Case Name: Kennedy v. New York Life Insurance Company
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1855-12
Citations: 10 La. Ann. 809
Docket Number: 
Parties: Kennedy v. New York Life Insurance Company.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 10
Pages: 809–814

Head Matter:
Kennedy v. New York Life Insurance Company.
A special plea to that effect, is necessary to put the plaintiff upon proof of his interest in the life in-
The agent of a foreign insurance company received the premium upon a life insurance, and gave his receipt, which, it was agreed, should be exchanged for a policy, within thirty days, if the insurance was not rejected by the parent office. Keld: The “ temporary policy ” did not terminate at the expiration of thirty days. That time was fixed as the period within which the policy was to be exchanged for one from the parent office. It was the duty of that office to forward the rejection of the contract, made by their agent, to the office at New Orleans, (where the “ temporary policy” was entered into,) immediately on receiving notice of the contract made on their behalf by their agent. The insurance office could not therefore relieve itself from liability by rejecting the insurance, when, after the lapse of thirty days, it received notice of the death of the person insured.
Kennedy had an insurable ^interest in the life of Mathews to the extent only of one half of the amount due by Mathews to K&mtedy & Foster, — Lea, J.
PPEAL from the Fourth District Court of New Orleans, Reynolds, J.
J-3L Wolfe & Singleton, for plaintiff.'
R. Hunt and Bright, for defendants and appellants:
A policy in the name of a single partner, is limited to his own share. 2 Duer, 20, 24, n. Ill; 1 Arnould, 147; 8 Kent., 258; Graves v. Boston Oo., 2 Oranch, 419.

Opinion:
Merrick, C. J.
On the 21st day of May, 1852, the defendant, through 0. 0. Lathrop, its agent at New Orleans, entered into the following agreement with the plaintiff, viz:
"Agency New York Life Insurance Company,
Ho. 92 Oamp street, Hew Orleans.
TEMPORARY POLICY NO. 41.
Received of Samuel H. Kennedy, Esq., the sum of $157, as specified below in full, for twelve months' premium on the amount of $5000Jierewith insured on the life of Bmid Wooldridge Matthews, subject to the usual conditions contained in the policies of the New York Life Insurance Company.
It is hereby agreed that a policy from the parent office for the above amount $5000 shall be exchanged for this, within thirty days from this date : provided, the risk is accepted ; but if rejected, this temporary, policy shall become void on receipt of such rejection at this office, when a pro rata amount of the premium received shall be returned.
$98 30 costs,.
62 20 note, [Signed]. C. C. LATHROP,
1 50 policy.. Agent."
$157 00
At the time this agreement was made, and subsequently, the parties were treating for an insurance for life upon the life of Matthews, who, it seems, at that time, was under medical treatment. The physician of the company having given it as his opinion that, from the improved state of Matthews' health, it would be safe to issue a temporary policy at once, the above instrument was-executed.
It further appears that Matthews went to Louisville, where he continued under medical treatment until his death, the 3d of September of the same year, the proposition for an insurance for life, still being entertained and only awaiting the certificate of the Louisville physician to be issued. He died of tubercular consumption. There is nothing in the testimony to induce a suspicion that Kennedy, Matthews and the physician of the company were not acting in the most perfect good faith at the time the agreement was entered into.
After the death of Matthews, the President of the company having been informed thereof by G. 0. Latlwop,' the agent, directed him (Lathrop) to deduct the pro rata premium for thirty days, and return the remainder of the premium paid to Kennedy, the plaintiff, advising Lathrop that the application forwarded to that office, upon examination on receipt, was declined or suspended until Mr. Matthews' complete recovery.
This appears to be the first notice of the rejection, (if such it can be called,) of the temporary policy issued the 21st of May.
The answer admits Lathrop's authority to enter into said agreement. The first question, therefore, is, Did the temporary policy terminate at the expiration of the thirty days ?
"W"o are satisfied that it did not so terminate. The thirty days were fixed as the period in which the policy was to be exchanged for one from the parent office, if the risk should be accepted by the parent office. This period was in the interest of the company, and was for the purpose of enabling the parent office to reject, if they should see fit, the contract éntered into by their agent. And it was their duty to forward the rejection of the contract made by their agent, to the office at New Orleans, within the thirty days, and immediately on receiving notice of the contract made on their behalf by their agent. 11 L. R. 286.
The acknowledgment of the receipt of the premium for the insurance upon the life of David Wooldridge Matthews, for the amount of $5000, for twelve months, shows that, in contemplation of the parties, the contract was for insurance for one year. If the policy should be rejected by the company, it did not annul the contract made by their agent for the past; it terminated it for the future only. The insured was to receive back his premium pro rata for the time remaining, and, as a consequence of the retaining of the premium between the date of the temporary policy and the notice, the company were liable to the risk during the same period. We have no doubt of the liability of the company upon the instrument produced in evidence.
We have looked into the evidence offered by defendant and rejected by the court. It was not communicated to the insured, and its reception could have had no influence upon the case. It is objected in this court, that the insured was without an insurable interest to the amount of the policy taken out, and that, therefore, the judgment should be either reduced in amount or absolutely in favor of the defendant.
There would be more force in this objection if the defendant had put the fact at issue in his answer.
The -answer, after admitting the execution of the policy by Lathrop, as their agent, .is but a general denial as to all other matters.
We think in order to put the plaintiff upon proof of interest in the life insured, there should have been a special allegation to that effect. The contract of insurance is one of indemnity; but in the life insurance, the amount of the indemnity, we think, like a valued policy, is agreed upon before hand, and the other party ought not, under our system of pleading, to contest this admission m his contract, without putting it expressly at issue.
Perhaps in the action of assumpsit at common law upon a policy of life insurance, under the general issue, it might be necessary to show an interest in the life insured, but then it would be because, in the action of assumpsit, that plea puts every thing at issue, the consideration, as well as every thing tending to show that there was an indebtedness on the part of defendant.
Under this plea, the defendant might give in evidence the illegality of the contract, coverture, lunacy, and in fine, everything which would show that the plaintiff was not entitled to recover. 8 Greenleaf, No. 135. At common law also, upon simple contract debts, that is, on contracts not under seal, (and of this nature we take the policy of insurance to be,) it was necessary in all cases that the party suing upon such contract, should prove the consideration for the promise.
Oür law, on the contrary, presumes every contract which does not appear illegal or immoral on its face, to be made for a valid cause and upon a sufficient consideration, and it is incumbent upon him who would put the opposite party upon the proof of the sufficiency of the cause, to do so, specially by his pleadings. 2 L. R., 455.
As a general rule in life insurance, there is no distinction between total and partial losses. Annesley, 207.
If a party is not permitted under our law to recover on an insurance for life, in a life in which the insured has no interest, it is because it is a wager and, as such, is against the policy of our law. It is evident, then, that the defendant who would avail himself of the defence, should plead it.. Harvey v. Fitzgerald, 6 M. R. 550.
It is true that the plaintiff, in his petition, has alleged that he had an interest in the life insured, and he has also adduced proof to show that he was the surviving partner of Kennedy & Foster, and that Matthews, as a member of the insolvent firm of Matthews & Patch, was indebted to Kennedy & Foster, in a sum somewhat larger than the amount covered by the policy. Perhaps under the authority of Millaudon v. Atlantia Insurance Company, 8 L. R. 557, the plaintiff would be entitled to recover, had the defendant put the interest of the plaintiff directly at issue. However this may be, under the view we take of the case, the allegation in plaintiff's petition was unnecessary, and the introduction of proof, out of extreme caution, cannot be permitted to prejudice his case. It is a well settled rule of law, that unnecessary allegations, need not be proven. Montgomery v. Meyers, 2 An. 276.
It is therefore ordered, adjudged and decreed, that the judgment of the; lower court be affirmed, with costs.
Spoffobd, J.
Although the fact of the plaintiff's interest, as a creditor, in the life of Matthews, appears to me to have been put at issue by the pleadings,, yet I do not find that the extent of that interest was put at issue at all.
The defendant, it seems, has raised that question for the first time in this, court.
I therefore think the judgment should not be disturbed, unless it appears affirmatively and conclusively from the evidence, that the plaintiff's interest was less than the amount insured.
But the evidence is quite consistent with the opposite hypothesis. For instance, if the plaintiff was in advance to his firm, of jKennedy & Foster, or if the assets of the firm were less than the liabilities, and the succession of Fos- fer¡ insolvent, or if at the time the insurance was effected, Kennedy, as is probable, had the sole administration of the partnership affairs, it might follow that he had an insurable interest in Matthews' life, to a greater amount than the policy specified.
I therefore concur in the judgment.