Court Opinion

ID: 5626535
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:55:09.891593+00
Date Added: 2024-06-11T08:37:37.956040
License: Public Domain

ON MOTION FOR REHEARING.
Per Curiam.
The plaintiff in error insists that the court is in error in stating that the defendant insurance' company assumed liability on outstanding policies of the Pittsburgh Company in force on May 7, 1917, whereas such assumption of liability was on the condition: “with the consent of the several owners and holders thereof, and subject to an agreement on th.e part of each holder and owner.” It is unquestioned that on May 7, 1917, the Pittsburgh Company was liable on the policy sued on, under its assumption agreement made with the Security Trust and Life Insurance *309Company. On August 3, 1917, the receiver oJE the Pittsburgh Company, subject to the approval of the court, which was obtained, entered with the defendant company into an agreement whereby it was stipulated that the assets of the Pittsburgh Company “do not exceed in value the amount set opposite such item in such schedule, and that a fair market value of such assets amounts to only 72-1/2 °/o of its liabilities.” The liabilities consisted of its obligations to policyholders. The contract recited that the defendant company being also “engaged in the business of issuing insurance policies,” and “it is desired by the parties to effect an arrangement whereby the policyholders of the Pittsburgh Company may with the assent of such holders of contracts have their contracts assumed by the Metropolitan Company subject to the conditions believed to be fair and equitable to all parties conqerned,” and that such also was the desire of the insurance departments of the States of New York and Pennsylvania in order that policyholders in the Pittsburgh Company “may avoid the loss of insurance protection and the expense usually incident to the liquidation of a life-insurance corporation,” the defendant company agreed to assume, “with the consent of the several owners and holders thereof,” all the insurance in force with the Pittsburgh Company on May 7, 1917, “and, except as herein provided, to carry out all the provisions and agreements contained in said policies, subject to an agreement of each holder that the Metropolitan Company may establish and place against his or her policy a lien equal to 33-1/3 % of the legal reserve thereon as it has been established and carried on the books of the Pittsburgh Company.” Both parties agreed “to use all possible diligence to obtain the consent” of the policyholders. The receiver was to cause to be assigned to the Metropolitan Company the assets of the Pittsburgh Company at a valuation fixed at 72-1/2 °fo of the reserves on such policies. It was further agreed “that where the policyholders shall establish claims against the receiver under their contracts, instead of accepting such assumption by the Metropolitan Company, it will pay to the receiver, upon demand, a sum equal to the amount that shall have been paid by said receiver to the Metropolitan Company on account of policyholders. . . Upon such repayment the Metropolitan Company shall be relieved of any and all responsibility with respect to such policies.” The con*310tract further provided that where assent was obtained to the transfer, the receiver was to be relieved of all further liability on the policy. The provision in the policy that the assent of the policyholders be obtained was for the purpose of limiting the liability of the Metropolitan Company to an amount less than the face value of the policy or to an amount which was agreed on as 72-1/2 a/o of the face value thereof. The entire assets were transferred to the Metropolitan Company with the prdviso that in event the policyholder refused the contract and proceeded against the receiver, the Metropolitan Company would be liable to pay back to the receiver an amount equal to 72-1/2 °fo of the claim, and thus relieve itself of further responsibility. The insured in the present case, never having received notice of any such agreement, did not assent or dissent thereto. After the claim matured by reason of the death of the insured, the beneficiary could elect to proceed as he has done on the contract as made between the parties, and such suit was properly maintained on the contracts as shown by the evidence. If a proceeding had been had against the receiver, the defendant company would have been liable under its contract to pay to the receiver, for the benefit of the plaintiff in this case, the amount found to be due. As discussed in the main opinion, the insured, under the policy issued to him by the American Union Life Insurance Company, was entitled, after three full years’ premiums had been paid, to certain secondary insurance under the non-forfeiture clause. We have not overlooked or failed to consider any of the contentions made. We adhere to our previous ruling.

Behearmg denied.

MacIntyre and Guerry, JJ., concur. Broyles, O. J., dissents.