ASSIGNED POLICIES.

Auckland Star, Volume LXIV, Issue 211, 7 September 1933, Page 11

ASSIGNED POLICIES.

! LIFE ASSURANCE. PROOF OF SURVIVAL. j ASSIGNEE MUST SUPPLY. An important judgment dealing with life assurance in cases where a policy has been assigned by the assured to another was delivered nt the Supreme Court this morning by his Honor, Mr. Justice Herdmnn. The point was raised in an originating summons which came before the Court lust week, the parties being the Industrial Aceeptnnce Corporation, Limited (Mr. A.H. Johnstone) and the Mutual Life and Citizens' Assurance Company, Limited (Mr. Powles). The question asked the Court was whether tho plaintiff, to whom the assured had assign'ed his life insurance policy, will be bound to furnish proofs of the age and of the survival of the as.uirccl if no claim is made under the policy until its maturity date arrives. On June 30, 1930. the defendant company issued a policy of life insurance in favour of one, Robert Beddows. The policy was now described as a "free policy," and provided, first, for the payment of a sum of £24 1«/ to the executor or administrator of the assured upon proof of his age and death; and, alternatively, for the payment of the same sum to t*.e assured upon proof of his age. and survival until the date upon which the policy matured. The policy matures on December 4, 1930, and no premiums are payable under it nor will the policy holder be entitled to any bonus. It is what is called an industrial policy. "An Express Stipulation." "It is common ground," said hie Honor, "that defendant is obliged to pay the sum of £24 10/ upon the death of the assured, upoa proof of his age and death, but a dispute has arisen about the formalities to be gone through when the assignee of the policy makes a claim at the 'time of maturity.' It is admitted that proof of the policy holder's age can be demanded, but it is contended by the defendant company that, in the absence of some kind of proof of survival, the assignee of the policy cannot in law demand the sum assured. The. policy has been assigned to the plaintiff, who as assignee stands in the shoes of the person assured. "The plaintiff claims that when the due date of the policy is reached it would be absurd to insist upon proof of survivorship, for whether the assured be dead or alive, the company, so it is contended, is bound to pay. On the other hand, the defendant company takes its stand upon its contract and points to the fact that it contains an express stipulation for certain proofs when the due date of the policy arrives. If the assured had not assigned his policy and were he alive, the plain words used in the policy would indicate that if he demand the money at the 'time of maturity' it would have been necessary for. him to furnish proof, first, of his age, and, second, that he bad survived until the 'time of maturity.' Company's Viewpoint. "I cannot see how it would be posr sible, had there been no assignment, to escape from an obligation so clearly expressed. An insurance company which demands such proof may appear to be finical, but there may be some reason for such a provision which is not on the face of the document apparent. A company may wish to be certain of the identity of the person through whom the assignee claims, and there may be some other reason arising out of insurance practice not apparent to me at the moment which may make such inforr mation of, value. It is bound to pay on death or if the assured survives upon a date certain, and it appears to me not to be unreasonable that a company should want proof of the event upon which the claim is founded. Is the company obliged to pay out because the assured has died or is it being called upon to pay because the assured has survived up to the time of maturity is a question which the company may be called upon to consider. "Such a difficulty as this may arise," said his Honor. "A person may insure and he may assign his policy. Between the date of the assignment and the time of maturity the policy-holder may vanish. He may be in the world somewhere but it may be impossible to discover his whereabouts. On the other hand, however, he may be dead. Still, on the date of maturity the money becomes due subject to the production of certain proofs. It undoubtedly becomes due and it becomes due to a particular person or to hie assignee, who, by virtue of the assignment and as a result of the express statement contained in section 43 of the Life Insurance Act, 1908, becomes the vested owner and holder of the policy, possessing the right to sue for and give a receipt for the moneys payable under it.

Words Used in Contracts. "If there had been no assignment, could the insurance company have insisted upon proof of survival ae well as of age? I think so. There appears to be no escape from deciding that the words used by the contracting parties must be construed in their plain and ordinary sense, and if their natural meaning ie that the assured at the time of maturity is obliged to prove that he is still alive, I must accordingly give that interpretation to them. What motive the company had in making such a stipulation I have been unable to discover, and I don't think that I am bound to seek for it. "If the assured, had he not assigned, would have been under an obligation to satisfy the company that he had survived, what difference does an assignment make? I fail to see that it makes any difference. The assignee, because he is an assignee, can have no betteF rights than his assignor. If the assignee by the instrument of assignment takes all the advanta/ges which it gives he must be subject' to all the obligations which it imposes. I am not called upon to express any opinion about the kind of proof of survival or death that an insurance company can demand. That question does not arise upon the present summons. My answer to the question asked in the originating summons will be in the affirmative."