112 Wis. 665 | Wis. | 1902
Lead Opinion
The following opinion was filed November 29, 1901:
As we view this case, several reasons advanced for a reversal, and several reasons given in support of the judgment, need not be considered. The pleadings admit, or the evidence establishes beyond controversy, that payment of the assessment of August 31, 1898, was made by the city of Eau Claire, the owner of the policy, several days too late; that the money was retained by appellant several months with knowledge of all the facts, before its duty to refund the same, or be bound to consider mere time of payment thereof immaterial, was recognized; that no notice whatever that the money was conditionally received and retained was given to the o wner of the policy; and that no valid tender back of the money was made to such owner or to
Appellant, from the beginning to the end of this controversy, seems to have assumed that the city of Eau Claire, the owner of the policy, was bound by the receipt claimed to have been sent to McQuillan. If that were so, it would not avail appellant, as we have seen, because of its failure to return the money seasonably after receiving knowledge of facts rendering compliance with the conditions named in the receipt impossible. While appellant insists that Mc-Quillan and his wife parted absolutely with the policy by the assignment, except his interest in having it extinguish his liability to the city, that situation seems to have been entirely overlooked so far as it bears on appellant’s transactions with him in respect to the receipt. When the assignment of the policy was perfected, the city became substituted, for most purposes, for McQuillan and for his wife as well. All communications thereafter, by the association, affecting the validity of the insurance contract, ivere due to the new party, and it was not affected by any made to Mc-Quillan any more than it would have been by communications made to a mere stranger to the contract. We cannot see any excuse for appellant’s neglect in that regard. It not only knew the city was the sole and unconditional owner of the policy, but that, under the conditions of its ownership, it was expected to keep up the payments thereon, was, to all intents and purposes, except the mere circumstance necessary to the maturity of the contract of insurance, substituted for McQuillan and his wife. Bowen v. Nat. L. Asso. 63 Conn. 460. From this it will be seen that the conditional receipt is immaterial to appellant’s liability. The case stands the same, as regards total forfeiture of the
What has been said does not militate against appellant’s insisting upon the right to recover being limited to the amount due the city of Eau Claire from McQuillan when he died, with interest. As before indicated, the McQuillans irrevocably parted with all interest in the policy by the assignment. The condition in that regard may be considered harsh, but courts must enforce contracts as they find them. If a person sees fit to make an insurance contract so that an assignment thereof to one of his creditors will have the effect of limiting all liability thereon to the amount due such creditor from him at the time of his death, there is no law to prevent it, and he and those who come after him must abide thereby. There can be no question but that an insurance company may, by contract, place such restraints upon the assignment of its insurance policies as it sees fit, not inconsistent with its own laws or some statute. Niblack, Ben. Soc. & Acc. Ins. §§ 168, 169. We cannot escape the conclusion that, by the terms of the contract before us, respondent must suffer, as a penalty for the assignment of the policy, the loss of all interest therein. That is as plainly stipulated in the policy as language can make it. The effect thereof, and of the assignment, was to substitute a new contract for the policy as originally written, with like conditions except that the liability of the assurer was limited solely to the city of Eau Claire and to the amount due the city from McQuillan at the time of his death, including payments by it to keep up the policy and interest thereon, not exceeding in all the amount payable under the contract in the absence of the
Some questions are discussed in appellant’s brief to which we have not alluded, but so far as. they could in any event .affect the result of the appeal they have been considered, but are not deemed of sufficient significance to justify speaking of them specifically.
By the Court.— The judgment of the circuit courtis reduced to $20.13 and interest thereon from August 11, 1899 and costs as taxed, and is affirmed as modified, costs in this court to go in favor of the appellant.
Rehearing
On a motion for a rehearing counsel for the respondent contended, inter alia, that the provision of the policy, that in case of an assignment to a creditor all of the policy in excess of the amount due the insured should be forfeited, does not apply to an assignment as collateral security. Joyce, Insurance, §§ 888, 889, 914, 919, 2336; 19 Am. & Eng. Ency. of Law (2d ed.), 87; Curtiss v. Ætna L. Ins. Co. 90 Cal. 245; Elsberg v. Sewards, 66 Hun, 28; Hitchcock v. N. W. Ins. Co. 26 N. Y. 68; Griffey v. New York C. Ins. Co. 100 N. Y. 417; 16 Am. & Eng. Ency. of Law (2d ed.), 931. That provision as a ground of forfeiture was eliminated by the incontestable clause in the policy. Mareck v. Mut. R. F. L. Asso. 62 Minn. 39; Mutual R. F. L. Asso. v. Payne (Tex. Civ. App.), 32 S. W. Rep. 1063; Goodwin v. Provident S. L. Ass. Asso. 97 Iowa, 226; Sun L. Ins. Co. v. Taylor, 22 Ky. L. Rep. 37; Wright v. Mut. B. L. Asso. 118 N. Y. 237; Kline v. Nat. B. Asso. 111 Ind. 462; Fitch v. Ameriecm P. L. Ins. Co. 59 N. Y. 557; Patterson v. Nat. Prem. Mut. L. Asso. 100 Wis. 118.
Counsel for respondent suggest five reasons why a reargument of this case should be granted, each of which will be briefly considered.
The first proposition is that the clause in the policy upon which the decision was based refers to an absolute assignment, not to an assignment as collateral security as in this case. To that several authorities are cited. None of them, in our judgment, solves or attempts to solve the question here involved, or treats the same, except Elsberg v. Sewards, 66 Hun, 28. There the policy contained a clause like the one before us. The meaning thereof was not a subject for decision, nor was it determined, the company having paid the money into court, leaving conflicting claimants to have their rights judicially determined. Wholly outside the questions for decision, however, the court said that it was not entirely clear that the company could take advantage of the forfeiture clause as against the'assured, for the evident purpose thereof was to protect the corporation against creditors speculating upon the life of a person by obtaining something beyond what was actually due from him; that if, under such a clause, an assignment is made, absolute in form, the provision will protect the company from liability in excess of the bona fide claim of the creditor. The court suggested that such meaning must be the only effect of the provision; that it cannot be held to apply to a mere assignment as security, because of the hardship which would otherwise result. We do not deem those suggestions of any considerable importance, first, because not made in the course of the decision of any question involved in the cause; and second, because they are entirely inconsistent with the plain words of the policy. Words of a contract cannot be legitimately bent out of their ordinary meaning merely because otherwise a hard contract would result. If that were
The next proposition is that the forfeiture clause was waived by the agreement and conduct of the parties. The agreement and conduct referred to are the company’s assent to the assignment and directions as to how it should be effected. ¥e are unable to see in that any indication of a waiver. All the indications are in perfect harmony with the preservation of the insurance contract as it was written.
The third proposition is that the forfeiture clause was eliminated by a provision rendering the policy incontestable after being in force for five years, for any cause except nonpayment of dues, etc. Counsel favor us with a very plausible argument in support of that proposition, citing numerous cases. It would not be profitable to review them. It is sufficient to say that they are all cases involving the effect of violations of conditions of insurance contracts where there is an incontestable clause. No case is cited, and we venture to say none can be, holding that an agreement between the assured and the insurer, subsequent to the issuance of the policy and in strict accordance therewith, rendering a policy partly or wholly void, is affected by the incontestable clause. The clause in that regard, in the policy before us, is the one usually found in insurance contracts. The effect thereof is that no violation of the conditions of the policy, except in the cases specified, shall constitute a defense thereto, at the maturity of the contract. There was no violation of the terms of the insurance contract in this case, either by act of omission or commission. There was merely an assignment of the policy by consent of the company according to its terms. By necessary inference, as a condition of the assignment, it included the clause limiting the validity of the policy to the amount due the creditor at the time of the maturity of the contract, in case at such time such creditor should hold it. At every
The fourth proposition is that the defense that the policy was not a valid claim except as to the amount due the as-signee at the time of the death of the assured, and the payments made by the assignee to keep up the policy, cannot be considered, because it was not pleaded or insisted upon on the trial, nor any error in respect thereto, committed by the trial court, preserved for consideration by proper exceptions. The record does not bear out that contention. On the contrary the defense was fully pleaded in subdivision 8 of the answer, and there was a specific exception to the order of the court for judgment on the special verdict for the full amount of the policy. There is ample evidence that the defense, was deemed by appellant’s counsel one of the important features of the answer and subjects for consideration on the trial, and for exception to the result reached by the trial court.
The last proposition is that the city of Eau Claire was not a creditor within the meaning of the policy because it did not possess any legitimate enforceable claim against Mc-Quillan for money advanced for his benefit from the poor fund. That proposition would be true as applied to the ordinary circumstance of supporting a pauper out of the poor fund of a municipality. But such was not this case. There was a contract between McQuillan and the city whereby
We say again that we have fully appreciated the unfortunate outcome of this litigation from the standpoint of respondent, and have given the case the most careful study, applying all the established rules for the construction of insurance contracts for the protection of policy holders, without being able to discover how a different result could be reached than the one embodied in our judgment, without grossly violating the liberty of contracting. There is some reason for saying that such violations have sometimes taken place in some jurisdictions in respect to insurance contracts. They have probably occurred through mistaken notions of the extent to which courts can go merely to effectuate judicial notions of equity. They do not strictly observe the established principle that courts cannot make contracts for parties by bending the meaning of words out of their reasonable scope to avoid inequitable results,— cannot do that even to effect the intention of the parties. The best that can be done is to carry out such intention so far as it can be discovered and found expressed, reasonably, by the words they saw fit to use therefor.
By the Court. — The motion for rehearing is denied.