Case Name: Schneider v. United States Life Ins. Co.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-03-29
Citations: 4 N.Y.S. 797
Docket Number: 
Parties: Schneider v. United States Life Ins. Co.
Judges: 
Reporter: West's New York Supplement
Volume: 4
Pages: 797–798

Head Matter:
Schneider v. United States Life Ins. Co.
(Supreme Court, General Term, First Department.
March 29, 1889.)
1. Life Insurance—Surrender of Policy—Forfeiture.
A policy of life insurance, issued upon the life of plaintiff’s husband, in her favor, was surrendered by him without her authority, he having forged her name. Held, in an action to revive the policy after the death of the husband, plaintiff not knowing of the existence of such policy during bis life, that it was no defense that a cSrtain installment of the premium had not been paid, where the surrender, though made after notice for the payment of such installment was received, was made before default in the payment thereof.
2. Same.
Nor was it a defense that plaintiff had collected a paid-up policy issued by the insurance company in place of the one surrendered.
Appeal from special term.
Argued before Van Brunt, P. J., and Brady and Daniels, JJ.
Oliver P. Buell and W. A. Ogden Hegeman, for appellant. MeAdam & MeAdam, for respondent.

Opinion:
Daniels, J.
By the judgment the plaintiff has been permitted to recover' the amount for which a policy of insurance was issued by the defendant upon the life of her husband. She had no knowledge of the existence of this insurance prior to his decease. By the formal language of the policy, $6.47 for one-fourth of the annual premium would become due on the 17th of April, 1886, and notice of that fact was on the 15th of March, 1888, given to the plaintiff's husband, pursuant to chapter 341 of the Laws of 1876. This notice was not brought to the knowledge or attention of the plaintiff, but before the 30 days expired, and on or about the-25th of March, 1886, the policy was surrendered by the husband, whose life was insured, to the company, for the sum of $525, which was paid to him. This surrender was accepted, and the payment was made upon the authority of a release subscribed with the name of the plaintiff and of her husband; as that, in case she had subscribed her name, was permitted to be done by section 38of chapter 710 of the Laws of 1870. But, as a matter of fact, she neither subscribed nor knew of the release or surrender of the policy, but her name subscribed in this manner was a forgery. Her husband died on the 22d of December, 1886, and after the facts of the issuance of the policy and its surrender in this manner came to her knowledge this action was commenced to revive it as an obligation against the company, and to enforce its payment for her benefit. The court at the trial held that the surrender of the policy was not only without the authority, but a fraud upon the plaintiff, and that she was entitled to have it revived and enforced according to its terms against the defendant. The defense which was mainly relied upon was the omission or failure to pay the premium within the 30 days mentioned in the notice mailed to the plaintiff's husband on the 15th of March, 1886. But this defense was not sustained by the law, although in ordinary cases such a default would forfeit the policy. Holly v. Insurance Co., 105 N. Y. 437, 11 N. E. Rep. 507. But this principle was rendered inapplicable to this insurance by reason of the accepted surrender of the policy by the defendant before a default had taken place in the payment of this installment of the premium. That was held to be the law in Whitehead v. Insurance Co., 33 Hun, 425, which was to this extent affirmed in 102 N. Y. 143, 6 N. E. Rep. 267; for as to the two policies, which in that instance had been surrendered without right before the arrival of the time for payment of the premium, the court held the defendant in the action to be liable, and this holding of necessity maintained the right of the plaintiff in this action to recover against the defendant. The collection by the plaintiff of a paid-up policy issued by the defendant upon the same life for her benefit, in place of another preceding policy, in no manner affected her right in this action; for that right arises entirely out of what transpired between the parties concerning the policy upon which she was held entitled to recover, notwithstanding this fraudulent surrender of it. The liability of the company to pay the amount of the policy to the plaintiff is undoubtedly a hardship, but it cannot be excused or exempted from that liability by its reliance on the forged and fraudulent instrument produced as the authority for the surrender of the policy. It is not, however, without a remedy; for as long as it acted upon the certificate of the commissioned of deeds, who falsely certified that the plaintiff had appeared before him, and was personally known to him to be an individual described in and who had executed the authority, and acknowledged such execution before him, it may be at liberty to resort to him for indemnity for the loss in this manner produced. The judgment was right, and it should be affirmed, with costs. All concur.