Case ID: abbn-cas_11/html/0145-01.html
Source: Caselaw Access Project
Author: {"author": "Westbrook, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MATTER OF BOOTH.
    N. Y. Supreme Court, Third Department, Third District ; Special Term,
    
    
      June, 1882.
    Life Insurance.—Crediting Payment of Premium by Agent and Charging to Himself. —Notice of Forfeiture under L. 1877, c. 321. —Surrender of Policy for Benefit of Wife and Children.—Acknowledgment of wife’s Surrender.—Jurisdiction of Notary Public.— Costs against Receiver.
    A credit to the insured, of payment of ti premium on a life insurance policy, by a general agent on his books, in pursuance of a custom in that respect, and a charge of the amount as received by himself, —Held, as between the insured and the company, a payment thereof.
    There can be no forfeiture for non-payment of premiums, without giving the notice required by L. 1877, c. 381.
    
      A surrender by the insured, of a policy on his life in favor of his wife and children, is ineffectual, when executed by the husband for the wife without her authority, the company having nolice of that fact. The surrender by the wife must be acknowledged in the same manner as a release of dower [3 li. 8. (6 ed.) 162, § 79]. If acknowledged without the territorial jurisdiction of the officer taking the acknowledgment, it is ineffectual.
    A notary public, appointed for and residing in the city and county of New York, is not authorized to take an acknowledgment within the county of Dutchess.
    
    Costs will not be allowed against a receiver of a corporation who has in good faith and upon reasonable grounds resisted a claim against the fund, which is finally established.
    Motion to confirm the report of a referee in favor of a claim against the receiver of the Globe Mutual Life Insurance Company, arising upon a policy on the life of Oliver H. Booth.
    F. L. Westbrook, for motion.
    
      Mr. Devenny, for the receiver.
    Deputy Attorney-General Keeler, opposed.
    
      
       The statute as to powers without the county is 1 L. 1880, p. 358, c. 234, amending L. 1875, p. 527, c. 458, and Id. p. 94, c. 105, and L. 1873, p. 1211, c. 807.
    
   Westbrook, J.

By the report of the referee the following facts are established : On February 28, 1866, upon the application of Oliver H. Booth to Henry II. Frost, the General Agent of the Globe Mutual Life Insurance Company at Poughkeepsie, New York, such Insurance Company issued its policy of insurance No. 1,377, whereby in consideration of the sum of $338.60 then paid, and the payment of a like sum on or before February 28, in each and every year thereafter during the continuance of such policy, it “insured the life of said Oliver H. Booth for the benefit of his wife and surviving children.”

It was the custom of the general agent, Mr. Frost, on February 28, in each year, to charge Mr. Booth with the annual premium upon his books, giving the company, as against himself, credit for the premium, and call upon Booth for the money, when he needed the same, who then made prompt payment.

On March 1, 1871, on the application of Mr. Booth, policy No. 1,377 was exchanged for registered policy No. 1,891, which was for the same amount, requiring the same amount of annual premium, and was also for the benefit of the wife and children of the said Booih.

On February 28, 1879, Mr. Frost, the general agent of the company, according to his custom, charged Mr. Booth with the annual premium due upon1 the policy 1,891, crediting the company with the payment to himself of such premium.

On March 21, 1879, Mr. Frost died, and after his death Mr. Booth went to the office occupied by said. Frost in his lifetime, and tendered to the persons therein, who had been in Mr. Frost’s employ, the amount of the premium due February 28, 1879. Such persons declined to receive the money, upon the ground that they were not the agents of the company.

No notice has been served by the company, as provided by chapter 377 of the Laws of 1877, requiring the payment of the premium under penalty of the forfeiture of the policy.

After the death of Frost, Booth called at the office of the company in New York, and was told that the policy was lapsed by reason of the non-payment of the premium due February 28, 1879, but that if he would assent to*a re-examination they would give him a paid-up policy for four years. Booth, believing such statement to be correct, at the request of the company, signed in his own name and that of his wife a written surrender of the policy. He informed the officers, however, that he was not authorized to sign the surrender for his wife, to which the answer was made that it was a matter of no consequence, as it was a mere form.

On the next day the company sent a messenger to Poughkeepsie with a paid-up policy, and took from Booth and wile a surrender of the policy, they signing the same for themselves and as guardian of W. P. Booth, their infant child. The signature to such surrender, and acknowledgment of execution were made in the city of Poughkeepsie, in the county of Dutchess, to one Charles Bauer, a notary public, appointed for, and residing in the city and county of New York.

The only surviving child of Booth is the infant W. F. Booth. The claim founded upon policy No. 1,891 has been duly presented to the receiver within the time limited for that purpose—the net value of the policy on June 1, 1879, was $2,507.77, and the fund for the payment of registered policies is ample, and will leave, after paying all demands thereon in full, a large surplus.

The referee’s legal conclusions are: 1. That the policy had not lapsed on the first day of June, 1879. 2. That the policy was not surrendered to the company ; and, 3. That Elizabeth F. Booth and William- F. Booth are entitled to be paid the said sum of $2,508.77, with interest from June 1, 1879, ou.t of the special fund deposited with the Superintendent of Insurance for the benefit of registered policies.

A motion is now made to confirm the report, and direct payment. Such motion involves two questions : 1. Has the policy lapsed ? 2. Has it been surrendered \ The questions will be briefly answered :

First. Did the policy lapse by reason of the nonpayment of the premium due February 28, 1879 ? It did not—for two reasons.

1. As between the insured and the company, the premium due February 28,1879, was paid. It had been charged by the general agent to Booth, and the com- " pany had been credited with the receipts of the money •'(Lasher v. Northwestern Insurance Co., 55 How. Pr. 324; S. C. at General Term, 18 Hun, 98, 100 ; Bodine v. Exchange Fire Ins. Co., 51 N. Y. 117). This is unlike the case of Marvin v. Universal Life Ins. Co. (85 N. Y. 278). In that case the premium had not been paid, and the policy was forfeited prior to the alleged transaction with the general agent, whose powei-s were limited by the terms of the policy. In this case, as between the insured and the company, the premium was paid on the day it was due. The company had a credit for the amount thereof on the books of their agent. It was entirely competent for the agent to pay the premium for Mr. Booth and look to him for repayment, and this was precisely the transaction. There was consequently no forfeiture.

2. No step had been taken to forfeit the policy as required by chapter 321 of the Laws of 1877, and without giving the notice as required by said act, there could be no for feitnre, as that statute expressly declares.

Second. Was there a surrender of the policy ?

1. Very clearly- the attempted surrender by Mr. Booth was ineffectual. The insurance was for the benefit of his wife and children, and he had no authority in fact, and of such fact the company was informed, to execute the surrender for his wife. '

2. The surrender by the wife was ineffectual, as the statute (3 R. S. 162, § 90, 6 ed.) requires it to be acknowledged in the same manner as a release of dower. The notary, who took the acknowledgment, was an officer appointed for and residing in the city and county of New York, and could not execute its duties in the city of Poughkeepsie, which is not within the county for which he was appointed.

The surrender which was executed in Poughkeepsie seems to be a surrender of policy No. 1,377, and not of policy No. 1,891, the registered policy, upon which the claim was made. As the surrender is attached to policy No. 1,891, and such policy is wrongly indorsed as No. 1,377, it was doubtless assumed on the argument (no point on this irregularity being made), that it should be treated as an attempted surrender of policy No. 1,891. No discussion of the form of the surrender is therefore undertaken.

Costs are also asked against the receiver. This is not an action, and the case is not, therefore, covered by Columbia Ins. Co. v. Stevens (37 N. Y. 536). The most that could be urged in behalf of costs is, that they are discretionary with the court by force of sections 3,236 and 827 of the Code. Without any formal examination of the question, however, it is sufficient to say there are no facts disclosed which would warrant the order. Surely the receiver was justifiable in not admitting the demand. His resistance was in good faith, and upon reasonable grounds, and the award of costs in applications to the court against a fund in its hands for distribution would burden the trust so as to leave very little of the fund for creditors. The resistance to this claim being upon reasonable grounds and in good faith, no costs should be imposed.

An order must be entered confirming the report of the referee and directing payment of the amount thereby recommended, but without costs.