Jenkins v. Sun Life Ins. Co. of America , 120 Ky. 790 ( 1905 )

Opinion by

Judge Paynter

Affirming.

The Sun Life Ins. Co. of America is a corporation organized under the laws of this State. It is not a mutual, but a stock company. It was engaged in what is known as “industrial insurance.” It had issued policies of insurance on the lives of various persons. It desired to retire from business, and on December 9,1902; entered into an agreement with the Metropolitan Life Ins. Co., by-the terms of which the latter company agreed to assume its • outstanding policies of insurance, with the consent of the several holders and owners thereof, and to carry out all the provisions of such policies. It was also provided that the Metropolitan Co. was entitled to receive all premiums thereafter paid on the policies which it assumed with the consent of the owners, and was to pay the death claims arising thereunder. It was further provided that, where the holder of.a policy refused to release the Sun Co: and consent that the Metropolitan Co., might assume the liability thereon, the Sun Co. was to assign, to the Metropolitan Co. all premiums thereafter received on such policies, and in consideration thereof the Metropolitan Co. would insure the Sun Co. against claims which might be asserted thereunder. It was further agreed that all policies which the Metropolitan Co. assumed with the consent of the holders were to be stamped with the contract of assumption, and each contract was to contain a release of the Sun Co. by the policy holder. The effect of the contract was to require the Metropolitan Co., so far as the policy holder of the Sun Co. would consent, to stand in the shoes of the Sun Co., and thus be responsible to the insured instead of the Sun Co. • There are other provisions in the contract unnecessary to recite-. "We will not state the steps taken in the action in the lower court by which the appellee, Belle Jenkins, became a party thereto. It is sufficient to say that the court allowed her to he made a party on a cross-petition, and we do not pass upon the question as to whether the court erred in that respect, because we prefer to decide the important and controlling question in the case. It appears the court sustained a demurrer to her cross-petition as amended, and that action of the court is here for review.

The Sun Co. issued to the appellant a policy of insurance on her life, by the terms of which, in consideration of 10 cents per week, it agreed at her death to pay her personal representative $144. She had been paying on it some time when a contract was entered into by the Sun Co. and the Metropolitan Co. It is averred in her petition that the Sun Co. has a large reserve fund, and that her part of it amounted to '$20.13; and she seeks by this action to recover that sum for herself, and other sums for a class of policy holders situated like herself. She agreed that the Metropolitan Co. might assume the liability which existed under her policy against the Sun Co. With her consent there was stamped upon her policy by the Metropolitan Co. an indorsement as follows: “The Metropolitan Life Ins. Co. hereby assumes this policy as its own, provided the same is in force by its terms, and agrees with the owner thereof to perform the same in place of the Sun Life Ins. Co. of America, and the owner of this policy hereby agrees to accept the Metropolitan Life Ins. Co. as a party to this policy in place and release of the Sun Ins. Co. of America, and to pay all premiums to the Metropolitan Life Ins. Co. This contract is placed upon this policy by agreement of the owner thereof. In witness thereof, the Metropolitan Life Ins. Co. has by its president and secretary executed this agreement.” It will be observed by the terms of the contract she agreed to accept the Metropolitan Co. as a party to this policy in place and release of the Sun Co., and she agreed to pay the premiums to the Metropolitan Co. It was made in accordance with the agreement that existed between the Sun Co. and the Metropolitan Co. Since the indorsement was made upon her policy she has continued to pay premiums to the Metropolitan Co. She had the same right to make the. contract with the Metropolitan Co. that it would assume the liability of the Sun Co. as she had to make the contract with the Sun Co. for a policy of insurance. She is bound by the contract which she has made. The Metropolitan Co. is required to carry out the obligations which the Sun Co. assumed when it issued the policy. Everything which the Sun Co. agreed to do, the Metropolitan Co., with her consent, assumed to do for her. There is not the slightest doubt about her right to enforce against the Metropolitan Co. whatever rights existed by the terms of the contract. Therefore she is not in the slightest degree prejudiced by the contract which she made, unless the Metropolitan Co. should ultimately be unable to perform the obligations imposed by the policy. If that be true, then she suffers from a risk that she voluntarily assumed, and she can not complain of the Sun Co. In some way the appellant seems to think that she is entitled to part of the reserve fund of the Sun Co. While she held the policy in the Sim Co. she had a right to look to that, together with other assets of the company, for the faithful performance of the terms of her policy; but, as we have said, she surrendered that right when she permitted the other company to assume all. the liability imposed by the policy.

In subdiv. 3, sec. 659, Ky. Stats., 1903, it is provided: “On policies of industrial insurance, where the weekly premiums are-less than 50 cents each, it shall be optional with the company issuing said policy, to pay either the cash surrender value, or issue a paid-up policy of insurance, and upon such payments, the company shall be . absolutely released from all further claims or demands whatsoever, under or by reason of said policies, which shall then be can-celled.”

This provision of the statutes gives the company the option when premiums are less than 50 cents, either to pay their cash surrender value, or issue a paid-up' policy of insurance, and upon such payment the company shall be absolutely released from all further claims or demands whatsoever -under the terms of the policy. If the appellant had never released the Sun Co., and had made certain yearly payments, and then had failed to pay a premium, she would, under another clause of sec. 559, Ky. Stats., have been entitled to the surrender • value of her policy. To obtain this she would have been compelled to surrender her policy in the Sun Co. So, had she remained a policy holder in that company, this action could not have been maintained against it upon the facts averred in her petition. We are of the opinion that her cross-petition did not state a cause of action.

The judgent is affirmed.