Rand v. Massachusetts Benefit Life Ass'n , 42 N.Y.S. 26 ( 1896 )

Daly, P. J.

The case is submitted to me upon an agreed state of facts, by which it appears that the plaintiff’s assignor, Mr. Gib-. son, was originally insured in the Security Mutual Benefit Society of New York, which society, about the month of September, 1889, was consolidated with the defendant company upon an agreement that the members of the Security Society should exchange their policies for defendant’s policies, the same as if they had originally" taken their insurance in the defendant company.

Mr. Gibson made a transfer application under the consolidation, and received from the defendant, on or about September 10, 1889, the policy which is the subject of this action, and has paid to the defendant company, for annual dues and assessments upon call, various sums, amounting to $934.67, up to about January 1, 1896, at which time his policy lapsed for nonpayment of a note given by him for a bi-monthly assessment.

This action is brought by the plaintiff, as assignor of Gibson, to recover from the defendant all of the sums so paid, upon the claim that the policy issued by the defendant to Gibson was void from the beginning as being contrary to a statute of Massachusetts, which, at that time, forbade the companies organized under its laws from insuring persons over sixty years of age. The prohibition is contained in the General Insurance Statute of Massachusetts, approved April 21, 1885 (section 10), declaring that “ No corporation- doing business under this act shall' issue a certificate or policy upon the life of any person more than sixty years of age. * * *’’

The question in this case is whether the prohibition contained in the act affects Mr. Gibson’s policy. By the same insurance statute it was provided (section 7): “No corporation organized under the laws of this state shall transfer its risks to, or reinsure them in, any other -corporation, unless the said contract -of transfer or reinsurance is first submitted to and approved by a two-thirds vote of. a meeting of the insured, called to consider the same, of which meeting a written or printed notice shall be mailed to each policy or certificate holder at least ten days before the date fixed for said meeting ; and' in case said transfer or reinsurance shall be approved, every policy or-certificate holder of said corporation who shall file with the secretary thereof, within five days after said meeting, written notice of his preference to be transferred to some other corporation than that named in the contract, shall be accorded all the rights and privileges, if any, in aid of such transfer as would have been accorded under the terms of such contract had he been transferred to the corporation named therein.”

It appears, therefore, that by the same statute which prohibits the insurance of persons over sixty years of age, a general power was given under certain conditions (having no reference to age) to transfer risks from one insurance company to another and. for reinsurance of such risks by the latter corporation. It is not questioned but that the' defendant corporation had full power and authority to consolidate with the Security Company, to take a transfer of the latter’s risks and to reinsure them, and I am clearly of the opinion that in such a case the absorbing corporation is not required to refuse the transfer of risks of the other company because the insured in such risks happen, at the time of the consolidation, to be over sixty years of age. In this case, when Mr. Gibson became a policyholder in the Security Company, he was under that age, although at the time of the consolidation he had passed it.

The authority for consolidation, or transfer of risks from one company to another, and reinsurance of such risks, is general. The statute contemplates the reinsurance of every policy or certificate holder who may consent to transfer to the absorbing company. That is apparent from the provision that every policy or certificate holder who shall prefer to be transferred to some other corporation may filé with the secretary written notice of such preference, in which case he is to be accorded 'all the rights in aid of such transfer as would have been accorded under the terms of such contract of consolidation had he been transferred to the corporation named therein.

In authorizing such consolidation or reinsurance, the legislature -must have contemplated the existence of policies the subject of which might be over sixty years of age at the time of such consolidation, and had it been intended to exclude from the agreement of transfer and reinsurance such risks it would undoubtedly have been expressly declared. The absence of any such provision in the authority for consolidation or transfer of risks clearly indicates an intention to except from- the general prohibition against insuring ■ subjects over sixty years risks already existing at the time of com solidation.

Plaintiffs assignor stands in such a position. He held a policy in the Security. Company which he had taken out at the age. of fifty-four years, and was a member in good standing when he was invited by the defendant to apply for reinsurance under its agreement of consolidation with his company. -Under the statute he had his option to accept reinsurance with the defendant or to be transferred to some other corporation ; and. nothing in thé act indicated that his policy was to be excluded from the benefit of consolidation because he had passed the age limit at which original insurance might be effected in a Massachusetts company.

It is suggested -that, as a subsequent amendment to the General Insurance Law (chapter 421, Acts of 1890, Com. of Mass.) provides in case of transfer or reinsurance the limit of . age shall not apply to members who have reached sixty years since their membership began, the original act could not. have, had that meaning. This does'not follow. If subsequent legislatures see fit to. make clearer what .their predecessors left obscure, ambiguous or doubtful, the courts are not thereby relieved o± the duty, nor deprived of the power, of deciding what the statute ih its unamended form intended. After the act is framed the function of the legislature is performed and that of the court begins. . To allow subsequent legislatures, directly or by inference, to determine the meaning of earlier acts, might impair contractual obligations entered into between the first statute and the amendment.

The plaintiff’s policy issued by the defendant under the circumstances detailed appears to have been authorized, and the assessments and dues under it properly levied and received by the defendant, and they cannot, therefore, be recovered back upon the claim made in this action. .

Judgment for defendant, with costs.