|
Rights
of Life Insurance Assignees; Enforcement of Storage Liens
Section 305
(50 U.S.C.
App. § 535)
(1) Where any life insurance policy on the life of a person in military
service has been assigned prior to such person's period of military service
to secure the payment of any obligation of such person, no assignee of
any policy (except the insurer in connection with a policy loan) shall,
during the period of military service of the insured or within one year
thereafter, except upon the consent in writing of the insured made during
such period or when the premiums thereon are due and unpaid or upon the
death of the insured, exercise any right or option by virtue of such
assignment unless upon leave of court granted upon an application made
therefor by such assignee. The court may thereupon refuse to grant such
leave unless in the opinion of the court the ability of the obligor to
comply with the terms of the obligation is not materially affected by
reason of his military service. For the purpose of this subsection premiums
which are guaranteed under the provisions of article IV of this Act shall
not be deemed to be due and unpaid.
(2) No person shall exercise any right to foreclose or enforce any
lien for storage of household goods, furniture, or personal effects of
a person in military service during such person's period of military
service and for 3 months thereafter, except upon an order previously
granted by a court upon application therefor and a return thereto made
and approved by the court. In such proceeding the court may, after hearing,
in its discretion, on its own motion, and shall, on application to it
by such person in military service or some person on his behalf, unless
in the opinion of the court the ability of the defendant to pay the storage
charges due is not materially affected by reason of his military service--
(a) stay the proceedings as provided in this Act, or
(b) make such other disposition of the case as may be equitable to
conserve the interest of all parties. The enactment of the provisions
of this subsection shall not be construed in any way as affecting or
as limiting the scope of section 302 of this Act.
(3) Any person who shall knowingly take any action contrary to the
provisions of this section, or attempts so to do, shall be fined as provided
in title 18, United States Code, or imprisoned not to exceed one year,
or both.
Life
insurance. Subsection (1) is designed to govern the situation where,
prior to entry into military service, an insured has assigned
his/her life insurance policy as collateral for a loan. After entry on
active duty, this section prohibits the assignee from exercising any
right or option under the assignment of the policy except in the following
circumstances:
(1) Where written consent is made by the insured after entry into military
service; or
(2) When the premiums on the policy due are unpaid; or
(3) When the insured dies; or
(4) Upon leave of court granted upon an application made therefor by
the assignee.
The purpose of this section is to require creditors holding life insurance
policies as collateral to obtain court approval before attaching the
proceeds of the policy.
Storage
liens. Subsection (2) pertains to the foreclosure of liens for storage
of household goods or other personal property of military
personnel, whether the goods were stored prior to entry upon active duty
or not. Such foreclosure is prohibited during the period of military
service and for three months thereafter, unless the lienholder obtains
an order from a court and a return is made and approved by the court.
Criminal penalties for violation are provided.
Congress included this section to ensure judicial safeguards in all
foreclosure proceedings and to avoid the possibility that summary foreclosures
allowed by some states would be held without the protections of section
302.
Next page > Chapter
5 > Page 1, 2, 3, 4, 5,
6
Above Information Courtesy
of United States Army JAG Corps
|
