Cahill v. Maryland Life Insurance

This case was most fully and ably argued, but it does not appear to us that there is any serious difficulty presented. There is little if any contention in regard to the controlling facts. Of course if it be admitted, as contended on the part of the appellant, that the contract or policy by which the appellee bound itself to pay the annuity is ultra vires and therefore void, or that the instrument itself was not properly executed, or that an annuity cannot be created or granted by parol, but must be by deed, there might be some room for controversy; but we not only do not admit any of these propositions, but we distinctly deny them all as applicable to this case.

What are the facts? On the 20th of April, 1895, the Maryland Life Insurance Company of Baltimore, issued its policy of annuity to Mrs. Kate Cahill, agreeing thereby, in consideration of the sum of $14,116.96 paid by her husband, John Cahill, to pay to her an annuity of $1,040 during the continuance of her life. This sum was paid by the husband in accordance with an agreement set forth in a deed of separation executed by him and his wife, she agreeing on her part, in consideration of the purchase of the annuity by him, to renounce her right of dower and to do and perform certain other things not necessary now to mention. She lived but a short time to enjoy the annuity, for she died on the 20th of November, 1896, all the payments of the annuity having been promptly made during her life as provided by the policy. The contract or policy by which the insurance company agreed to pay the annuity was signed by its president and secretary in accordance with its by-laws and was in the usual form in which such assurances were made by the company. The administrator d.b.n.c.t.a., of Mrs. Cahill brought an action of assumpsit against the insurance company on the common counts for money lent, money had and received and money found to be due on accounts stated, c. The theory upon which this suit was brought is that the policy is void because an annuity can be created or granted only by deed, and that the charter of the insurance company does not give power to grant annuities otherwise. The contention is, therefore, that the policy in question being not under the seal of the company, and not its deed, but simply a written contract of the company signed by its president and secretary, no action at law could have been maintained for arrears of the annuity and consequently there was no valid contract between the parties. There are some other questions which were argued at great length, but the view we entertain of this case renders it unnecessary to consider them. The judgment of the Court below being for the defendant, the plaintiff has appealed.

It will be observed that, if we leave out of consideration the mere form of the policy, Mrs. Cahill got all that the defendant agreed to give her, Penniman v. Winner 54 Md. 135, for it is conceded that the annuity was promptly paid during her life, and as was suggested at bar, if she had lived sixteen years to enjoy the annuity instead only of sixteen months, it is not likely this suit would have been brought. Without considering whether the representative of Mrs. Cahill or her husband is the proper party plaintiff, we will briefly consider the question whether an action of any kind by any person can be brought against the insurance company under the circumstances presented by this appeal. The answer to this question depends upon the relation of the parties to each other, and, as contended by the plaintiff, upon the validity of the contract by which the defendant agreed to pay the annuity. Assuming without deciding, as contended, that if the contract was invalid and void — that the plaintiff had a right to bring an action of assumpsit to recover the purchase money — which the Court below sitting as a jury found was paid by and was the money of the husband, the first question presented and indeed the only one is, whether that contract was or was not a binding and valid contract of the defendant. The answer to this question it seems to us is obvious. The defendant's charter (Act of 1864, ch. 362, sec. 3) authorizes it among other things "to grant, purchase or dispose of annuities." Now let us assume ex gratia that the proper construction of the language used in the charter is that the defendant may grant or dispose of an annuity only by deed, yet it can hardly be contended that the contract itself is ultravires, and therefore void because the officers of the defendant executed it in an irregular or imperfect manner. The power to grant or dispose of annuities is a charter power, and the most, therefore, that can be said is that in this case the officers of the company have failed to attach the seal of the company or have omitted some other technical requirement. Under such circumstances the defendant, after receiving the purchase money would not be allowed to defend itself in a suit to recover the annuity on the ground, not that the contract is void because it is ultra vires but because, although the charter authorized it to make the contract, it had not been executed in a proper and legal manner. On the contrary a Court of Equity would have compelled it to execute the contract in a legal and binding form, and in the meantime the annuitant could have sued for the instalments because the law would have implied a promise to pay them, on which an action of assumpsit would lie. And if the defendant would not be allowed to repudiate the contract, neither could the other party, for in order to be equitable the estoppel must be mutual. It may be conceded as contended by appellant, without, however, so deciding, that if this were a contract ultra vires, which as we have seen it is not, neither party would be estopped.

Thus far we have assumed that while the charter authorizes the defendant to grant or dispose of annuities, the legal and proper construction of the grant requires the contract to be in the form of a deed. But so far from this being the true construction we think it abundantly clear not only that the policy issued to the late Mrs. Cahill is, as testified by the president of the defendant, in the usual form in which such assurances were made by the defendants, but that both in form and substance it was in entire accordance with the charter. Indeed we might almost take judicial notice of the fact that it is now usual and has been for many years the general custom of insurance companies to issue just such documents as the one issued to Mrs. Cahill, not under seal, but in the form of a written contract signed by officers designated by the by-laws. We do not place our conclusion on judicial notice of this alleged general custom, nor on the evidence of it offered by the defendant, for the Court below excluded that evidence, and the propriety of that ruling is not before us. But it is settled law in this State that a policy of life insurance is a mere chose in action for the payment of money. Rittler v. Smith 70 Md. 265. And so is a contract for a life annuity, unless it be a life annuity issuing out of or charged upon lands. Of this latter class are most of the cases relied upon by the appellant. What is an annuity like the one in this case but a contract on the part of the insurance company in consideration of a sum certain to pay the annuitant specified sums annually during life? There is certainly no feature of inheritance about such a contract as this, and we can conceive of no reason why such a chose in action may not, as any other chose in action, be the subject of a parol or written contract, unless there be some statute requiring such a contract to be by deed. But so far from this being the case, as we have already said, we are of opinion that the charter of the defendant company, authorizes just such a contract as the one we are considering. By that charter the defendant may "grant, purchase or dispose of annuities." Whatever may be said of the word "grant," it certainly cannot be contended that any conclusion can be drawn from the use of the word "dispose," that the contract by which the annuity is disposed of must be by deed. But we cannot adopt the view of the appellant that the charter of the defendant does not confer power upon it to grant annuities otherwise than by deed. Undoubtedly it may "grant" annuities by deed, if it will, but it may also by the very terms of the charter "dispose" of them by contract in writing. That a chose in action like this annuity can be disposed of only by deed is a proposition which we think requires no argument to refute. It is sufficient to say that the mode of creating or transferring an annuity adopted in this case is authorized by the charter itself of the defendant. 2Am. Eng. Ency., p. 388. We think it unnecessary to refer to the many authorities citied at bar, because most of them have application only to questions which were argued, but which, as we have said, we need not consider. Nor do the English Statutes 17Geo. III. ch. 26 and 53 Geo. III. ch. 141 appear to have any controlling effect in this case, even if we assume that they are in force here, for each of them provides that the provision of the Act "shall not apply to annuities granted by any body corporate."

Our conclusion is that the contract of annuity being valid there is no right of action in the plaintiff or any other person to recover the purchase money paid by Mr. Cahill for the annuity.

Judgment Affirmed.

(Decided January 9th, 1900).

Case Details

Case Name: Cahill v. Maryland Life Insurance

Court Name: Court of Appeals of Maryland

Date Published: Jan 9, 1900

Citation: 45 A. 180

Court Abbreviation: Md.