Parvin v. Mutual Reserve Life Insurance

125 Iowa 95 | Iowa | 1904

Sherwin, J.

The contract between the Mutual Re^ serve Pund Life Association and the Northwestern Life Assurance Company, so far as material to the inquiry before us, is in the following language:

Pirst. Said Company has and does hereby tender to said Association, as members of said Association, each and all of its living members who, by its books and records, are in good standing, except such as shall file a written notice of his or her preference to be transferred to some other corporation than to the said association, in accordance with the provisions of Section 16 of an act of the Legislature of the State of Illinois [Hurd’s Revised Statutes, 1903, page 1109, chapter 73, -section 245], entitled, “an act to incorporate Companies to do the business of life or accident insurance on the assessment plan, and to control such companies of this State and of other States doing business in this State, and to repeal a certain Act therein named, and providing and fixing the punishment for the violation of the provisions thereof,” approved by the Legislature of the said State of Illinois, June 22nd, 1893, and in force July 1st, 1893, and all who may keep and continue their respective insurance in force by paying the premium calls of said association, in accordance with its calls, rules and by-laws now in force or hereinafter to be established, and in accordance with the conditions of this agreement.

Second. And the said Association on its part agrees to accept and does hereby accept as its members, all of the members of said company who are in good standing at the date and hour of the day this contract is ratified and approved by the members of said company, as aforesaid, as shown by the books and records of said company, upon the terms and conditions herein provided, and expressly disclaims the assumption of any policy or certificate, or of any liability on account of any which do not appear as aforesaid to be in good standing by the books and records of said company.

The section of the Illinois statute to which reference is made in the contract reads as follows:

No such corporation, under the laws of this State, shall transfer its risks to or reinsure them in any other corporation unless the contract of transfer or reinsurance is first submitted to and approved by a two-thirds vote of the meeting of insured, called to consider the same, of which meeting a written or printed notice shall be mailed to each member, certificate or policy holder, at least thirty days before the day fixed for such meeting. If such transfer shall be approved, every member, certificate or policy holder of the corporation, who shall file with the secretary thereof, within ten days after the meeting, a written notice of his preference to be transferred to some other corporation than that named in the contract, shall be accorded all the rights and privileges, if any, in aid of such transfer, as would have been accorded under the terms of such contract had he been transferred to the corporation named therein. No such eorporation organized under the laws of this State shall transfer its risks or assets, or any part thereof, to or reinsure its risks, or any part thereof, in any insurance corporation of any other State or country which is not at the time of such transfer or reinsurance authorized to do business in this State under the laws thereof. [Hurd’s Revised Statutes, 1903, page 1109, chapter 73, section 245.]

1. Reinsurance: contracts: statutes: By the terms of the contract between the company and the association, only such members of the company as were at the time in good standing, as shown by its books and records, were tendered for membership in the association, and only such members of the company were accepted by the association. The statute permitted the transfer of the risks which had been assumed by the company, and their reinsurance in any insurance corporation which was at the time authorized to do business in the State. It did not, in terms or by implication, attempt to dictate the contract which should be made between the corporation so transferring its membership and the rein-surer, nor did it prohibit a contract limiting the transfer or reinsurance of those only who appeared by the books and records of the transferring corporation to be in good standing at the time. On the contrary, the very terms of the act contemplated a partial transfer of risks, as well as of assets, and we discover nothing in the law which would warrant the conclusion that the contract in this case could not legally be made. The right to transfer and to reinsure is generally recognized and sustained unless it be prohibited by statutory enactment. Phoeni’x Ins. Co. v. Transfer Co., 117 U. S. Rep. 312 (6 Sup. Ct. 750, 29 L. Ed. 873); Faneuil Hall Ins. Co. v. Liverpool, London & Globe Ins. Co., 153 Mass. 63 (26 N. E. Rep. 244, 10 L. R. A. 423). The statute under consideration attempted only’to restrict such transfer and reinsurance to companies or corporations authorized to do business in the State, and to regulate the method thereof. Hnder the contract, no members were tendered for transfer, or accepted as members, except those whom the books and records showed to be in good standing; hence the books and records were the only means provided for determining who could take advantage of the contract and become a member of the appellant, and, if they did not show that Mr. Parvin was a member in good standing at the time the contract became effective, he never became a member of the appellant, and was not reinsured under the contract, or by the statute in question.

2. Reinsurance: non-payment of assessments of rights of members. We do not consider it necessary to determine where the burden of proof rested on this question, because the books of the Northwestern Life Assurance Company showed that Mr. Parvin was not a member in good stand-at the time of the transfer. The books introduced in evidénce showed that he had failed to pay assessments, and, under the terms of his contract with the company, such failure forfeited his rights as a certificate holder. That he had not only failed to pay assessments, but had absolutely refused to do so, because of his belief, that the assessments were unjust, is clearly proven; and, indeed, it is not contended that such was not the fact. Whether he was unjustly assessed or not is a question not involved in this case. ' The appellant did not assume any liability for the wrongful or mistaken acts of the Northwestern Company, and, however unjust such company’s treatment of the deceased may have been, the appellant cannot he held liable therefor.

Other questions are discussed by counsel, but our. conclusion on the main proposition presented renders their consideration unnecessary.

The plaintiff was not entitled to a verdict or judgment, and the case is reversed.