Blackman v. Liberty Life Insurance

Higgins, J.

The court properly sustained the demurrers for failure of the complaint to state a cause of action in tort based on the negligent failure to deliver the insurance policy., The cause, however, is still pending. The plaintiffs may amend, and allege and prove, if they can, a cause of action in contract upon the ground the policy of mortgage redemption insurance was duly applied for, issued, and delivered to the Peoples Savings & Loan Association. The Association directed the amount, the type, and the terms of the policy. It selected the insurer with which it had a working arrangement permitting the secretary-treasurer and general manager of the Association to act as a local agent of the insurance company. Both the Association and insurance company may be charged with notice of a possible conflict of interests. When the insurance company sent the policy to Mr. Smith, may either of the defendants be permitted to say Smith received it as local agent but did not receive it as secretary-treasurer and general manager of the Association?

The Savings Association had charge of the Blackman account “in process” from which it had already deducted certain expenses incident to the loan. The policy provided for payment of the insurance premium along with the interest to the Savings Association. There may or may not be reason why it could not and should not deduct the premium due on the insurance policy in the same manner it had deducted other expenses. The manager of the Savings Association had physical possession of the policy and had access to the Blackman account. Decision on these questions must await the filing of proper pleadings and a hearing on them in the superior court. The plaintiffs may amend if so advised. However, the judgment sustaining the demurrers to the complaint is

Affirmed.