '1871, was the policy of 1854; in the issuance of that in 1871, there was ■no re-examination of the person whose life was insured, no physician’s -certificate, no increase of the annual premium regulated by the age of the person insured, although when this new policy, as it is styled, was issued, Mason Pilcher was eighteen years older than when the first policy was taken out. Indeed, it is shown that, with the exception of the change in the date and in the name of the beneficiary, that of July, 1871, is identical with that of 1854. The transfer of the policy of 1871 to Johnson & Goodrich was made in payment of the husband’s debts, ■and it is not contended or shown that its transfer enured to her separate benefit or advantage. The face of the original policy disclosed for •whose benefit it had been issued; and the Insurance Company better than any person knew this, and knew also that there had never been ■ any legal transfer of it by her. The pretended lapse of the policyi never actually took place; on the expiration of the time within which j •she or any one for her could pay the annual premium, without giving her an opportunity to avail herself of the benefit of a stipulation agreed to by the company, viz: “ If premiums are not paid at maturity, the •policy by its terms becomes forfeited, but it may within a reasonable "time be renewed at the office with satisfactory evidence of good health,” ■etc., the company with indecent haste issued what is claimed to be as to i Mrs. Pllchera new policy. It was not as to Mrs. Pilcher anew policy, but! merely as to her a continuation of the original one. The company notwith- ‘ ■standing the alleged failure to pay the premium at maturity, received the amount due therefor within a reasonable time, kept it alive with the same requirements, stipulations and consideration as. were contained in the original policy; and it even appears that the premium note — 326 — putstanding at the death of the insured was a renewal, a continuation of the premium note on the policy of 1854 accepted from the bank in lieu of Mrs. Pilcher’s note. It appears from the evidence that the annual premiums due on the-policy issued in 1854 were paid by or for Mrs. Pilcher for all the years-from 1854.'.to,1870, inclusive, and by Johnson & Goodrich from 1871 to 1873, both inclusive, and from 1874 to 1878, both inclusive, by the Louisiana National Bank. Holding the company responsible and liable to-Mrs. Pilcher for the amount of the policy in her favor and for her benefit, we think it just and equitable that the company should compensate their indebtedness to her with the amount of the premiums-accrued from the date of the maturity of the' premium due for 1871,. viz: 17th June, 1871, to the date when the last annual premium became-due, i. e. from 187‡ to 1878, both inclusive, being eight years. The first apparent knowledge of these transactions and the first notice to the Insurance Company and demand for recognition of her rights under the policy in her favor, on the part of Mrs. Pilcher, is evidenced by her letter, written conjointly with her husband, to the company, January 8th, 1876, and it is urged that not even then, nor thereafter, did she make any tender of the premiums; and that, therefore,, so far as she was concerned, her policy became forfeited. We think such position on the part of the company is not tenable, and should not prevail. It must be borne in mind, that the company itself was a party to the wrong committed against Mrs. Pilcher; it had done all in its power, without her knowledge or consent, to deprive her of a right;. it had, by its own act and contract, ignored any faculty on her part to reinstate herself to her rights in the policy; it 'denied the existence of any policy on which she, or any person for her, could pay the annual premiums, and, therefore, is estopped from complaining that she did. not do that which it had itself deprived her of the power of doing. If, upon the notification and demand made in the letter of January 8th, 1876, the company had offered to undo the wrong which it had participated in, and had offered to reinstate her in her rightful position, it. might perhaps with some reason and propriety have required on her-part the payment of these premiums as a condition 'precedent to such-reinstatement; but so far as the record shows, no such action was taken by it, and on the contrary, it preserved silence, made no response to her demand for recognition, and its conduct must be construed as persistence in its wrong and continued denial of her rights, which, under the circumstances, relieved her of the necessity of making a vain tender. It was not required that she should herself make the payments; vitality would be preserved in the policy in her favor, no matter by whom the premiums were paid, and these premiums were paid on a — 327 — policy which, as to her, existed in her favor. If the company chose by its own act to attach to that policy a new character and liability, and by mere change of date and name of the beneficiary, to give it validity as to another party, and create thus a double obligation on itself, it .must bear the responsibility of its own acts, and cannot release itself from liability, and throw loss upon an innocent party who had no participation in its wrongful acts. Considerations of equity and good conscience require that if Mrs. Pilcher shall avail herself of the full benefits of the policy in her favor, she should comply with the obligations and requirements of the policy, when she is in a position where she can do so, and, therefore, we think the company should be allowed to compensate the premiums for the years from ’74 to ’78 inclusive, pro tanto. We are next called upon to decide as to the claim of the Louisiana National Bank as transferree and holder of the policy of insurance issued on July 5th, 1871, in which Mason Pilcher’s representatives are named and constituted the beneficiaries. It is true a policy of insurance is not what is termed a negotiable instrument, but it is assignable and transferable, and indeed one of the articles or stipulations incorporated in the policy prescribes the manner in which its assignment may be made. It is contended that Johnson & Goodrich, to whom the policy of 1871 was assigned, were fully informed as to the facts connected with the issuance thereof, and had full knowledge of the defects of that policy, and, therefore, if Johnson & Goodrich had no rights under the transfer to them by Mason Pilcher, the bank, transferree of Johnson & Goodrich, could acquire no greater rights than its transferrer had. But wa are clearly of opinion that the Insurance Company is estopped from making such defense as to the bank. The Insurance Company joined Mason Pilcher in a wrongful attempt to divest Mrs. Pilcher in her right to the policy issued in 1854, in her favor and for her benefit. The company issued what they claimed to be a new policy, and sent it forth, subject to be assigned and transferred in the manner prescribed by them. It was so assigned and transferred to the bank; there is nothing to show that the bank had any knowledge whatever of the circumstances under which the policy sought to be assigned to them had been issued, or that the policy of 1854, in favor o: Mrs. Pilcher, “had been,” by the company, “allowed to lapse for the purpose ” of divesting Mrs. Pilcher of her rights therein, and “ having the policy of 1871 issued in its stead, making the heirs or assigns of Mason Pilcher the beneficiaries.” As to the bank this was a new policy; the company had issued it as such, its assignment to the bank was acknowledged by them, and they accepted the assignment, without — 328 — which acknowledgment or acceptance, no validity would have attached to it, and thus the company is, we think, bound to the bank on its new policy, and is estopped from pleading against the bank the defect of the invalidity of the new policy which the company itself had issued for the purpose of depriving Mrs. Pilcher of. her rights, and avail itself in defense of a legal fraud perpetrated by itself. It may be that the company received the premiums on only one policy, but it can blame no one for that but itself. Its own attempted wrong prevented the beneficiary under the first policy from redeeming it when she had a right to do so, and from paying the annual premiums at the time they fell due; it issued as a new policy that of which the bank became assignee in due form, and with its own acknowledgment, acceptance and sanction, and so far as intrinsic evidence in the policy itself is concerned, having no connection with any previous policy, and affording no grounds for the slightest suspicion that it invaded the rights of other persons, or was in any manner tainted with invalidity. Bliss Life Insurance, under head of Assignments of Policy and Assignments by Married Women, p. 540 et seq. We think the company is liable to the bank, and cannot aver that there is any other policy to displace that which the bank holds. We regard the company’s liability to the bank as distinct and separate from that to Mrs. Pilcher; and this liability is, as contended by counsel of the bank, irrespective of any former policy. The case of Barry vs. Brune et al., 71 New York Reports, was different in its features from the present one. In that case, the court held there was but one policy, and the company should pay.but once; in this, as to Mrs. Pilcher and the bank, there were two policies practically, and by the act of the company the beneficiaries separately and distinctly created by the company are each, as to the company, entitled to recover the amounts for whose benefit each of them by distinct acts of the insurer had become entitled. In support of the views which we have expressed in this opinion, we are sustained by the following authorities: 38 Conn. Rep. 294; 71 N. Y. 261; 36 Conn. 132; 52 N. Y. 312. We are. of opinion that the bank should recover the amount of the policy of July 5th, 1871, less the amount due on its premium note, which must compensate pro tanto the indebtedness to the bank on said policy. It is, therefore, ordered, adjudged and decreed, that the judgment rendered in favor of Mrs. A. M. Pilcher, by the court below, in suit No. 9571, Fifth District Court, parish of Orleans, be amended, and that there be judgment in her favor against the New York Life Insurance Company for the sum of ten thousand dollars, with five per cent per annum interest thereon from December 14th, 1878, to be credited with the sum — 329 — of five hundred and twenty-five dollars, with five per cent interest from 17th June, 1871; with a like sum with like interest from June 17th, 1872; with a like sum with like interest from June 17th, 1873; with a like sum with like interest from June 18th, 1874; with a like sum with like interest from June 17th, 1875; with a like sum with like interest from June 17th, 1876; with a like sum with like interest from June 17th, 1877, and with a like sum with like interest from June 17th, 1878; and that the judgment of said lower court in the case of the Louisiana National Bank vs. New York Life Insurance Company, No. 9685, be annulled, -avoided and reversed; and proceeding to render such judgment as -should have been rendered by the court below, it is ordered, adjudged and decreed that the Louisiana National Bank do have and recover judgment against the New York Life Insurance Company for the sum of ten thousand dollars, with five per cent per annum interest thereon •from December 14th, 1878, subject to a credit of one thousand and two dollars and ninety-five cents, to be applied to the principal and interest due to said Louisiana National Bank on the judgment herein, as of the -date of March 14th, 1879. It is further ordered, adjudged and decreed, -that the amount of eight thousand nine hundred and ninety-seven dollars and ninety-five cents, tendered by the defendant and deposited by order of the lower court in the Canal Bank, in the city of New Orleans, be applied pro rata to the judgments herein rendered; the balance due on each of said judgments to be paid by said New York Life Insurance Company. The costs of this appeal to be paid jointly by the New York Life Insurance Company, defendant and appellant, and Mrs. A. M. Pilcher, plaintiff and appellee, and the costs of the lower court by the New York Life Insurance Company.