Helsby ite Lis istlitt trabtreaush yer aenbubicl Lacerta CTT ORE AaH iy alee Wester seliy acres stsyay ee 8h ck rey ph TMH Maserribsid bpd Hrellebibat ae Hebb aalibieda thet HOGHUSHR A ohne sey Ao meisielceennitts eat tet ih ah Ale SH piead ee RAAT IO PA atl 4 thee Ursbog ray Gn fey tpt lL Ey be Hi) het bya Warde Heb asdeasda saga] Fest ach Ae bett eah Wit eLiL tit kay Helwatin hee teeberdbtbet ct ebro Tah tet CoRNELL UNIVERSITY LAw LIBRARY FROM THE BENNO LOEWY LIBRARY RECEIVED BY CORNELL UNIVERSITY UNDER THE WILL OF ‘MR. BENNO LOEWY Cornell University Library KFN5292.Z9A37 “Tinie inni 3 1924 021 908 078 law NOTES ON THE NEW YORK LAW OF LIFE INSURANCH. BY Se att CHARLES B., ALEXANDER, — OF THE NEW YORE BAR. NEW YORK: BAKER, VOORHIS & CO., PUBLISHERS, 66 NASSAU STREET. 1887, (sigs ti Coryricut, 1887, By Baker, Voornis & Co. NOTE. The writer acknowledges his indebtedness to his friend James T. Boothroyd, Esq., of the New York Bar, for valuable assistance rendered by him in the preparation of this book. CONTENTS. CHAPTER I. Lire InsuRANOE.............00. : Rifas Bite ts Oat teeta te 1 CHAPTER II. MEHR POLICY oie a 2okd vised cede ee ea we Socks 5 CHAPTER WL Toning PoLicrs.... 2... ee ccc ee eee cece ees 11 CHAPTER IV. InsuRABLE INTEREST............ 0.0 cee cece ecceeeee 14 CHAPTER V. Lire Insurance 18 NOT GAMBLING............0000cee: 17 CONTENTS. CHAPTER VI. PAGE Tur PREMIUM...........0 0000 e ee eens Des enc itectsees 19 CHAPTER VIL. Tur Riguts or tHE Porrcy-Hotprr Dvrine tae Lire OF THE POLIOY......... 2.0 cee eee eens :Biduve wean Qt CHAPTER VIII. Tur Ownersuie oF A Poticy anD THE ASSIGNMENT THEREOF. ee ee ee 84 CHAPTER IX. PRoor OF LOss.e sa kk earned Ss bed od es 45 CHAPTER X. Derenses FoR Breacnes or Warranty, Fravp, Mis- REPRESENTATION AND CONCEALMENT............... 51 CHAPTER XI. Suiome anp Dears py tar Hann or tue Insurep.... 58 CONTENTS. Vil CHAPTER XII. O PAGE Deats in tHE Known Viotation or any Law.—Dzatu BY THE Hanns or Justion, &..............2005 61 CHAPTER XIII. Tue Insurance DeparTMENT.................c00000- 64 CHAPTER XIV. On tHE IncornPoration or Lire Insurance Compantes.. 72 CHAPTER XV. THE Powers or Lire Insurance Companins.......... 81 CHAPTER XVI. Or Forrian Insuranok CoMPaNIEs................00: 87 CHAPTER XVII. Or tHE EXAMINATION AND OF THE Winpine Ur or’ Lire Insurance COMPANIES. ........0. 00 ccc cere rece 92 “CHAPTER XVIIL Tue Lire Insuranok AGENT. ......ccccee cece cee eeee 116 TABLE OF CASES CITED. ABtna Ins. Co. v. France, 15 Ainsworth v. Backus, 40, 44 Alwin ». Witty, 34 Armour ov. Transatlantic Fire Ins. Co., 55 Atty.-Genl. ». Atlantic Mut. Life Ins. Co., 82, 99 ». Bank of Niagra, 98 2. Continental Life Ins. Co., 20, 21, 32, 95, 97, 98, 104, 105, 106, 108 ». Guardian Mut. Life Ins. Co., 20, 28, 33, 98, 103, 108, 114 ‘ 2. North America Life Ins.Co., 28, 96, 104,105, 108 %. Utica Ins, Co., 98 Baker v, Mut. Life Ins. Co., 14, 36 Baldwin v. N. Y. Life Ins. and Trust Co., 62 Barnes v.Mewcomb, 97 Baron »v. Brumer, 40, 43 Barry v. Brune, 40 . . Eq. Life Ass. Society, 40 v. Mut. Life Ins. Co., 40 v. Merchants’ Ex. Co., 84 Barteau v. Phenix Mut. Life Ins, Co., 53 Belknap »v. North Am. Life Ins. Co., 28 Bewley ». Equitable Life Ass. Soc., 29 Bickerton v. Jaques, 34 Bigelow v. Benedict, 18 Bloomingdale ». Lisberger, 40, 41, 42 Bockover v. Life Assoc. of Am., 114]’ Bogardus v. N. Y. Life Ins. Co., 12, 21,31, 55 Boos », World Mut. Life Ins, Co., 8 Bradley v. Mut. Benefit Life Ins. Co., 8, 61 B Breasted v. Farmers’ Loan and Trust Co., 58 British Commercial Life Ins. Co, 2. Com. Taxes, 91_ Brockaway v. Mut. Benefit Life Ins. Co., 14 Brummer 2, Cohen, 14, 41 Buffalo & C. R. R. Co. v. Cary, 91 Bunten ». Orient Ins. Co., 6, 52 Burridge 2. Rowl, 34 Burritt 0. Saratoga Mut. F. Ins. Co., 5Y Butler v, Am. Pop. L. I. Co., 21 Cammeyer ». United Churches, 84 Campbell v. Campbell, 32 Cannon ». Northwestern Mut. Life Ins. Co., 16, 46 Carpenter v. The Mut. Safety Ins. Co., 6 Case v. People, 65, 78 Casler v. Conn. Mut. Life Ins. Co., 8, 62 Chautauqua Bank ». Risley, 84 Clarke v. Brooklyn Bank, 4 Co. W. C. v. Conliffe, 32 Coffey ». Home L. I. Co, 59 Cohen v. N. Y. Mut. Life Ins. Co., 22, 29, 31 Cole v. Knickerbocker Life Ins. Co., 7, 31 Commissioners 2. R. R. Co., 82 Conn. Mut. Life Ins, Co. », Schaefer, 14, 15, 16 Cushman ». U. S. Life Ins. Co., 8, 9 Day »v. Ins. Co., 34 De Gogorza v. The Knickerbocker Life Ins. Co., 9, 58 De Jonge v. Goldsmith, 41 Deutz v. O'Neil, 9 Dilleber ». Home Life Ins. Co., 52 Douglas 2. Knickerbocker Lite Ins. Co., 62 1 x Durien », Central Verin, 40 Dutton v, Willner, 35 Dwight ». Germania Life Ins, Co., 8, 52, 58, 55, 66 Eadie »v. Slimmon, 14, 89, 40, 41 Eaton v. Asspinwall, 91 Edington v. Aitna Lite Ins, Co., 55 Edington v. Mut. Life Ins. Co., 9, 55 Elisworth v. R. R.*Co., 81 Erie Railway Co, v. Ramsey, 98 Evans v. United States Life Ins. Co., 63 Excelsior Petroleum Co, v. Lacey, 97 Farley ». Union Mut. Life Ins, Co., 22 Ferdon’s Executors ». Canfield, 34 Ferguson 2. Mass. Mut. Life Ins. Co., 15 Fisher ». Charter Oak Life Ins. Co., 4 Fitch », Am. Popular Ins. Co., 52, 54, 59, 60 Flynn v. Eq. Life Ins. Co., 58 Foley v. Hill, 82 Fowler v. Butterly, 40, 41 ». Mut. Life Ins. Co., 59 Frank ». Mut. Life Ing, Co,, 8, 19, 26, 89, 41, 42, 48, 55 Franklin Ins. Co. v. Colt, 117 Fried v. Royal Ins. Co., 7 Furniss ». Mut. L. I. Co., 44 Garner v. Germania Life Ins, Co. , 34 Gerarty v. Reid, 40 Gibson v. Am. Mut. L. I. Co., 56 Globe Mut. Life Ins, Uo., », Snell,2 v. Wolff, 118 Goetzman », Conn. Mut. Life Ins. Co., 61 Goldschmidt v. Union Mut. Life Ins. Co., 7, 44, 46, 60 Goodwin ». Mass. Mut. Life Ins. Co., 15, 45 Grace v, Am. Cent. Tus, Co., 28 «| Grattan v. Metropolitan Life Ins. Co., 8, 46, 58, 55 Greeno ». Greeno, 84 Haight vo. Day, 4 Harris v. Equitable L. Ass. Soc., of the U. 8, 24 Harris v. White, 18 Hayner v, Am. Pop. L. Ins. Co., 21 TABLE OF OASES CITED. Hayward »v. Knickberbocker Life Ins. Co., 6 Hemings 0. Pugh, 32 Higbie ». Guardian Mut. Life Ins. Co,, 55 Higgins ». Phonix Mut. Life Ins. Co,, 9, 58 Hincken »v. Mut. Benefit Life Ins. Co., 45 Hoffman ». John Hancock Mut. Life Ins. Co., 117 Hogle v. Guaidian L. I. Co., 384 Homer v. Guardian Mut. L. I. Co , 24 Hone », Van Schaick, 85 Horn v. Amicable Ins, Co. Horton v. Equitable Life Ass. Soc., 53 How v. Union Mut. Life Ins. Co.. 86 Howell v. Knickerbocker Life Ins. Co,, 19, 24 Hoyt ». Thompson, 84 v, N. Y. Life Ins. Co., 15 Hull v. Hull. 85, 40 Ins. Co., 0. Higu loon, 20 Insurance v. Slaughter, 56 Insurance Co. ». Morse, 87 v. Newton, 48 International Life Ass, Soc. ». Com- missioners of Taxes, 1 Jefferson Fire Ins Co. v, Cotheal, 52 Kelly » The Commonwealth Ins. Co., 6, 7 Kent’s Commentaries, Vol. 2,12 Ed.,. Kent v. Quicksilver Co,, 84 Kingsbury o. Kirwin, 18 Klein v. N. Y. Life Ins. Co., 19 Knickerbocker Life Ins. Co., 0, Foley, 53 ; Knickerbocker Life Ins. Co. v, Nor- ton, 118 Lafond v. Deems, 84 Lambert v. People, 78 Lawrence v, Fox, 84 Leonard ». Clinton, 40, 44 Liverpool Ins. Co. v, Mass., 87 Livingston ». Maryland Ins. Co., 54 Lockwood 2. Bishop, 34, 35 Lorillard . Clyde, 84 Lovell ». St, Louis Mut. Life Ins. Co., 82 TABLE OF CASES CITED. Magaw v. Field, 85 __ ; Mallory v, Travellers’ Ins. Co., 34, 5%, 59 Manhattan L, Ins.Co, v. Broughton,89 Marcus v. St. Louis Mut. Life Ins. Co., 36 Martin », Tradesmen’s Ins, Co., 8 Marvin @. Tradesmens’ Ins. Co., 8 ». Brooks, 32 v. The Universal Life Ins, Co., 23 Matter of World’s Safe Ins. Co., 71, 96 Matthaei v. Galitzin, 91 Mayor v. Hamilton Fire Ins. Co., 56 McArthur o. Globe Mut. L. I. Co., 53 McCord 0. Noyes, 40 McCulloh o, Moss, 84 McKee v, The Met. Life Ins. Co., 6 Merrick ». Van Santwoord, 91 Meyer ». Knickerbocker Life Ins. Co., 20, 21 Miessell v, Globe Mut. L. I. Co., 21, |: 23 Miller », Brooklyn Life Ins. Co., 117 Moehring ». Mitchell, 40 Moss v. Averell, 83 Mowatt o. Carow, 35 Mowry 2, Rosendale, 53 Moxon »v. Brfght, 32 Murray 0. N. Y. Life Ins. Co., 8, 61 Mutual Life Ins. Co. v. Terry, 41, 42 Nat. Life Ins. Co, 2. Minch, 54, 56 New Jersey Mut. Life Ins. Co. ». . , Baker, 116 , Newland, Jn re, 35 Newton »o. Mut. Benefit Life Ins. Co., 58 N.Y. Life Ins, Co. v. Fletcher, 54, 118 o. Statham, 19, 23 v, Universal Life Ins. Co., 6 Ogdensburg R. R. vo. Vermont R, R., 91 Olmsted v. Keyes, 14, 15, 16, 36 O’Niel v, Buffalo Fire Ins. Co., 52 O’Réilly 2. Guardian Mut. Life Ins. Co., 45 Palmer v. Horn, 35 * Patrick 0. Excelsior Life Ins, Co., 8, 59, 60 : Paul 2. Virginia, 87. Peacock v, N. Y. Life Ins. Co., 8 Penfold o. Universal Life Ins, Co., 58 People v. Atlantic Mut. Life Ins. Co., 3 71, 96 v. Empire Mut. Life Ins. Co., 20, 21, 28, 104 3 ex rel. Hartford Life and Annuity Ins.Co., Fairman, 69 v. Globe Mut. Life Ins. Co., 20, 71, 104 ». Empire Trust Co., 79 ex rel. Church v. Hopkins, 65 o. McCann, 89 v. Miller, . : vo. New England Mut. Life Ins. Co., 64 v. Knickerbocker Life Ins. Co., 107 vo Security Life Ins. Co., 106 ». Security Life Ins. and An- nuity Co., 28, 30, 31; 76,81, 108, 104, 105, 106 Phenix Mut. Life Ins. Co. v. Doster, 20 Pierson v. McCurdy, 79 v. People, 55 Pohalski ». Mutual Life Ins. Co., 5,8 Prentice ». Knickerbocker Life Ins. Co., 36, 46 Rainsford v, Royal Ins. Co., 62 Rawls v. The Am. Mut. Life Ins, Co., 1, 15, 57, Redfield», Patterson Fire Ins. Co., 23 Reese ». Smith, 107 Reiner v. Marquis of Salisbury, 91 Relfe v. Rundel, 114' Ripley v. Astor Ins. Co., 34 v. The Attna Ins. Co., 24, 51 Robertson v. Metropolitan L, I. Ca., 24 Rockwell v. Hartford Fire Ins. Co., 7 Rohrbach o. Germania Fire Ins. Co., Ruppert v. Union Mut. Ins. Co., 34. Ruse v. Mut. Benefit Life Ins. Co., 6, 19 Salter ». Ham, 32 Sands v. N. Y. Life Ins. Co., 22 Shaw ». Republic Life Ins. Co., 21 xii Shepard v. Brown, 32 Sherman v. Sherman, 35 Sherwood v. Am. Bible Soc., 84 Simons v. N. Y. Life Ins, Co., 17, 20 Smillie v. Quinn, 42 Smith o, Atna Life Ins. Co., 54, 57 v. Bodine, 32 v Saratoga County Mut. Fire Ins. Co., 24 Southern Life Ins. Oo. o. McCain, 88, 116 Spear v. Crawford, 83, 84 ». Phoenix Life Ins. Co. » 22 Stanton v. King, 40 St. John v. Mut. Life Ins. Co., 14, 15, 36 Stout v. Sioux City R. R., 87 Taylor. Charter Oak, 19, 29 0. Life Association of America, 114 v. Merchants’ Fire Ins. 117 Temple Grove Seminary v. Cramer 84 Co., Thompson 2. A. T. Life & Savings Ins. Co., 14, 40 ». KnickerbockerLife Ins. Co., 20, 24 Travellers’ Ins. Co. v. Seaver, 61 Underwood v. Farmers’ Joint Stock Ins. Co., 24 TABLE OF CASES CITED. Union Mut. Ins. Co. ». Wilkinson, 116 Union Mut, Life Ins. Co., o. Mowry, 5 U.S. Trust Co. » N. Y. W. 8. & Buffalo Co., 98, 114 Valton v. Mut. Loan Ins. Co., 15 ». Nat. Fund Lifé Ins. Co., 55 Van Valkenburgh 7 Am. Popular Life Ins. Co., 9, 53 Van Zandt v, Mut. Benefit Life Ins, Co., 9, 58 Warnock ». Davies, 14, 15, 36 vee Mut. Benefit Life Ins. Co., Welts », Conn. Mut. Life Ins. Co., 9, 68 Wendell, In the matter of, 42, 43 Wheeler v. Conn. Mut. Life Ins. Co., 20, 21 White ». Howard, 82 Whitehead ». N. Y. Life Ins. Co., 6, 28, 48 Woerishoffer ». North River Cons. Co., 33 Worlds Safe Ins, Co., Matter of, '71, Wuesthoff 7. Germania L. Ins. Co., 46 Yates v. Van De Bogert, 84 NEW YORK LAW OF LIFE INSURANCE. NEW YORK LAW OF LIFE INSURANCE, CHAPTER I. LIFE INSURANCE. Life Insurance is a contract whereby one undertakes to pay another a sum of money upon the happening of an unknown or contingent event depending on the ex- istence of a life. It is not a mere contract of indemnity. Rawls v, The American Mutual Life Ins: Co., 27 N. Y. 282. The person who makes the contract of insurance is called the insurer, and the person who is named as the beneficiary is called, the insured. The consideration paid the insurer for undertaking the risk is called the ‘premium, the payment of which is regulated by agree- ment. It is usually paid at stated periods. Any person capableof making a contract may be an insurer, ‘but practically, owing to the importance of the risk of life insurance, being distributed over a great number of lives, the business is confined to corpo- rations. The amount insured may be made payable on the death of the person insured or on his surviving a speci-. fied period; or periodically so:long as he shall live, or otherwise contingently on the continuance or determi-— nation of life. 2 LAW OF LIFE INSURANCE. MANNER OF EFFECTING INSURANCE. As the business of life insurance is conducted in New York, its methods take one invariable form. The suggestion of insurance ordinarily comes from the in- surer, although it is becoming more and more common, for those desiring insurance, to select a company and make direct application to one of its officers or agents. The company furnishes to the applicant for insurance a blank form, containing questions as to the name, resi- dence, and occupation of the applicant, the kind of policy desired, with an inquiry as to the details of the applicant’s habits, life, and medical history. This “ap- plication” is signed by the applicant, and includes within it a written warranty of the truth of each and every one of the answers contained. The application may be withdrawn before it is ac- cepted. Globe Mut. L. I. Co. v. Snell, 19 Hun, 560. There is also furnished to the medical examiner selected by the insurer a blank form, and the written answers of the medical examiner are ordinarily referred to in the application for insurance. In‘ addition, there is usually a reference to some friend of the applicant, to whom a few general questions are asked with refer- ence to his knowledge of the person on whose life the insurance is to be effected. When the application is made out, it is filed with the company. In certain cases where the application is made at a distance from the home office, agents are by express authority sometimes permitted to issue what is known as a “ binding receipt,” which insures the applicant provided the risk is approved by the company, and sometimes pending the approval by the company, and for which, after approval, the policy LAW OF LIFE INSURANCE. 3 is substituted. In ordinary cases, however, the applica- tion is forwarded to the home office of the company, and the company reaches its determination whether, and upon what terms, it will insure; this, of course, is based upon the examination of the application, the medical examination, and upon the warranties contained in the application, Having approved the risk, the company issues the policy, and as the payment of the premiums referred to in it are made, receipts are issued to the insured. The company retains in its hands such description of the policy as enables it to know what the policy is that is issued, and files the application in its office. Insurance companies desiring that the number of their risks should be as large as possible, consistent with perfect safety, issue such policies as are likely to prove most attractive to the persons whom they desire to insure. These policies are called by different names, but in reality they consist only of certain varieties, under whatever name they may be called. Some com- panies are more liberal in their terms in favor of the insured than others. The most common, and the origi- nal form, consists in the simple life policy, which is an agreement to pay a certain sum upon satisfactory proof’ of the death of the insured, or within a certain time thereafter. The second form is like the first, except that it is called an endowment policy, and provides that at a certain time, or on the happening of a certain event, the whole amount of the policy shall, if the applicant be living, be paid to him, but if he die during the meantime, that it will be. paid to his representatives, These two kinds of policies may be either with or with- out dividends. If they are policies entitled to divi- dends, then the insurer at a certain day ascertains what’ 4 LAW OF LIFE INSURANCE. amount it has on hand, over and above the amount of surplus, which as a matter of good business prudence it is required to hold, and then Sa the sum so ascertained to the various policy-holders entitled to div- idends. The question of what amount slHall be apportioned is a question resting in the discretion of the insurer. Fisher v. The Charter Oak Life Ins. Co., 52 N. Y. Su- perior Ct. 179. Haight v. Day, 1 Johns, Ch. 18. Clarke v. Brooklyn Bank, 1 Edw. Ch. 368. CHAPTER II. THE POLICY. The Policy is the written evidence of the agreement of insurance. It is ordinarily signed by one or more of the officers of the corporation. It contains a statement of the amount insured, the name of the person insured, the amount of the premium, the duration of the risk, the condition that the premium shall be paid at the time when the same falls due, or the policy be avoided, the days on which the premiums fall due, the contingency on which the payment is to be made, and a statement that the contract is based upon the statements and warranties contained in the application. It also contains such conditions regarding travel, causes of death, &c., as the insuring company deems proper to incorporate in it. The policy is the sole and conclusive evidence of the agreement of the parties. Pohalski v. Mutual Life Ins. Co., 30 N. Y. Sup. Ct. (4 J. & S.) 234; affirmed 56 N. Y. 640. Union Mut. Life Ins. Co. ». Mowry, 96 U. 8. 544. An agreement in the following form, indorsed upon the back of: a policy of life insurance, is not void for uncertainty : “Tn case the holder of this policy wishes to cancel it after three annual premiums have been paid, a fair proportion of the premiums will be returned if applied . for before the policy has expired.” Tn an action thereon by the insured, it may be shown by extrinsic evidence what would be a fair proportion 6 LAW OF LIFE INSURANCE. of the premiums to be returned, and for what purpose expert testimony showing the surrender value is com- petent. Hayward v. Knickerbocker Life Ins. Co., 12 Daly, 42. In such a case the company is entitled to be paid for carrying the risk, that is for insuring the insured during the life of the policy. Farley v. Union Mut. L. I. Co., 24 Week. Dig. 439. Stipulations contained in a policy as to the making of modifications therein by officers or agents do not take effect until the policy is delivered. Whitehead ». N. Y. Life Ins. Co., 3 N. Y. State Re- orter, 478; Court of Appeals, April 13, 1886; 102 . Y. 148. A policy of life insurance is not an evidence of debt for the absolute payment of money. N. Y. Life Ins. Co. against Universal Life Ins. Co., 88 N. Y. 424. McKee v. Metropolitan Life Ins. Co., 25 Hun, 583. Statements of a prospectus will not vary or coutrol _ the terms of a contract of insurance, unless reference be made to them in the policy. Ruse v. The Mut. Benefit Life Ins. Co., 23 N. Y. 516. An insurance company may make a verbal insurance. Kelly v. The Commonwealth Ins. Co., 10 Bosw. 82. And the court will compel the issuing of a written policy of insurance when an agreement has been made to issue it. , one v. The Mutual Safety Ins. Co., 4 Sandf. Ch. Bunten v. Orient Mutual Ins. Co., 8 Bosw. 448. And in the event of loss before the issuance of the policy, a court will in such case enforce the payment. LAW OF LIFE INSURANCE. q This has been held only in the case of fire insurance companies. Rockwell v. The Hartford Fire Ins. Co., 4 Abb. Pr. 179. Kelly v. The Commonwealth Ins. Co., 10 Bosw. 82. Where an agent has authority to and issues “a bind- ing receipt” pending the decision of the company as to the issuance of the policy, the binding receipt is good, unless terminated by its terms, until the company has given notice of its refusal of the risk. Fried v. Royal Ins. Co., 47 Barb. 127. Some of the companies issue a binding receipt which duly insures in case the application is accepted. In such case this decision would not apply. The acceptance of the risk is sufficient to bind the company if the premium be paid, even if the policy is not delivered. Fried v. Royal Ins. Oo., 40 N. Y. 243. An action will lie by a husband to reform a policy taken out in favor of a wife from whom he has since been divorced. Equity will only reform a policy where the mistake is mutual, and it so appears by the evi- dence. Goldschmidt v. Union Mut. L. Ins. Co., 24 Week. Dig. 421; reversing 2 How. Pr. N. 8. 32. When a policy-holder is entitled to a “paid up” policy it must be in the terms of the poltoy of which it is the successor. Cole v. Knickerbocker IL. I. Co., 63 How. Pr. 442. The alteration of the policy by an insurance com- pany without the consent of the beneficiary or the annulling of the. policy by marking it paid, will not impair the rights of such owner or beneficiary, and: the 8 LAW OF LIFE INSURANCE. mere fact of such alteration does not subject the com- pany to an action for damages for conversion, for the reason that the insured may enforce any right he may have had or now has irrespective of any such alterations. Martin v. The Tradesmen’s Ins. Co., 101-N. Y. 498. Cited in Frank v. The Mut. Life Ins. Co. (N. Y. Court ‘of Appeals, 102 N. Y. 266). Courts can only construe a policy so as to make the meaning differ from the ordinary interpretation of the words, where its meaning is doubtful or its language ambiguous. Dwight v. Germania Life Ins, Co. (Not reported ; de- cided { in the Court of Appeals, Oct., 1386.) The following phrases used in policies and applica- tions, have, among others, had. consideration by the courts. “ Settled limits of the United States.” Casler v. Conn. Mut. Life Ins. Co., 22 N. Y. 427. : Congestion of: the liver.” Cushman »v. U. 8. Life Ins, Co., 63 N. Y. 404. “Own risk of epidemics.” Pohalski v. Mut. Life Ins. Co., 56 N. Y. 640; affg. 36 N. Y. Sup. Ct. 234. “Good health.” Peacock v. N. Y. Life Ins. Co., 20 N. Y. 298; affg. 1 Bosw, 338. Grattan v. Metropolitan Life Ins. Co., 92 N. Y. 274. “Severe sickness or disease.” Boos v. World Mut. Life Ins. Co., 64 N. Y. 236. “Known violation of law.” Bradley v. Mut. Benefit Life Ins. Co., 45 N. Y. 422. Patrick ». Excelsior Life Ins. Co., 4 Hun, 263. Murray v. N. Y. Life Ins. Co., 19 Hun, 350. LAW OF LIFE INSURANCE. 9 “ Medical attendance.” Edington v. Mut. Life Ins. Co., 67 N. Y. 185. Cushman v. U.S. L. I. Co., supra. Higgins v. Phoenix Mutual L. I. Co., 74 N. Y. 6. Deutz -v. O'Neill, 25 Hun, 442. “Sane or insane.” : “Died by: his own hand.” Van Zandt v. Mut. Benefit Life Ins. Co., 55 N. Y. 169. ae Gogorza v. The Knickerbocker Life Ins. Co., 65 N. . 232. “Military service.” ~ Welts v. Conn. Mut. Life Ins. Co., 48 N. Y. 34. “ Disease.” Cushman v. U.S. L. I. Co., 70 N. Y. 72. “Intemperate use of alcoholic stimulants.” Van Valkenberg v. American Pop. L. I. Co., 70 N. Y. 605. Laws or 1879, Chap. 847.—An Act to protect the rights of policy-holders in life insurance companies. Passed May 21, 1879. . “Sxcotron J. Whenever any policy of life insurance here- after issued by any company organized or incorporated under the laws of this State, after being in force three full years, shall by its terms lapse or become forfeited for the non-payment of any premium, or of any note giveu for a premium, or loan made in cash on the policy for security, or of any interest on such note or loan, unless the provisions of this act are specifically waived in the application, and notice of such waiver written or printed in red ink on the margin of tlie face of the policy when issued, the reserve on such policy, including dividend additions, calculated at the date of the failure to make any of the pay- ments above described, according to thé American experience table of mortality, and with interest at the rate of four and a half per cent. per annum, after deducting any indebtedness of the insured on account of any annual, semi-annual, or quarterly premium then due, and any loans made in cash on such policy, evidence of which is acknowledged by the insured in writing, shall, on demand made, with surrender of the policy within six 10 LAW OF LIFE INSURANCE. months after such lapse, be taken as a single premium of life insurance at the published rates of the company at the time the policy was issued, and shall be applied, as shall have been agreed in the application and policy, either to continue the insurance of the policy in force at its full amount so long as such single premium will purchase temporary insurance for that amount, at the age of the insured at the time of lapse, or to purchase upon the same life at the same age, paid up insur- ance payable at the same time, and under the same conditions, except as to payment of premiums, as the original policy. Pro- vided, that if no such agreement be expressed in the applica- tion and policy, the said single premium may be applied in either of the modes above specified, at the option of the owner of the policy; notice of such option to be contained in the demand hereinbefore required to be made to prevent the for- feiture of the policy. Provided, also, that the net value of the insurance given for such single premium under this section, computed by the standard of this State, shall in no case be less than two-thirds of the entire reserve after deducting the in- debtedness as specified ; but such insurance should not partici- pate in the profits of the company.” ENDOWMENT POLICIES. “Sxcrion II. If the reserve upon any endowment policy, applied according to the preceding section as a single premium of temporary insurance, be more than sufficient to continue the insurance to the end of the endowment term named in the policy, and if the insured survive that term, the excess shall be paid in cash at the end of such term, on the conditions on which the original policy was issued.” The above act is frequently waived in policies issued in this State. CHAPTER JTL TONTINE POLICIES. Tontine Dividend Policies, or Tontine Savings or Interest Policies, are so called, because there is a benefit given to the person who continues his policy in force and survives a certain period mentioned within it. In the case of these policies no surrender values are given, that is, no portion of the amount of what is reserved in the hands of the company, to pay the policy at maturi- ty, and no part of the surplus over that-reserve, is given to the policy-holder, in case he wishes to surrender his policy before the expiration of the tontine period. If he cannot pay the premiums the policy lapses and comes toanend. All profits from lapsed policies, interests on investments, increase in the value of securities, saving in death-rate, and from excess of amount of premiums collected over and above the amount necessary to secure the payment of the policy at maturity, go into what is known as a“ Tontine Fund,” that is,in the books of the company a statement is made that indicates what amount has accrued as above from the money paid by tontine policy-holders. This fund should pay its pro- portion of the general expenses of the company. Each tontine policy contains a date, which fixes its tontine. period, and on that day the company apportions the equitable share of that policy in the tontine fund to the person entitled thereto, and deducts it as a dividend. The policy-holder may use this dividend, either to continue his insurance in the form of paid up insurance or an annuity, or may draw the same in cash, and, 12 LAW OF LIFE INSURANCE. having done so, his policy continues, until his death, as an ordinary policy, disconnected from any tontine element. The question of tontine insurance has been in the last five years attacked in the courts, but the system has been sustained. The courts of Missouri, Massachusetts, Alabama, Mississippi, Ohio, and New York, have all had the subject under consideration, and their decisions have been in favor of the tontine companies. _ Dealing, however, in this book, with the subject of tontine insurance in New York, it is sufficient to cite what has been said of it by Chief Judge Ruger, giving the opinion of the Court. of Appeals, in the case of Bogardus v. N. Y. Life Insurancé Co., 101 N. Y. 338. He says: “Tt contemplates.the union of the interests of a large number of persons, and the administration of a fund for their mutual benefit, and from its very nature ‘is incapable of being moulded and managed, to meet the special requirements of: particular individuals. Upon the accession of any person to this class, he becomes interested in the contributions of every other member, and neither of them can afterwards withdraw his contribution without injury to the rights of all others interested in the fund. It is the very nature of a corporate company carrying the business of insurance, that it should be subjected, at indefinite periods to the payment of large expenses, and the incurrence of large liabilities and risks, and its only resource, for the satis- faction of such obligations consists in the fund created by the premiums paid to it by its policy-holders. This fund is necessarily subjected to drafts upon it for un- certain amounts at uncertain intervals, and to require changes of its investments, and is incapable, either in its, LAW OF LIFE INSURANCE. 13 entirety or any specific part thereof, of being kept in- vested and managed separately from all other funds. “ We, therefore, think that the use of these moneys in connection with its other funds, and their investment and management according to the mode which, in the judgment of the defendant, was best adapted to promote the interests of all its policy-holders, was entirely legitimate and in accordance with the true meaning of the contract. The tontine plan undoubtedly contem- plated such action, on the part of the insurers, as would enable them, at the expiration of the ten year dividend period, to determine the aggregate of such dividends, accretions, and interest, and to divide the same among the survivors of the class to which they belong, accord-. ‘ing to their respective rights therein; but it seems to us, that it does not involve the necessity of keeping separate from its other funds, either the premiums paid. by such class, or their profits or accumulations, or the duty of separately handling, investing, or accumulating such funds.” Semi-tontine policies resemble. tontine policies, ex- cept that in case of lapse or surrender a portion of the funds is paid to the policy-holder, the remainder of the reserve and surplus remaining in the tontine fund. CHAPTER IV. INSURABLE INTEREST. If insurance is not taken out by the applicant for the purpose of protecting the payee of the policy, it is void. In other words, the insured must have what is known as an “insurable interest.” . This interest has been defined by the Supreme Court of the United States as follows: “Such an interest arising from the relations of the party obtaining the insurance, either as creditor of, or surety for the assured, or from the ties of blood, or marriage to him, as will justify a reasonable expectation of an advantage or benefit from the continuance of his life.” Warnock v. Davies, 104 U. 8. 775. Without such interest a policy is void at common law. Eadie v. Slimmon, 26 N. Y. 9. Brockaway v. Mut. Benefit Life Ins. Co., 9 Fed. Rep. 249, A wife has an insurable interest in her husband’s life. Baker v. Mut. Life Ins. Co., 43 N. Y. 283. Thompson v. A. T. Life & Savings Ins. Co., 46 N. Y. 674. Brummer v. Cohn, 86 N. Y. 14. St. John v. Mut. Life Ins. Co., 2 Duer, 419. Subsequent divorce will not vitiate a wife’s rights in a policy. Olmsted v. Keyes, 85 N. Y. 601. Conn. Mut. Life Ins. Co. v. Schaefer, 94 U. S. 457. LAW OF LIFE INSURANCE. 15 A father has an insurable interest in the life of his child. Conn. Mut. Life Ins. Co. v. Schaefer, 94 U.S. 457. A sister has an insurable interest in the life of her brother. Aitna Ins. Co. v. France, 94 U. S. 561. A creditor has an insurable interest in his debtor’s life. Rawls v. Am. Mut. Life Ins. Co., 27 N. Y. 282. Hoyt vw. N. Y. Life Ins, Co., 3 Bosw. 446. A creditor may.insure his debtor for a greater amount than the sum advanced. Goodwin v. Mass. Mut. Ins. Co., 75 N. Y. 480, 497. If the policy is valid in its inception, the assignee of the policy need not have any insurable interest; and the company is bound to pay the amount of the policy to such assignee. St. John v. The Am. Mut. Life Ins. Co., 13 N, Y. 31. Valton v. Mut. Loan Ins. Co., 22 Barb. 20. The contrary of this rule is held by the Supreme Court of the United States. Warnock v. Davies, 104 U.S. 781. A policy must be paid to the payee by the insurer without proof of interest. The policy is not in itself a contract of indemnity. Rawls v. Am. Mut. Life Ins. Co., 27 N. Y. 282. And the ceasing of insurable interest will not vitiate the policy in any case. ‘ Olmsted v. Keyes, 85 N. Y. 601. Ferguson v. Mass. Mut. Life Ins. Co., 32 Hun, 306. Rawls v. Am. Mut. Ins. Co., 27 N. Y. 282. Valton v. Mut. Loan Ins. Co., 22 Barb. 20. 16 LAW OF LIFE INSURANCE. A person may insure his own life to any extent, and assign the policy, or have it made payable, in the absence of agreement with a third person, to such third person. ' . - Olmsted v. Keyes, 85 N. Y. 593. Conn. Mut. Life Ins. Co. v. Schaefer, 94 U. S. 457. Objection taken by the company that proofs of loss are not furnished, waives right to object that there was -no insurable interest. a ». Northwestern Mut. Life Ins. Co., 29 Hun, As a practical matter at the present.day, in the State of New York, the defense that there is no insurable interest is never raised, except in cases where circum- stances indicate either that the insured came to his death through the agency of the applicant, or that the applicant knew, at the time of making the application, of some fact tending to impair the continuance of the life. It is seldom that people take out policies on lives, if they cannot show some slight interest in them, and if there is enough evidence of interest shown to send the case to a jury, the verdict will be against the company on a question of the interest of the: applicant, in the absence of fraud or the intentional destruction of life. ' CHAPTER V. LIFE INSURANCE IS NOT GAMBLING. Insurance is certainly not gambling where there is an interest in the life of the insured. This question was specifically raised in regard to a tontine policy in Simons w. N. Y. Life Ins. Co., 45 Hun, 309-316. The court said: “It was claimed by the counsel for the appellant, on the argument, that this insurance con- tract was a gambling contract, and that the plaintiff was in effect. betting on the chances of the continuance of her husband’s life, beyond the tontine period of ten: years, and that the company had bet against her. We cannot assent to this view. All insurances are’ based, more or less, on the.doctrine of chances; but they are by no means gambling contracts, unless they . are wager policies, and then they are void in law. But this consideration need not be further pursued, for the plaintiff can obtain no advantage from the position, even if it be tenable. Her action is not based on the law against gaming, and she is 7”. paré delicto, even if the contract was immoral and void.” Almost every transaction in human life is attended with a possibility of gain or loss; and the amount of profit in any vast commercial or business transaction is always a subject of uncertainty, and the ultimate result of most agreements is a matter which can only be de- termined in the future, and yet these uncertainties have been repeatedly held not to vitiate transactions. - ; 18 LAW OF LINK INKURANON, So a contract to purchase gold at a specified price has been held not to be a bet. Bigelow o, Benedict, 70 N.Y. 202, Nor ia the purchase of colon for future delivery necessarily a gambling: contrnet, Kingsbury . Kirwin, 48.N, Y¥. Kuper. Of 451. Nor is the payment made to a Driving Park Axso- elation for the entry of a horse, where the money poor into the treasury of the association to be offered: as a prize, a gambling transaction, Iurrin o, White, HIN. Y, boy. There are few contracts in whieh the clements of, certainty are greater than thoke ino contrach of life insurance in the State’ of New York. Mands are re. quired to be invested ina class off securities whowe fluctuations are seldom Jarge, and while the duration of any single Jife is uneertain, the duration of ten thousand lives is aamatter of almost mathematienl certainty. There is no clancnt of bething in the chance that the poliey-holder may fail to pay his premium, Were it true that such uncertainty rendered a contract void asa wager, the same might be said of every purchase on credit. The very bext evidence of there being wo such gambling clement is, that after the many years in which insurance buniness bas been carried on, no court has ever been found willing to bold that an insurance policy, where there was an intercst, was a yaming contract ‘ CHAPTER VIL. THE-PREMIUM. The premium is the consideration paid to the insurer for the insurance. The policy regulates the amount of the premium and the times of payment. In some cases the entire pre- mium is paid at once, in which case the policy is called a paid up policy. Ordinarily the payment is an annual one. Policies are so drawn as, in almost. every case, to make the punctual payment of the premium a condition precedent, the failure of which will avoid the policy and forfeit any interest of the insured in the policy. The following among many cases hold that a default in the payment of a premium avoids the policy. Howell v: Knickerbocker Life Ins. Co., 44 N. Y. 276. Ruse v. Mut. Benefit Life Ins. Co., 23 N. Y. 516. Taylor v. Charter Oak L. I. Co., 59 How. Pr. 468. And in the Supreme Court of the United States. N. Y. Life Ins. Co. ». Statham, 93 U. 8. 24. Klein v. N. Y. Life Ins. Co., 104 U. 8. 88, Where a wife makes an assignment of a policy, and fails to pay the premium, it is no defense to such failure, and furnishes no remedy to her, that after such assign- ment she elected to disaffirm it under her rights as set- tled by the Act of 1840, relating to married women. Frank v. Mut. Life Ins. Co., 1 N. Y. State Reporter, 681. « 20 LAW OF LIFE INSURANCE. The insanity of the insured is not an excuse for the non-payment of the premium. Wheeler v. Conn. Mut. Life Ins. Co., 82 N. Y. 543. Thompson v. Hniokenoacksr Life Ins. Co., 104 U.8. 252. Where the company has been in the habit of sending notice to the insured calling attention to the necessity of paying the premium, and stating the amount thereof, less a reduction by dividend, a failure to send such notice prevents the strict lapsing of the policy. Atty.-Gen’l v. Continental Life Ins. Co., 33 Hun, 138. Meyer v. Knickerbocker Life Ins. Co., 73 N. Y. 516. But. the facts must show, that the insured had a right to rely on the receipt of a notice, containing a statement of the balance due, Ins. Co. v. Eggleston, 96 U.S. 572, Pheenix Mut. Life Ins. Co. v. Doster, 106 U. 8. 30. Meyer v. Knickerbocker L. I. Co., 51 How. Pr. 263. Aetommeyetden'l a Continental Ins. Co., 33 Hun,.138. Mere insolvency of the company will not excuse the insured from the payment of a premium, unless that insolvency is accompanied by the failure of the com- pany. People v. Globe Mutual Life Ins. Co. , 82‘Hun, 147, and cases there cited. Simons v. N. Y. Life Ins. Co., 38 tim, 309-316. The failure of the company and the appointment of a receiver excuses the further payment of premiums. Atty,-Gen’l v. Guardian Mut. Life Ins. Co., 82 N. Y. 336. People v. Empire Mut. Life Ins. Co., 92 N. Y. 105. A forfeiture requires no act on the part of the com- * LAW OF LIFE INSURANCE. 21 pany. The mere failure to pay a premium works a forfeiture. : Atty.-Gen’l v. Continental Life Ins, Co., 93 N. Y. 70. Mere failure on the part of the company to comply with some of the terms of the policy, does not excuse the payment of the premium. , People v. Empire Mut. Life Ins. Co., 92 N. Y. 105, 109. Shaw v. Republic Life Ins. Co., 69 N. Y. 286-293. Bogendus v. N.Y. Life Ins. Co., 101 N. Y. 328, 335, A company having in its hands dividends applica- ble to the payment of a premium is not bound, without the request of the insured, to apply the same to the payment of the premium, to prevent a forfeiture of the policy. Wheeler v. Conn. Mut. Life Ins. Co., 82 N. Y. 543-558. ‘But if the assured appropriate a payment of divi- dend from the insurer to the payment of his premium, the company cannot insist upon a forfeiture. Butler v. Am. Pop. L. I. Co., 42 N. Y. Supr. Ot. (10 Jones & Spencer), 342. Where the insured tenders a premium which is wrongfully refused by the company, it is not necessary for the insured to further tender premiums in order to preserve his rights. ‘ 5 Shaw v.. Republic L. I. Co., 69-N. Y. 286. Meyer v. Knickerbocker Life Ins. Co., 73 N. Y. 516. Miesell v. Globe Mut. L. I. Co., 76 N. Y. 115. Hayner v. Am. Pop. L. I. Co., 69 N. Y. 435. : Atty.-Gen’l v. Continental L. I. Co., 33 Hun, 138, 140. People v. Empire Mutual Life Ins. Co., 92 N. Y. 105. But where a company wrongfully refuses to continue a policy, the amount of damages is not the amount of the 22 LAW OF LIF INSURANOR. premiums paid on the life insured. The measure of the policy-holder’s damages being the difference between the then present value of the premiums he would have been compelled to pay during tho life of the insured, and the present value of the premium which he would be compelled to pay for a policy which could then be obtained from another responsible company; but if at the time the life of the insured was not insurable, the damage would be the actual value of the policy at the time of the breach, as being a valid claim against a responsible company. Spear v., Phanix Mutual Life Ins, Oo., 86 Tun, 822, In computing the equitable amount of a paid up policy, there should be considered the timo the policy had run, the age of the insured, the amount of the pro- miums paid and to be paid during its continuance, and the probable period of its continuance, in order to arrive at the equitable value thereof. Farley v. Union Mutual Life Ins. Oo., 24 Weekly Di- gost, 439, THE EFFECT OF WAR BRON EXISTING POLICIES, The effect which a war his upon an existing policy of life insurance is to suspend the life of the policy until peace is‘restored. Then the penny may be revived by a tender of premiums. The payment of premiums is suspended on the breaking out of war, but a tender after peace is declared revives the policy. Cohen v, N. Y. Mut. Life Ins, Oo., 50 N. Y. 610, Sands wv. N. Y. Life Ing. Co., 60 N. Y. 626, LAW OF LIFE INSURANCE. 23 And the court will relieve in such case against for- feiture. Whitehead v. N. Y. Life Ins. Co., 33 Hun, 425, 430, and cases cited. The Supreme Court of the U.S., in the case of the N.Y. Life Ins. Co. v. Statham, 93 U.S. (3 Otto), 24, held, that on a failure to pay the premium, by reason of the intervention of war, the policy is forfeited; but that the insured is entitled to the difference between the cost of anew policy and the present value of the premiums yet to be paid on the forfeited policy when the forfeiture occurred. : The tender of a premium to an agent in time of war, who is in the enemy’s country, will not keep the policy alive. Grace v. Am. Cent. Ins. Co., 109 U. 8. 278. WAIVER OF FORFEITURE. A promise to receive an overdue premium, which is made without consideration and after lapse, is not bind- ing on the insurance company. There must be either something said or done, by or on behalf of the insurance company, while the party bound to make the payment still has time and opportunity for so doing, or else there must be a consideration. Marvin v. The Universal Life Ins. Co., 16 Hun, 494; affd. in 85 N. Y. 278. Redfield v. Patterson Fire Ins. Co., 6 Abb. N. C. 456. But see Miesell v. Globe Mut. L. I. Co., 76 N. Y. 115, 118. The waiver of the right of forfeiture by an insur- 24° LAW OF LIFE INSURANCE. ance company must be supported by a valuable con- sideration. Ripley v. The Zina Ins. Co., 80 N. Y. 186. Underwood v. The Farmers’ Joint Stock Ins. Co., 57 N.Y. 500, 506. It must be with a knowledge of the fact that the premium is overdue. Robertson v. Metropolitan L. I. Co., 88 N. Y. 541, 545. Indeed, strictly speaking, there can be no waiver if ‘the policy is, by its very terms, dead, and any insurance -must be a new insurance for a consideration. Smith v. The Saratoga Co. Mut. Fire Ins. Co., 3 Hill, An extension of time to pay a premium is good, _ even if the insured die in the meantime. Homer v. Guardian Mut. L. I. Co., 67 N. Y. 478. An extension of the time of payment ofa premium can be made orally. Howell v. Knickerbocker L. I. Co., 44 N. Y. 276. If a policy-holder would avoid a forfeiture for any cause he must tender the premium before bringing his action. Thompson v. Knickerbocker Life: Ins. Co., 104 U. S. 252. A waiver of forfeiture, procured by a false repre- sentation, is void. ‘Harris v. Equitable L. Ass. Soc. of the U. S., 64 N. Y. 196. The consideration of the subject of the payment of the premium, and the forfeiture of the policy, would not be complete without a reference to the New York LAW OF LIFE INSURANCE. ° 25 Statute prescribing that notice shall be given to the in- sured by the insurance company of the amount of pre- miums due on the policy. It is as follows: Laws or 1876, Chap. 341, as amended by Laws of 1877, chap. 321, section 1—An Act regulating the forfeiture of Life Insurance policies. ae +g Passed May 15, 1876. “Sxcrion 1. No life insurance company doing business in the State of-New York shall have power to declare forfeited or lapsed any policy hereafter issued or renewed by reason of non-payment of any annual premium or interest, or any portion thereof, except as hereinafter provided. Whenever any pre- ‘ mium or interest.due upon any such policy shall remain unpaid when due, a written or printed notice stating the amount of such premium or interest due on such policy, the place where said premium or interest should be paid, and the person to whom the same is payable, shall be duly addressed and mailed to the person whose life is assured, or the assignee of the policy, if notice of the assignment has been given. to the eompany, at his or her last known post-office address, postage paid, by the company, or by an agent of such company or person appointed by it to collect such premium. Such notice shall further state that unless the said premium or interest then due shall be paid to the company or to a duly appointed agent or other person authorized to collect such premium within thirty days after the mailing of such notice, the said policy and all payments thereon will become forfeited and void. In case the payment demanded by such notice shall be made within the thirty days limited therefor, the same shall be taken to be in full compliance with the, requirements of the policy in respect to the payment of said premium or interest, anything therein contained to the contrary notwithstanding ; but no such policy shall in any case be forfeited or declared forfeited or lapsed until the expiration of thirty days after the mailing of such notice. Provided, however, that a notice stating when the premium will fall due, and that if not paid the policy and all payments thereon will become forfeited and void, served in the manner hereinbefore provided, at least thirty and not more than sixty days prior to the day when the premium is payable, shall have the same effect as the service of the notice hereinbefore provided for.” Passed "May 23, 1877. “Sxorton 2, The affidavit of any one authorized by sec- tion one to mail such notice, that the same was duly addressed 26 LAW OF LIFE INSURANCE. to the person ‘whose life is assured by the policy, or to the assignee of the policy, if notice of the assignment has been given to the company, in pursuance of said section, shall be presumptive evidence of such notice having been given.” The above act was amended by Laws of 1885, chap- ter 328, so as not to apply to policies where the pre- miums are payable in weekly or monthly installments. This act has been recognized by the courts. Frank v. The Mut. Life Ins. Co. of N. Y., 1 N. Y. State Reporter, 681. , CHAPTER VIL. THE RIGHTS OF THE POLICY-HOLDER DURING THE LIFE OF THE POLICY.. The insured is the holder of an obligation of the insurer, which, when matured; can be enforced by action, but which gives him no other rights until it has matured. He is not a stockholder, and is not a creditor, within the meaning of the statutes of New York, un- til the maturity and recovery of enone on his claim. He is not a person mas in a trust, nor is the company a trustee for him. The company may make investments which in his opinion are bad, it may pay risks which it ought not to pay, but the insured cannot interfere. These rules are for the protection of the insured. ‘Otherwise, each dissatisfied policy. holder might file a bill to enforce his peculiar views, and the company would be submerged in: litigations. As well might the passengers in a ship be expected to regulate its navigation by bill in equity as for each policy-holder to: seek to control the operations of the company. The arguments which have been addressed to courts against these views have been based upon © a mistaken view of the “mutual” element in life insurance; of a wrong inference from the use of the word “profit,” it being supposed that partnership profits were intended; or a wrong application of the 28 LAW OF LIFE INSURANCE. word “ dividend,” as supposed to be indicating a stock dividend, and from certain loose expressions in law books as to the property of a corporation being a trust property. Life insurance is a business, each department of which must be managed by trained experts. A suc- cessful company must have in it a good mathemati- cian, an accomplished financier, a wise real estate dealer, and a good general business man. The insured is under the strong protection of the law. The Su- perintendent of Life Insurance represents the insured, and closely watches over the course of the company, and the liability of directors under the criminal law, in ease of a deviation from duty, is well established, and has been enforced. But when a company becomes insolvent, and sus: pends business, the insured has a claim against its funds in the nature of a claim for damages for breach of contract. If the company fails, a right of action immediately accrues as for a breach of contract, and the tribunal assessing the damages should ordinarily assess them at such figures as the insured. could, for the same price, obtain similar insurance. Attorney-Gen. v. North Am. L. I. Co., 82 N. Y. 172. . People v. Empire Mutual Life Ins. Co., 92 N. Y. 105. oe v. Security Life Ins. & Annuity Co., 78.N. Y, In Belknap v. North America Life Ins. Co. 11 Hun, 282, a policy-holder having a paid up policy ap- plied for the winding up of the company, receiver, injunction, &c., on the ground that the property of the company had been corruptly diverted, and that ‘the company had been mismanaged. The court held that the plaintiff was not a creditor, and had no present LAW OF LIFE INSURANCE. 29 right of action. That the word “creditor” of the Re- vised Statutes means a judgment creditor, and that there was no right of visitation in the Supreme Court. In Taylor v, The Charter Oak Life Ins. Co, 9 Daly, 489, the. insured had a policy forfeited by failure to pay the premiums. He alleged various violations of the company’s charter, its insolvency, and claimed that he was entitled to participate in the profits of the com- pany by reason of a trust relation. The court held that the course of the insured, in allowing his policy to lapse, was not excused by the alleged violations of the charter of the company, and that he had uo right to refuse to pay premiums on the ground that he thought the company was in- solvent. And the court pronounced a suggestion of the plaintiff, that there was a trust relation, to be un- founded in law. The case of Bewley v, The Equitable Life Assurance Society, 61 How. Pr. 344, 346, was brought. by the holder of a policy in full force and abet, the premiums having been paid. He made allegations of fraud, misapplication of funds, waste and wltra vires investments, and defend- ant Asaaieed. The court held that the debalaat was a duly incorporated company ; that there was no dis- ' tinction between contracts of insurance and any other contracts ; that the money paid to the company did not . in any sense belong to the policy-holder, but belonged exclusively to the company; and that the policy-holder was interested in it in the same way only that cred- itors are interested. The court cited Cohen v. The New York Mutual Life Ins. Co, 50 N.Y. 610, as holding that the policy-holders were in no sense partners ; that there was no trust relation; that the position of the policy- * 30 LAW OF .LIFE INSURANCE. holder was simply that of a creditor, and that except in the case of a judgment creditor, the statute confers no right upon a policy-holder to bring an action for the: winding up of the affairs of the company. These questions have been before the Court of Ap. peals on several occasions. In the case of The People v. The Security Life In- surance & Annuity Company, 78 N.Y. 114, the relation of the policy-holder to the company: was ‘cnasitiered Judge Karl, giving the opinion in that case, after — stating that the policy-holder enters into an engagement only with the company, and not with any other policy- holder; that he, pays the premiums solely as a considera- tion of his own insurance, says: “The company receives the money as its own, and may do with it as it will, ex- cept as it is restrained by some statute. It is wholly im- - material to the insured what the company does with the money, provided it remains solvent until the maturity of © his policy. That they who pay their money for insur- ances are no more jointly interested, or in any sense _ partners, than the depositors in a bank. Depositors swell the assets of the bank and also its liabilities, and they have a common interest that the bank shall keep its funds so as to be able to discharge its liabilities, and that is all. The fund produced by the. payment of all the premiums’ does not in any sense belong to the policy-holders, but belongs exclusively to the company ; and the policy- -holders are interested in it in the same way only that the creditors of any other corporation are interested in its funds.” Sharing in the profits does not ae policy-holders partners, even in a purely mutual company. Polity- | holders cannot make any profits. These profits when LAW OF LIFE INSURANCE. 31 distributed are simply an equitable adjustment of pre- miums paid. People v. Security L. 1. & Annuity Co., supra. Cohen v. N. Y. Mut. Life Ins. Co., 50 N.Y. 610. The case of Bogardus v. New York Life Insurance Company, 101'N. Y. 328, 839, was a case where the plaint- iff brought suit against the defendant, claiming various breaches of contract, and to this complaint the defend- ant demurred. The court held that no relation of trust existed between the insured and the company, and that there wa’ no right in the plaintiff to interfere with the management of the funds of the defendant. In Cole v. The Knickerbocker Life Insurance Co., 23 Hun, 255, it was held that a creditor at large could not maintain an action to have a life insurance company ' dissolved on the ground of insqlvency, nor compel its: trustees, directors and officers to make good the losses which it has sustained by reason of their negligence, and. ' mismanagement, and that a policy-holder was only such a creditor. -The court stated that the statute (2 R. S. 463, § 35) gives the remedy to a creditor of the corpo- ration, but the court held that it was not the intention of the legislature to make that remedy the medium of liti- gating the question whether the plaintiff was a creditor when the suit was begun. The court held that such an * action could not be brought within the principles which govern remedies for breaches of private trusts. That the - assets of a corporation, it is true, are a trust fund for the payment of its debts, but that fact does. not give to individuals, who are creditors of the corporation, a right to intermeddle or interfere with its affairs, before an at- tempt has been made to enforce payment of the debt by the corporation. 82 LAW OF LIFE INSURANCE. It was held by the Supreme Court of the United States, in the case of Lovell v. St. Louis Mut. Life Ins, Co., 111 U. 8. 264, that a general re-insurance of all its es constitutes enh a breach of ‘contract as permitted each of the policy-holders to sue for damages. Mere right to profits does not justify a suit in equity for an accounting. Smith v. Bodine, 74 N. Y. 30. A mere creditor has no right to an accounting. Salter v. Ham, 31 N. Y. 321. To entitle a person to an accounting there must bea complicated account, the need of a discovery, and the existence of a trust relation. Marvin v. Brooks, 94 N. Y. 71. Moxon v. Bright, L. R. 4 Ch. App. Cases, 292. Foley v. Hill, Sy H. of L. Cas., 28. Shepard v. Brown, 4 Giffard, "208. Hemings v. Pugh, "Td. 456. If the court is satisfied that no amount is due on the alleged account, no accounting will be ordered. Campbell v. Campbell, 4 Halst. N. J. Ch. 748. Co. W. C. v. Conliffe, 43 L. J. Ch. 741. The sole remedy for improper conduct on the part of a corporation, while it is a going concern, and before the policy has ripened into a judgment, consists in the power given to the Insurance Department and the Attorney- General to wind up insurance corporations, which power is hereinafter discussed. This power is exclusive, and the court will enjoin any other attempt when it is set in motion to interfere with the corporation. Atty.-Genl. v. Continental Life Ins. Co., 53 How. Pr. 16. at eal ». Atlantic-Mutual Life Ins. Co., 74. N. Y. 17 LAW OF LIFE INSURANCE. 33 Atty.-Genl. v. Guardian Mutual Life Ins. Co., 77 N. Y. 272. Woerishoffer v. North River Cons. Co., 99 N. Y. 398. The Penal Code contains ample provisions which serve to guard the interests of the policy-holder. See $$ 602, 603, 604, 606, 609, 610, 611, 614. Laws or 1881, Chapter 434, page 592.—An Act in relation to life insurance companies. Passed May 31, 1881. “Sxcrion 1. No director or officer of a life insurance com- pany shall receive any money or valuable thing for negotiating, procuring, or recommending any loan from such company, or for selling or aiding in the sale of any stocks or securities to or by such company. “Section 2. Any person. violating the provisions of this act shall forfeit his position either as director or officer, or both, and shall be disqualified forever after from holding any such office in any life insurance company.” CHAPTER VIIL THE OWNERSHIP OF A POLICY AND THE ASSIGNMENT THEREOF. The person named in a policy as the payee is or- dinarily to be considered the sole owner thereof. Lawrence'v. Fox, 20 N. Y. 268. Ripley v. Astor Ins. Co., 17 How. Pr. 444. Mallory v. Travelers’ Ins. Co., 47 N. Y. 52. Lockwood v. Bishop, 51 How. Pr. 221. Hogle v. Guardian L. I. Co., 4 Abb. Pr., N. S., 348. Day v. Ins. Co., 45 Conn. 480. Ferdon v. Canfield, 39 Hun, 572. Ruppert v. Union Mutual Ins. Co., 7 Rob. 156. Greeno'v. Greeno, 23 Hun, 482. A power of disposition may.be reserved. Greeno v. Greeno, 23 Hun, 482. Courts of this State, not of the highest appellate jurisdiction, have, in:two recent cases, held that, in cases where the premium has been paid by a party other than the person named in the policy as the beneficiary, and where such a person has retained control over the policy, that such person is the owner. So v. Jaques, 12 Abb. N.C. 25; 8. 0, 28 Hun, 119. Garner v. Germania Life Ins. Co. (Common Pleas, Gen’] Term, June, 1885), 22 N. Y. Weekly Digest, 204. The mere fact, that a person other than the payee or insured makes-payment of the premium, gives him no itle to the policy. Lockwood v. Bishop, 51 How. Pr. 221. -Alwin v. Witty, 30 L. J. Ch. 860. Burridge v. Row, 1 Younge & Collyer’s Ch. Cases, 183. LAW OF LIFE INSURANCE. 35 Where a policy is payable to a man’s wife and his children, the word children applies only to the issue of the wife then living, and not in any respect to the chil- dren of a future wife, Lockwood v. Bishop, 51 How. Pr. 221. A policy payable to a wife, and in case of her death to her children, has even been held to belong to her grandchild born of a child who died prior to the death of the wife. Hull v. Hull, 62 How. Pr. 100. But this is contrary to the general current of au- thority. . Mowatt v. Carow, 7 Paige’s Chy. 332.. Hone v. Van Schaick, 3 Coms. 538. * Sherman v. Sherman, 3 Barb. 387. Magaw v. Field, 48 N. Y. 668. Palmer v. Horn, 84 N. Y. 516. Where a person has advanced money to pay premi- ums on a policy, in such a case such person sometimes stands in the position of salvor or other privileged per- son, with a species of equitable lien, which the courts protect, and which entitles him to have his advances paid out of the proceeds of the policy. In re Newland, 2 Ins. Law Jour. 860, 895. Dutton v. Willner, 52 N. Y. 312. But such person must be in some relation to the insured. Lockwood v. Bishop, supra. In view of the present position of the authorities it is wise for the prudent insurer to obtain, if possible, the acquittance both of the applicant and the payee, on the payment of the loss. 36 LAW OF LIFE INSURANCE. But the payee of a policy is bound by the agree- ments made by the applicant on the making of the in- surance. Baker v. Union Mut. L. I. Co., 43 N. Y. 287. ASSIGNMENT OF POLICY. All policies are assignable except “ wives’ poli- 7 ” . cles. Marcus v. St. Louis Mut. Life Ins. Co., 68 N. Y. 625. Policies may be assigned by delivery without a writing. ; Marcus v. St. Louis Mut. Life Ins. Co., supra. St. John v. Am. Mut. Life Ins. Co., 138 N. Y. 37. The assignee need not have an insurable interest, if he sues in the courts of the State of New York. Olmstead v. Keyes, 85 N. Y. 593. The contrary of this New York doctrine is held by the Supreme Court of the United States. Warnock v. Davis, 104 U. S. 775. The assignee takes the policy with all its burdens and duties. How v. Union Mut. Life Ins. Co., 80 N. Y. 32. The assignee of a policy may recover premiums paid in mutual ignorance that the insured was dead. Prentice v. Knickerbocker Life Ins. Co., 77 N. Y. 483. The method of assignment is usually provided for by restrictions contained in the policy. LAW OF LIFE INSURANCE. 37 MARRIED WOMEN’S POLICIES. The most difficult of all the questions of title arises in the case of married women’s policies. The act which gave rise to the litigation, as amended, is as follows: “Sxction 1. It shall be lawful for any married woman, by herself and in her name, or in the name of any third person, with his assent, as her trustee, to cause to be insured, for her sole use, the life of her husband, for any definite period, or for the term of his natural life; and, in case of her surviving, such period or term, the sum or net amount of the insurance becom- ing due and payable, by the terms of the insurance, shall be payable to her to and for her own use, free from the claims of the representatives of the husband, or of any of his cred- itors, or any party or parties claiming by, through or under him. But, when the premium paid in any year. out of the property or funds of the husband shall exceed tive hundred dollars, such exemption from such claims shall not apply to so much of said premium so paid as shall be in excess of five hun- dred dollars, but such excess, with the interest thereon, shall inure to the benefit of his creditors.” (Laws of 1840, chap. 80, as amended by Laws of 1858, chap. 187, sec. 1; by Laws of 1866, chap. 656, sec. 1; by Laws of 1870, chap. 277, sec. 1. “Sec. 2. Any policy in favor of a married woman, or of her and her children, or assigned in her, or in her and their favor, on written request of said married woman, duly ac- knowledged before a commissioner of deeds, or other officer authorized to take acknowledgments of deeds, in the same manner as required by law, to pass her dower right in lands of her husband, and on the written request of the policy-holder may be surrendered to and purchased by the company issuing the same in the same manner as any other policy. And such married woman may, in case she have no child or children born of her body. or any issue of any child or children born of her body, dispose of such policy in and by a last will and testament, or any instrument in the nature of a last will and testament, or by a deed duly executed and acknowledged before an officer authorized to take acknowledgments of deeds, in the same manner as required by law to pass her dower right in lands of her husband, which disposition, lawfully made, shall invest the person or persons to whom such policy * 38 LAW OF LIFE INSURANCE. shall have been so bequeathed, or granted and conveyed, with the same rights in respect thereto as: such married woman would have had in case she survived the person on whose life such policy was issued, and such legatee or grantee shall have the same right to dispose of such policy as herein conferred on such married woman.” (As amended by Laws of 1858, chap. 187, sec. 2; by Laws of 1862, chap. 70, sec. 1; by Laws of 1866, chap. 656, sec. 2; and by Laws of 1873, chap. 821, sec. 1.) The Act of 1840, as originally passed, provided that the exemption should not apply where the amount of premium paid should exceed three hundred dollars, and contained no provision for the assignment of the . policy. . The Act of 1858, chap. 187, omitted the provision contained in the Act, of 1840, that the exemption only applied where the premiums were paid out of the funds or property of the husband. Chap. 70, of Laws of 1862, provided that the amount of the insurance might be made payable, in case of the death of the wife before the decease of her husband, to his or to her children for their use, and to their guard- jan, if under age. Chapter 656, of the Act of 1866, merely changed the Act of 1840 so as to provide that the wife should receive the whole amount of the insurance at the end of the period or term provided in the policy, instead of only at the termination of the natural life of the hus- band. : By chapter 277, of the Laws of 1870, the first sec- tion of the Act was amended as above set forth, and by © the Act of 1873, chapter 821, the second section was amended as above set forth. The act for the relief of policy-holders in life insur- ance companies (L. 1879, chap. 248), is as follows: LAW OF LIFE INSURANCE. 39 Laws or 1879, Chap. 248,—An Act Sor the relief of policy-holders in life insurance companies. Passed May 5, 1879. “Szcrion 1. All ae of insurance heretofore or here- after issued within the State of New York upon the lives of husbands for the benefit and use of their wives, in pursuance of the laws of the State, shall be, from and after the passage of this act, assignable by said wife with the written consent of her husband ; or in case of her death by her legal representa- tives, with the written consent of her husband, to any person whomsoever, or be surrendered to the company issuing such policy, with the written consent of her husband.” The original decisions on which the rules laid down in regard to married women’s policies depend, were based upon the Act of 1840. They cannot by any pro- cess of legal inference or logic be considered as justified by the Act or any of its amendments. The first insur- ance case decided under the provisions of the Act of 1840, was a hard one for the plaintiff, and the court legislated, as it were, in order to decide the case according to sub- stantial justice. Eadie v. Slimmon, 26 N. Y. 10. The rule laid down in Eadie v. Slimmon is not de- rived from any provision of the statute, but was estab. lished by the decisions of the court, and has been steadily adhered to, both on the principle of stare decisis, and on the further principle of the legislative reeognition of the rule laid down in Eadie v. Slim- ‘mon,. by chapter 341, Laws 1873, chapter 248, Laws ‘1879. : Frank v. Mutual Life Ins. Co. (decided in Court of Ap- ‘peals, April 20th, 1886), 1 N. Y. State Reporter, 681. The following authorities pass upon questions 40 LAW OF LIFE INSURANCE. _which have arisen under the rule in Eadie v. Slim- mon. Eadie v. Slimmon, 26 N. Y. 9. Barry v. Equitable Life Ass. Soc., 59 N. Y. 587. Moehring v. Mitchell, 1 Barb. Ch. 264. McCord v. Noyes, 3 Bradf. 139. Durien v. Central Verin, 7 Daly, 168. , Thompson v. American Tontine Savings Ins. Co., 46 N. Y. 674. Barry v. Mutual Life Ins. Co., 49 How. Pr.; 504. Hull v. Hull,.62 How. Pr. 100. Geraty v. Reid, 78 N. Y. 64. Ainsworth v. Backus, 5 Hun, 414. noe v. Butterly. 53 How. Pr. 471; affi'd s. o. 78 N. . 68. Barry v. Brune, 8 Hun, 395; affi’d s. c. 71 N. Y. 261. Leonard v. Clinton, 26 Hun, 288. Baron v. Brummer, 100 N. Y. 872, 374. Bloomingdale v. Lisberger, 24 Hun, 359. Stanton v. King, 76 N. Y. 585. The rule in Eadie v. Slimmon is that a married woman has no power to assign a policy taken out for her benefit on the life of her husband. The court, in endeavoring to find a reason for the rule, said that the intent of the statute of 1840 was to create a provision for a state of widowhood and or- phanage. See, as following Eadie v. Slimmon, and affirming same, Barry v. Equitable Life Ins. Co., 59 N. Y. 587. This rule cannot be evaded by permitting the pol- icy to- lapse, for non-payment of premium, without the knowledge of the wife, by issuing a new policy and as- signing it to a creditor. The assignment will be void. Barry v. Brune, 71 N. Y. 261. LAW OF LIFE INSURANCE. 41 _ A guaranty by the wife, of the sufficiency and va- lidity of the assignment, will not avail the assignee. De Jonge v. Goldsmith, 46 N. Y. Supr. Ct. 131. The effect of the Act of i840 cannot be avoided by omitting all reference to it in the policy. Nor is it necessary at the trial of a suit on such a policy, that it should appear that the parties contracted with reference to that Act. Brummer v. Cohen, 86 N. Y. 11. * The Act applies even to the case of an endowment policy. ‘Brummer v. Cohen, supra. Fowler v. Butterly, supra. Tt does not change the character of the policy to exchange ‘it for a “paid up policy” for a less amount. Mut. Life Ins. Co. v. Terry, 62 How. Pr. 325. It makes no difference as to assignability, whether the premiums are paid from the funds of the hushand or not. Frank v. Mut. Life Ins.:Co. (decided in Court of Ap- peals, April 20, 1886), 1 N. Y. State Reporter, 681. Eadie v. Slimmon, supra. It makes no difference as to assignability, that a pol- icy does not appear in the name of the wife, if it is issued for her benefit. Bloomingdale v. Lisberger, 24 Hun, 357. A payment by the assignee of premiums, even in good faith, gives him no title. De Jonge v. Goldsmith, 46 Supr. Ct. 131; 86 N. Y. 614. 42 LAW OF LIFE INSURANCE. And the Court of Appeals fas so ,held even in the light of the rule that a wife has an insurable interest by common law in her husband’s life. Frank v. Mut. Life Ins. Co., supra. A policy payable to a wife is not even liable to her creditors to pay her debts. Smillie v. Quinn, 90 N. Y. 492. In the Matter of Wendell, 3 How. Pr., N.S., 70. A wife cannot.go to another State to assign. her pol- icy, so as to enable the assignee to sue nm New York. Mutual Life Ins. Co. v. Terry, 62 How. Pr. 326. Bloomingdale v. Lisberger, 24 Hun, 359. Only the wife herself can avoid an assignment of a married woman’s policy. A creditor cannot avoid it. Smillie v. Quinn, 90 N. Y. 492. Frank v. Mut. Life Ins. Co., supra. The wife, when an assignment is made, may affirm the acts of the assignee, when the policy becomes a claim ; and where the assignee has taken out a paid up palieysin the place of her policy, the wife may sue for the proceeds of the paid up policy, instead of the proceeds of the original policy. Frank v. Mut. Life Ins. Co., supra. The possession of the assignee, of a. wife’s policy, is lawful until she chooses to reclaim it and set aside the assignment. Frank v. Mut. Life Ins. Co., supra. . The assignee of a wife’s policy may surrender it to the insurer. It is not a. conversion for the insurer to' LAW OF LIFE INSURANCE. 43 receive and retain it. The wife, however, may refuse to recognize the surrender, and sue on the policy. Frank v. Mut. Life Ins. Co., supra. The mere stamping upon the policy of the word “paid,” by the insurer, does not prejudice the rights of the wife. : Whitehead v. N. Y. Life Ins. Co. (Court of Appeals), 1 N.Y. State Reporter, 344. A creditor of the husband can only claim the excess . of the premiums paid under the act, when it appears that such excess was paid during the period of the existence of the debt, and that it was paid from the husband’s funds. The “lien” only attaches to the ex- cess of premiums over the payment exempted by law. Baron v. Brummer, 100 N. Y. 372, 377, In the Matter of Wendell, 3 How. Pr., N. S., 70. The acts increasing the amount of: the premium allowed to be paid by.the wife under the act, are enabling acts, and are constitutional and. relate only to the remedy. Baron v. Brummer, 100 N. Y. 372, 377. The court will not sustain an‘action in the nature of a creditor’s bill against a wife’s policy. Baron v. Brummer, supra. The act allowing the wife to assign with the con- sent of her husband (chap. 248, Laws 1879), does not aid creditors in attacking her title to a policy in her favor. Baron v. Brummer, 100 N. Y. 372, 377. 44 LAW OF LIFE INSURANCE. If a wife has children to whom the policy is payable she cannot assign, even under the enabling act. Leonard v. Clinton, 26 Hun, 288. An action will lie for the reformation of a policy after divorce, where the mutual intention was that the policy should be payable to the wife only so long as-she remained the wife of the insured. Goldschmidt v. Union Mutual Life Ins. Co., 24 Weekly Digest, 421 ; reversing 2 How. Pr., N.S8., 32. ‘Where a husband, as a wife’s agent, makes a war. ranty, the sworn declarations of his wife, made in an- other proceeding, can be offered against her in a suit on the policy. Furniss v. Mutual L. I. Co., 14 J. & S. 467. If an assignee of a wife’s policy undertakes to keep it alive by payment of premium she can recover dam- ages if he neglects to do so, in spite of the fact that his assignment is void. Ainsworth v. Backus, 5 Hun, 414. CHAPTER IX. PROOF OF LOSS. When the life on which the policy is issued dies, the policy ordinarily requires that notice and proof of death should be furnished. O'Reilly v. Guardian Mut. Life Ins. Co., 60 N. Y. 169. The proof must be such reasonable evidence as the party can command, to give assurance that the event has happened upon the liability of which the insurers depended. What is proof, must be determined accord- ing to the rules of evidence, so far as they can be ap- plied to extra-judicial proceedings. O'Reilly v. Guardian Mut. Life Ins. Co., 60 N. Y. 169. Where a paper is given to the insurer which is not apparently intended to be proof, it is not necessary for the company to notify the person sending it that a better character of proof is required. O’Reilly v. Guardian Mut. Life Ins. Co., supra. The giving of proof of loss is a condition precedent to maintaining an action on the policy. Hincken v. Mut. Benefit Life Ins. Co., 50 N. Y. 657. _ OReilly v. Guardian Mut. Life Ins. Co., supra. ‘The giving of proof of loss may be waived, and no new consideration is required to support such waiver. Goodwin v. Mass. Mutual L. I. Co., 73 N. Y. 480. 46 LAW OF LIFE INSURANOBD.. The receiving and retaining of proofs of loss, with- out rejection, justifies a finding by a court, that fur- ther proof is waived. Prentice v. Knickerbocker Life re Oo., 77 N. Y. 483. Cannon v. N. W. L. I. Co., 29 Hun, 471. Blanks are usually furnished by the company on ‘which the proof of loss is to be made, and a refusal to furnish such blanks by an agent of the company on the ground that the policy is null and void, is a waiver of the necessity of furnishing proofs of loss. Grattan v. Metropolitan Life Ins. Oo., 80 N. Y. 281. It has been held that proofs of loss are only avail- able when served by the person recited. in, and who is entitled to receive the proceeds of the policy. If this be true, then every person who may, by any possibility, have a claim on a policy, should make separate proof of loss) The writer doubts whether this decision will be sustained by the Court of Appeals. Wuesthoff v. Germania Life Ins. Co., 52 N. Y. Supr. Ct. 208. The latest decision in regard to proofs of loss is that of Goldschmidt v. Mut. Life Ins. Co. of New York (de- .cided by the Court of Appeals of N. Y., June Ist, 1886), 24 Weekly Digest, 9; reversing 20 Weekly Digest, 95. 2N. Y, State Reporter, 421. There were two policies in suit, one was payable in sixty days after due notice and proof of the death of the life insured, unless the insured should “die by his own act or hand, whether sane or insane,” in which . LAW OF LIFE INSURANCE. 49 ease the policy was declared to be null and void, and the company agreed to return the premiums paid. The second policy was payable within sixty days after notice, and the proofs and record of the death of the said Oscar Eidler should be furnished to the company, at its .office, and the policy provided, that “The proofs of the death by which this contract ma- tures, shall contain” * * * “the statement of the physician,” * * * “undertaker,” &&. The policy: declared that the self-destruction of the person, whether voluntary or involuntary, or whether he be sane or in- sane at the time, was not a risk assumed by the company in the contract, but in- every such case the company agreed, upon demand’ made and sur- render of the policy, accompanied with satisfactory proof of such death, within sixty days after its oc- currence, to pay the net reserve upon it held by the company at the beginning of the year in which death should occur. The answer pleaded suicide, and the proofs of death served on the company stated as: follows: “ We are informed that-wbat purported to be a coroner’s inquest was held; we annex a copy of what was represented to us to be the verdict of the jury, and of the evidence on which said verdict was based. But ‘we do not hereby admit that there was any such in- quest, verdict, or evidence, and we deny that the pur- ported finding of such alleged jury was true or well- founded, and we deny the fact alleged to have been found by such jury, aud we deny the truthfulness of the alleged evidence on which said verdict is said to be based.” . Attached to the answer was a paper purporting to be a copy of the testimony taken before a coroner’s 48 LAW OF LIFE INSURANCE. jury, which had rendered a verdict of suicide. The trial judge ruled that the complaint must be dismissed unless the plaintiff, the assignee of the payee of the ' policy, showed how the death of Eidler was produced _and that the plaintiff had the affirmative of the issue. The above rulings were held by the Court of Ap- peals to be error, and that the death and service of proofs by the assignees of the policy having been ad- mitted by the answer, the only evidence necessary to sustain the plaintiff’s title was proof of the assignment. The court held that where no particular form of proof was specified in the policy, the company was only en- titled to such proof as would afford reasonable assur- ance that their liability for loss existed, and nothing more could afterwards be -required. That the ver- dict of the inquest furnished no evidence of suicide —the policy making no provision for it. That the original proceedings by the coroner would not be evidence upon the issue in any case. “The verity of the record is not admitted by the claimant.” It could not have been required of him, but “out of what must now seem ill-advised courtesy, was furnished to the de- fendants, at their request.” “It contained matter which, if properly substantiated, would have availed the de- fendants in maintaining an affirmative defense” The court distinguisbes this case from a case in the Su- preme Court of the United States (Ins. Co. v, New- ton, 22 Wallace, 32). In the case in the Supreme Court the proof of death consisted of affidavits giv- ing the details of the death and the record of the jury, and the court there held, that the preliminary proofs presented to an insurance company were admissible as prima facie evidence of the facts stated therein against LAW OF LIFE INSURANOB. 49 the insured and in behalf of the company, and the opin- ion of the Supreme Court said: “The narration of the manner of the death of the deceased was so interwoven with the statement of his death, that the two things were inseparable.” The Court ef Appeals stating that. in the case at bar it was quite otherwise. The insurer raised no issue as to the preliminary proofs of death, and they were in all respects complete without the statement as to the coroner’s inquest. Its contents formed no part of the representations of the claimants; the statements were not sworn to by them, nor presented as worthy of belief. They were in no respect bound by them. , Nor were they necessary, as in the case cited, to qualify the defendant’s admission, on which the plaintiffs then re- lied. The court held that any question as to the sigaest was unwarranted, and although the circumstances stated were calculated to gratify curiosity and, perhaps, serve a useful end, formed no part of the proofs called for, nor were they given as matter credited by the claimants. The insurer could, so far as it thought proper, regulate its conduct by any suspicions thereby excited, but it could not make use of the statement, as one binding upon the plaintiffs. The court therefore held that the burden of proof was upon the defend. ant to prove its defense irrespective of the proofs of the death. Taking the case above cited in connection with the case in the Supreme Court of the United States, it would appear that where the proofs of loss consist of a sworn statement that the death occurred from one of the causes not insured against, the applicant is concluded by such statement. But it is otherwise 4 ‘ 50 LAW OF LIFE INSURANCE. where the applicant does not admit this to be the case, even although the applicant furnishes the findings of a coroner’s jury, indicating that the death has oc- curred under one of the excepted clauses. The verdict of acoroner’s jury is not by any statute or rule of law made evidence between parties in a civil action, and the facts found by such verdict are not evidence, and this is really the principle underlying the above decision. When, however, the plaintiff makes an admis. ‘gion in his proofs of loss, which, being offered in evi- dence by him, constitute part of the evidence in the case, it would seem that such admission would be evidence against him, just as if, in an action upon a promissory note, the plaintiff should make an admission upon the record that the note was paid. CHAPTER X. DEFENSES FOR BREACHES OF WARRANTY, FRAUD, MISREP- RESENTATION AND CONCEALMENT. For their own protection insurance companies usu- ally insert in their ‘policies or applications written war- ranties, whereby .the applicant warrants the truth of various replies to questions propounded to him in the application as to his health, history, occupation, &c. In addition to this it may happen that the warranty does not apply by its terms to all the statements made by the applicant. These replies are called representa- tions, although in one sense every warranty is a repre- sentation. If no questions are asked the applicant is bound to disclose every fact known to him to be ma. terial to the risk. That is, every fact upon which the insurer would naturally rely in determining whether or not he will insure the risk. There was a time in the history of the business when hundreds of statements as to the age, causes of death of ancestry, and the like, were warranted by applicants, and policies were often contested for breach of warranty after payments had been made for years. The present tendency of insurers is to make the warranty cease to be in force after a limited period, and to confine its operation to reasonable and pertinent inquiries. A warranty is a stipulation in writing, on the literal truth or fulfillment of which the validity of the entire contract depends. Ripley v. Atna Ins. Co., 30 N. Y. 136, 157. 52 LAW OF LIFE INSURANCE. The court will not infer that a warranty is intended to be made, unless it is clearly expressed. O’ Niel v. Buffalo Fire Ins. Co., 3 Comst. 122. Dilleber v. Home L. I. Co., 69 N. Y. 256. And this is true even where the word “ warranty” is used, in case the context nullifies the use of the word, Fitch v. Am. Popular Ins, Co. 59 N. Y. 557. ‘Where a question is not answered in the application. there is no warranty that the answer, if it had been made, would be material. Dilleber v. Home Life Ins. Co., 69 N. Y. 256. Fitch v. Am. Popular Life Ins. Co., 59 N. Y. 557. In the law of insurance a representation is not nec- essarily a part of the contract, but is collateral to it; whereas an express warranty is always a part of the contract. Burritt v. Saratoga Mut. F. Ins. Co., 5 Hill, 188, Jefferson Fire Ins. Co. v. Cotheal, 7 Wend. 72, Where the evidence is undisputed, the court must not send the question of breach of warranty to the jury. So held in a case where it appeared that the applicant warranted that he had not been engaged in the manufacture or sale of beer, wine or other intox- icating liquors. ‘Dwight v. Germania Life Ins. Co., 25 Weekly Di- gest, 1. It is not enough for the plaintiff to produce a scin- tilla of evidence, in order to send the case to a jury, in LAW OF LIFE INSURANCE. 53 an action on a policy where the defense i is for breach of warranty. Dwight v. Germania Life Ins. Co., supra.” Where a policy contains a warranty, that the insured isnot addicted to the intemperate use of alcoholic stimu- lants, and that he does not habitually use intoxicating drinks as a beverage, there can be no recovery thereon, if the death occurred whilst be was in a state of intoxi- cation; it is not only a present warranty, but an im- plied agreement for future conduct. Horton v. Equitable Life Assurance Society, 3 Alb. Law Journal, 233. ‘But such clause refers to a customary and habitual use; not to a single or incidental indulgence. Van Valkenburgh v. American Popular Life Ins. Co., 70 N. Y. 605. Knickerbocker Life Ins. Co. v. Foley, 105 U. 8. 350. A clear breach of warranty, however immaterial, avoids the ‘policy, and knowledge of the agent of the fact that the warranty is false, does not: relieve against such breach. Rohrbach v. Germania Fire Ins. Co., 62 N. Y. 47. Barteau v. Phoenix Mut. Life Ins. Co., 67 N. Y. 595. Dwight v. Germania Life Ins. Co., supra. But where the agent dictates the answers of the ap- plicant, and the applicant tells the truth, and the agent states what is not true, it has been held that such act constitutes an estoppel on the company and excuses a breach of warranty. Mowry v. Rosendale, 74 N. Y. 360. Higgins. Phoenix Mut. Life Ins. Co. 74 N.Y. 6. Flynn v. Equitable Life Ins. Co., 78 N. Y. 568. Grattan v, Met. Life Ins. Co. 99° N. Y. 274. McArthur ¢ ». Globe Mut. L. I. Co., 14 Hun, 348. 54 LAW OF LIFE INSURANCE. The Supreme Court of the United States. has lately held that where the agent’s powers are limited in the application, that the fact that he writes down false answers—the insured having given a true statement to him—will not prevent the company from insisting that the warranties contained in the application. have been broken. N. Y. Life Ins. Co. v. Fletcher, 6 Supreme Court Re- porter, 842. If there is a collusion between the agent and the assured to cheat the company, the agent’s acts do not bind the company. Nat. Life Ins. Co. v. Minch, 53 N. Y. 144. Reference to the report of the examining physician contained in the application makes that report a part of the applicant’s statement. Smith v. Aitna Life Ins. Co., 49 N. Y. 211. A representation is any affirmation or denial of some fact, or an allegation which would lead the mind to the same conclusion. Chief Justice Mansfield, in Livingston v. Maryland Ins.. Co., 7 Cranch, 535. In the case of a representation, the statements to avoid the policy must be known by the applicant to be untrue, and must be made intentionally and with a fraudulent design. Fitch v. Am. Popular Life Ins. Co., 59 N.Y. 557. In the absence of fraud, or of any agreement, repre- sentations need only to be substantially correct. Un- LAW OF LIFE INSURANCE. 5 less they are material to the risk, even if incorrect, they do not avoid the policy. Higbie v. Guardian Mutual Life Ins. Co., 53 N. Y. 603. They must be in the eyes of the insured material to the risk. Valton v. The Nat. Fund Life Ass. Co. 20 N. Y. 32. Armour v. Transatlantic Fire Ins. Co., 90 N. Y. 450. (Cited, in Dwight v. Germania Life Ins. Co., as ap- plicable to a life policy.) What is or is not a material question as to the employment of an insured, is a question solely for the insurer. Dwight v. Germania Life Ins. Co., supra. A representation in a policy must be taken as being the words of the promisee, and taken most strongly against him. Dwight v. Germania Life Ins. Co., supra. A warranty may be inferred from proof of a repre- sentation, but the naked allegation, in a pleading of a representation, is not equivalent to an allegation of a warranty or a contract. Bogardus v. N. Y. Life Ins. Co., 101 N. Y. 328, 343. The medical examiner’s mouth is closed, and in an action on a policy where the defense is that there is a breach of warranty, as to the health or medical history of the person whose life is insured, he cannot testify to the cause of death learned by him while attending the patient in a professional capacity. Edington v. Aitna Life Ins. Co., 77 N. Y. 564. Edington v. Mut. Life Ins. Co., 67 N. Y. 185. Pierson v. People, 79 N. Y. 424. Grattan v. Met. Life Ins. Co., 80 N. Y. 281, 282. 56 LAW OF LIFE INSURANOE. ‘But a retired physician, present at an accident, who examines the person at the request of a friend, is not within the prohibition. Gibson v. Am. Mut. L. I. Co.,,37 N. Y. 580. As‘most of the terms of the policy are inserted by the insurer, the construction of the clauses of the policy will in most cases be strictly construed against the insurer. Insurance v. Slaughter, 12 Wallace, 404. Mayor v. Hamilton Fire Ins. Co., 39.N. Y. 45. An action will lie by a defrauded insurer to recover money paid in ignorance of the existence of the fraud at the time of payment. National Life Ins. Co. v. Minch, 53 N. Y. 144.” While the reports are full of cases with reference to misrepresentations and concealments, as a practical mat- ter today, in the State of New York, there is no such thing as a defense based on either concealment or mis- representation. Unless a matter is warranted, it is use- less to contest a policy, as the case will almost un- doubtedly go to the jury. The tendency of the present day is to make rigorous inquiries before insuring a risk, and to insist little on breaches of warranty thereafter. Parties have a right to insert in the policy, in plain and unambiguous language, the observance of an apparently immaterial requirement, as the condition of a valid contract, and neither courts nor juries have a right to construe by implication another contract. Dwight ». Germania Life Ins. Co., supra. > LAW OF LIFE INSURANCE. 57 CONCEALMENT. The fact that insurance companies cover, by their questions, all the matters which they regard as material and obtain express warranties from the insured, and as the questions are intended” to. cover the whole subject of the condition of the insured, they leave but little room for the defense of concealment. A concealment is the suppression by the insured of a fact material to the risk, and which the insured is bound to communicate. It is fatal to the policy. Smith v. tna Life Ins. Co., 49 N. Y. 211. But where the applicant omits to disclose such in- formation, and no inquiry is made by the insurer of a nature to elicit it, and when in his own mind it is not material to the risk, it does not avoid the policy. Mallory v. Travelers’ Ins. 'Co., 47 N. Y. 52. Rawls v. Am. Mut. Life Ins. Co., 27 N. Y. 282. CHAPTER XI. SUICIDE AND DEATH BY THE HAND OF THE INSURED. Policies often contain stipulations that the death of the insured, by his own act, will make the policy void. Where a policy provides, that if the insured dies by his own hand, the policy will be void, the words will only apply to a death by suicide. That is a wrong- ful death. It will not apply to a case in which the insured is bereft of reason. The literal meaning is not the true meaning. The insured must act voluntarily, and know the consequences of his act to avoid the policy. Breasted v. Farmers’ Loan & Trust Co., 4 Hill, 73, and 8 Seld. 299. Van Zandt v. Mut. Benefit Life Ins. Co., 55 N. Y. 169. Newton v. Mutual Benefit Life Ins. Co., 76 N.Y. 426. The words “sane or insane” extends the exeniption to the case of death while insane. De Gogorza v. Knickerbocker Life Ins. Co., 65 N. Y. 232. Van Zandt v. Mut. Benefit Life Ins. Co., 55 N. Y. 169. The words “voluntary or otherwise” will not ex- . tend the exemption to a case of accidental self-destruc- tion: Penfold v. Universal Life Ins. Co., 85 N. Y. 317. In an action upon a policy on the life of a husband, for the benefit of his wife, the suicide of the insured is LAW OF LIFE INSURANCE. 59 not a defense, where there is no stipulation to that effect in the policy. The expression “in the known violations of the laws of any State,” cannot be construed to mean suicide, Patrick ». Excelsior Life Ins. Co., 4 Hun, 268. Fitch v. Am. Popular Life Ins. Co., 59 N. Y. 557. Self-killing by one who understands the physical consequences of the act, but not its moral character, is not suicide within the meaning of a life insurance policy, which, by its terms, is void in case of suicide. Manhattan Life Ins. Co. v. Broughton, 109 U. S. 121. In an action upon a life policy, where the insured has committed suicide, acts and incidents which are as consistent with sanity as insanity, will not author- ize the submitting to the jury of the question of the insanity of the insured. ' Weed v. Mut. Benefit Life Ins. Co., 70 N.-Y. 561. Suicide is not of itself sufficient evidence of insanity; and if it appear that the act was premeditated, and fully comprehended, and that there was no direct manifesta- tion of previous insanity of a positive character, the in- surers are not liable. Fowler v. Mut. Life Ins. Co., 4 Lans. 202. Weed v. Mutual Benefit L. I. Co., 70 N. Y. 561. Coffey v. Home L. 1. Co., 3 J. & Spencer, 314. Death by drowning is presumed to be accidental— not suicide—in the absence of evidence to the con- trary. Mallory v. Travelers’ Ins. Co., 47 N. Y. 52. The affirmative is on the insurer to prove that a death is within an exception, and where the applicant 60 LAW OF LIFE INSURANCE. has not in his proof of loss admitted that the death came within the exception, the mere annexing of the copy of a verdict of a coroner’s jury will not relieve the insurer from proving its defense. ° Goldschmidt v. Mutual Life Ins. Co., 102 N. ¥. 486, The suicide of the person whose life is insured, in the absence of a-clause in the policy, is no defense when the policy is payable to a third party. Patrick v. Excelsior Life Ins. Co., 4 Hun, 268. Fitch v. Am. Pop. Life Ins, Co., 89 N. Y. 573. CHAPTER XII DEATH IN THE KNOWN VIOLATION OF ANY LAW.—DEATH BY THE HANDS OF JUSTICE, &c. One of the conditions often inserted in a policy of insurance is that where the assured dies in the known violation of any law the ‘policy is void. The death must be the direct, proximate, and neces- sary incident or result of the violation of the law. The policy is not to be avoided by the mere fact, that, at the time of the death, the assured was violating the law, if the death occurred from some cause other than ‘such violation. Bradley v. Mut. Benefit Life Ins. Co., 45 N. Y. 422. Murray v. N. Y. Life Ins. Co., 96 N. Y. 614. Unless the death takes place during the unlawful act, the policy is not avoided. Goetzman v. Conn. Mut. Life Ins. Co., 3 Hun, 515. It is sufficient to bring a case within the condition, if there is such a relation between the act and the death, that the latter would not have occurred at the time, if the deceased had not been engaged i in the viola- tion of law. Murray v. N. Y. Life Ins. Co., supra. Travellers’ Ins. Co. ». Seaver, 19 Wall. 531. LIMITATIONS AS TO RESIDENCE AND TRAVEL. It ig not uncommon to provide in policies that they shall be void in case certain restrictions are violated as 62 LAW OF LIFE INSURANCE. to the residence and travel of the person whose life is insured. ‘The words “settled limits of the United States” in the condition of a life policy, are. not violated where the assured joined an emigrant train in 1850, on the over- land route to California, and died in the wilds on the south fork of the Platte river. The words are to be understood only as designat- ing the recognized or established boundaries of the country. ° Casler v. Conn. Mut. Life Ins. Co., 22 N. Y. 427 (1860). Illness while attempting to leave the prohibited dis- trict before the prohibited time, thus preventing depar- ture, will excuse a breach in the condition of the policy. Baldwin v. N. Y. Life Ins. & Trust Co., 3 Bosw. 530. Where a permit is granted to travel pending an ap- plication for insurance, it affects only the contract exist- ing at the time it was given, and is not to be incorpo- rated into the policy when issued. Rainsford v. Royal Ins. Co., 83 N. Y. Supr. Ct. (J. & S.) 453; aff'd, 59 N. Y. 626. A provision in a policy, that permits for foreign voy- ages will be granted to insured persons on reasonable terms, allows the insurer to impose terms as to time, mode and route of travel; and, after the policy has been forfeited by the insured taking an ocean voyage without a permit, there is no power in a court of equity, to re- lieve from the forfeiture, upon allowing a proper deduc- tion for such a permit. Douglas v. Knickerbocker Life Ins. Co., 83 N. Y. 492. LAW OF LIFE INSURANCE. 63 There must be an agreement to waive the condition as to travel. A mere offer not accepted will not suf- fice. Evans v. United States Life Ins. Co., 64 N. Y. 304. Permits to go to a region prohibited by the policy, are to be construed: with reference to the known condi- tion of the country at the time. Welts v. Conn. Mut. Life Ins. Co., 46 Barb. 412; affi’d, “in 48 N. Y. 34. ‘CHAPTER XIII. THE INSURANCE DEPARTMENT.. It is intended in the following pages to give a state. ment of the leading statutory provisions, not already mentioned, relating to life insuranée in the State of New York, and the decisions of the courts relating to them. The insurance department of New York was estab- lished by Laws of 1859, chap. 366—An Act to estab- lish an insurance department, passed April 15, 1859. This act is intended to form a complete code for the organization and government of life insurance com- panies. People v. New England Mut. Life Ins. Co., 26 N. Y. 303, 306. The chief officer of the department is the Superin- tendent of the Insurance Department. He is appointed by the Governor, by and with the advice and consent of the Senate, and holds his office for three years, All fees and moneys collected by him, must be paid into the State Treasury monthly. He may employ clerks, and a deputy who possesses the powers and performs the duties attached by law to the office of principal, during a vacancy in such office, and during the absence or in- ability of his principal. Whenever examinations are made of any insurance company, no charge canbe made on such examination but for actual expenses, and they must be presented in the form of an itemized bill, ap- LAW OF LIFE INSURANCE. 65 proved by the superintendent and audited by the comp- troller, and paid on his warrant. ‘Section 2. The act makes strict provision for the honest and economical examination of companies. Section 2, as amended by Laws of 1861, chap. 326, sec. 1, and by Laws of 1873, chap. 593, sec. 1. In the absence of the superintendent, the deputy can only do the ordinary necessary business of the depart- ment. But, in case of a vacancy, he is entitled to the salary while he performs the duties of the superinten- dent. People re Church v. Hopkins, 55 N. Y. 74. The superintendent of the insurance department is required to make annual reports. Section 3, as amended by Laws of 1866, chap. 514, sec. 1. It was the intention of the Legislature that all re- ports of companies should be filed with the Superin- tendent of the Insurance Department. Case v. People, 6 Abb. N. C. 151; 8. o. 14 Hun, 503. The fiscal year of the companies is made to end De- cember 31st. Chap. 326, Laws 1861. FEES PAYABLE TO INSURANCE DEPARTMENT. Laws of 1859, chapter 366, as amended by Laws of 1871, chap. 709: “Sxcorton 7. There shall be paid by every company, associ- ation, person or persons, or agent, to whom this act shall apply, 5 66 LAW OF LIFE INSURANCE. the following fees toward paying the expenses of executing this act: For filing tle declaration now required by law, or the cer- tified copy of a charter also now required, the sum of thirty dollars; for filing the annual statement now required, twenty dollars ; for each certificate of authority and certified copy there- of such sum not exceeding five dollars as shall be fixed from time to time by said superintendent; for every copy of paper filed in his office, the sum of ten cents per folio, and for affix- ing the seal of said office to such copy and certifying the same, one dollar. In case the expenses of said department shall ex- ceed the amount of fees collected under this act, and paid into the State treasury (exclusive of the tax upon marine premiums), the excess of such expenses shall be annually assessed by the superintendent, pro rata, upon all the insurance companies of this State; and the said superintendent is hereby empowered to colléct such assessments and pay the same into the State treasury.” (As.amended by Laws of 1871, chap. 709, § 1.) ° L. 1868, chap. 732—An Act in relation to transfer of securities deposited by insurance companies with the Superintendent of the Insurance Department, and to amend the act entitled, “An Act to establish an insur- ance department,” passed April fifteen, eighteen hun- dred -and fifty-nine, makes regulations for the transfer of securities to the department. : L. 1874, chap, 398—An Act to provide for the sup- port of government and’ for other purposes, passed May 9,1874. Provides that all fees and perquisites of every name and nature charged, received and collected by the insurance department, or any officer thereof, shall be immediately paid into the treasury. . L. 1881, chap. 600—An Act to regulate the depos- iting of securities by insurance companies with the Su- perintendent of the Insurance Department, passed July 4, 1881, provides, in all cases where, by the laws of this State, any insurance company is required to deposit with the Superintendent of the Insurance Department stocks. or bonds of the United States, or of the State of New LAW OF LIFE INSURANCE. 67 York, as security for policy-holders, bearing not less than six per centum per annum, the superintendent may receive for the purposes of such deposit registered stocks or bonds of the United States or of the State of New York, bearing any tate of interest, provided that such stocks or bonds shall not be received at a rate above their par value. And if the market value of such stocks or bonds deposited, or offered for deposit, shall at any time be less than par, the superintendent shall require an additional deposit of such stocks or bonds to make the total deposit equal in the aggregate to the sum required by law to be deposited with the superintendent, Laws or 1865, Chap. 694.—An Act in ‘relation to the de-. posits required to be made, and the tames, fines, fees and other charges payable by insurance companies of sister States, Passed May 11, 1865. ‘“Sxorton 1. Whenever the existing or future laws of any other States of the-United States shall require of insurance companies, incorporated by or organized under the laws of this State,and having agencies in such other State, or of the agents thereof, any deposit of securities in such State for the protec- tion of policy-holders, or otherwise, or any payment for taxes, fines, penalties, certificates of authority, license fees, or other- wise, greater than the amount required for such purposes from similar companies of other States by the then existing laws of this State, then, and in every such case, all companies of such Staté’s establishing, or having heretofore established an agen- oy or agencies in the State, shall be and are hereby required to make the same deposit for a like purpose in the instrauce de- partment of the State, and to pay the superintendent of said department for taxes, fines, penalties, certificates of authority, license fees and otherwise, an amount equal to the amount of such charges and payments imposed by the laws of such State upon the companies of this State and the agents thereof. And the Superintendent of the Insurance Department is hereby au- thorized to remit any of the fees and charges which he is re- quired to collect by existing laws, except such as he is required 68 LAW OF LIFE INSURANCE. to collect under and by virtue of this act, provided, however, that no discrimination shall be made in favor of one company over any other from the same State.” (As amended by Laws of 1875, chap. 60, § 1.) Laws or 1884, Chap, 341, page 416.—An Act to, provide Sor the valuation of life insurance policies and obligations connected therewith. ; . Passed May 28, 1884. “The People of the State of New York, represented in Senate and Assembly, do enact as follows : “Sxorton 1. For all the purposes of the general life insur- ance laws known as chapter three hundred and eight of the laws of eighteen hundred and forty-nine, and chapter four hun- dred and sixty-three of the laws of eighteen hundred and fifty- three, and the acts amendatory thereof and supplementary thereto, the Superintendent of the Insurance Department is hereby directed to value the policy obligations of all life insur- ance companies transacting business in this State on the net premium basis according to the actuaries or combined experi- ence table of mortality, with interest at four per centum per. annum. When the actual premiums charged by a company for an insurance is less than the net premium for such insurance, computed according to the table of mortality and rate of inter- est aforesaid, then, and in every such case, the company shall be charged as a separate liability with the value of an annuity, the amount of which shall equal the difference between the premiums aforesaid, and the term of which in years shall equal the number of future annual payments due on said insurance at the date of the valuation. “ Srorion 2. Nothing herein contained shall authorize the appointment of a receiver for any life insurance company, if such company has actual funds invested according to law of a net cash value equal to its outstanding liabilities, and a reserve on policies,and claims, not matured, calculated by the net pre- mium method, on the American experience table of mortality, with interest at four and one-half per centum per annum, and. in no case under this act shall capital stock be considered as a liability of acompany. But no company shall issue new policies if its premium reserve is shown to be impaired by the mode of valuation described in the first section of thie act until the im- pairment is made good, and a certificate of the Superintendent: of the Insurance Department is issued to that effect. Nothin in this act shall be construed to prevent the Superintendent o LAW OF LIFE INSURANCE. 69 the Insurance Department from accepting the certiticate of valuation of the superintendent or commissioner of insurance of any other State, of the companies organized under the laws of such other States, provided the obligations of such compa- nies are valued in the manner described in the first section of this act.” “ Sgorion 4. This act shall take effect December thirty- first, eighteen hundred and eighty-seven.” Laws or 1873, Chap. 593.—An Act to amend an act enti- tled “An Act to establish an insurance department,” passed April fifteenth, eighteen hundred and fifty-nine. / Passed May 23, 1873, (Section 1 amends Laws of 1859, chap. 366.) “Szorion 2. The said superintendent shall have power to refuse admission to any corhpany, corporation or association, applying to be permitted to transact thé business of insurance in this State from any other State or country, whenever, upon examination, the capital stock of such company, corporation or association shall be impaired, and, also, whenever, in his judg- ment, such refusal to admit shall best promote the interests of the people of this State.” An application will not lie for a mandamus to com- pel the Superintendent of the Insurance Department to file an annual statement of a foreign company where it appears that he has examined such annual statement, and is not satisfied with the company’s solvency. It will lie to compel him to consider such an application. People ex rel. Hartford Life & Annuity Ins. Co. 2. Fair- man, 12 Abbott's New Cases, p. 252; 91 N. Y. p. 385. Chapter 346 of the Laws of 1884, page 420, pro- vides for the appointment in this State by foreign in- surance companies of the Superintendent of the Insur- ance Department as attorney upon whom all lawful processes may be served, and it requires that the super- intendent shall forthwith forward a copy of any process 70 LAW OF LIFE INSURANCE. so served upon him, by mail, prepaid, directed to the secretary of the company or association, or, in the case of foreign companies or associations, to the resident manager or last appointed general agent in this coun- try, for which services the superintendent shall collect two dollars, which shall be paid by’ plaintiff at the time of such service—such sum to be recovered by plaintiff as part of his taxable costs if he succeeds in the suit. The act provides that if it shall appear to ihe sajd superintendent from the statement of any life or casualty insurance company, or from any examina- tion (if a stock company), that its capital stock is impaired to the extent of fifty per cent. thereof, it is made the duty of the superintendent, if the company is organized under the laws of any other State or country, to revoke its certificate of authority by notice thereof to be published in the State paper for four weeks, and the agent or agents of such company are, after such notice, required to discontinue the issuing of any new policies. If the company so impaired 1 is organized under the laws of this State, it is made the duty of the superintendent to direct the officers to re- quire the stockholders to make good in cash the amount of such deficiency within ninety days after the date of his requisition. And ‘in case of the failure of the stockholders to comply with such demand, it is made the duty of the superintendent to report: the facts to the attorney-general, who must thereupon bring an action in the Supreme Court for the dissolution of the corporation. The matter of making a report to the attorney-gen- eral may be oral or written, and may be at any time LAW OF LIFE INSURANCE. 71 before the appointment of a receiver, but such report must be made at the time of the application or at least when the order is entered. People v. Globe Mut. Life Ins. Co., 60 How. Pr. 57. General Insurance Laws, as amended by Laws of 1879, chap. 161, sec. 2. ‘If ‘lig funds of a company substantially equal the amount of the capital, it should be allowed to continue its business, so far as respects the question of the suffi- ciency of its funds. If they substantially fall short, the company should be dissolved. Matter of World’s Safe Ins. Co., 40 Barb. 499. It is a great power which is put into the hands of the superintefdent and attorney-general, and is not to be used without great caution, and judicious considera- tion, lest it become destructive and intolerable; and it is for the court to critically scrutinize the proceedings in every case, and determine with care, whether good: cause exists on interference, and whether there is suffi- cient reason for continuing the corporation. People v. Atlantic Mutual Life Ins. Co., 74.N.Y. 179, tee: CHAPTER XIV. ON THE INCORPORATION OF LIFE INSURANCE COMPANIES. By L. 1858, chap. 463—An Act to provide for the incorporation of life and health insurance companies, and in relation to agencies of such companies, passed June 24, 1853—any number of persons not less than thirteen may associate and form an incorporation or company to make insurance upon the lives of persons, and every insurance appertaining thereto, or connected therewith, and to grant, purchase, or dispose of an- nuities. Insurance of lives comes under the head of the First Department, in the above act. The Second Depart- ment pertaining to insurances upon the health of indi- viduals, animals, &c., with which this work has noth- ingto do. . The persons who may associate and form a company, ' are designated as corporators, and they must file in the office of the Superintendent of the Insurance Depart- ment a declaration, signed by each of the corporators, setting forth their.intentions to form a company for the purposes named in the above act, and the department under which the company is intended to be formed, which declaration must comprise a copy of the charter they propose to adopt, and the charter must set forth the name of the company, the place where it is to be located, the kind of business to be undertaken, and the depart- ment of the first section of this act by which such business 1s authorized; the mode and manner in which LAW OF LIFE INSURANCE. 73 the corporate powers of the company are to be exer- cised ; the manner of electing the trustees or directors and officers, a majority of whom shall be citizens of this State, and the time of such election; the manner of filling vacancies, the amount of capital to be em- ployed, and such other particulars as may be neces- sary to explain and make manifest the objects and pur- poses of the company, and the manner in which it is to ‘be conducted. Section 3, as amended by Laws of 1869, chap. 404, § 1, and by Laws of 1879, chap. 485, § 1. The act then provides: * “Szction 4. Whenever the corporators shall file such dec- laration with the Superintendent of the Insurance Department» it shall become his duty to submit the same to the attorney- general for examination ; and, if found by him: to be in accord- ance with the provisions of this act, and not inconsistent with the constitution and laws of the United States and of this State, he shall certify to the same and deliver it back to the said superintendent, who shall cause the said declaration, with the certificate of the attorney-general, to be recorded in a book to be kept for that purpose, and, upon application of the cor- porators to the said superintendent, it shall become his duty to furnish a certified copy of such declaration and certificate to the said corporators. — “Sec. 5. Whenever the corporators shall have received from the said superintendent the certified copy provided for in the last section, and desire to proceed to organize such com- pany, they shall publish their intentions in the paper in which the State notices are directed to be inserted; and when such intentions have been published in said paper for six weeks, they may open books to receive subscriptions to the capital stock, and keep such books open until the amount required by this act is subscribed, and may then proceed to distribute the stock among the subscribers, if more than the hecessary amount is subscribed, and proceed to collect in the said capital and complete the organization of the company.” 74 LAW OF LIFE INSURANCE. The act then provides: “Szcrion 6. No company shall be organized under this act, for the purposes mentioned in the first department (life insur- ance) with a less capital than one hundred thousand dollars. , * * * The whole capital of such. company shall, before proceeding to business, be paid in and invested in stocks or in ‘treasury notes of the United States or of the State of New York, or in bonds and mortgages on improved unincumbered real estate within the State of New York, worth seventy-five per cent. more than the amount loaned thereon, exclusive of ‘farm buildings thereon, or in such stocks or securities as now are or may hereafter be receivable by the bank department. And it shall be lawful for any company organized under this act, to change and reinvest its capital or any part thereof, at any time they may desire, in the stocks or bonds and mort- gages or securities aforesaid. No company organized for the purposes mentioned in the first department shall commence business until they have deposited with the Superintendent of: the Insurance Department of this State the sum of one hun- dred thousand dollars in United States or New York State stocks, in all cases to be, or to be made to be, equal to stock producing six per cent. per annum, and not to be received at arate above their par value; or above their current market value, or in bonds and mortgages of the description and char- acter above indicated, and no company organized for the pur- poses named in the second department shall commence business until they have deposited with the Superintendent of the Insur- ance Department of this State at least the sum of one hundred thousand dollars, invested as hereinbefore provided for the in- vestment of the capital of such company. The Superintendent of the Insurance Department shall hold such securities as se- curity for policy-holders in said companies, but, so long as any company so depositing shall continue solvent, may. permit such company to collect the interest or dividends on its securities so deposited, and, from time to time, to withdraw any of such securities on depositing with the .said superintendent such other securities of like value as those withdrawn, and of the same character, and to be received as those above mentioned. Any company incorporated by the laws of this State to trans- act the business embraced in the second department of section one, with the amendments thereto: of the act hereby amended, may invest its capital and the funds accumulated in the course of its business or any part thereof excepting the amount re- quired to be deposited with the insurance department in the same manner as is permitted fire insurance companies, as pro- LAW OF LIFE INSURANCE. 7D vided in chapter four hundred and sixty-six of the laws of eighteen hundred and fifty-three, with the amendments thereto. And the amount required to be deposited with the insurance department may be invested in registered bonds of the United States, provided that such bonds shall not be received at a rate above their par value, and if the market value of such bonds de- posited or offered for deposit shall at any time be less than par, the superintendent shall require an additional deposit equal in the aggregate to the sum required by law to be deposited with the superintendent.”’ (As amended by Laws of: 1858, chap. 551, §1; by Laws of 1860, chap. 328,§1; and by Laws of 1862, chap. 300, § 2, as modified by Laws of 1865, chap. 328, § 2, and as amended by Laws of 1881, chap. 560, § 1.) ‘The following are the statute provisions prescrib- ing the kind and nature of the stock above referred to, receivable by the bank department above referred to: “The stocks which banking associations or individual bankers, now or hereafter to be organized under the provisions of the act ‘to authorize the business of banking,’ passed April 18th, 1838, and the amendments thereto, shall hereafter depos- it with the superintendent, shall be New York State stocks, in all cases to be, or to be made to be, equal to stock ‘producing six per cent. per annum, or at least one-half the amount so de- posited, shall be in the stocks of the State of New York, as he- ‘fore mentioned, and not exceeding’ one-half in stocks of the United States, in all cases to be, or to be made to be, equal to a stock producing an-interest of six per cent. per annum; and it shall not be‘lawful for the superintendent to take such stocks at arate above their par value, or above their current market value.” (See Laws of 1849, chap. 318, §.1.) “Tn lieu of stocks one-half of the deposit of securities in the . bank: department may consist of seven per cent. bonds and ee on improved, productive, unincumbered lands with- in this State, for not exceeding two-fifths of the value of said lands, excluding buildings; to be received at a sum not above ‘five thousand dollars for each mortgage, and under regulations to be prescribed by the superintendent of the bank depart- ment.” (See Laws of 1838, chap. 260, § 8; Laws of 1848, chap. 340, §§ 2 and 3, and Laws of 1851, chad. 164, § 10.) “Under the provisions of the act ‘To revise the’ statutes of this State relating to banks, banking and trust companies,’ 76 LAW OF LIFE INSURANCE, pees July 1, 1882, any interest-bearing stock of the State of ew York, or of the United States, are receivable by the bank department.” (See Laws of 1882, chap. 409, §§ 67 and 71.) “Section 7.. Whenever the corporators shall have fully or- ganized such company, and the said company have deposited with the said superintendent the requisite amount of capital, it shall become his duty to furnish the corporation with a certifi- cate of such deposit, which, with a certified oN of the papers previously required under this act, shall, when filed in the coun- ty clerk’s office of the county where such company is to be lo- cated, be the authority to commence business and issue poli- cies, and the same may be used in evidence for and against the corporation in all suits.” All suits at law may be prosecuted and maintained by any member or stockholder against such corpora- ‘tion. . People v. Security Life Ins. & Annuity Co., 78 N. Y. 123; s.c. 7 Abb. N. C. 198. Any interest in stock of the U.S. or the State of New York, is receivable. Laws of 1882, chap. 409, sec. 67. Laws or 1868,.Chap. 482.—An Act authorizing any life insurance company, or any trust or loan company to invest their funds in bonds issued by any county, town or village of this State, pursuant to any law of this State. Passed April 30, 1868. “Srorton 1. Any life insurance company, or any trust or loan company, may, by the direction and consent of two-thirds of their respective boards of directors, managers or finance committee purchase, or invest, by loan or otherwise, any of their funds in the bonds issued by any county, town or village of this State, pursuant to any law of this State, any thing in the charter of either of said companies to the contrary, not- withstanding.” ; Laws or 1875, Chap. 423, as amended by Laws of 1886, chap. 394, § 1—An Act to regulate investments by insurance companies. “Sxotion 1. Whenever any insurance company, organized LAW. OF LIFE INSURANCE. 7 under any of the laws of this State, shall have invested any of its funds in the stock of other incorporated companies, under and in pursuance of the laws of this State, and the Superin- tendent of the Insurance Department shall have reason. to be- dieve that such stock is below par, he may direct any such company report to him under oath the amount of such stock so held by any such company, and the market value thereof is below par, he may direct: the sale (under such regulations as he may establish) of such stock by such insurance com- pany. ' “Sno. 2. It shall be lawful for any life, fire or marine in- surance company organized under any of the laws of this State, and transacting business in other States of the United States, or in foreign countries, to invest the funds required to meet its obligations incurred in such other States or foreign coun- tries, and to conform to the laws thereof respectively in the same class of securities, in those States or foreign countries, that such corporations are by law allowed to invest in this State; but this act shall not be construed as authorizing, nor does it permit, any such corporation to loan moneys on mort- gee upon real estate, without the limits of -this State, and tates adjacent thereto, except for the purposes above men- tioned.” By Section 12, the companies are required to re- port within sixty days from the first of January, on oath : “1, The number of policies issued during the year. “2. The amount of insurance effected thereby. “3. Amount of premiums received during the year. “4, Amount of interest and all other receipts, specifying the items. *¢5.. Amount of losses paid during the year. “6. Amount of losses unpaid. “7, Amount of expenses. “8, Whole number of policies in force. “9, Amount of liabilities or risks thereon, and of all other liabilities. “10. Amount of capital stock. “11. Amount of accumulation, specifying whether received upon life insurance, annuities, or how otherwise. “12. Amount of assets and manner in which they are in- vested, specifying the amount in real estate, on bond and 78 LAW OF LIFE INSURANCE. mortgage, stocks, loans on stocks, premium notes, credits: or other securities. “13. Amount of dividend unpaid. “14. A tabular statement of the policies in force for the whole term of life, showing how many thereof for each age of life, and for what amount of risk, were issued or in force dur- ing the first year of the existence of the company, during the. second year, and so on upto the time of making such state- ment. “15, A tabular statement of the policies in force fora. shorter period than the whole term of life, showing how many thereof for each age of life, and for what amount of risk, were issued or continued in force. during the first year of the com- pany’s existence, during the second year, and so on up to the time of making such statement.” Printed forms must be furnished by: the Superin- tendent of the Insurance Department to every company: to which the above act applies. The affidayit above’ mentioned must be true or the affiant may be convicted of perjury. Case v. People, 14 Hun, 511. Lambert v. People, 14 Hun, 513. “ Unless officers,” Justice Donohue. said, in his opin- ion in the last case, “are held to honest, fair dealing; no safety whatever exists, and the safeguards placed by law are useless. The law violated” (the above stat- ute) “in the case was one of the most necessary char- acter; and when the violation is clear, as in this case, the court should not be astute to find grounds to allow the plaintiff in error to escape.” The superintendent is required: to arrange the in- formation contained in the statements in tabular form, . or in his annual report. Once in every five years at least, and annually, in his discretion, he must make valuations of all the outstanding policies, additions thereto, unpaid dividends and all other obligations of LAW OF LIFE INSURANOE: 79 every American life insurance company, transacting business in this State; the rate of interest assumed must be four and a half -per cent. per annum, and the rate of mortality that established by the American experience tables. The superintendent may vary the standards of in- terest and mortality, 1 in cases of companies from for- eign countries, and in particular cases of invalid lives or other extra hazards, The superintendent may also, in his discretion, value policies in groups, use approx: imate averages for fractions of a year, and otherwise, and calculate values by the net, the actual or the gross premiums or otherwise, deducting, in cases of gross ‘valuations, from the gross value of future premiums, one-sixth thereof for future expenses or contingencies. The superintendent may, in his discretion, accept the valuation of the department of insurance of any other State, in place of the valuation required in this act, provided the insurance officer of such State does not refuse to accept, as sufficient and valid for all pur- poses, the certificate of valuation of the insurance de- partment of this State. Section 15, as amended by Laws of 1866, chap. 785, §1; by Laws ‘of vie chap. ‘G93 ,§ 1, and by Laws of 1873, hae 849, § 1. No life insurance company may re-insure its risks without the written consent of the owners of the pol- ‘icies, Laws 1877, chap. 229. People v. ape Trust Co., 92 N. Y. 105, 110. Nor has a company the power of acquiring an- other bodily. Pierson v. McCurdy, 33 Hun, 520. 80 LAW OF LIFE INSURANCE. SCHEDULE ABOVE REFERRED TO. TABLE OF MORTALITY BASED ON AMERICAN EXPERIENCE. Numbers |’ Numbers | Expectation ‘ Numbers Numbers | Expectation AGE living. dying. of life. AGE. living. dying © of life. 10 | 100,000 749 48.72 53 66,797 1,091 18.79 11 99,251 746 48.08 54 65,706 1,143 18.09 12 98,505 748 47.44 55 64,568 1,199 17.40 13 97,762 740 46.82 56 63,364 1,260 16.72 14 97,022 737 46.16 57 62,104 | 1,825 16.05 15 96,285 735 45.50 58 60,779 1,394 15.39 16 95,550 132 44.85 59 59,385 1,468 14.74 17 94,818 729 44.19 60 | 57,917 1,546 14.09 18 94,089 727 43.53 61 66,871 1,628 13.47 19 93,362 725 42.87 62 54,743 1,718 12.86 20 92,637 723 42.20 63 53,030 1,800 12.26 21 91,914 722 41.58 64 51,230 1,889 11.68 22 91,192 721 40.85 65 49,341 1,980 11.10 23 90,471 720 40.17 66 47,361 2,070 10.54 24 89,751 719 39.49 67 45,291 2,158 10.00 25 89,032 718 38.81 68 43,133 2,243 9.48 26 88,314 718 38.11 69 40,890 2,321 8.98 27 87,596 718 37.48 70 88,569 2,891 8.48 28 86,878 718 36.73 71 36,178 2,448 8.00 29 86,160 719 36.03 72 33,730 2,487 7,54 30 85,441 720 85.83 73 31,243 2,505 7.10 31 84,721 721 84.62 74 28,738 2,501 6.68 32 84,000 723 33.92 75 26,237 2,476 6.28 83 83,277 726 33.21 76 23,761 2,431 5.88 34 82,551 729 32.50 V7 21,330 2,369 5.48 35 | 81,822 782 81.78 || 78] 18,961 | 2,291 5.10 36 81,090 737 31.07 79 16.670 2,196 4.74 37 80,353 742 30.35 80 14,474 2,091 4,88 38 79,611 749 29.62 81 12,383 1,964 4.04 39 78,862 756 28.90 82 10,419 1,816 8.71 40 78,106 765 28.18 83 8608 1,648 3.39 41 77,341 V4 27.45 84 6,955 1,470 3.08 42 76,567 785 26.72 85 5,485 1,292 2.77 43 75,782 197 25.99 86 4,198 1,114 2.47 44 74,985 812 25.27 87 3,079 933 2.19 45 74,173 828 24.54 88 2,146 744 1.93 46 73,845 848 23.80 89 1,402 555 1.69 47 72,497 870 28.08 90 847 385 1.42 48 71,627 896 22.86 91 462 246 1.19 49 70,731, 927 | 21.63 92 216 137 98 50 69,804 962 20.91 93 19 58 80 51 68,842 1,001 20.20 94 21 18 64 52 67,841 1,044. 19.49 95 3 3 50 CHAPTER XV. THE POWERS OF LIFE INSURANCE COMPANIES. The corporators have power to adopt a seal, and to make such by-laws, not inconsistent with this act or the constitution and laws of this State, as may be deemed necessary for the management of its affairs; and suits at law may be maintained by any corporation formed under the act, against any of its members or stockholders, for any cause relating to the business of such company; also, suits at law may be prosecuted and maintained by any member or stockholder against such corporation for losses which may have accrued, if payment is withheld more than two months, on all risks, after such losses shall have been due. Chapter 463, Laws 1853, Section 10. The portion of the act as to suits by or against mem- bers or stockholders is wholly unnecessary, and has no significance. . It is frequently found in similar statutes. It cannot be construed as making the policy-holders members of the company. . People v. Security Life Insurance & Annuity Co., 78 N. Y. 123; 8.0. 7 Abb. N. C. 198. A prohibition in a general or special law against certain acts, will not be held to extend in its force out- side the State in which a corporation is incorporated. Ellsworth v. R. R. Co., 98 N. Y. 553. So although.a company is forbidden in New York 6 82 LAW OF LIFE INSURANCE. to take by devise, it may so take in another State if not forbidden by the law of that State. White v. Howard, 38 Conn. 342. The act provides: “Src. 8. It shall be lawful for any company organized under this act, to invest its funds or accumulations in bonds. and mortgages, on unincumbered real estate within the State of New York, and also on uniucumbered real estate located outside of said State, and within fifty miles of the city of New York, worth fifty per cent. more than the sum so loaned there- on, or in stocks of the United States, stocks of this State, or of any incorporated city in this State, if at or above par, and any stocks created under the laws of this State, that shall be, at the time of such investment, at a market value in the city of New York at or above par.” (As amended by Laws of 1860, chap. 328, § 2; by Laws of 1862, chap. 300, §3; by Laws of 1866, chap. 525, § 1; and by Laws of 1868, chap. 318, § 1.) The act makes no provision for the use of funds in process of investment or kept in hand pending their use by the company. These may be kept in bank, loaned on call, kept in specie, or otherwise cared for as prudent business men, and other corporations keep these funds. ; Commissioners v. R. R. Co., 77 North Carolina, 289. The word “stocks” has not the limited meaning which confines the term to capital stocks. It applies equally to bonds and other long term obligations of corporations and municipalities. “Sxc. 9. No company organized under this act shall be permitted to purchase, hold or convey real estate, except for the purposes or in the manner herein set forth, to wit: “41. The building in which is contained its principal offices. and the land upon which it stands; or, “9, Such as shall be requisite for its accommodation in the transaction of its business; or, «¢3, Such as shall have been acquired for the aceommoda- tion of its business previous to the passage hereof; or, LAW OF LIFE INSURANCE. 83 “4, Such as shall have been mortgaged to it in good faith, by way of security for loans previously contracted, or for moneys due; or, \ “5, Such as shall have been conveyed to it in satisfaction of debts previously contracted in the course of its dealing; or, “6. Such as shall have been purchased at sales upon judg- ments, decrees or mortgages obtained or.made for such debts. And it shall not be lawful for any company incorporated as aforesaid to purchase, hold or convey real estate in any other case, or for any other purpose. And all such real estate mort- gaged and conveyed in satisfaction of debt or acquired by pur- chase at sale as aforesaid, shall be sold and disposed of within five years after such company shall have acquired title to the same ; unless the said company shall procure a certificate from the Superintendent of the Insurance Department that the interests of the company will suffer materially by a forced sale of such real estate, in which event the time for the sale may be ex- tended to such time as the said superintendent shall direct in said certificate.” (As amended by Laws of 1875, chap. 170, § 1; and by Laws of 1876, chap. 357, § 1.) (This act shall apply to all life insurance companies organized under the laws of this State. ) (Laws of 1876, chap. 357, § 2.) There is an implied power, unless restricted by stat- ute, in all corporations to acquire necessary property to _ carry on their business. Sad ». Crawford, 14 Wend. 23. oss v. Averell, 10 N . Y. 449. The object of this restraining act is not to prevent profitable investment. It is not for the benefit of the policy-holder. It is in the alleged interest of the people of the State in order that lands shall not he held in mortmain. The English Statutes of Mortmain from Magna Charta, 9 Hen. III, to 9 Geo. II, have never been in force in this State, and are not now in force. The whole tendency of our legislation is to do away with such statutes. It is difficult to see how a State can be injuriously affected by the existence of such buildings, 84 LAW OF LIFE INSURANCE. as those which are occupied by insurance companies in the State of New York. The law is founded on ancient prejudice, almost akin to the laws against witchcraft. Free trade in land by corporations, benefits the State. The former statute, sec. 9, chap. 468, of the Laws of 18538, limited the companies to the puirebase of land requisite for its “ immediate” accommodation in the transaction of its business. The word “immediate” is omitted in the amendment of 1875. Whether a piece of land is required for the con- venient accommodation of a company is a question, of -course, of opinion, and its decision rests with the board of directors, and will not be lightly interfered with by any court where the directors are acting honestly. Hoyt v. Thompson, 19 N. Y. 216. McCullough v. Moss, 5 Denio, 578. Cammeyer v. United Churches, 2 Sand. Ch. 228. All corporations have, by common law, absolute jus disponendi of lands and chattels, neither limited as to objects, nor circumscribed as to quantity. 2 Kent’s Com., 12th ed. 281. © Barry v. Merchant’s Exe. Co., 1 Sandf. Ch. 280. Sherwood v. Am. Bible Soc., 1 Keys, 561. A corporation may alienate its corporate property, if not required for immediate use. And may therefor sublet such parts of their building as aré not required for immediate use. Spear v. Crawford, 14 Wend. 20. Lafond v. Deems, 81 N. Y. 508. Temple Grove Seminary v. Cramer, 98 N. Y. 121. There is a strong presumption in favor of ane legal- ity of corporate dealings. Kent v. Quicksilver Co., 78 N. Y.-159. Chautauqua Bank v. Risley, 19 N. Y. 369. Lorillard v. Clyde, 86:N. Y. 384. Yates v. Van DeBogert, 56 N.-Y. 526, LAW OF LIFE INSURANCE. 85 Laws or 1877, Chap. 158.—An Act extending to corpora- tions located in and organized under the laws of other States, certain rights and powers now possessed by similar corporations of this State. : ; Passed April 17, 1877. “Sxorton 1, It shall be lawful for any corporation, duly organized under the laws of any State in which such corpora- tion shall be located, to purchase under any foreclosure sale based upon any mortgage or mortgages owned by such corpo- ration, or upon judgments or decrees obtained or rendered for- debts due to it, or in any settlement effected to secure such debts,, any of the lands lying within this State that may be covered by or subject to such mortgages, judgments, decrees or settle- ments, and also to hold for a term not exceeding five years. from the date of such purchase, and to convey such lands by deed or otherwise, in the same manner as though such corpo- ration had been organized under the laws of and located within this State.” ‘ Laws or 1882, Chap. 290.—An Act in relation to sales: and purchases of lands by corporations. . Passed June 5, 1882. “Sxcorion 1. Any corporation which shall have sold and conveyed any part of its real estate, may, notwithstanding any restriction in its charter, purchase, take and hold, from time to time, any lands adjacent to those already held by it; -pro- vided the Supreme Court shall authorize such purchase, tak- ing and holding upon the application of such corporation, and on being satisfied that the value of all lands proposed to be so purchased shall not exceed that of lands sold and conveyed b the said corporation within the three years next preceding suc application.” Laws or 1883, Chap. 361.—An Act to amend ie ae one’ hundred and nineteen of the Laws of eighteen hundred and seventy-fiwe, entitled “An Act to amend chapter one hundred and forty-six of the Laws of eighteen hundred and seventy-two, entitled ‘An Act to authorize corporations to hold and convey real estate for business purposes, in other States, with the con-~ sent thereof?” . Passed May 10, 1883. “Section 1. It shall be lawful for any corporation organized under the laws of this State, and transacting business in it and. other States, or foreign countries, except savings banks, to ac~ 86 LAW OF LIFE INSURANCE. quire, hold and convey in such States or foreign countries, with the consent thereof, such real estate as shall be requisite for such corporation, in the convenient transaction of its busi- ness, and to invest its funds in the stocks, bonds or securities of other corporations owning lands situated in this State or such States, provided that loans shall not be made on any stocks upon which dividends shall not have been declared continu- ously for three years, immediately before such loans are made; and provided further that such stock shall be continuously of a market value twenty per cent. greater than the amount loaned or continued thereon.” CHAPTER XVI. OF FOREIGN INSURANCE COMPANIES. A State may prohibit a foreign insurance company from doing business within its borders, or make any conditions for its so doing. Paul v. Virginia, 8 Wall. 168. Liverpool Ins. Oo. v. Mass., 10 Wall. 566, And a State may make reasonable fees aaone for a company when admitted. Stout v. Sioux City R. R., 8 Fed. Rep. 794. Ins. Co. v. Morse, 20 Wall. 445. By the Laws of 1881, chapter 484, page 656, foreign insurance companies are placed on the same footing with insurance companies organized under the laws of this State as regards the holding and conveying of real estate. But any such corporation shall be subject to the same supervision and control by the superintendent of insur- ance, in regard to real estate situated in this State, as such superintendent has in regard to real estate held by similar corporations of this State. And the superin- tendent was given the same powers and duties as re- gards any real estate now or hereafter owned by any foreign insurance company, as he has, possesses or exer- cises as to the real estate of similar insurance companies of this State. The Insurance Act provides: By Section 14, agents for any company of any other State government cannot act in this tate, unless such pe cas has the amount of actual capital required by the laws of this State for companies in this State, and the same is invested in stocks 88 LAW OF LIFE INSURANCE. or treasury notes of the United States, or of the State of New York, or of the State in which said company is located, or on bonds and mortgages on improved unincumbered real estate. within the State where’such company is located, or in such stocks or securities as now are, or may hereafter be, receivable- by the bank department; but all mortgages deposited by any foreign company must be upon improved unincumbered real. estate, worth seventy-five per cent. more than the amount loaned thereon, which stocks and securities shall be deposited with the auditor, comptroller or chief financial officer of the ‘ State, by whose laws said company is incorporated and the superintendent of the insurance department of this State, fur- nished with the certificate of such auditor, comptroller, or chief financial officer aforesaid, under his hand and official seal, that: he, as such auditor, comptroller, or chief financial officer, of ‘such State, holds in trust and on deposit, for the benefit of all the policy-holders of such company, the security before men- tioned, which certificate shall embrace the items of the security so held, that:he is satisfied that such securities are worth one’ hundred thousand dollars, if the company proposes to transact the business of life insurance, such company may exchange securities and draw dividends and interest without impairing its rights to do business. Such company must appoint an Attorney in this State, on whom process of law can be served ;, and such attorney must file with the superintendent a certified copy of the charter, resolution of the directors appointing such attorney, which appointment shall continue until astother at- torney be substituted. And in case any such insurance corpo- ration shall cease to transact business in this State, the agent last acting as such for such corporation, shall be deemed to continue agents for such corporation for the purpose of serv- ing process for commencing actions upon any policy or liabil- ity issued or contracted while such corporation transacted busi-- ness in this State, and service of such process, for the causes aforesaid, upon any such agent, shall be deemed a valid per- sonal service upon such corporation. Southern Life Ins. Co. v. McCain, 96 U.S. 84. Such company shall also file statements like similar com- panies organized under the laws of this State. Agents must procure from the superintendent a certificate of authority, stat- ing that the foregoing requirements have been complied with, and setting forth the name of the attorney for such company, a certified copy of which certificate must be filed: in the county clerk’s office of, the county where the agency is to be estab- LAW OF LIFE INSURANCE. 89 lished in this State, and such company must annually, in the month of January, file with the superintendent of the insur- ance department of this State a statement of all its affairs like similar companies in this State; and if the said annual state- ment shall be satisfactory, to the superintendent, he shall issue renewal certificates of authority to the agents of said company, certified copies of which shall be filed in the county clerk’s office of the county where the agency is located, during the month ‘of January in each year, and which renewal certificates shall be the authority of such agents to issue new policies in this State for the ensuing year. (§ 14 amended by Laws of 1853, chap. 551, § 2; and by Laws of 1862, chap. 300, § 4, as modified by Laws of 1865, chap. 328, § 3.) - Laws of 1861, chap. 834, section 2, provides a penalty for neglect or refusal to file annual statements. “Suc. 2. In case of neglect or refusal to make such annual statements, as aforesaid, all persons acting in this State, as agents : or otherwise, in transacting the business of insurance for said companies, corporations, associations, partnerships, or individ- uals, shall be subject to the same penalties provided by law in ease of the failure of any insurance company, organized under the laws of this State, to make an annual statement as now provided by law.” People v. McCann, 67 N.Y. 506. “A violation of the Insurance Law is a misdemeanor.” § 18 of the Act of 1853 ; Laws 1853, chap. 551, § 15, as amended. by Laws of 1862, chap. 300, § 15. “Src. 15. It shall not be lawful for any person to act in this State as agent or otherwise in receiving or proctring ap- plications for life or health insurance, or in any manner to aid in transacting the business of any life or health insurance com- pany, partnership or association, incorporated by or organized under the laws of any foreign government, until such company, partnership or association shail have deposited with the super- inteudent of the insurance department, for the benefit of the policy-holders of said company, partnership or association, citizens or residents of the United States, securities to the amount of one hundred thousand dollars, of the kind required, or which may hereafter be required, for similar companies of this State, and shall have appointed an attorney in this State, on whom process of law can be served, and the said company, partnership or association shall-have filed with the superin- tendent of the insurance department a duly certified copy of 90 LAW OF LIFE INSURANCE. the charter or deed of settlement of the said company, partner- ship or association, and also a duplicate original copy of the letter or power of attorney of such company or association appointing the attorney thereof, which appointment shall con- tinue until another attorney be substituted. And in case any such insurance corporation shall cease to transact business in this State, according to the laws thereof, the agents last desig- nated or acting as such for such corporation, shall be deemed to continue agents for such corporation for the purpose of serving process for commencing actions upon any policy or liability issued or-contracted while such corporation transacted business in this State, and service of such process, for the causes afore- said, upon any such agent, shall be deemed a valid personal service upon such corporation. Such company, partnership or association shall also fle a statement of its condition and affairs, in the office of the superintendent of the insurance depart- ment, in the same form and manner required for the annual statements of similar companies organized under the laws of this State. It shall not be lawful for any agent or agents to act for any company, partnership or association referred to in this section, directly or indirectly, in a risks, collecting premiums, or in any manner transacting the business of life insurance in this State, without procuring from the said super- intendent a certificate of authority (which shall be renewable annually), stating that the foregoing requirements have been complied with, and setting forth the name of the attorney for such company, a certified copy of which certificate shall be filed in the county clerk’s office of the county where the agency is to be established, and which shall be the authority of such company and agent to commence business in this State; and such company, partnership or association, shal] annually, on the first day of January, or within thirty days thereafter, file with the superintendent of the insurance department, a state- ment of all its affairs, in the same manner and form provided in the twelfth section of this act for similar companies in this State; which statement shall be made up for the year ending on the preceding thirtieth day of June, accompanied also by a supplementary annual statement, duly verified by the attor- ney or general agent of the company or association in this State, giving a detailed description of the policies issued and those which have ceased to be in force during the year, the amount of premiums received and claims and taxes paid in this State and the United States for the year ending on the preceding thirty-first day of December. Said supplementary statement shall also contain a description of the investments. LAW OF LIFE INSURANCE. 91 of such company or association in this country, and such other information as may be required by said superintendent; and if the said annual statement shall be satisfactory evidence to the said superintendent of the solvency and ability of the said company to meet all its engagements at maturity, he shall issue renewal certificates of authority to the agents of said company, partnership or association, certified copies of which shall be filed by such agents in the county clerk’s office of the county where the agency is located, within sixty days after the first day of January in each year, and which renewal certificates shall be the authority of such agents to issue new policies in this State for the ensuing year. All such foreign insurance companies, partnerships and associations engaged in the trans- action of the business of life or health insurance in this State shall annually, on or before the first day of March in each year, pay to the superintendent of the insurance department a tax of two per cent. on all premiums received in. cash or otherwise, by their attorneys or agents in this State during the year end- ing on the preceding thirty-tirst day of December, upon which a tax on premiums has not been paid to any other State. The avails of said tax shall be paid into the State treasury, and shall be applicable, as far as necessary, toward defraying the expenses of the insurance department. In case of neglect or refusal by any such company to pay said tax the superintendent is hereby authorized to collect the same out of the interest on the stocks and securities deposited by such company in the insurance de- partment.” (As amended by Laws of 1862, chap. 300, § 5.) International Life Assurance Society 1. Commissioners of Taxes, 28 Barb. 318. British Commercial Life Ins. Co. v. Commissioners of Taxes, 18 Abb. Pr. 130. A court will not undertake to wind up, regulate, or otherwise grant equitable relief in regard to the inter- ‘nal management or winding up of a foreign corporation. Merrick v. Van Santvoord, 34 N. Y. 222. Eaton v. Aspinwall, 19 N. Y. 119. Buffalo, &c., R. R. Co. v. Cary, 26 N. Y. 75. Reiner v. Marquis of Salisbury, L, R., 2 Ch. Div. 378. Matthaei v. Galitzin, L. R., 18 Eq. 340. Ogdensburg R. R. v. Vermont R. R., 16 Abb. Pr. (N. 8.) 250. CHAPTER XVIL. OF THE EXAMINATION AND OF THE WINDING UP OF LIFE INSURANCE COMPANIES, The-following are the provisions of law applicable to the above subject. . They are all in force. Laws or 1853, Chap. 463, as amended by Laws of 1879, Chap. 161. “‘Sxcotion 17. It shall be the duty of the Superintendent of the Insurance Department, whenever he shall have good reason to suspect the correctness of any annual statement, or that the affairs of any company required by law to make such state- ment, are in an unsound condition, to cause 4n examination to be made, for the purposes named in this act, into the affairs of any such insurance company, or any insurance company doing business by its agencies in this State; and it shall be the duty of the officers or agents of any insurance company incorporated or doing business in this State, to cause their books; and the books of such companies, to be opened for the inspection of the said superintendent and the person or persons appointed by him to make such examination, and otherwise to facilitate such examination, so far as it may be in their power so to do; and for that purpose the said superintendent, or the person or persons so appointed by him, shall have power to examine, under oath, the officers and agents of any company relative to the business of such company ; and whenever the said superin- tendent shall deem it for the interest of the public so to do, he shall publish the result of such investigation in the State paper. henever it shall appear to the said superintendent from the statement of any life or casualty insurance company made at the insurance department, or from an examination of the affairs of any such company (if a stock company), that its capital stock is impaired to the extent of fifty per cent. there- of, it shall be the duty of the said superintendent, if the com- pany is organized under the laws of any other State or country, to revoke the certificate or authority issued to the agent or agents of any such-company and shall cause a notice thereof to LAW OF LIFE INSURANCE. 93 be published in the State paper for four weeks, and the agent or agents of such company are, after such notice, required to discontinue the issuing of any new policies. If the company so impaired is organized under the laws of this State, it.shall be the duty of said superintendent to-direct the officers thereof to require the stockholders to make good in cash the amount of such deficiency within ninety days after the date of his requisition. And in case of the failure of the stockholders to comply with such demand, it shall be the duty of the superin- tendent to report the facts to the Attorney-General, who shall thereupon bring an action in the Supreme Court for the disso- lution of the corporation. And in case it shall satisfactorily appear to the court that the assets and funds of the company are not sufficient to justify the further continuance of the busi- ness of insuring lives, granting annuities and incurring new -obligations, as authorized by its charter, the court shall render judgment dissolving such company, and directing a distribution of its assets, exclusive of those deposited with the Superin- tendent of the Insurance Department. Provided that any company organized under the laws of this State, whose capital is impaired as above fifty per cent., may by a vote of a majority -of ‘its directors, at a meeting called for that purpose, reduce its capital stock to an amount not less than one hundred thou- sand dollars; and the said directors are hereby empowered to issue new certificates of stock to the stockholders for the amount of the reduced capital, and require in return all cer- tificates previously issued. Whenever it shall appear to the superintendent that the assets of any of the companies referred to in this section, other than stock companies, are insufficient to reinsure its outstanding risks, he shall communicate the facts to the Attorney-General, whose duty it shall then be to bring an action in the Supreme Court for the dissolution of such company. And in case it shall satisfactorily appear to the Court in such action that the assets and credits of the company are not sufficient to reinsure the outstanding risks, the court shall render judgment dissolving the company and directing a distribution of its assets. exclusive of the securities deposited with the Superintendent of the Insurance Department. In any action authorized by this section, the court may prescribe the time within which the company proceeded against shall answer, and may hear and try the issues af’such time, in such manner, and upon such notice as the court may direct; and may appoint a referee to inquire into and report upon the facts ; and shall have power to grant such orders, and in its discretion, from time to time, to modify or revoke the same, as the facts 94 LAW OF LIFE INSURANCE. or evidence in the case, and the situation of the parties and the interests involved shall seem to require. After the rendition of any judgment referred to in this section, the court shall have power to order the distribution by the superintendent of the securities and funds deposited with and held by him under the provisions of this act. -And in estimating the condition of any life insurance company under the provisions of this act, the superintendent shall allow as assets, only such investments as are authorized by the existing laws of the State at the date of examination, and must charge as liabilities in addition to the capital stock all outstanding indebtedness of the company and a premium reserve on policies, and additions thereto in force, based on net premiums, American experience table of mor- tality, with four and one-half per cent. interest. * * * * The report of every examination of the affairs of a company made pursuant to this act shall be verified by the person mak- ing such examination, to be just and true in all respects, ac- cording to the best of his knowledge and understanding, and when so verified shall be presumptive evidence in all courts and legal proceedings. The expense of any examination made under this section, shall be borne by the company whose affairs are so examined, to be paid by the company to the State Treas- urer, after being approved by the Superintendent of the In- surance Department and audited by the comptroller.” Laws of 1867, chapter 708, § 8, is as follows: “Sc. 8. It shall be the duty of the Superintendent of the Insurance Department to make, or cause to be made, an exami- nation of the condition and affairs of any life or casualty insur- ance company, as provided for in the seventeenth section of chapter four hundred and sixty-three of the laws of eighteen hundred and fifty-three, whenever he shall deem it expedient so to do, and also whenever he shall have good reason to sus- pect the correctness of any annual] statement, or that the affairs of any company making such statement are in an unsound condition.” By Laws of 1869, chapter 902, § 7, it is provided, that if at any time the affairs of any life insurance company which has deposited securities with the de- partment shall, in the opinion of the Superintendent of the Insurance Department, appear in such a condi- tion as to render the issuing of additional policy and LAW OF LIFE INSURANCE. 95 annuity bonds by said company injurious to the pub- lic interest, the superintendent must report that fact to the Attorney-General whose duty it shall then be to apply to the Supreme Court for an order requiring the company to show cause why its business should not be closed. The court must thereupon proceed to hear the allegations and proofs of the respective parties, and in case it shall appear to the satisfaction of the court that the assets and funds of the company are not sufficient to justify the further continuance of the business in in- suring lives, granting annuities and incurring new obli- - gations, as authorized by its charter, then the said court shall issue an order enjoining and restraining the com- pany from the further prosecution of the business, and. shall also appoint a receiver of all the assets and credits of said company. The receiver, upon filing his bond to the people of the State of New York in an amount and sureties approved by said court, conditioned. for the faithful performance of his duties, shall take pos- session of all the assets and credits df said company, except the securities deposited in the insurance depart- ment under the provision of this act and the act hereby amended, which said securities shall remain in said de- partment to be disposed of as hereinafter provided. The word “assets ” means all the property including the real estate. It is not necessary that a conveyance be executed to the receiver of the company to vest the property in him. ; Atty.-Gen. v. Atlantic Mut. L. L. Co., 100 N. Y. 279. Atty.-Gen. v. Continental Co., 93 N. Y. 630. The receiver of any company under the act has the powers incident to the successful management of its affairs; and to that end, authority to purchase policies 96 LAW OF LIFE INSURANCE. issued by the company, to make any other compromise in the settlement of its outstanding obligations, and to use the corporate seal of the company, whenever neces- sary in the transaction of the business of his receiver- ship. Laws 1867, ch. 708. ‘Attorney-General v. North American Life Ins. Co., 56 How. 160. ; What authorizes an insurance company to commence business, authorizes it to continue ; and if its funds sub- stantially equal the amount of its capital, it should con- tinue, so far as respects the question of the sufficiency of its funds. But it is to be borne in mind, that when it starts business, it has no obligations to burden its capital.. Tf, after it has begun, gone on in business, and has incurred obligations serious in amount, it has lost its capital, and then has assets no more, substantially, than was its capital, whatever obligations it after that takes, it takes in effect, as if it then started business without capital and it is not proper and considerate to expend ‘the capital in building up a business. The better expression of the rule is, are the assets sufficient to justify the belief that the company may continue in the business of insurance with safety to the public? People v. Atlantic Mut. L. I. Co., 74 N. Y. 180. Atty.-Gen. v. N. A. L. I. Co., 77 N. Y. 297. If the company is solvent at the time of the decision of the court, it is enough to prevent dissolution even if insolvent when the proceedings are commenced. Matter of World’s Safe In. Co., 40 Barb. 499. The officers of a company have, when acting in good faith and with a conviction of the solvency: of the com- pany, a right to resist an application, to dissolve on LAW OF LIFE INSURANCE. 97 the ground of insolvency, and are entitled to their ex- penses out of the assets of the company for so doing, even if defeated. Barnes v. Newcomb, 89 N. Y. 108. _ The court, in Atty.-Genl. v. Continental Life Ins. Co, 58 How. Pr. 19, considered the question of how far the act of 1853, chapter 463, sections 11 and 17 (see also Laws of 1867, chapter 708, section 8, arid of 1869, chapter 902, section 15), repealed the provisions of the Revised Statutes applicable to insolvent corporations, and the court in that case held “ that it would seem that ‘the passage of a statute specially applicable to life in- surance companies must supercede other and older ones passed before any such companies existed. Perhaps, however, it would be more accurate to say that a gen- eral law regulating the formation, the practical work. _ ing and dissolution of such corporations, purporting to provide for them a complete system, should be deemed the only one applicable.to such ‘corporations, and that older statutes framed for other kinds of corporations should not apply, unless specially declared to be so applicable in the new act.” (Excelsior Petroleum Co. v. Lacey et al., 68 N. Y. 422.) “This principal was evidently present to the legislative mind which framed the act of 1853. By its eleventh section portions of the old statutes are declared to be applicable to life insurance companies, and other parts are said to be inapplicable. That section pro- vides that they ‘shall be subject to all the provis- ions of the Revised Statutes in relation to corporations so far as the same are applicable, except in regard to annual statements and other matters herein otherwise 7 98 LAW OF LIFE INSURANCE. specially provided for’” * * * “If the Revised Statutes, then, did provide for the dissolution of a life insurance company, has not the act of 1853 also given a way to the same result, which is ‘otherwise?’ And if it is ‘otherwise, has not the act of 1853 expressly declared that the old remedies are inapplicable?” The acts of 1853, chapter 463, section 17; 1867, chapter 708, section 8, and 1869, chapter 902, section 15, contain the only provisions in the nature of visitorial power in the statutes or law relating to life insurance. See Atty.-Genl. v. Bank of Niagara, 1 Hopk. Ch. 403. Atty.-Genl. v. Utica Ins. Co., 2 Johns. Ch. 871. U. 8. Trust Co. v. N. Y. W. 8. & B. Co., 101 N. Y. 488. An application made by the Attorney-General to dissolve an insurance company is exclusive, and super- sedes all other proceedings. Atty.-Genl. v. Continental Life Ins. Co., 53 How. Pr.. 16. The Supreme Court having acquired jurisdiction of _ proceedings for-winding up the affairs of the corpora. tion and having appointed a receiver, has jurisdiction to stay the suit of a creditor brought to recover assets to which the receiver is entitled, in whatever court such suit may be pending. The stay may be granted on motion in the proceedings; it is not, necessary for the receiver to bring an action for that purpose. ae ». Guardian Mut. Life Ins. Co., 77 N. Y. - And the stay granted by the court, however hastily or improvidently granted, is not old, and if dis- obeyed, the party can be punished for contempt. Erie Railway Company v. Ramsey, 45 N. Y. 687. LAW OF LIFE INSURANCE. §9 ACT PROVIDING FOR APPOINTMENT OF RECEIVERS OF DEPOSITING COMPANIES. Section 8, Laws of 1867, Chapter 708, provides that the receiver “immediately on entering upon the duties of his office appoint a competent actuary, approved by the Superintendent of the Insurance’ Department, who shall make a careful investigation according to the standard. fixed by the laws of this State into the condition of said company and report thereon in writing, under oath, to said court, the said superintendent and-receiver; and if it shall, by said report, be found that the securities deposited by said com- pany in the insurance department, and the assets and credits including the future premiums that will mature on the out- standing policies and other obligations of said company, are sufficient under the laws of this State to pay. all the policies, annuities and other obligations of said company as they may. mature by the terms thereof, and the legal costs .and expenses incident to the business, and if upon due notice to the superin- tendent said actuary’s report shall be confirmed by the court, the said receiver shall notify all the. holders of said policies, annuities and other obligations requiring them to pay to him, as such receiver, all prerniutms or other payments due or to become due to said company, from time to time, on their re- spective policies, annuities or other obligations. Such notice shall be given by depositing the same in the post office, at the place where said company has its principal business oftice, ad- dressed to said parties respectively at their several residences, so far as the same can be ascertained’ by said receiver, and, algo, by the publication thereof in the State newspaper, published. in the city of Albany, once a: week for six consecutive weeks, or on the confirmation of the report of said actuary, the court may, in its diseretion, direct the receiver to-reinsure all regis- tered policies in some solvent. company on the execution by said receiver of an assignment to said reinsuring company of all securities on deposit in trust for registered policy-holders. And in case the said report of the said actuary shall:show that the said securities, assets, credits and premiums are not suf- ficient under the laws of. this State to pay all the: policies, an- nuities and other obligations of said. company as they may mature by the terms thereof, and the legal costs and expenses of said receivership, and the said report shall, upon due notice to the superintendent, be confirmed by the court, the court may direct the conversion of the securities held by the superin- 100 LAW OF LIFE INSURANCE. tendent into money for the purpose of distribution, and the superintendent shall thereupon, with the consent and advice of the treasurer of the State, and in such manner as the said receiver, superintendent and treasurer, or a majority of them, shall determine, sell and convert said securities into money; and the proceeds of such securities, when required for distri- _bution, and when the court shall make an order for that pur- pose with suitable provisions for ‘the safety of the moneys, shall be paid to the said: receiver on his giving his receipt to. said superintendent, and shall be applied. by said receiver, under the direction of the court, as follows: To the payment of the registered policy-holders of said company, in. a propor- tion to the net value of their policies respectively, and to the registered annuities of said company, in proportion to the then present value of their respective annuities, as estimated by the legal standard for valuing life insurance and annuity obliga- tions within this State. The surplus of the proceeds of such securities, if any there be after the payments last above men- tioned, with all the other assets.of the said company, shall be then applied to the payment of all the just debts of said com- pany incurred in the conducting. and carrying on its lawful business.” (As amended by Laws of 1880, chap. 168, § 1.) “ Sxo. 9. Whenever the business of any company shall be eontinued under the provisions of the next preceding section, in case the receipts for premiums and from all other sources shall at any time be in excess of the sums required to meet the policy, and all other obligations of said company, said re- eeiver, whenever such excess shall amount to twenty-five thou- sand dollars, shall invest said excess in. such securities as are authorized to be deposited in the insurance department, and shall deposit said securities with the superintendent of said department in.the manner herein provided. If, at any time, the funds in the hands of said receiver are not sufficient to meet such obligations of said.company as they mature, he shall notify the said superintendent of the amount required to meet the deficiency in respect thereto, and it shall become the duty of the superintendent to sell, with the consent and advice of the treasurer of the State, and in such manner as the receiver, superintendent and treasurer, or a majority of them, shall de- termine, such portion of said securities as may be required to meet the said matured obligations, and the proceeds of such sale or sales shall be. paid to said receiver,-on his giving his receipt therefor to the said superintendent, to be used as re- quired for said matured obligations.” 2 LAW OF LIFE INSURANCE. \ \ 192g 10y “Sro. 10. On the first day of January, in Sfdey xeaxo ; within thirty days thereafter, an investigation shall~be-made ’ by a_competent actuary, approved by the Superintendent of the Insurance Department, into the affairs of said company, and if, upon such investigation, it shall be found that a surplus of its assets, not Jess in amount than ten thousand dollars, ex- ists, after making adequate provisions for meeting at maturity all the obligations of said company and all the legal expenses of said receivership, and in case of a joint-stock company, over and above the amount of its capital, such portion of said sur- plus as may, under the charter of said company, if a stock com- pany, belong to its stockholders, shall be set aside and invested by said receiver in such securities as are authorized to be de- posited by life insurance companies in the insurance depart- ment, as a contingent fund, and scrip therefor shall be issued by said receiver to said stockholders, respectively, in proportion to their respective shares, bearing six per cent. interest and pay- able on the final settlement of the affairs of said company, as herein provided. The remainder of such surplus, if the com- pany be a stock company, and the whole of said surplus, if it ea mutual company, shall be disposed of as follows: One quarter of such remainder shall be reserved by said receiver and invested by him in such securities as are authorized to be deposited by life insurance companies in the insurance depart- ment as a contingent fund, for which scrip shall be issued by said receiver to all policy-holders entitled under their policies to share in the surplus of said company. Said scrip shall bear interest at the rate of six per cent. per annum, payable annu- ally, and shall be redeemable on the maturity of the respective policies to which said scrip ed be related. The remaining three-quarters of said surplus shall be paid by said receiver within one year from said first day of January to said poly holders, respectively, in lawful money of the’.United States. But no scrip shall be issued for any fractional part of a dollar, and any scrip so issued may, at any time, be called in and can- celled by said receiver, without payment, if necessary to better secure the remaining obligations of said company; and all scrip so issued shall have printed thereon a clause to this effect. If, on the final accounting of said receiver, after the liquidation of all the obligations of said company, as herein provided, and in case of a joint-stock company, the return to the respective stockholders of their respective amounts of stock and the scrip issued to them under this act, there shall. remain a surplus in the hands of said receiver, it shall be divided by him among said stockholders, if a stock company, proportionately to their 102 LAW: OF .LIFE INSURANCE. respective shares, as provided by the charter of said company, and the balance of said surplus among the last ten policy- holders of said company, or their legal representatives, m proportion to the amounts of their said respective policies, and, if not a stock company, among the holders of the last ten poli- cies issued by said company, or their legal representatives, in proportion to the amount of their said respective policies.” (Laws of 1867, ch. 708.) Laws or 1884, Chap. 285, page 345.—An Act to provide Jor the transfer of securities and property by bankrupt corpo- rations to the receivers of such corporations and_for the trans- Fer by the Superintendent of the Insurance Department to recewers of insolvent lyfe insurance and annuity companies of funds and securities deposited with such superintendent by such companies for the security of policy-holders. Passed May 13, 1884, “ Szc. 2. In every case where a life insurance or annuity company has been or hereafter may be dissolved and a receiver thereof appointed, upon the application of the Attorney-Gen- eral, or by action.begun in the name of the people of the State of New York, each and every.security and fund which shall have been deposited by such company prior to its dissolution, ‘with the Superintendent of the Insurance Department, for the security and protection of its poliey-holders or any class of such policy-holders, under the statutes in such cases made and pro- vided, may by an order of the Supreme-Court made at a Special Term thereof held within the judicial district in which the rincipal office of such company is located, prior to its disso- Tution, upon the application of the Attorney-General, after service of eight days’ written notice of .such application upon the Superintendent of the Insurance Department, be trans- ferred from the said Superintendent of the Insurance Depart- ment to the receiver of such company; and thereupon the said superintendent shall deliver such funds and securities to such receiver, and in him the title thereto shall immediately ‘vest. Such receiver shall thereupon convert such securities _ and funds into money, and shall distribute the proceeds there- of, and of each and every class of such funds and securities, among the respective holders of valid policies of such company for whose benefit and security the deposit or deposits were originally made Eee to the respective valuations of such policies, as shall be ascertained in proceedings taken by LAW OF LIFE INSURANCE. 103 such receiver for the valuation of policies and the determina- tion of the liabilities of such company under the statutes in such cases made and provided, and the course and practice of the Supreme Court in cases of insolvent corporations, until such valuation shall have been paid in full. If any portion of such proceeds shall then remain, such balance may, under an order of the Supreme Court in such behalf duly made at Spe- cial Term, be made a part of the general assets of such receiver- ship, and thereupon be distributed by said receiver in payment of or upon the general liabilities of such dissolved company according to law.” Where a receiver is appointed, an order may be granted restraining other suits, which may tend to interfere with assets in the receiver’s hands. Attorney-General v. Guardian Mut. Life Ins. Co., 77 N. Y. p. 272. The receiver, by publication of a notice to creditors, inay cut off claims not exhibited within the time speci- fied in the notice. People v. Security Life Ins. & Annuity Co., 78 N. Y. p. 114. A receiver appointed ‘under the Act of 1853, so far as relates to his conduct, the distribution of the assets or any of the proceedings subsequent to his appoint- ment, is governed by the provisions of the Revised Statutes in relation to corporations, and by the practice of courts of equity. People v. Security Life Ins. & Annuity Oo., 78 N. Y. p. 114. The regularity of the appointment of a receiver under proceedings of this kind cannot be questioned éollaterally by any other tribunal than the one by which he was appointed. Attorney-General v. Guardian Mut. Life Ins. Co., 77 N. Y. p. 272. 104 LAW OF LIFE INSURANCE. A receiver is nly authorized by the statute to col- ‘lect and pay. It gives no command to invest. Where no directions are given by the court, it is his duty sim- ply to keep and protect the trust funds and hold them ready for distribution. But where a receiver, acting in good faith, but without obtaining authority from the ‘court, loans trust funds, and no loss occurs, and the loan results in a benefit to the estate, although the court may not punish him for so investing the trust funds, and will only charge him with the amount of the inter- est actually received, yet the court disapproves of such action by the receiver. Attorney-General v. North American Life Ins. Co., 89 N. Y. 94. When a referee is appointed to fix the fees of a receiver of an insolvent company, the collection of fees cannot be enforced against the successor in office of such receiver, but must be collected from the first re- ceiver. Attorney-General v. Cont. Life Ins. Co., 27 Hun, 524. The appointment of a receiver annuls the contract — with a general agent, and he has a right of action against the company as for a breach of contract. People v. Globe Mut. Life Ins. Co., 91 N. Y. p. 174. The dissolution of a company: gives each policy- holder a claim against its funds as for breach of con- tract. People v. Empire Mut. Life Ins. Co., 92 N. Y. 105. People v. Security Life Ins. & Annuity Co.,78.N. Y.114. Allowances from ‘the funds in the hands of the re ceiver to compensate special counsel employed by the LAW OF LIFE INSURANCE. 105 Attorney-General in proceedings to wind up the affairs of an insolvent life insurance company, are not author. ized by the statute. Attorney-General v. Cont. Life Ins. Co., 88 N. Y. 571. An attorney who, upon the retainer of certain of the policy-holders in an insolvent insurance company, has appeared and resisted improper claims made by the receiver against the assets in his hands, has no legal ‘claim to be compensated for such services by the re- ceiver out of the assets of the corporation. Attorney-General v. Continental Life Ins. Co., 31 Hun, 623. — It is not error in computing the amount due to an- nuitants to base it upon the Northampton Tables with interest at six -per cent. People ». Security Life Ins. & Annuity Co., 78 N. Y. p. 114. The receiver may file exceptions to report of referee to take proof of claims. Attorney-General ». North America Life Ins. Co. 82 N.Y. 179. The holders of running unmatured life policies are not entitled to havea pro rata portion of the premiums paid by them refunded before payment to other cred- itors, rau v. Security Life Ins. & Annuity Co., 78 N. Mele The court has a right to refuse to revalue policies where it appears that by so doing it will delay the clos- ing of the trust and perpetrate injustice. spe eee v. Cont. Life Ins. Co., 64 How. Pr. 3. : , 196 LAW OF LIFE INSURANCE. Death claims maturing before the dissolution of a company are not entitled to a preference over the claims of holders of unmatured policies. Where a policy-holder dies after the appointment of a receiver and during the pendency of his policy, he is entitled to the sum insured, less the interest up to the time when by the terms of the policy the company are required to pay it. ' People v. Security Life Ins. & Annuity Co., 78 N. Y. 114. Where a receiver has been appointed of an insolvent company, the holder of a death claim which matured prior to the appointment of a receiver, has no right to an adjustment and payment of his claim before a gen- eral distribution of the assets. People v. Security Life Ins. Co., 71 N. Y. p. 222. Where, after the expiration of the time specified for the presentation of claims to the receiver of an insolv- ent company, certain policy-holders, whose claims have been presented and allowed, died, the Supreme Court has the power within its discretion to direct a revalua- tion of their claims and make such payment as may be just. Attorney-General v. Cont. Life Ins. Co., 88 N.Y. 77. After insolvency and appointment of a receiver, and valuation of existing policies, a husband on whose life a policy was held by his wife died, and she applied to the court to have the policy revalued, held, that the court, under the circumstances, could and would order the policy to be revalued as a: death claim, as it ap- LAW OF LIFE INSURANCE. 107 peared that this could be done without affecting the dividends already awarded to others. People v. Knickerbocker Life Ins. Co., 84 Hun, p. 476. The statute forbids reinsurance except the written consent of the owner of such policy so reinsured shall first be obtained to such reinsurance. Laws of 1877, c. 229. “Sxo. 3. It shall be lawful for any receiver of any life in- surance company organized under the laws of this State, to reinsure upon the written consent of the Superintendent of the Insurance Department, and the Attorney-General, the whole of the policy obligations of such company in any solvent com- ‘pany or companies organized under the laws of this State, whenever the assets of the company of which he is receiver are sufficient to effect such reinsurance, and whenever such assets are not sufficient to effect such reinsurance, such receiver, upon the like consent as above provided, may reinsure a per- eentage of each and every policy obligation outstanding in such company to the extent that the’assets of such company may be sufficient to effect such reinsurance, provided, however, that no contract effecting such reinsurance shall be entered into ex- cept in pursuance of an order of the court in which such re- ‘ceiver was appointed, directing reinsurances authorized by this section, and establishing the general form of the contract to effect the same.” ‘f Where a receiver of a New York company has rein- sured its risks with a Connecticut company, that does not make a receiver of the Connecticut company a policy-holder, so as to entitle it to share in a special deposit made in the New York department. Reese v. Smyth, 95 N. Y. 645. Where a policy-holder pays premiums to a company in which he has been reinsured by the original insurer, it does not cause him to lose his claim against the orig- inal insurer. Reese v. Smyth, supra. 108 LAW OF LIFE INSURANCE. By Laws 1869, c. 902, § 18, it is provided that “The compensation of the receiver under this act shall be fixed by the Superintendent of the Insurance Department, and shall not exceed the sum of five per cent. on the amount of the assets of such company, as shall come into his possession. The receiver may employ such clerks and actuaries as he may deem necessary for the proper conducting of his business as such receiver, and the said clerks and actuaries shall be paid such reasonable compensation as he may determine, subject, how- ever, to.the approval of the Superintendent of the Insurance Department, all of which compensation to said receiver, clerks and actuaries, shall be a charge on the funds of such company, -and paid out of the said funds.” See Laws of 1883, chap. 378, § 2; also Laws of 1886, chapter 275, § 1. Attorney-General ». Guardian Mut. Life Ins. Co., 93 N. Y. 681. In settling the fees of a receiver, the superintendent of insurance has power to allow him commissions upon the special fund held by him for the company and paid over to the receiver, as well as upon the general assets, and such special fund is also chargeable with its pro- portionate part of the expenses of closing up the affairs of the company. The court may review the action of. the superintendent. . Attorney-General v, North American Life Ins. Co., 26 Hun, 294; affi’d, 89 N. Y. 94. Fun commissions are not allowed to a second re- ceiver upon funds collected and turned over to him by his predecessor. Attorney-General v. Continental Ins. Co., 32 Hun, 223. WINDING UP OF INSURANCE COMPANIES, Section 8, of chapter 95 of the act of 1851, makes provision ‘for the voluntary dissolution of insurance companies. | “Sec. 8. When any company transacting the business of LAW OF LIFE INSURANCE. 109 life insurance within the State of New York, shall desire to relinquish its business, the comptroller shall, on application of such company or association, under the oath of the president or principal officer, and secretary, give notice of such intention in the State paper at least: twice a week, for six months; and after such publication he shall deliver up to such company or association, the securities held by him belonging to them, on being satisfied by the exhibition of the books and pavers of such company or association and the examination aforesaid, and upon the oath ofthe president or principal officer, and secretary of the same, that all debts and liabilities of every kind are paid and extinguished, that are due or may become due upon any contract or agreement, made with any citizen of this State.” Laws of 1853, chapter 463. “Szc. 19. When any company, transacting the business of insurance under either of the departments specified in the first section of this act, within the State of New York, shall desire to relinquish its business, the Superintendent of the Insurance Department shall, on application of such company or association, under the oath of the president or principal officer and secretary or actuary, give notice of such intention in the paper in which the State notices are directed to be inserted, at least twice a week for six months, and after such publication he shall deliver up to such company or association the securities held by him, belonging to. them, on being satisfied by the exhibition of the books and papers of such company or association, and on examination, to be made by himself or some competent person, not officer of any life insurance company in this State, to be appointed by him, and upon the oath of the president or principal officer and the secretary or actuary of the same, that all debts and liabilities of every kind are paid and extinguished that are due or may become due upon any contract or agreement made with any citizens of the United States. And the said superintendent may also from time to time deliver up to such company or association, or its assigns, any portion of said securities, on being satisfied in manner and form aforesaid, or by any other competent proof, that all the debts and liabilities of every kind that are due or may become due upon any contract or agree- ment made with any citizen-of this State by said company or -association are less than one-half of the amount of the portion of.said securities he shall still retain.” “Sua 91. Anv existine eomnanv inearnoarated hv ar an. 110 LAW OF LIFE INSURANCE. thorized under the laws of this State, for the. purposes men- tioned in this act, may avail themselves of the provisions df this act, after publishing their intention for six weeks in the. State paper, and obtaining the consent of the majority of the trustees or directors, and complying: with the third section of this act, in relation to the filing and contents of the declaration therein referred to. And any existing company incorporated by or authorized under the laws of this State, or any company formed under this law, to transact the business embraced in the second department of section one of the act hereby amended, may at any time increase the amount of its capital stock upon the same proceedings being had as are required by a fire insurance company, as provided in chapter four hundred, and sixty-six of the laws of eighteen hundred and fifty-three, with the amendments thereto,” (Chapter 463, Laws 1853, as amended by the Laws of 1880, chap. 42’7.) The following statutes apply to. this subject : “Any foreign life insurance company desiring to discontinue business in this country, and having made the aforesaid publi- cation, may, in the discretion of the Superintendent of the Insurance Department, withdraw one-half of its deposits of one hundred thousand dollars, on registering, according to the provisions of law for registered policies, all its outstanding poli- cies, issued to citizens or residents of the United States, and covenanting to maintain unimpaired the reinsurance deposit for such registered policies at all future times, and specially pledging for their security all future premiums payable on American policies.” (Laws of 1853, chapter 403, § 19, as amended by Laws of 1859, chap. 263, § 1, and by Laws of 1869, chap. 829, § 1.) “Suc. 1. Every application hereafter made for the ap- pointment of a receiver of a corporation shall be made at a special term of the court held in and for the judicial district in which the principal business office of the corporation was located at the commencement of the action wherein such re- ceiver is appointed, or in and for a county adjoining such dis- trict; and any order appointing a receiver, otherwise made, shall be void. “Sc. 2, Every receiver shall be allowed to receive, as com- pensation for his services as such receiver, five per centum for the first one hundred thousand dollars received and paid out, and two and one-half per centum on all sums received and paid out in excess of the said one hundred thousand dollars. But no receiver shall be allowed or shall receive, from such percent- LAW OF LIFE INSURANCE. lil ages or otherwise for his said services for any one year, any greater sum or compensation than twelve thousand dollars, nor for any period less than one year more than at the rate of twelve thousand dollars per year, provided that where more than one receiver shall be appainted, the compensation herein provided shall be divided between such receivers.” “Szo. 3. All orders appointing receivers of corporations shall. designate therein one or more places of deposit, wherein all funds of the corporation not needed for immediate disburse- ment shall be deposited, and no deposits or investments of such trust funds shall be made elsewhere, except upon the order of the court upon due notice given to the Attorney-General. “Sxc. 4. It shall be the duty of every receiver of an insur- ance, banking or railroad corporation, or trust company, to pre- sent every six months to the Special Term of the Supreme Court, held in the judicial district wherein the place of trial or venue of the action or special proceeding in which he was ap- pointed may then be, on the first day of its first sitting, after the expiration of such six months, and to file a copy of the same, if a receiver of a bank or trust company, with the bank super- intendent, if a receiver of an insurance company, with the superintendent of insurance, and in each case with the Attor- ney-Geueral, an account exhibiting-in detail the receipts of his trust, and the expenses paid and incurred therein during the preceding six months; and it shall be unlawful for any receiver of the character specified in this section to pay to any attorney or counsel any costs, fees or allowances until the amounts thereof shall have been stated to the Special Term in this man- ner, a8 expenses incurred, and shall have been approved by that court, by an order of the.court duly entered, and any such order shall be.the subject of review by the General Term and the Court of Appeals on an appeal taken therefrom by any party aggrieved thereby. Of the intention to present such account, as aforesaid, the Attorney-General shall be given eight days’ notice in writing; and the Attorney-General shall examine the books and accounts of such receiver at least once every twelve months. “Suc. 5. In case of the intervention of any policy-holder or depositor, by permission of the court, such policy-holder or depositor shall defray the legal expenses thereof, and no allow- ance shall be made for costs or fees to any attorney of such policy-holder or depositor. 112 LAW OF LIFE INSURANCE. “Sze. 6. The affairs of every insolvent corporation now in the hands of any réceiver shall be fully closed up by the re- ceiver thereof within one year from the passage of this act, unless the court, upon application by said receiver and upon due notice to the Attorney-General, shall give additional time for that purpose. “Suc. 7. The Attorney-General may, at any time he deems that the interests of the stockholders, creditors, policy-holders, depositors or other beneficiaries interested in the proper and speedy distribution of the assets uf any insolvent corporation will be subserved thereby, make a motion in the Supreme Court at a Special Term thereof, in any judicial district, for an order removing the receiver of any insolvent corporation and appoint- ing a receiver thereof in his stead, or to compel him to account, or for such other and additional order or orders as to him may seem proper to facilitate the closing up of the affairs of such re- ceivership, and any appeal from any order made upon any motion under this section shall be to the General Term of said court of the department in which such motion is made. “Sec. 8. A copy of all motions and all motion papers, and a copy of any other application to the court, together with a copy of the order or Judgment to be proposed thereon to the court, in every action or proceeding now pending for the dis- solution of a corporation or a distribution of its assets, or which shall hereafter be commenced for such purpose, shall, in all cases, be served on the Attorney-General, in the same manner as provided by law for the service of papers on- attorneys who have appeared in actions, whether the applications but for this law would be ex parte or upon notice, and no order or judg- ment granted shall vary in any material respect from the relief ete in such copy or order, unless the Attorney-General shall appear on the return day and have been heard in relation thereto; and any order or judgment granted in any action or proceeding aforesaid, without such service of such papers upon - the Attorney-General, shall be void, and no receiver of any such corporation shall pay to any person any money directed to be paid by any order or judgment made in any such action or proceeding, until the expiration of eight days after a cir- tified copy of such order or judgment shall have been served as aforesaid upon the Attorney-General. “Sec. 9. All applications to the court contemplated by this” act shall be made in a judicial district where the principal office of the insolvent corporation was located ; and the venue of LAW OF LIFE INSURANCE. 113 all actions and proceedings now pending, not in the judicial district where the principal office of the insolvent corporation was located, are hereby changed and transferred to the county and judicial district where such principal office was located. “Src. 10. All actions or other legal proceedings and ap- peals therefrom or therein brought by or against a receiver of any of the insolvent corporations referred to in this act, shall have a preference upon the calendars of all courts next in order to actions or proceedings brought by the people of the State of New York.” (Laws of 1883, chapter 378, as amended by chapter 40, Laws of 1885, and by chapter 275, Laws of 1886.) Laws or 1886, Chap. 436.—An Act to facilitate closing up the affairs of insolvent life insurance and annuity companies. Passed May 24, 1886. “Szorton 1. Upon the expiration of two years after the declaration of a final dividend by a receiver heretofore ap- pointed of an insolvent life insurance and annuity company, a Justice of the Supreme Court, at a Special Term thereof held in and for the county in which the office of such receiver is situated, may upon. petition of the Attorney-General, or the receiver or any of his bondsmen, make an order authorizing such applicant to cause to be published and mailed a notice to the remaining creditors of such insolvent company or receiver, to present their claims for payment, within three months from the date of said notice, or that the same be thereafter forever -barred; a copy of which said notice shall be published in the newspaper in the city of Albany designated for the publication of certain public notices pursuant to chapter two hundred and sixty-two, Laws of eighteen hundred and eighty-five, and in a newspaper published in said county once in each week for six successive weeks, and a copy of which said notice shall be mailed, postage paid, on the day of the date thereof, to each of said remaining creditors, to their last known address. . “Szc. 2. Upon due proof of the publication and mailing of such notices as aforesaid, and the payment of all claims so presented, and the payment into the insurance department of any cash,.if any there be, actually in the hands of said receiver after making the usual deductions and allowances, and allowing him the amounts paid out by him for services rendered, a Jus- 114 LAW OF LIFE INSURANCE. tice of the Supreme Court, at a Special Term thereof held in and for said county, upon motion of the Attorney-General, or ‘the receiver or any of his bondsmen, may grant an order dis- charging such receiver and his bondsmen from further lia- bility.” (Laws of 1886, chapter 436.) The above act does not refer to mortgage foreclos- ures but only to corporate insolvency proceedings. . U.S. Trust Co. v. N.Y. W.8. & B. Co, 101 N.Y. 478. And was to cure certain notorious abuses which had arisen, U.S. Trust Co. v. N. Y., W. S. & B. Co., supra. See act applied. Attorney-General v. Guardian Mut. L. I. Co., 93 N. Y. 631. In the case of a foreign insurance company resort. must be had to the provisions of the Code of Procedure, sections 1806 to 1810. : Where a receiver is appointed under a general act, under. which an insurance company is incorporated, every State within which such company is permitted to do business must be charged with notice of such appointment, which all interested in the affairs of the corporation can insist shall be regarded. Relfe v. Rundel, 103 U. 8. 229. Taplor v. The Life Association of America, 13 Federal eporter, 493. The following case is-instructive, Bockover v. Life Assn. of America, 77 Va. 85, 1883. In 1879, the defendant company was adjudged in- solvent in Missouri under a decree and statute of Mis: LAW OF LIFE INSURANCE. 115 souri passed that year,—said company having been regularly incorporated under the Laws of Missouri, and all its assets were vested in a receiver for the benefit of its creditors. In 1880 one Bockover (on whose life the company had issued: an Endowment Policy) attached debts due company in Virginia. The company answered admitting the claim of Bockover, but denying that the debts were liable to attachment. The receiver became a party claiming the debt. On motion to abate attach- ments, held: 1. Statute providing mode for winding up insolv- ent corporations and distributing their assets equitably among those entitled thereto impairs no contract and is valid. Such is the Missouri Statute of 1879. 2. If a State allows a foreign corporation to do busi- ness within her limits the corporation comes as it is cre- ated and brings its charter as the law of its existence. 8. Every person dealing with a corporation every- where must take notice of the provisions of its charter for managing and controlling its affairs, both in life and’ after dissolution. 4, Under the decree and statute the company’s assets were validly vested in the receiver as trustee for an express trust, and the debt due the company in Virginia could not be attached by a policy- holder in Virginia. CHAPTER XVIII. THE LIFE INSURANCE AGENT. The life insurance agent has been the subject of numerous decisions of the courts. An insurance company cannot hold out a person as its agent, and then disavow responsibility for its acts. Authority once conferred may be presumed to continue until notice of revocation is given. . Southern Life Ins. Co. v. McCain, 96 U. S. 84. The receipt, without objection, by an insurance company, of a statement by a person who has been act- ing as its agent, that the premium for the renewal of a policy had been paid to him, and its failure then to notify the assured that the powers of the agent had terminated,‘is equivalent to an adoption of the act of the agent, and estops the company, when sued on the policy, from denying his authority. Southern Life Ins. Co. v. McCain, 96 U.S. 84. Where an agent of a life insurance company under. takes to prepare an application for a pdlicy, and writes therein in answer to questions relating to the risk mat- ters of which he obtains information wholly from a third person, he acts therein as the agent of the com- pany, and the policy will be valid, although the an- swers so written are untrue. Union Mut. Ins. Co. v. Wilkinson, 18 Wal. 222. New Jersey Mut. Life Ins. Co. v. Baker, 94 U. S. 610. LAW OF LIFE INSURANCE. 117 An insurance agent authorized to take and approve risks, and to insure, is, by usage, authorized to give credit for the premium. Franklin Ins. Co. v. Colt, 20 Wal. 560. An agent having no instructions as to the mode of payment of premiums may bind the insurer by receiv- ing a check drawn against funds in bank. . Taylor v. Merchants’ Fire Ins. Co., 9 How. 390. Where an insurance company instructs its agents not to deliver policies until the premiums are paid, giving them notice that “the same will stand charged to their'account until the premiums are received,” and an agent delivers a policy without requiring payment, it will be presumed, especially where the company is a stock company, that a credit was intended, and the company will be bound. Miller v. Brooklyn Life Ins. Co., 12 Wal. 285. An agreement between the agent of an insurance company and an applicant for insurance, whereby the former, without authority from the company, accepts articles of personal property in satisfaction of a premi- um payable in money; is a fraud on the company and invalid. Hoffman v. John Hancock Mut. Life Ins. Co., 92 U. S. 161. Where an insurance company, notwithstanding a provision in its policies that its agents are not author. | ized to waive forfeitures, sends to them signed renewal -receipts to be used according to their judgment, and uniformly ratifies their action in accepting premiums tendered after a forfeiture might be insisted on, it thereby 118 LAW OF LIFE INSURANOE. precludes -itself from denying, in a given case, the authority of an agent to accept an overdue premium, and thereby binds the company to a waiver of the forfeiture. . ‘ Globe Mut. Life Ins. Co. v. Wolff, ‘5 U. 8. 326. Although a life insurance policy contains an express declaration that agents are not authorized to waive forfeitures, and provides that a failure to pay premium notes at maturity shall cause a forfeiture, the company may waive those provisions, since they are for its benefit. Knickerbocker Life Ins. Co. v. Norton, 6 U. 8. 284. A stipulation between a life insurance company and an applicant for a policy limiting the powers of the soliciting agent, and providing that the contract for insurance shall be based upon the written application, is binding upon the parties, and it is immaterial what may have been said by or to the agent at the time of making the application, unless the same was reduced to writing, and presented to the officers of the company at the home office. N. Y. Life Ins. Co. v. Fletcher, 6 Supreme Court Re- porter, 837. The following statute regulates the responsibility of agents of insurance companies: Srction 1. Any person who shall be appointed, or who shall act as agent for any insurance company within this State, or who shall as such agent solicit applications, issue policies or renewals, and collect premiums either for original insurances or renewals, or who shall receive or collect moneys from any source or any account whatsoever, as such agent, for any insur- LAW OF LIFE INSURANCE... 119 « ance company doing business in this State, whether such com- pany be organized under the laws of this State or any other tate of the Union, such person shall be held responsible, in a trust or Seen ao, to such company for any moneys received by him“for such company. Sxo. 2. Any such agent or person who shall embezzle or convert to his own use, or shall take or secrete or otherwise dis- pose of, with intent to embezzle or use, or who shall fraudulently withhold or appropriate, invest, loan or otherwise fraudulently apply or make use of, without the consent of such company or contrary to its instructions, any money belonging to such com- pany which shall have come ,into his possession, or shall be under his care, by reason of such agency, he shall be deemed by so doing to have committed the crime of larceny, and upon conviction shall be punished for such crime. (L. 1873, chap. 688.) , INDEX. ACCOUNTING. ACT. mere creditor has no right to, 32. mere right to profits does not justify suit in equity for, 32 what will entitle a person to have an, 32. when will not be ordered, 32. allowing wife, with husband’s consent, to assign policy does not aid creditor, 43. authorizing corporations to hold and convey real estate for business purposes in other States, 85, 86. authorizing life insurance companies to invest in county, town or village bonds of this State, 76. , authorizing superintendent to refuse admission to foreign insurance company to do business in this State, 69. changes noted in the various acts relating to married women’s policies, 38. construction of acts of 1853, 1867 and 1869, with refer- ence to provisions of R. S. applicable to insolvent corporations, 97, 98. giving to foreign corporations same rights and privileges as domestic in regard to purchases upon foreclosure sale, &c., 85. in relation to deposits to be made, and the taxes, fines, fees, &c., payable, by foreign insurance companies, 67, 68. in relation to investments in stocks of other incorporated companies, 76, 77. in relation to transfer: of securities deposited by companies with superintendent of insurance department, 66. increasing the amount of premium which may be paid by wife, is enabling and constitutional, 43. of 1840, when cannot be avoided by omitting reference to in policy, 41. of 1840, when not a defense for a wife to elect to disaffirm assignment under, on her failure to pay premiums, 19. prohibiting officers, etc., of life insurance companies from 122 INDEX. ACT—continued. receiving fees, etc., for loaning moneys of company, 33° providing for appointment of receivers of depositing com- panies, 99, 100. providing for compensation of receivers, 108, 110. providing for discontinuance of business in this State by foreign companies, IIo. providing for incorporation of insurance companies, and in relation to agencies, 72. providing for investigation of affairs of insurance com- panies, 101, 102. : providing for re-insurance of policy obligations by receiver, 107. providing for transfer of securities and property of ‘bank- rupt corporations to receiver, 102, 103. providing for valuation of life insurance policies, 68. providing for voluntary dissolution of companies, 108, 109, IIo. relating to examination and winding up of insurance com- panies, 92, 93, 94, 95. relating to fees collected by Superintendent of Insurance Department, 66. relating to married women’s policies, 37, 38. relating to sales and purchases of lands by corporations, 85. regulating depositing of securities with Superintendent of Insurance Department, 66. regulating forfeiture of policies, 25. regulating investments by companies transacting business in foreign States, 77. regulating responsibility of agents, 119. to protect rights of policy-holders, 9, ro. to protect rights of policy-holders frequently waived in ap- ‘plications in this State, 10. ACTION. by creditor at large, not within principles governing rem- edies for breaches of private trusts, 31. cannot be maintained by creditor at large to charge officers of company with losses resulting from mismanage- ment, 31. company not liable to action for damages, when policy is altered or cancelled by it, 7, 8. INDEX. 123 ACTION—continued. ‘insured is the holder of an obligation which may be en- forced on maturity by, 27. proof of death a condition precedent to maintaining action on policy, 45. statute governing appointment of receiver, does not furnish medium of litigating question whether plaintiff was a creditor when action began, 31. _ when tender of premium must be made before bringing action to avoid forfeiture, 24. when will lie by defrauded insurer, 56. will not be sustained by creditors against a wife’s policy, 43. AGENT. act regulating responsibility of agents, 119. agreement between, and applicant for insurance to accept personal property in satisfaction of premium without authority from company, is invalid, 117. authority conferred on, presumed to continue until notice of revocation given, 116. company bound even if agent disobeys instructions as to delivery of policy without receipt of premium, 117. effect of collusion between agent and insured, 54. effect of falsely writing down answers of applicant, 53, 54, 116. insurance company cannot hold out person as, and then disavow responsibility for its acts, 116. may waive forfeiture, on authority from company, 118. stipulation between insurer and applicant for insurance as to powers of soliciting agent is binding, 118. tender of premium to agent in time of war and in enemy’s country, not binding on company, 23. what will annul contract with general, 104. when act of company equivalent to adoption of act of, 116. 3 when authorized to give credit for premium, 117. when company bound by agent's waiver of forfeiture, 117, 118. when, has right of action against company as for breach « of contract, 104. when knowledge by agent of falsity of warranties, does not relieve against breach, 53. when, may bind insurer by receiving cheque drawn against funds in bank in payment of premiums, 117. 124 INDEX. AGENT—continued. when, may issue “ binding receipt,” and validity of, 2, 7. will be considered as acting for company where he fills an- swers in application on information furnished by third person, even if answers not true, 116. AGREEMENT. indorsement of agreement on back of policy to return proportion of premiums after three annual payments, not void for uncertainty, 5. when agreement made to issue policy court will compel its issuance, 6. when agreement made to return proportion of premiums paid, company entitled to be paid for carrying risk during life of policy, 6 ALTERATION OF POLICY. without consent of insured does not impair rights of in- sured, 7. without consent of insured, does not subject company to action for damages for conversion, 7, 8 ANNUITANTS. not error to use Northhampton Tables in computing amount due to, 105. ANNULLING OF POLICY. by marking it paid without insured’s consent will not im- pair rights of insured, 7. APPLICATION. approval of risks based on, 3. contents of, 2. effect of not answering question in, 52. includes often within it a warranty to be signed by ap- plicant, 2 medical examiner’s answers generally referred to in, 2. ordinarily forwarded to company for approval, 3. reference to the report of the examining physician in the application makes it a part of applicant’s statement, 54. when made at distance from Home Office, agents some- times authorized to issue a “binding receipt,” when made out it is filed with company, 2 ASSETS. , | means what, 95. ‘ of a corporation are a trust fund for payment of debts, 31. when courts to direct distribution of, 101, 102. 103. INDEX. 125 ASSIGNEE OF POLICY. may surrender wife’s policy to insurer, 42. * need not have an insurable interest, 36. of married woman’s policy, when subject to cee for non-payment of premium, 44. payment of premiums by assignee, even when dade in . good faith, gives no title to, 41. possession by assignee of a wife’s policy lawful until re- claimed, 42. takes policy subject to equities, 36. when entitled to notice before forfeiture, 25. when insurer bound to pay amount of policy to, 15. when may recover premiums paid, 36. wife may affirm acts of, 42. ASSIGNMENT. effect of married woman’s guaranty of her, 41. election of wife to disaffirm subsequent to, gives right to sue for proceeds of policy, 42.’ manner of aera usually provided for in policy, 36. of married woman’s policy can only be avoided by her, 42. of policy, need not be in writing, 36. when, of married woman’s policy void, 40. ATTORNEY-GENERAL. consent of, must be obtained by receiver before re-insur- ing policy obligations, 187; duty of, on report of company’s insufficiency of. assets to insure risks, 94, 95. must be served with copies of all motion papers, etc., 112. power of Attorney-General to wind up, exclusive, 32, 98. when may make motion to remove receiver, 112. when may make motion to compel’ receiver to account, 112. when not to pay special counsel,. 104, 105. what notice must be given by receiver to, of intention to present account, 111. BENEFICIARY. effect of payment of premiums by person other than the beneficiary, who retains control over, 34. the insured is called the, 1 when rights of beneficiary not to be impaired by compa-_ ny’s alteration of policy, 7, 8 126 INDEX. BETS. illustrations of what are not, 18. | “BINDING RECEIPT.” may be issued by agents when express authority conferred to issue pending approval of risk by company, 7. when policy to be substituted for, 2, 3. BROTHER. sister has insurable interest in life of, 15. CHILD. father has insurable interest in life of, 1 5: CLAIMS. how receiver may cut off, 113. CONCEALMENT. definition of, 57. effect of failure of applicant for, insurance to disclose in- formation not asked for, 57. CONDITION PRECEDENT. service of proofs of death a condition precedent to right to maintain action on policy, 45. COLLUSION. where collusion between agent and assured, agent’s acts do not bind company, 54. “CONGESTION OF THE LIVER,” 8. CONSIDERATION. a promise by company to receive overdue premium, and after lapse, must be founded on some act or, 23. CONTRACT. a general re-insurance of risks by company, a breach of, 32. of insurance, not different from other contracts, 29. of insurance, not one of indemnity, 1. of Tontine insurance, not gambling, 17. prospectus not to vary or control, unless reference be made to statements in prospectus, in policy; CORONER'S JURY. annexing copy of verdict of coroner’s jury to proofs of death, wil not relieve insurer from proving defense, Go. CORPORATIONS. remedy for improper conduct of, 32. INDEX. 127 -CORPORATORS. act in relation to dutiés of, 72, 73. may adopt seal and make by-laws, 81. when, and for what time, to publjsh intentions, 73. when made duty of superintendent to fyrnish corpora- tors with certificate of deposit, and when certificate to be filed, 76. when certificate of organization to be used in evidence for and against corporations in all suits, 76. when may proceed to distribute stock, and complete or- ganization, 73. who are, 72. COURTS. have not the right of visitation over insurance companies, 29. when to direct distribution of assets, 103. when to restrain companies from incurring new obliga- tions, 95. ‘when may construe policy so as to make its mean- ing differ from the ordinary interpretation of the words in it, 8. when may refuse to revalue policies, 105. will compel issuance of a written policy when agreement. made to issue it, 6. will compel payment of loss occurring after’ agreement to issue and before issuance of policy, 6. CREDITOR. as used in the revised statutes, means judgment-creditor, 29. at Jarge, when cannot maintain action to dissolve com- pany, 31. . at large, policy-holder is, 31. at large, when cannot maintain action to recover losses sustained by mismanagement, 31. has insurable interest in life of debtor, 15. may insure debtor’s life for greater amount than that of debt, 15. ; policy-holder is not, before maturity and judgment on claim, a, 27. when assignment of married woman’s policy to creditor void, 40. has lien on premiums over $500 paid in any year from _ funds of husband, 37. 128 INDEX. DAMAGES. ey not to be subjected to, for alteration of policy, 7) 0 insured has right of action for, on insolvency and suspen- sjon of company, 28. measure of, for breach of contract in policy, 28. measure of, on wrongful refusal by company to continue policy, 21, 22. DEATH. proof of, how determined, 45. service of proof of, condition precedent to action, 45. what evidence required to prove, 45. when notification of better proof being required not nec- essary to come from insurer, 45. _ DEBT. policy of life insurance not evidence of, 6. DEBTOR. creditor has insurable interest in life of, 15. DEFINITION. of concealment, 57. of endowment policy, 3. " of insurable interest, 14. of life insurance, 1. of phrases in policies, 8, 9. of policy, 5. of premium, 19. of representation, 54. of “ Semi-Tontine,” 13. of “ Tontine Fund,” rx. of Tontine policies, 11. of warranty, 51. “DIED BY HIS OWN HAND,” 9. DIRECTOR. ‘ not to receive fee for recommending loan, 33. when disqualified to act as, 33. when forfeits position, 33. DIVIDENDS. amount of what, shall be apportioned, rests in discretion of insurer, 4. how apportioned, 3, 4. how may be applied by Tontine policy-holders, 11, 12. kinds of policies that may or may not have, 3. . INDEX. 129 DIVORCE. when a ground of reformation of “ wife’s” policy by hus- _ band, 7. subsequent, not to impair wife’s right in policy, 14. EMPLOYMENT. materiality of question as to, of insured solely for determi- nation of insurer, 55. ENDOWMENT POLICY. : act of 1840 applies to, 41. act to protect policy-holders of, ro. definition of, 3. EQUITY. will only reform policy where mistake is mutual, 7. EVIDENCE. affidavit of service of notice of due date of premium pre- sumptive evidence of such service, 25, 26. : ‘expert testimony to show surrender values of premiums competent, 6. policy not an evidence of debt, 6. FOREIGN INSURANCE COMPANY. ‘act authorizing superintendent to refuse foreign company permission to transact business in this State, 69. act providing for appointment of superintendent as at- torney of foreign insurance companies for service of process upon, 69. act relating to special deposits required to be made by, and the taxes, fines, fees, &c., of, 67, 68. application will lie to compel superintendent. to consider foreign company’s application to file annual state- ment, 69, 70. reinsuring of risks by foreign companies does not confer on, such reinsuring companies rights of policy-holder, so as to share in special deposits, 107. ’ when and how foreign companies may discontinue business. in this State, 110. when application for mandamus by foreign insurance com- pany will not lie to compel superintendent to file an- nual statement, 69. 9 130 INDEX. FORFEITURE. FUND. act in relation to, 25. company need not apply dividend to prevent, 21. failure to pay premium works, 21. notice required to be given before, 25. premium must be tendered before bringing action to avoid, 24. reliance on receipt of usual notice must be shown to pre- + vent, 20. requires no act on part of company, 20, 21. rule in U.S. court as to forfeiture on failure to pay pre- mium on war breaking out, 23. waiver of forfeiture procured by false representations, void, 24. waiver of right of forfeiture must be with knowledge that premium is overdue, 24. when company cannot insist upon a, 21. when court will relieve against, 22, 23. when failure to send usual notice as to premiums will pre- vent strict, 20. when there can be no waiver, 24. _ produced by payment of premiums does not belong to policy-holders, 30. Tontine, not required to be kept separate from other funds of company, 13. GAMBLING. illustrations of what are not, 18. life insurance is not, 17. HUSBAND. when husband has action to reform policy, 7. IMPROPER CONDUCT ON PART OF CORPORATION. what is sole remedy for, 32. INDEMNITY. insurance not a contract of, 1. INDEX. 131 INDORSEMENT. of agreement on policy, effect of, 5. INSANITY. not an excuse for non-payment of premium, 20. suicide not sufficient evidence of, 59. when acts and incidents as consistent with sanity as insan- : ity not to be submitted to jury, 59. INSOLVENCY. and after suspension of business, insured may sue for damages for breach of contract, 28. not an excuse for non-payment of premiums, 20. INSURABLE INTEREST. assignee must have, in U. S. courts, 15. ceasing of, not to make policy void, 15. creditor has, in life of debtor, 15. father has, in life of child, 15. how defined, 14. policy must be paid to payee without proof of, 15. policy void at common law without, 14. sister has, in life of brother, 15. when assignee need not have, 15. when defense of, raised, 16. when insured must have, 14. wife has, in life of husband, 14. INSURANCE. applicant for, bound to disclose every known fact, even when question not asked by company, 51. application for, may be withdrawn before acceptance by company, 2. . based more or less on doctrine of chances, 17. creditor may take out, on debtor’s life, 15. definition of life, 1. is not gambling, 17. manner of effecting, 2. omission by applicant to disclose information not asked for, and not deemed by him material, will. not avoid policy, 57. verbal may be made, 6. when payable, 1. when void, 14. who may make, 1. 132 INDEX. INSURANCE COMPANY. a State may subject foreign, to prohibitions and condi- tions, 87. act as to suits by or against members or stockholders not to be construed as making policy-holders members of, . 81. ; act governing issuance of married women’s policies, 37. act incorporating, and as to agencies, 72. act relating to examination and winding up of insolvent, 92, 93> 94- agents of foreign, must procure certificate of authority from superintendent, and contents of certificate, 88, 89, 90. amount of capital required on organization, 74. amount of capital required to be deposited by, and in what securities to be. invested, 74, 75. amount to be apportioned by, on dividend bearing policies in discretion of company, 4. any member or stockholder of, may prosecute suits against, 76. cannot acquire another bodily, 79. certificate of valuation of foreign States, when may be ac- cepted by superintendent ,of insurance department, 68, 69. clauses in policy to be strictly construed against, 56. condition of company, how estimated, 94. contents of charter, 72, 73. contents of declaration, 72. contents of report to superintendent, 77, 78. corporators may adopt seal and make by-laws, 81. creditor at large cannot maintain action on ground of mismanagement to dissolve, 31. courts will not interfere with the internal management or winding up of foreign, 91. declaration filed by incorporators to be submitted for examination to attorney-general, 73. declaration, when to be recorded, 76. decision of directors as to acquiring land not to be lightly interfered with by courts, 94. dissolution of, gives each policy-holder claim against, 104. duty of receiver on filing bond, 95. * duties and fees of superintendent when appointed as attorney for foreign, and process served upon, 69, 70. INDEX. 133 INSURANCE COMPANY—continued. effect of collusion between insured and agent of, 54. employment of insured a question solely for the, 55. expenses of examination to be paid by, when and to whom, 64, 65, 94. failure and appointment of receiver excuses non-payment of premium, 20. fiscal year ends when, 65. foreign, deposit required to be made with superintendent, amount of, 67. foreign, act in relation to taxes, fines, fees, etc., 67, gI- foreign, neglect or refusal to pay tax, how collected, gr. foreign, placed on same footing with domestic, 87. foreign, subject to same penalties for non-compliance with law, as domestic, 89. foreign, to appoint superintendent as attorney, 69. foreign, to file with superintendent similar statements as domestic, 88, go. foreign, when to file supplementary statement and con- tents of, go. forfeiture requires no act on part of, 20, 21. form of verification to report of examination, 94. forms to be furnished by superintendent on which to report, 78. funds or accumulations, may be invested in what and where, 82. how impairment of premium reserve calculated, 68. how married women’s policies may be surrendered to and purchased by, 37. has absolute and unlimited rights to dispose of lands and chattels, 84. incorporators to file declaration, contents of, 72. insolvency and suspension of, gives right to insured to sue for damages as for breachof contract, 28. interest or dividends may be collected on securities de- posited with insurance department by, while solvent, 74 if value of bonds deposited with superintendent fall below par, additional deposit to be made, 75. is not trustee for insured, 27. kind of policies issued by insurance companies, 3. majority of trustees or directors to be citizens, 73. 134 INDEX. INSURANCE COMPANY—continued. may acquire necessary property to carry on its business, 83. may invest funds in toreign States to meet obligations there, 77. may withdraw securities on depositing others, 74. not less than thirteen persons may incorporate, 72. powers of courts on dissolution for insufficiency of assets, 93) 94+ premiums paid belong exclusively to, 29, 30. presumption of legality as to dealings of, 84. regulations as to investments in securities by foreign, 87, 88. relation of policy-holder to company considered, 30. report to superintendent must be made within 60 days from January rst, 77. report to superintendent must be true, or affiant may be convicted of perjury, 78. securities deposited with superintendent to be held as security for policy-holders, 74. service of process on last acting foreign agent deemed valid, 88, go. stocks not to be received above their par value to credit of insurance companies by superintendent, 67, 74. suits at law may be maintained by, 81. Supreme Court has not-the right of visitation over, 29. verbal insurance may be made, 6 violations of charter not excuse for non- -payment of premiums, 29. violations of the laws by an insurance company 2 misde- meanor, 89. what attorney for foreign insurance company must file with superintendent, 88. what may be done with funds in process of investment, 82. what will prevent dissolution, 71, 96. when foreign, may discontinue business and how, 110. when acceptance of risk sufficient to bind company, 6. when agents of foreign companies cannot act in this State, 87, 88. when agents of foreign companies to discontinue issuing policies, 92, 93. when and for what purpose foreign, to appoint attorney in this State, 69. INDEX. : 135 INSURANCE,COMPANY—continued. - when and how may be dissolved, 93, 108, 109, 110. when and how may be voluntarily dissolved, 108, 109, 110. when application to dissolve may be resisted as a rights and as to costs, 96, 97. when attorney-general to certify as to correctness of de- claration, 73. when capital will not be considered as a liability, 68. when corporators may proceed to distribute stock, 73. when corporators to publish intentions, 73. when court may issue order restraining companies from incurring new obligations, 95. when court may order distribution of securities in hands of superintendent, 94. when court to appoint receiver of company, 95. when depositing company may be required to show cause why business should not be closed, 94, 95. when duty of attorney-general to bring action for dissolu- tion, 93- when expenses of examination to be borne by companies, 64, 65, 94- when foreign, may be refused admission by superintendent, 69. when last acting agents to be deemed to continue as such for foreign, go. when mandamus will lie to compel superintendent to con- sider application of foreign, 69. when mandamus will not lie to compel superintendent to file annual statement of foreign, 69. when may alienate its corporate property, 84. when may hold and convey real estate in foreign States, 85, 86. when may increase capital, 110. ‘when may insist that warranties are broken, 54. when may purchase, hold, and convey real estate, 82, 83. when may reduce, and to what extent, capital, 93. when may take by devise, 81, 82. when not to issue new policies, 68. when prohibition in ee or special law not to extend outside of New York State, 81. when superintendent to direct officers to require stock- holders to make good deficiency, 70, 93. 136 INDEX. INSURANCE COMPANY—continued. when receiver to take possession of assets and credits of, 95: when required to report, and form of report, 77, 78. when report may be asked of amount of stock of other incorporated companies, and sale of directed, 77. when report of examination to be presumptive evidence in all legal proceedings, 94. when should be allowed to continue, 71, 96. when to open books for subscription, 73. whole capital to be paid in and invested before commenc- ing business, 74. INSURANCE DEPARTMENT. act as to fees, charges, etc., 65, 66. act authorizing valuation of policies, 68. act establishing, 64. act establishing, intended to form complete code for gov- ernment of companies, 64. act in relation to transfer of securities deposited in, 66. act incorporating makes strict provision for honest and economical examinations, 65. ‘ act SENS depositing of securities with superintendent, amount of annuity to be charged company, how ascer- tained, 68. authority of superintendent to dissolve insurance com- panies, to be used with great caution, 71. certificate of insurance department of another State may be accepted by superintendent, 79. chief officer of insurance department is called superin- tendent, 64. consent of superintendent to be obtained before receiver may re-insure policy obligations, 107. companies to facilitate superintendent’s examination, 92. deputy in case of vacancy entitled to superintendent’s salary while performing his duties, 65. duty of attorney-general on receiving notice of insuffi- ciency of assets of companies, 70. duty of superintendent on company’s failure to make good any existing deficiency, 70. duty of superintendent on receiving receiver’s report of insufficiency of funds to meet maturing obligations, 100, INDEX. 137 INSURANCE DEPARTMENT—continued. examination'and winding up of companies by, 94, 95. exclusive power in, to wind up insurance companies, 98. expenses of examination. of companies—how presented, approved, audited, and paid, 64, 65, 94. fees collected by superintendent to be paid to, 64. fees payable to, 65, 66. foreign insurance company to appoint superintendent attorney for service of process upon, 69. form of verification to report, on examination of com- panies, 94. how and when superintendent to report to attorney-gen- eral ‘condition of companies, 70, 71. how superintendent appointed, 64. how superintendent to estimate condition of companies, 68, 94. intention of legislature that all reports of companies should be filed with superintendent, 65. interest on valuations of policies, how computed. by super- intendent of, 78, 79. kind and nature of stock receivable from companies by, 66, 67, 75, 76. no charge to be made by superintendent for examinations, except for actual expenses, 64. policies, how to be valued by, 68. power in superintendent and attorney-general to dissolve not to be used without great discrimination, 71. powers of deputy in absence of superintendent, 65. rate of mortality to be computed by, 79. report of companies to superintendent must be made within 60 days from January rst, 77. report of examirfation of companies to be verified by per- son making such examination, 94. report of companies to, must be true or affiant may be convicted of perjury, 78. rule as to when company should be allowed to continue. business or be dissolved, 96. superintendent may employ clerks, 64. superintendent may employ deputy—powers and duties of deputy, 64. superintendent required to make annual reports, 65. 138 INDEX. INSURANCE DEPARTMENT—continued. superintendent to approve compensation to be paid re- ceiver’s clerks, 108. superintendent to arrange information in tabular form, 78. superintendent to revoke certificate of authority of foreign company whenever examination shows impairment of capital stock to extent of 50 per cent., 70, 92. table of mortality, 80. to furnish printed forms to companies on which to make report, 78. what securities may be received by, 75, 76. when, and on what report, attorney-general to apply for order to show cause why company’s business should not be closed, 92, 93, 95. when and to whom superintendent must report com- pany’s insufficiency of assets to re-insure outstanding risks, 95. when and what report companies required to make to, 77, 78. when and what securities to be transferred by superin- tendent to receiver, 102. when books of company to be placed at disposal of, g2. when company should be allowed to continue business, 71. when company to be charged as a separate liability with value of an annuity, 68. when company should be dissolved, 71. when court may decree distribution and of what securities in hands of superintendent, 93. when excess of expenses to be assessed upon companies, 66. when securities may bear a lower rate of interest than 6 per cent., 66, 67. when superintendent may accept valuations of another State, 68, 69, 79. when superintendent may ask report from companies of stock held in other incorporated companies, and order sale, 77. when superintendent may examine officers and agents of companies, 92. when superintendent may require additional deposits to be made, 67. when superintendent may value policies in groups, 79. when superintendent may vary standards of interest and mortality, 79. INDEX. 139 INSURANCE DEPARTMENT—continued. when superintendent of, to convert securities into money, how and for what purpose, 99, 100. when superintendent of, to direct that deficiency be made good in cash, 93. when superintendent of, to make examination of the con- dition and affairs of companies, 94. when superintendent of, to make valuations of all out- standing policies, 78. when superintendent of, to publish the result of his exam- ination of companies, 92. INSURED. . who is, 1, 27. INSURER. may enforce rights under policy where alteration made with- out consent of, 7, 3. must show reliance on usual notice, to avail on defense of forfeiture, 20. not excused from payment of premium by mere insolvency of company, 20. present tendency of, as to warranties in policy, 51. when action will lie by defrauded, 56. when has affirmative to prove death to be within an excep- tion, 59, 60. who is an, 1. INTEREST. creditor has an insurable interest in his debtor’s life, 15. father has an insurable interest in life of child, 15. objection taken by company that proofs of loss were not furnished waives defense of insurable interest, 16. policy must be paid without proof of, 15. sister has insurable interest in life of brother, 15. INTOXICATION. habitual, a breach of warranty, 53. policy void if death occurs while in a state of, 53. INVESTMENT. insured cannot interfere with, of funds by insurer, 27. of tontine funds cannot be made separately, 12, 13. of tontine funds governed by discretion of company, 13, JUDGMENT-CREDITOR. the word “creditor” of the R. S. means a, 29. 140 INDEX. JURY. when acts as consistent with sanity as insanity not to be submitted to, 59. when court not to send question of breach of warranty to, 52. is KNOWN VIOLATION OF LAW. unless the death takes place during the unlawful act policy not void, 61. what is sufficient violation to bring case within, 61. when death must be a direct result of a, 61, LIFE INSURANCE. based more or less on doctrine of chances, 17. definition of, 1. not a contract of indemnity, 1. not gambling, 17. LIMITATIONS AS TO RESIDENCE AND TRAVEL. how permits to go to region prohibited by policy to be construed, 63. illness while attempting to leave prohibited district before prohibited time excuses breach of condition, 62. permit given to travel pending acceptance of application only affects contract existing at time permit given, 62. provision in policy as to granting permits for foreign voy- ages on reasonable terms, allows insurer to impose terms as to time, mode and route of travel, 62. there must be an agreement to waive conditions as to travel, 63. when restrictions as to “settled limits of the U.S.” not violated, 62. , when there is no power in court of equity to relieve from forfeiture, 62. MARRIED WOMEN’S POLICIES. act in relation to, 37. ; act permitting assignment not an aid to creditors in at- tacking title of, 43. assignee may surrender, to insurer, 42. INDEX. 141 MARRIED WOMEN’S POLICIES—continued. assignment can only be avoided by married woman, 42. authorities passing on questions arising on, 40. cannot be assigned in another State so as to enable as- signee to sue in New York, 42. creditor’s bill will not lie against, 43. effect of guaranty of assignment by married woman, 41. effect of lapse without married woman’s knowledge, 40. effect of stamping word “ paid” upon, 43. how disposed of by married woman, 37. how surrendered to, and purchased by, issuing company, 37, 38. intent of statute of 1840 ag to, 4o. not conversion for insurer to receive and retain, 42, 43. not liable for debts of married women, 42. possession by assignee lawful until reclaimed by married woman, 42. premiums paid in excess of $500 and out of husband’s funds, rule as to creditors’ rights against, 37, 43. rule in Eadie v. Slimmon, how derived, 39. when assignable on written consent of husband, 39. when assignee subject to damages for non-payment of premiums, 44. when grandchild takes proceeds of on death of married woman, 35. when married woman cannot assign, even under enabling act, 44. when may be reformed after divorce, 44. MEDICAL ATTENDANCE. defined, 9. MEDICAL EXAMINER. when cannot testify, 55. GEMENT. creditor at large of insurance company cannot maintain action to recover losses sustained by reason of, 31. MONEY. : paid to company belongs exclusively to company, 29. when action will lie by defrauded insurer to recover money paid, 56. 142 INDEX. NOTICE.. act regulating service before forfeiture by companies, 25. : as to payment of premiums, reliance on to be shown to prevent forfeiture, 20. i contents and time ‘to serve to entitle company to for- feiture, 25. time after giving in which payment will be received, 25. what is presumptive service of, 25, 26. OFFICER. of insurance company, when forfeits position, 33. when disqualified from holding office, 33. ORDER. may be granted restraining other suits when receiver ap- pointed, 103. OWN RISK OF EPIDEMICS, 8. OWNER OF POLICY. : when rights not to be impaired by company’s alteration ' of policy, 48. PAID-UP POLICY. when policy-holder to be entitled to a, 7. PARTNERS. have an insurable interest in life of copartner, 27. policy-holders are not, 49 sharing in profits does not make policy-holders, 30. PENAL CODE. provisions in, serving to guard interests of policy-holders, 33: PHYSICIAN. effect of reference to report of examining, in statement of applicant, 54. when cannot testify as to cause of death, s55. when may testify as to cause of death, 56. POLICIES. act governing issuing of married women’s, 37. act of 1840, cannot be avoided by married women by omitting all reference to it in, qr. act permitting wife to assign with husband’s consent does not aid creditors in attacking her title, 43. INDEX. 143 POLICIES—continued. agreement indorsed on, when. binding, s. agreement to waive condition as to travel in, must be ‘accepted to bind insurer, 63. are the sole and conclusive evidence of the agreement of the parties, 5. ; assignability of, not affected, even if policy does not ap- pear in wife’s name, if for her benefit, 41. assignee’s change of form, entitles married women to sue for proceeds of last policy held by assignee, 42. assignee must have insurable interest to sustain assign- ment in U.S. Courts, 15, 36. assignee need not have an insurable interest in N. Y., 36. assignee of married woman’s, may surrender it to insurer, 42. assignee takes subject to all equities, 36. assignment by married woman can only be avoided by her, 42. assignment of, how made, 36. assignability of, not affected even if premiums not paid from husband’s funds, 41. _assignment need not be in writing, 36. before payment of, insurer should obtain acquittance of applicant and payee, 35. clauses in, to be strictly construed against insurer, 56. clause in, as to death by own hand, not to apply in case of insanity, 58. clear breach of warranty avoids, 53. company bound to pay assignee of, without proof of in- terest, 15. company’s failure to comply with some of the terms in, does not excuse non-payment of premiums, 36. construction of phrases in, 8, 9. “ Known violation of law,” 8. “Sane or insane,” 9. “Voluntary or otherwise,” 58. “ Settled limits of the U. S.,” 8, 62. “Congestion of the liver,” 8. “Own risk of epidemics,” 8. “Good health,” 8. “Severe sickness or disease,” 8. 144 INDEX. POLICIES—continued. “‘ Medical attendance,” 9. “Died by his own hand,” 9. “ Military service,” 9. “ Disease,” 9. “Tntemperate use of alcoholic stimulants,” 9. damages, how reckoned on wrongful refusal to continue, 21, 22. definition of endowment, 3. definition of tontine, 11. description of, retained by company, 3. effect of alteration of, without consent of policy-holder, 7, 8. " effect of lapse of married woman’s, without her knowl- edge, 4o. effect of loss before issuing of, 6. effect of no provision being made in, for suicide of in- sured, 58, 59: effect of permit given to travel pending acceptance of ap- plication for insurance, 62. effect of provision in, that permits will be granted on rea- sonable terms, 62. effect of reference to report of examining physician in, 54. - effect of stamping word “ paid” on married women’s pol- icles, 43. effect of words “voluntarily or otherwise,” in policy, in’ .case of accidental death, 58. effect of subséquent election by married woman to disaf- firm assignment on her failure to pay premiums, 19. exchange of, for “ paid-up ” does not change character of, 41. foreign company re-insuring risks not a policy-holdey, so as to share in special deposit, 107. guaranty of assignment by married women, will not avail assignee, 41. holders of running unmatured, not entitled to preferences in re-payment of premiums paid, 105. how courts to construe language in, 8 how equitable amount of “ paid up” computed, 22. - how re-insurance may be lawfully made of, 107. in force three full years, when not to lapse or become for- feited for non-payment of premium, 9, 10. INDEX. 145 POLICIES—continued. insurer on issuing, files application in its office, 3. issuance of, when compelled, 6. kinds of, 3. may be assigned or made payable to third person by in- sured, 16. married women’s, authorities passing on questions aris- ing upon, 4o. married woman’s declaration, when may be offered against her, 44. married women’s, how may be surrendered to and pur- chased by issuing company, 37, 38. married women’s, rule in Eadie v. Slimmon, 4o. married women’s, to whom payable, 37. married women’s, when assignable on wrritten consent of husband, 39. maturing before dissolution, not entitled to preference, 106. not conversion for insurer to receive and retain a wife’s policy, 42, 43. not evidence of debt, 6. notice required to be given before forfeiture, 25. on death of life insured, notice and proof of death should be given to insurer, 45. ordinarily signed by officers of company 5. payee of, bound by applicant’s agreement, 36. payment of premium alone gives no title to, 34. payment of premium by person other than one named in, and retention of control over, effect of, 34. payment of premiums in excess of $500 out of husband’s funds on married women’s policies, rule as to credi- tors’rights against excess, 43. payment of premium by assignee, even in good faith, gives him no title, 41. permits to visit prohibited districts, how construed, 63. person named in, usually considered owner, 34. policy how defined, 5. possession of by assignee, lawful until reclaimed, 42. power of disposition may be reserved in, 34. proofs of death, a condition precedent to right of action on, 45. . sole and conclusive evidence of agreement of parties, 5. stipulations as to modification in, when to take effect, 6. 10 146 INDDOX. POLICIES—continued. subsequent divorce of wife not to impair wife’s rights, 14. tontine, lapse if premium not paid, 11. valid, even when agent writes answers in application on information furnished by third party, although an- swers untruc, 116, violations of, as to restrictions on residence and travel, 61, 62. wager, void in law, 17. what evidence sufficient to bring case within exception in, of “violation of law,” 61. what may be inserted in, and power.of courts to construc conditions in, 56, when and to what extent receiver may re-insure percent: age of, 107. when action will lie for reformation of policy after divorce, 7, 44. when acceptance of the risks will bind insurer, 7. when, are avoided by suicide, 58. when breach of condition contained in excused, 62. a condition in as to settled limits of U.S. not violated, 2 when eaurls may construe meaning of words or language in, 8. when courts may refuse to re value, 105. when court of equity cannot relieve from forfeiture, 62. when court will compel issuance of, 6. when court will order re-valuation of, 106, 107. when death by drowning presumed accidental, 59. when equity will reform, 7. when holder of not to lose claim against original insurer, 107. when insanity not to apply on defense of suicide, 59. when insurance not taken out by applicant to protect payee in policy it is void, 14, when provisions of act of 1879 must be specifically waived in application, and notice of such waiver put on face of, to enable insurer to declare policy lapsed or for- feited for non-payment of premium, 9, when question of insanity not question for jury, 59. when receiver may re-insure policy obligations, 107. INDEX. 147 POLICIES — continued. when reserve including dividend additions may, on de- mand of insured, with surrender of policy within six months after lapse, be taken as a single premium and how applied, 9, ro. when suicide not a defense, 58, 59, 60. where policy provides that it will be void if insured die by his own hands, it only applies to death by suicide, 58. when representations need only be substantially correct, 54 when void at common law, 14. when will be void if representations intentionally made and known to be untrue, 54. wifé may affirm acts of assignee of, 42. wife’s, not liable for her debts, 42. words “sane or insane” in, will make void if death oc- curs while insane, 58. POLICY-HOLDERS. act for relief of, 39. act to protect rights of, 9, Io. are creditors at large, 31. effect of payment of premiums to a re-insuring company on right of action against original insurer, 107. may sue for damages as for breach of contract on a re- insurance of all risks by insurer, 32, 104. - position of, simply that of a creditor, and statute confers no right to bring action to wind up, 29, 39. when to be entitled to paid up policy, 7. when to defray expenses of intervening, 111. PREMIUM. advancement of money to pay, gives lien for money ad- vanced, 35. a valuable consideration from policy-holder must support waiver of overdue, 23, 24. appointment of receiver excuses further payment of, 20. company not bound to apply dividends in payment of, without request of insured, 21. definition of, 1, 19. effect of failure to pay, 21. effect of payment of, by person who retains control over, but not named in policy, 34. effect of tender of, wrongfully refused, 21. 148 INDEX. PREMIUM—continued. effect of tender to agent of, in enemy’s country in time of war, 23. insanity of insured not excuse for non-payment of, 20. failure of company excuses payment of, 20. failure of company to comply with terms of policy does not excuse payment of, 21. failure to pay, works forfeiture of policy, 19, 21. failure to send usual notice of due date of, will prevent strict forfeiture, 20. fund produced by, does not belong to policy-holders,'30. insolvency no excuse for non-payment of, 20. lapse prevented if usual notice not sent, 20. money advanced to pay premiums must be by person bearing some relation to insured, 35. oral extension of payment of, valid, 24. payment of, alone, gives no title, 34. payment of, suspended on breaking out of war, 22. payment of, usually made annually, ro. policy regulates amount and time of payment of, 19. punctual payment of, a condition precedent, 19. tender of, after peace declared revives policy, 22. time after notice when, to be received, 25. what notice to pay, required to be given before forfeiture, 25. when company entitled to be paid for carrying risk, 6. when expert’s testimony as to surrender value of, com- petent, 6. when insurer has no right to refuse payment of, 6. when payable, 1. when non-payment of, forfeits policy, 19. when payment of may be recovered back from company, 56. when promise to receive overdue, binding on company, 23, 24. ‘when risk accepted and premium paid, company bound, even if policy not delivered, 6. when tender of to be made before bringing action, 24. who may be an insurer, 1. wrongful refusal of, by company, makes no further tender necessary, 21, INDEX. 149 PROFITS. mere right to, does not justify suit in equity for account- ing, 32. only an equitable adjustment of premiums paid, 30, 31. policy-holders cannot make, 30. sharing in does not make policy-holders in mutual com- pany partners, 30. PROOFS OF DEATH. annexing verdict of coroner’s jury to, will not relieve in- surer from proving its defense, 60. decision in Goldschmid’s case as to, 46, 47, 48, 49, 50. effect oy a refusal by company of blanks on which to make, 46. effect of receipt and retention without rejection of, 46. insurer entitled to such, as will establish liability, 45. may be waived without giving new consideration, 45. policy ordinarily requires that notice and proofs of death be furnished, 45. serving of, condition precedent to action on policy, 45. what are, how determined, 45, when available only on service of, by person recited in policy, 46. when insurer not bound to notify insured that better, re- quired, 45, PROSPECTUS. statements in, when not to vary or control terms of con- tract of insurance, 6. RECEIPT. when “ binding,” may be issued, 2, 7. RECEIVER. all motion papers, etc., to. be served on attorney-general, 112. allowances from funds in hands of, to compensate special counsel not authorized by statute, 104, 105. application to court for appointment of, to be made in district in which principal office of company is lo- cated, 112. appointment of, annuls contract with general agent and furnishes such agent right of action for breach of contract, 104. appointment of, excuses further payment of premiums, 20, 150 INDEX. RECEIVER—continued. attorney-general to have notice of intention of, to present account, III. clerks of, to be paid reasonable compensation to be ap- proved by superintendent, 108, compensation of, and of clerks, to be a charge on funds of company, 108. compensation of, 108, 110, III. commission of, on special fund, 108. court having acquired jurisdiction by appointment of, may stay suit brought by creditor to recover assets to which receiver entitled, 98. court may review action of stiperintendent in relation to fees of, 108. death claims maturing before dissolution not entitled to preference over unmatured policies, 106. disposal of assets remaining on final accounting in hands of, 113. dissolution of company gives policy-holders claim against funds as for breach of contract, 104. duty of, on appointment, 95, 99. full commissions not to be allowed to second receiver upon funds collected and turned over by predecessor, 108. governed by Revised Statute in relation to corporations, 103. has authority to purchase policies, make compromises, use seal, &c., 95, 96. holder of death claim maturing prior to appointment of receiver, has no right to adjustment before general distribution of assets, 106. holders of unmatured life policies not entitled to have pro rata portion of premiums paid, refunded before other creditors, 105. how securities held by, to be converted into money, 102. how surplus proceeds of sale of securities by, to be ap- plied, 103. may cut off claims, 103, 113. may employ clerks, &c., 108. may file exceptions to referee’s report on proof of claims, 105. must deposit securities invested in, with superintendent of insurance department, too. only authorized by statute to collect and pay, no com- mand to invest, ro4. INDEX. 151 RECEIVER—continued. place of deposit of funds received by, to be designated in order appointing, 111. policy-holder who intervenes must pay legal expenses of intervening, 111° power of superintendent as to fees of receiver, 108. powers of, 95, 96. proceeds of securities, how applied, roz. proceeds that remain after sale of securities and distri- bution, to be made part of general assets and dis- tributed by, 103. proceedings brought by or against, to have preference on calendar next in order to proceedings by people of State, 113. regularity of appointment cannot be questioned collater- ally except by court appointing, 103. reports of, when and where to be presented and filed, Int. rule as to disposal of surplus, ror. scrip, clause to be printed on, ror. scrip of, rate of interest, and when payable, ro1. special fund chargeable with proportionate part of ex- penses of, 108. statute forbids re-insurance except on written consent of owner of policy, 107. superintendent may allow commissions on special fund, 108. stay granted by court not void, although hastily or im- providently granted, 98. to appoint, with approval of superintendent, competent actuary, and duties of, 99. to convert proceeds of securities, &c., into money, 99, Too. transfer of proceeds of securities to, how and when may be made, 99, 100. unlawful to pay counsel fees or costs until approved by court, I11. what policy-holder entitled to who dies after appointment of, and during pendency of policy, 106. when affairs of, to be closed, 112. when and how assets to be divided among last ten policy- holders, 102. when and how may be compelled to account, 112. 152 INDEX. RECEIVER—continued. when and how may be removed, 112. when and how scrip to be issued by, for excess of funds over liabilities, ror. when and how surplus remaining after issue of scrip to be disposed of, ror. when and how to be appointed, 94, 95. when and how to re-insure percentage of policy obliga- tions, 107. : when and to what extent may reinsure policies, 107. when and where to present detailed account of receipts and expenses of trust, 111. when appointed, an order may be granted restraining other suits, 103. when appointment of, cannot be questioned, 103. when attorney has no claims for compensation from re- ceiver, 105. when collection of referee’s fees cannot be enforced against, 104. when court may direct conversion of securities held by, into money, for what purpose, and money how to be applied, 99, 100. when court may direct re-insurance of all registered poli- cies by, 99. when court may direct a revaluation of claims,'106, 107. when court may refuse to revalue policies, 105. when deposit may be made elsewhere, by, 114. when every State in which company engaged in business, charged with notice of appointment of, 114. when investigation to be made by superintendent into affairs of, 101. when may be discharged, and bondsmen released from hability, 113. when may distribute proceeds of securities converted into money, 99, Ioo. when may re-insure policy ubligations, 99. when not to be appointed, 68. when proceedings of, governed by revised statutes, 103. when proceedings to be taken by, for valuation of poli- cies and determination of company’s liabilities, 102, 103. when, of foreign company not considered a policy-holder so as to share in special deposit made in N. Y. 107. INDEX. 153 RECEIVER—continued. when to pay surplus to policy-holders, ror. when to invest funds of trust, 100. when to notify policy-holders to pay premiurhs to, notice how given, 99. when to notify superintendent of insufficiency of funds to meet maturing obligations, and duty of superintend- ent, 100. when to take possession of assets and credits of com- panies, 95. where application for appointment to be made, r1o. REFORMATION OF POLICY. equity will only reform where mistake is mutual, 7. . when divorce a ground for, 7. REPORTS OF INSURANCE CONPANIES. | where to be filed, 65. REPRESENTATION. RISKS. defined, 54. must. be material to risk to avail insurer as a defense, 55. must be taken as being words of promisee and taken most strongly against him, 55. not necessarily part of contract, but collateral to it, 52. unless material to risk, policy not void if, incorrect, 54, 55. - when binding, 55. when need only be substantially correct, 54. when not a part of, but collateral to, contract of insur- ance, 52. when not equivalent to warranty, 55. when statements called representations, 51. insured not to interfere with the payment of, by insurer, 27. re-insurance of al], without consent of policy-holders, gives right of action to each policy-holder as for breach of contract, 32. when and under what circumstances insurer to be paid for carrying risk, 6. SANE OR INSANE, 9, 58. SEMI-TONTINE POLICIES. on lapse or surrender, portion of fund may be paid to in- sured, 13. 11 154 INDEX. SEMI-TONTINE POLICIES—continued, resemble tontine, 13. what are, 13. SETTLED LIMITS OF THE U. S.. 8, 62. SEVERE SICKNESS OR DISEASE, 8. SISTER. has an insurable interest in brother's life, 15. STIPULATIONS IN POLICIES. when to take effect, 6. STOCKHOLDER. insured not a, 27. STOCKS. kind and nature of, receivable by superintendent, 75, 76. meaning of “stocks” as used in statute, 82. officer of company prohibited from recciving commissions, etc., for sale of, 33. SUICIDE. death by drowning, when presumed not to be, 59. when avoids policy, 58. when not a defense, 59, 60. when, not sufficient evidence of insanity, 59. when self-killing not, within meaning of term, 59. SUPERINTENDENT OF INSURANCE DEPARTMENT. how appointed, term of office, etc., 64, (see Insurance Department). SURRENDER VALUES, may be given by company, 5. not given in tontine insurance, 11. SUSPENSION OF BUSINESS AND INSOLVENCY, gives insured accrued right to sue as for breach of con- tract, 28. TONTINE DIVIDEND. *how may be applied, 11, 12. TONTINE FUND. how made up, 11. incapable of being invested and managed separately, 12, 13, may be invested according to best judgment of insurer, 13. should pay its proportion of general expenses of company, ~ Il. when and how apportioned, 11, INDEX. 155 TONTINE INSURANCE. how policy-holder may use dividend, 11. is not gambling, 17. no surrender value given under, 11. policy lapses if premium not paid, 11. sustained by courts, r2, TONTINE PERIOD. how fixed, 11. TONTINE PLAN. contemplates what, 13. TONTINE POLICIES. contents of, rr. definition of, 13. TRUST. insured not a person interested in a, 27. TRUST RELATION. existence of between insured and insurer unfounded in law, 29, TRUSTEE. insurer not a, for insured, 27. UNCERTAINTIES. not to avoid transactions, 17. VERBAL INSURANCE. may be made by insurance company, 6. VISITATION. no right of, in Supreme Court, 29. WAGER POLICIES. void in law, 17. “WAR.” effect of on existing policies, 22. WARRANTY. clear breach of, avoids policy, 53. definition of, 51, duty of court in clear case of breach of, 82. express, always a part of contract, 52. from what to be inferred, 55- habitual intoxication a breach of. 53. 156 INDEX. WARRANTY—continued. WIFE. in policy as to intoxicating drinks ; when no recovery if death occurs while intoxicated, 53. is usually inserted in application and policy for protection of company, 51. must be clearly expressed even where word “ warranty” is used, in case context nullifies it, 52. present tendency of insurers as to, 51. single or incidental use of intoxicating liquors, not a breach of, 53. what evidence required, where defense is breach of, 52, 53. what excuses breach of, 53. where evidence undisputed, court not to send question of breach of, to jury, 52. where question not answered in application, no warranty that answer would be material, 52. as to husband’s right to have policy in favor of, reformed after divorce, 44. divorce from husband not to impair rights of, 14. has insurable interest in husband’s life, 14. may affirm acts of assignee, even after her assignment to him, and his change in form of policy, and have action for proceeds of last policy, 42. WIFE’S POLICY. assignee may surrender to insurer, 42. creditoy’s bill will not lie against, 43. effect of stamping word “ paid” on, 43. not conversion for insurer to receive and retdin, 42, 43. not liable for her debts, 42. possession of, by assignee, lawful until reclaimed, 42. when creditor of husband allowed to claim excess of pre- miums paid on, 43. where wife assigns her policy, but fails to pay premium, no defense to such failure, that she afterwards elected to disaffirm under act of 1840, 19. 4 Higeienel raft spittin Hath fav atari Mba breeds irvarede sbitccla Ett habyahybag batoh ne pa Si ties semeesete ert wr eve dirbles iby, at nersettea nt bbe te 1 Serenity rise ti ep athe sigalibatsietncteae fy Hise tia, beerhiatsihnr fat SHAN aah? usidetias ts ratte iaibashoresatd eee cnriel hee Titer tere ebaserpelnegset He (14 sesh tal ved Abpesebes tay Ones tatty ri etetreieiblalaieiars! Day oparceceraey tty Piette eat! Adis eee tall