46 F. 439 | U.S. Circuit Court for the District of Western Missouri | 1891
On the 6th day of July, 1885, the defendant, a corporation created under the laws of Illinois and doing business in this state, issued to John B. Berry, then a resident and citizen of this state, a policy of insurance on his life for the sum of $5,000, subject to conditions which will be hereafter noticed. On the 7th day of November, 1889, Berry committed suicide by hanging. The holders of the policy, the present plaintiffs, made due proof of Berry’s death, and demanded payment of the policy. The company refused to pay, upon the ground that the policy was void by reason of the following condition contained therein, viz.: “In case of the self-destruction of the holder of this policy, whether voluntary or involuntary, sane or insane, * * ⅜ this policy shall become null and void.”' The plaintiffs thereupon brought this suit to recover the amount of the policy. The company pleads the suicide of the assured, and the above-recited condition of the policy, in bar of the action. The plaintiffs reply that a statute of .this state, in force at the date of the policy, renders that provision of it void. The statute reads as follows:
“In all suits upon policies of insurance on life hereafter issued by anyeom-tny doing business in this state, it shall be no defense that the assured com-itted suicide, unless it shall be shown to the satisfaction of the court or jury ¿ng the cause that the assured contemplated suicide at the time he made pplication for the policy, and any stipulation in the policy to the con-shall be void.” Section 5982, Bev. St. Mo.
is statute is applicable to the policy in suit, it puts an end to the y’s defense. The defendant contends that it is not applicable for .reasons.
is said the policy is an Illinois contract, and to be construed by of that state. But clearly this is not so. The company estab-n agency, and carried on its business, in this state. It was that agency .the assured, who was a citizen and resident of the ade his application and received his policy. The fact that the was signed by the officers of the company in Chicago has no sig-It was transmitted to the company’s agent in Missouri, who the premium, called, in this case, an “entrance fee,” and de
2. It is contended that the provision in the policy, declaring that it shall be void if the assured commits suicide, is a waiver or nullification of the statute which declares such a stipulation in a policy “shall be void.” The statute is mandatory and obligatory alike on the insurance company and the assured. Its very object was to prohibit and annul such stipulations in policies, and it cannot be waived or abrogated by any form of contract or by any device whatever. The legislative will, when expressed in the peremptory terms of this statute, is paramount and absolute, and cannot be varied or waived by the private conventions of the parties.
3. The next contention of the defendant is that, although it was doing business in the state at the time the policy was issued, it had not then done those things which by the laws of the state were conditions precedent to its right to do business in the state, and “that, therefore,” in the language of its counsel, “the defendant did not in any way submit to the jurisdiction of the state,” and is in no manner bound by its laws. The state laws referred to were enacted for the benefit of the state, and the protection of the policy-holders. By failing to comply with them, the defendant and its agents incurred the prescribed penalties; but such failure does not affect the validity of its policies, or in any manner operate to the prejudice of its policy-holders. By the fact of doing business in the state it asserted a compliance with the laws of the state, and, after enjoying all the benefits of that business, and receiving the money of the assured, it will not be heard to say that it never submitted “to the jurisdiction of the state.” It can reap no advantage from its own wrong. To sustain this defense would be giving judicial sanction to
4. It is next contended that the defendant is not a life insurance company, and therefore not subject to the laws of the state applicable to life insurance companies, and particularly that section 5982 of the Revised Statutes of the state has no application to its policies. The company is variously styled in the answer and brief of 'its counsel “a corporation for benevolent''purposes,” “a fraternal brotherhood, having a community interest, ” and “a,co-operative benevolent insurance society.” The defendant was incorporated under the general incorporation laws of the state of Illinois on the 5th day of May, 1884. Its character as a corporation is disclosed by its charter, the policies it issues, and its mode of conducting business. Its charter provides:
“article i.
“Section 1. This company shall be known as the ‘Knights Templars’ and Masons’ Life Indemnity Company.’
“Sec. 2. The object of this company shall be to furnish life indemnity or pecuniary benefits to the widows, orphans, heirs, relatives, devisees, or legatees of deceased members, according to the regulations and provisions hereinafter specified.
“Sec. 3. The principal office of the company shall be at Chicago, Illinois, but the board may establish branch offices elsewhere.
“article ii.
“Section 1. The officers of this company shall be a president,- vice-president, second vice-president, and medical director, to be chosen annually by the board of directors.
“Sec. 2. The affairs of the corporation shall be managed by not less than five nor more than nine directors, who shall be elected from and by the members.
* * *
“ARTICLE III.
* * * * ******
“Sec. 2. The board of directors shall have power to employ any agent, agents, orother service, for such time, and on such terms, and with such powers, as in their judgment will best promote and conserve the interests of the company. * * *
“article iv.
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“Sec. 3. Policies of membership may be issued upon a basis of benefits ranging in amounts to five thousand dollars. * * *
“Sec. 4. Upon the death of any member, an assessment, increasing with age, shall be made upon the surviving members, provided an assessment is needed, according to the following table of rates. Said table is drawn for $1,000, which shall be the unit in determining all other amounts:
*443 “Table of Rates — Assessments per $1,000.
Years of age, inclusive, 21 to 30, - - - - $0 50
•« “ “ 31 to 35, - - - - 60
“ " “ 36 to 40, - - . 65
“ “ •« 41 to 45, - - - 80
«* *« 46 to 50, - - - - 95
“ “ “ 51 to 55, - - - - 1 20
“ ** “ 56 to 60, - - - - 1 50
“ “ » 61 to 65, - - - - 2 00
“ " “ 66 and upwards, - • - - 2 55
—But no assessment shall be made so long as the money in the death fund will pay the maximum loss in full.”
Its sources of revenue are an entrance free of from $6 to $12, depending on the amount of the policy, paid by each member on the acceptance of his application, fixed annual dues, at the rate of $1 dollar for each $1,000 of insurance, and assessments on its members, according to the fixed rule in the charter, to pay death losses. Three-quarters of the money derived from assessments to pay death losses is placed to the credit of the death fund, to pay policies. The remaining fourth of the money derived from that source, and all the moneys derived from entrance fees and annual dues, in the language of the charter, constitute “a contingent fund, out of which the expenses and emergencies are to be met.” The policies issued by the company provide that on the death of the assured the policy-holder shall receive the amount of the policy, and the money “paid on the policy in assessments, subject to the limitation, as to the amount of such payment, as provided in section one of article seven” of the charter, which reads as follows:
“A policy of membership for five thousand dollars shall be good for all the money in the death fund arising from one assessment, provided it shall not exceed five thousand dollars and all the money paid on the policy in assessments; and a certificate for four thousand dollars shall be good for four-fifths of all the money in the death fund arising from one assessment, provided it shall not exceed four thousand dollars and all the money paid on the policy in assessments; and so on in the same proportion as to all certificates.”
If the money in the death fund arising from one assessment to pay a policy of a given amount is sufficient for that purpose after deducting therefrom 25 per cent, for the “contingent fund,” as provided by article 5 of the charter, the full amount of the policy is paid; if not, the policyholder loses the deficiency, the company, unlike regular mutual companies, having no reserve fund. If the assured fails to pay promptly his annual dues or assessments, the policy becomes void; and there are numerous other conditions relating to the place of residence, travel, occupation, habits, and the like, of the assured, upon the violation of any one of which the policy is forfeited, being in this and other respects similar to the policies usually issued by life insurance companies. The manager testifies that the company does business in a good many states, and that the bulk of its business is done by and through agents, who are paid by the company for their services. Upon the organization of the company by its charter members, it was understood that members of
The learned counsel for the defendant say in their brief that their client manifests its “benevolence by contract, and through contractual