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RICHARD W. MEADE agt. The St. Louis MUTUAL LIFE INSURANCE COMPANY, St. Louis LIFE INSURANCE COMPANY and WILLIAM A. GREGORY.
A contract by a life insurance company to pay a sum certain on a future day, or on the death of a party before that day, on condition that the other party should pay to it a certain sum yearly, is violated by the company when it transfers all its assets to another company and ceases to do business. Such violation of the contract, during its term, gives the policyholder the right to rescind, and sue for and recover the whole amount of premiums paid, with interest, as money had and received for his benefit. The policyholder in such a case may bring an action, in the nature of a
bill in equity, on his own behalf and on behalf of all others similarly situated, to recover premiums and prevent the transfer of property of the company; and in such an action an injunction will issue and a receiver be appointed.
Kings Special Term, April, 1875.
Robert Sewell, for plaintiff.
James Emott & H. L. Burnett, for defendant.
Pratt, J. — The plaintiff took out a policy of life insurance in the St. Louis Mutual Life Insurance Company, in a certain class or department known as the army and navy branch. The object of forming this branch was to induce officers of the army and navy to insure in the company.
The company is a foreign corporation created under the laws of the state of Missouri, but at the time of the issuing
Meade agt. St. Louis Mutual Life Insurance Co.
of the policy to the plaintiff it had an agency in the city of New York, had complied with our statutes regulating the business of insurance by foreign companies, and had received 9 license to do business from the superintendent of the insurance department of New York. It had full power to enter into the contract sued upon and to bind itself by its provisions.
The policy issued to the plaintiff, a copy of which is annexed to the complaint, in consideration of the annual premium of $162.40 to be paid yearly for thirty years, insures the life of Richard W. Meade in the sum of $5,000, payable to him on the 19th day of March, 1901, or if he should die before that day to his wife.
It is provided, that a failure to pay any premium when due shall forfeit the policy, except that if, after three annual payments have been made, the insured ceases to pay premiums such default shall not work forfeiture, but the sum insured shall be commuted or reduced to such proportional part as the sum of the annual premiums paid shall bear to the sum of the premiums stipulated to be paid.
It is further provided, that the insured shall be permitted to serve in his profession in the army or navy, in peace or war; but if he should leave the service of the United States the policy is to be placed under the conditions of policies, in the same class of the said company, in civil life.
It is also provided, that the surplus arising from the overpayment of premiums on this class of risks (army and navy) shall be determined from its own mortality, and shall be divided equitably to the members of that branch of the company's business.
There is also a provision that the policy may be assigned and the beneficiary changed.
The policy is executed under seal of the company and attested by the president and secretary at St. Louis, on the 19th of March, 1871, and countersigned on the 4th of May, 1871, by Gregory and Houston, agents.
It is a special provision of the policy, next before the attesta
Meade agt. St. Louis Mutual Life Insurance Co.
tion clause, that the policy shall not go into effect until the first premium be paid, and until it is countersigned by Gregory and Houston, New York city.
The premium was paid, and the policy countersigned and delivered in New York.
The plaintiff paid three annual premiums; the fourth annual premium was due on the 19th March, 1874. This premium was not paid.
Before that time the St. Louis Mutual Life Insurance Company had executed a general assignment of all its property, of every kind and nature, to the Mound City Life Insurance Company, the last named company assuming all its liabilities.
The St. Louis Mutual Life Insurance Company was not dissolved or wound up, but gave up its business to the Mound City Company and practically ceased to exist. .
The defendant Gregory, who had been the agent of the old company in New York, became the agent of the Mound City Company as far as the laws of New York would allow him, but as this last named company was not admitted to do business in New York his agency was practically confined' to collecting the premiums on policies issued by the St. Louis Mutual Company
Instead of paying the premium due on the nineteenth March the plaintiff asked for a commuted policy for the sum, which would be equitable in proportion to premiums paid. He surrendered his policy to the agent of the old company and he received a policy for $500 from the agent, supposing it to be a policy of the St. Louis Mutual Life Insurance Company. Within a few days he discovered that the policy 80 received was issued by the St. Louis Life Insurance Company and not by the St. Louis Mutual Life Insurance Company, the
company in which he was insured; and immediately upon discovering this he returned the policy.
The commuted policy was, in fact, issued by the Mound City Company under a new name which they had legally