189 F. 498 | U.S. Circuit Court for the District of Eastern Pennsylvania | 1911
To this bill in equity, praying for a reformation of a life insurance policy and a discovery and accounting by the defendant, a demurrer has been filed denying the right of complainant to a reformation, and raising the question of the court’s jurisdiction to order the latter. There are numerous other questions raised by the demurrant, but it will be necessary to consider only those mentioned.
The defendant is in possession of the policy as collateral for a loan, and this was made an excuse by the complainant for not having attached a copy to his bill. It is, however, alleged that the date of the policy is June 7, 1889, and that it is known in the insurance business as a
It is further averred that the complainant was induced to accept the said policy and to pay the stipulated premiums by certain false and fraudulent representations made to him by defendant, to the effect that the experience of the defendant with similar policies issued by it was such that with like experience in the future, the complainant’s policy would entitle him, at the maturity thereof, according to its terms, to an option of $17,570 in cash, or a paid-up policy, payable at death, of $37,600, or a life annuity of-$1,400, and that the policy would yield these results to the complainant, unless variations in current rates of interest, in mortality, lapsing, or other variable quantities, would prevent the defendant from having the same experience in the future that it had with similar policies which had expired or which had then run for a period of 18 years; and that these"representations were made tp the complainant by the defendant’s authorized agent, communicated to him orally, and by a printed blank which was attached to the insurance policy, a copy of which is made part of this bill, in which we find the statement, “the policy holder has-at the tontine period á chance of three methods of settlement, shown in the following illustration; based on the actual results of tontine policies issued in the past. The results of policies issued hereafter will, of course, depend upon the future experience of the society.” . Then follow the three methods of settlement, to wit, (1) cash value $17,570; (2) paid-up value policy, payable at death, $37,600; (3) life annuity $1,400.
On March 18, 1909 defendant notified the complainant that at the maturity of his policy on June 7, 1909, if then in force, it would settle with him therefor as follows: It would give to him an option (1) in cash $12,194.80; or (2) a paid-up policy of $24,500; or (3) a life annuity of $774.96 — with the statement that this was all the complainant was entitled to receive.
The complainant insists that, by reason of the matters and things alleged in his bill, he is entitled to an accounting of the earning of his policy of insurance, and that the same is too complicated to be -settled in an action at law, and to a discovery of the defendant’s experience with similar policies at the time it presented to the complainant-the illustration blank, and particularly, the results of its business in the year 1888, and to have the policy of insurance reformed and payment made in accordance with the terms thereof as reformed, and that the policy be produced by The defendant in court. ...
“That the said policy of insurance No. 429,539, issued by the defendant to your orator, be reformed so that it shall read that your orator should be entitled at the maturity of the said policy, if then living, at his option, 'to a cash valne, consisting of matured endowment and surplus of $17,570, less such sum, if any, a.s defendant can show was caused by variation in rate of interest, maturity, value of investments, or other variable quantity, during the term of the policy, from the same quantities prevailing immediately previous to the date of said policy, and that the defendant be ordered to make payment to your orator in accordance with the policy so reformed.”
The defendant is bound by that representation, and would be es-topped from denying that its past experience was otherwise-than that it would entitle the plaintiff to $17,570, so that the plaintiff has a complete remedy at law for the balance due him on his contract, which, according to the allegations in his bill, is the difference between what he already received and $17,570, and in such a suit, it seems to me, the plaintiff would only be required to establish the fact that there was no difference in condition since the execution of the complainant’s policy from those existing prior thereto, and if he is entitled to this information from the defendant company, he has ample authority under section 724 of the Revised Statutes (U. S. Comp. St. 1901, p. 583) to compel a production of all its books and papers on this point.
If the policy be reformed as prayed for, the complainant’s rights would not be altered. According to the averments in his bill he is entitled to recover the $17,570 in cash, unless variations in current rates of interest, in mortality, lapsing, or other variable qualities prevented the same experience in the future that the society had with similar policies that had. run for 18 years at the time of the issuing the policy to the complainant.
If the contract be reformed in accordance with the prayer of the bill, the right of the complainant to recover would not be altered. The maximum amount would be no more than $1.7,570, subject to any reductions which might occur as a result of dissimilar experiences by the society during the running of the policy, so that the plaintiff, by his averments' in the bill, shows that he is not entitled to a reformation of the contract, because (1) it at present represents what the parties originally intended; and (2) that if reformed, the rights of the parties would not be altered. For these reasons, the demurrer as to the reformation is sustained.
In a case on all fours with the one at bar, Judge Buffington, in Everson v. Equitable Life Assurance Society (C. C.) 68 Fed. 258, affirmed by the Circuit Court of Appeals, 71 Fed. 570, 18 C. C. A. 251, held that the relation between the holder of a matured semitontine policy and the insurance company is that of debtor and creditor merely, and involves no trust relation; and a policy holder who is dissatisfied with the amount of the surplus which is apportioned to him by the company, pursuant to the terms of the policy, cannot mgjntain a bill
The demurrer, denying plaintiff’s right to a reformation and also to the jurisdiction of the court to compel a discovery and accounting, is sustained.