A LAPSED POLICY.

Press, Volume LII, Issue 15772, 13 December 1916, Page 5

A LAPSED POLICY.

QUESTION OF REINSTATEMENT

A-M.P. SUED.

At tho Magistrate's Court yesterday, before Mr H. W. Bishop, S.M., Sarah Lagan, wife of Michael Lagan (Mr Cuningham) sued tho Australian Mutual Provident Society for tho sum of £26 16s 2d, insurance due on the life of Serriamia Marguerita Maria Lagan, •who died on August 22nd, 1916. Mr Blair appeared for the defendant, company, which disputed the claim on tho > ground of a false provisional doclara- | tion. Sarah Lagan, wife of Michael Lagan, labourer, of Christchurch, deposed she was the mother of twelve children, of whom nine were living. In 1906 she took out an endowment policy at Timaru on four of her children with the defendant company. Her husband was then a hotelieeper in Timaru. where he lost everything. The company's agents urged her to keep up tho payments- She fell behind, _ but later renewed the premiums, paying up to August 28th. On renewing the premiums she had not been required to give any declaration. Sho did not at any time know that a declaration was necessary. On June 25th tho agent brought a paper for witness to sign, saying it was merely a matter of form, 'fhe agent did not see her daughter 6ign it. After the death of her daughter the agents offered to pay back all tho premiums paid on four policies, amounting to £20. Mr ■ Tustin, on August 18th, said there was 34s due, and if it were paid it would keep thing up to August 28th. Witness paid that 34s on August 21st, and the girl died on the day following. Tustin, representing the company, came_ after tho girl' 6 death and offered £'o lis. This witness refused. Her late daughter had left her work in May last. She had been in the hands of the doctors, who said she was suffering from lung trouble. The agents stated that they were very sorry for Iter when she complained that she had worked very hard to keep up tho payments, and now it was lost. They said they had no right to take the money, and had got into r trouble. To Mr Blair: Her daughter in May consulted Dr. Borrie, who stated she was suffering from bronchitis. The r;gents had led her to believe tho policy was in force. , Mr Blair stated that he had not till tliat day heard that there was any charge against the agents. Mr Bishop: You do not mean to go behind the act 6 of the agents. i Mr Blair: No. We only point out ■ hat ihc deceased, tin- subject of the oolicy, was suffering from consumption. \Ve are extremely jealous for the reputation of the Society. i Mr Bishop. I can quite sec that the Society stands for all that is sound in the insurance line. The witness, to Mr Cuningham: It was Mr Tustin who informed her that the renewal would be all right. To Mr Blair- She had never been served with a notice of renewal, and had not read the conditions. James Alexander Stewart, head of the Industrial Department in New Zealand for the A.M.P. Society, stated that according to the rules of tho Society tho policy lapsed on July 14th, 1914. It could only bo . reinstated on evidence of good health, and by tho directors. No agent could reinstate it. The agent who was connected with the case -was not now in the employ of the A.M.P. Every servant collect- i ing money was empowered to give a receipt. These Teccipts were merely provisional receipts. The policy in j question became capable of reinstate- ! ment only on August 21st, 1916. Tho company heard of the death of the girl before the formal claim was made. The only suggestion of misrepresentation mad& was .contained in the claim.

In the courso of enquiries as to the position of the life whether it was in us satisfactory a state as when. tho policy -was made in view of its ultimate reinstatement it was discovered that, the girl had died. Tho rule in the Society, when a. policy lapses, was to send out an explanatory circular- In this circular, tho system of provisional receipts was explained. The company had opposed the claim on the question of principle, and principle only.' To Mr Cuningham: The agents were only allowed one receipt book, and in this they wcro to enter all money received.

Charles Edward Tu6tin, local agent of the Industrial Branch of the A.M.P. Society, deposed that tho four policies taken out by Mrs Lagan had lapsed. Witness urged her to tako up—or reinstate the policies in case of two lives, "but she would not do so. Witness posted or delivered the special lapsed policy notices. Ho could not understand how she thought they were reinstated in June, when the policies came up for reinstatement. Witness saw the plaintiff, and asked her concerning the health of the children, and she assured him they were in good health. Tho payments that made the policies eligible for reinstatement was made on August 21st. On August 22nd witness was going to sec Mrs Lagan, when ho was informed the girl was dead- Had he been aware in June, when the policy came up for reinstatement, that the girl was ill from consumption, lie would not have considered them.

To Mr Cuningham: When proposals for reinstatement came uj> ho would wish to see if the children were in good health.

His Worship stated he would like to give a, sympathetic judgment for plaintiff, but he was n.fraid that there had been some concealment.

Mr Cuningham said authorities showed that the Society were estopped by receiving the amounts paid.

Mr Blair considered tho passages quoted by Mr Cuningham were not applicable. Tho Society was quite willing to return tho "moneys paid after the lapse of the policy. His Worship reserved his judgment.