49 Pa. Super. 245 | Pa. Super. Ct. | 1912
Opinion by
The plaintiff brought this action of assumpsit to recover the amount of two promissory notes made payable to his order by the defendant. The defendant filed an affidavit of defense, which the court below held to be sufficient and discharged a rule for judgment, from which order the plaintiff appeals. The affidavit of defense admitted the execution of the notes, stating that they were
The defendant alleged two distinct grounds of defense, one being that the contract involved a violation of the statutes of Pennsylvania and the other based upon the assertion that, under the covenants of the policy, the insurance company never assúmed any liability, and the consideration for the notes failed. We will, for convenience, first consider that branch of the allegation of defense based upon the covenants of the policy. The particular provision of the policy upon which the defendant relies to support his contention that the policy never went into
The other ground of defense alleged is based on the provisions of the Act of May 3, 1909, P. L. 405. The defendant had in his original affidavit relied upon the provisions of the Act of July 2, 1895, P. L. 430, which statute was quoted at length in that affidavit; and following such quotation he thus states his position: “I aver that the said Union Central Life Insurance Company, and its agent, E. It. Ellis, made a distinction and discrimination in my favor over other insurants of the same class and equal expectations of life, in that said agent and said company accepted said notes and the renewals thereof on payment of the respective premiums in said policies mentioned, and exact from other applicants for said insurance payment of such premiums in cash. I am advised by counsel, and therefore, aver that said policies, said oral agreement hereinbefore recited, and the said two notes and all renewals thereof, including the two notes in suit, given in pursuance thereof, are in violation of the act of assembly above quoted, and that neither the plaintiff nor the said Union Central Life Insurance Co. may, by reason thereof, recover upon said notes.” The defendant subsequently filed a supplemental affidavit of defense stating that the act of July 2, 1895, had been supplanted and expressly repealed by the Act of May 3, 1909, P. L. 405, and quoted in full the first section of the statute last mentioned. He in this affidavit averred that the facts in his original affidavit of defense set forth, constituted a violation of the act of 1909 and that the plaintiff was not entitled to recover. The material averments of the affi
The contention of the defendant is that the acceptance of interest bearing notes in payment of the premium for the first year, when the policy required the premium to be paid in advance and did not set forth the acceptance of the notes in payment thereof, constituted a violation of the act of May 3, 1909, in that it was the giving of an inducement to an insurant of a valuable consideration not specified in the policy, and, also, that it was a discrimination in favor of this defendant as against other insurants of the same class. The defendant concedes the logical consequences of his contention to be that he and the plaintiff were guilty of a misdemeanor, that the policies of insurance upon his life were void from the day they were issued, and that no action could be maintained either upon the policies or the notes which he gave in payment of the premium. We have here to deal only with the legal
The importance of the question, raised by this affidavit of defense, not only to insurance companies but to all who have occasion to take out an insurance policy of any kind or nature, is not likely to be overestimated. If the contention of the appellee is correct, the man who takes out an insurance upon his life for the benefit of his family, and the merchant who takes out a fire insurance policy upon his stock of goods, must consider with microscopic care every covenant in the policy. He must know that
The prohibitions contained in the first paragraph of the act were aimed at the practice of rebating, or returning to the assured any part of the premium payable on the policy. This paragraph consists of a single sentence, which forbids the giving, as “inducements to insurants”
The statute, as we have already said, does not require insurance premiums to be paid in advance. The affidavit does not set forth any rule or regulation by which this insurance company was governed which required that all premiums should be paid in cash. In the absence of any such prohibition or regulation this plaintiff and the company which he represented had the discretion ordinarily exercised by those engaged in business to extend credit to persons whom they believed to be financially responsible. They might require those whom they knew to be tricky or whose promissory note they had reason to believe would be valueless, to pay in cash. When the party with whom they were dealing was trustworthy and financially responsible, the acceptance of his interest bearing note for the amount of the premium was a matter in which they might properly exercise discretion. When they did accept such a note, that note did not vary the contract contained in the policy, nor was it a contract of insurance, nor did the transaction involve a discrimination in favor of the policy holder, within the meaning of the second paragraph of the act of 1909. We do not say that the contract might not be held invalid if it appeared that there was an understanding that the note never was to be paid, but that question does not arise in this case. The transaction out of which these notes arose did not, under the facts stated in the affidavit of defense, involve a violation
The order of the court below is reversed and the record is remitted, with directions to enter judgment against the defendant-for such sum as to right and justice may belong, unless other legal or equitable cause be shown to the court below why such judgment should not be so entered.