10 Mo. App. 393 | Mo. Ct. App. | 1881
delivered the opinion of the court.
On the twelfth day of June, 1877, the Commercial Insurance Company of St. Louis, being insolvent, ceased to
In order to produce equality, as far as possible, among the creditors, it became necessary for the receiver to fix upon a date from which the amount due for unearned premiums should be calculated. It also became necessary for him to determine the period beyond- which no allowance should be made for losses by fire. He carné to the conclu
The policies of the company contain the following conditions : “ This insurance maybe terminated at anytime, at the request of the assured, in which case the company shall' retain only the customary short-rates for the time the policy has been in force. The insurance may also terminate at any time at the option of the company, on giving notice to that effect, and refunding a ratable proportion of the premiums for the unexpired term of the policy.”
A statute passed since the date of the decree dissolving the company (2 Rev. Stats., sect. 6053) provides as follows : “ In the settlement of the affairs of insurance companies already dissolved and in the hands of the court by its receivers, the court shall, as far as possible, conform to, and be governed by, the provisions of this law.” Another section of the same statute (2 Rev. Stats., sect. 6046) provides that, “ in case of companies other than life, he [the superintendent of insurance] shall ascertain the amount of premium unearned on each policy, outstanding, and in force at the time of the decree dissolving the company, and the amount of losses outstanding at that time.”
We fully appreciate the force of the suggestions made by the receiver in his carefully prepared report, that the policyholders have had no substantial indemnity since the date of the commencement of these proceedings, and that they have been driven, no doubt, in the exercise, of ordinary prudence, to effect new insurances in solvent companies ; and we have not reached the conclusion which we now announce, without a good deal of doubt and hesitation. The cases which have been cited to us relating to life insurance companies do do not seem to have much bearing upon the question, because the contract of life insurance is materially different from that of fire insurance. The former is a continuing
Nor does the statute to which we have referred have any bearing upon this case. We have cited it merely to show that we have not overlooked its provisions. It was passed subsequently to the time when the rights under consideration became fixed. Those rights rest wholly in contract. It was not competent for the Legislature to vary them by a retrospective act. This is too plain for argument.
We have, then, to deal with the question as a general question of law, and as a question of first impression. We think, however, that when regard is had to the contract relation between the parties, the question presents no difficulty. The contract was determinable at pleasure by either side, — the assured by request, the company by notice. If terminated by the assured, the company was bound to pay back the premium it had received, except so much as was necessary to pay for the insurance which the assured had received under the policy, at the customary short rates of the company, by which we understand the rates at which the company was accustomed to take risks for the length of time the policy had run at the time it was thus terminated. If terminated by the company, the company was bound to pay back a ratable proportion of the premium it had received, represented by the unexpired term of the policy. But it could not be terminated by the company except on condition of thus restoring the unearned portion of the premium.
It seems impossible to hold that the act of the company in making an assignment for the benefit of its creditors was equivalent to an election on its part to cancel all its existing
It results that, in our view, neither the assignment to Priest, nor the commencement of proceedings by Relfe, ipso facto, impaired the contracts of the company with its policy-holders. After the commencement of proceedings by Relfe, it was not competent for the company, by its own act, to cancel or determine any policy; and all policies in force at that time are to be treated as continuing in force until the decree of dissolution, unless the respective policyholders themselves did some act indicating a distinct intention to terminate them and to claim the unearned premiums. In such cases the unearned premiums-are to be computed from the date when the respective policy-holders thus expressed their election to terminate the contract. In all other cases where the policies were not determined before the commencement of the proceeding by Relfe, the date of the decree dissolving the company (namely, February 15, 1878) will be taken as the date from which the surrender-value of the policies is to be computed. On the • date when each policy became determined according to these -rules, the policy-holder became a creditor of the company to the extent of the surrender-value of the policy. It will thus turn out, no doubt, that the demands of different policy-holders and creditors became payable at different times ; equality will be produced among them by allowing them interest upon their respective demands from the date when they respectively accrued until the date when the first dividend is struck.