Statham v. New York Life Insurance

45 Miss. 581 | Miss. | 1871

Simeall, J.:

This suit in chancery was brought by the complainants, the children and heirs of Mrs. Lucy B. Statham, deceased, who was the wife of Dr. Augustine D. Statham, deceased, against the New York Life Insurance Company, a corporation created by the state of New York, and Benj. Gr. Humphries, L. Mimms and J. Gr. Milligan, defendants, to recover the amount of a policy of insurance, on the life of Dr. A. D. Statham,' issued in favor of, and to be paid to, his wife, Lucy B., in case she survived her husband, if she did not, then to her children. The bill alleges that Dr. Statham, deceased on the ■-■ day of-, 1862; that all the annual premiums, from December 8th, 1851, until his death, were paid, except the note due December 8th, 1861, which was tendered to Brown, their resident agent, who declined to receive it; and moreover the pendency of the civil war excused the payment and prevented a forfeiture of the policy; that Humphries, Mimms and Milligan, have in their hands, effects and moneys, belonging to the company, which will be remitted to them at New York, unless restrained by injunction.

The bill was dismissed on demurrer, and appeal to this court. The first question is as to the jurisdiction of the chancery court. The remedy (it is said) ought to have been at law on the policy of insurance, or by an attachment at law, to seize the effects and credits in the hands of Humphries, Mimms and Milligan.

This is the renewal of a controversy which prevailed in the high court of errors and appeals for several years, whether the complainant (in such a case as this) must not show in his bill a distinct ground of equity, in addition to the fact that his debtor is absent from, or a non-resident of, the state, and that the home “ defendant has effects belonging to, or a debt due to him,” that the “absconding” or non-resident debtor has lands or tenements in this state; which view of the subject ought to have prevailed, as an original proposition, was not considered by this court an open question, in Scruggs et al. v. Blair, decided October term, 1870; but readhered to what was laid down in Trotter v. White, 10 Smedes & Marsh. 612, and Freeman v. Gwin, 11 ib. 62, accepting as the doctrine which had been established, “that the basis of the jurisdiction is purely statutory, and depends on the condition of facts, stated in the statute, to wit: “The absence of the debtor, the presence here of effects belonging to, or a debt due to, him, or his owning lands and tenements in this state.”

The allegations of the bill are within the terms of the statute ; the New York Life Insurance Company, the debtor, is a non-resident corporation, created by and resident in the state of New York; B. Gr. Humphries, Mimms and Milligan, resident defendants, are charged to have funds and effects of the debtor, in their hands, which they will transmit to New York, unless restrained by injunction.

The question has been settled by the supreme court of the United States in many cases, that the late civil war brought along with it, as between the belligerents, the consequences and disabilities incident by international law to foreign war. Among these are a suspension of the right of suit upon all contracts made before the war, so long as it continued, and a prohibition of all intercourse, commerce, dealing and trading, between the inhabitants of the respective belligerent countries, except by license granted by competent authority.

Under authority of the act of congress of July 13th, 1861, the president of the United States, by proclamation of August of that year, declared certain of the southern states, and parts of states, including Mississippi, in a state of insurrection, and that all commerce between said state and the inhabitants thereof, and citizens of the other states, was, and would continue, unlawful, until such insurrection should cease, or be suppressed, and that all goods, chattels, wares and merchandise, coming from said state into other parts of the United States (without special license of the president), would be forfeited to the United States. The restrictions and prohibitions continued until May 22, 1865. See Mrs. Alexander’s Cotton Case, 2 Wall.; The William Bagaly, 5 ib. 377; Hanger v. Abbott, 6 Wall. 532.

The excuse offered for non-payment of the premium note falling due December 8th, 1861, was, that the pending war made it impossible and illegal for the promisor to go to the city of New York, and make the payment to the .insurance company, domiciled there, and that it was also illegal and impracticable to make remittances. And second, that an offer of the money was made to the agent here through whom the policy of insurance was effected, but that he declined to receive it, for the reason that the war had put an end to his agency, and moreover his accepting the money would be an illegal act. Between the date of the maturity of this premium note, and December 8th, 1862, Dr. Statham deceased. The question made is, whether this default in the payment of the premium worked a forfeiture of the policy. The covenant is to the effect that if the annual premiums are not paid, but default is made when any one of them becomes due, then the policy ceases and is of no effect.

For the insurance company it is said, that the covenant is absolute, without condition or exception ; and, therefore, the party cannot set up any excuse or exception, which might have been introduced into the original contract; that if inevitable accident or other contingency is not stated in the contract as excuse or reason for non-performance, such defense cannot be set up, and reference is made to Jamison v. McDaniel, 25 Miss. 83, and Hammon v. Flemming, 23 ib. 142, where the general doctine is so laid down. It is claimed therefore as a legitimate deduction from the principle, that inasmuch as the casualties of war might, for a time, interrupt the agency of the company in this state, and render a payment at the home office in New York impracticable and illegal, unless that condition bf things is provided for in the policy, and stated as a reason for a postponement of the payment of the premium, and an exception which should not work a forfeiture, it is not provided against, and the party must take the consequences of such omission.

It is deduced by Mr. Duer, in his work on Insurance, p. 473, from the authorities, that a war between the countries of assurers and assured from the time that it occurs renders a prior marine insurance illegal and void, precisely for the reasons that render the contract illegal in its origin, when made during the war. Gray v. Lewis. 3 Wash. C. C. 280; Leather v. Com. Ins. Co., 3 Bush. (Ky.) 298; 4 East, 410; ib. 407.

It may be questioned whether war renders a contract void, or only suspends its enforcement, is dependent so much upon its character as “executed” or “executory,” as upon the question whether they give aid and comfort to the enemy, and, second, whether they involve intercourse.

If the war had the effect to annul the insurance, by this company, on the life of Dr. Statham, he being a citizen of Mississippi, then it became and was annulled and dissolved on the day that the war begun or was declared to exist by the proclamation of the president on August 16, 1861; although the premium note due the preceding 8th of December had been paid, and there was no default in any of the conditions at the time of the decease of Dr. Statham. Is there not a distinction which may be clearly discerned and which is substantial between a life policy and a marine policy. The cases cited go on the predicate that a contract of insurance is one of indemnity and tends to encourage the commerce of the enemy, which it is a main object of the war to prevent and destroy. Therefore, the subjects of one country shall not be permitted to lend assistance to encourage and promote, by insurance, the commerce of the other belligerent.

In what respect does a policy of life insurance, issued before the war, assist and strengthen the assured, or his .country, in the prosecution of the war. All that can be done, or is required to be done, is to pay the annual premi-. urns. If this could be done without sending the money to the insurer, it would, in no wise, increase the strength and power of the assured in his country to do hostile acts, nor would it diminish or affect the resources of the country of the assurer:

But analyze this policy, and its legal elements are these: The assured engages, upon the payment of so much down, and an annual sum, so long as Dr. Statham lives, within sixty days after his death, on notice and proof of the fact, to pay to the owner of the policy $5,000. Punctually the payment of the annual sums must be made, on the pain of losing the right to demand the $5,000. (There are other conditions not important in this connection to be named.) When the war broke out the assured had done nothing ; indeed no' act of performance would devolve upon him until after the death of the assured. When that occurred the war was in existence, and he could not lawfully remit from New York the $5,000. Was his duty to do so annulled or discharged, or the remittance postponed, until the impediment was removed, and intercourse and business might lawfully be resumed ?

In what essential feature does this contract differ from an advance of money, made by a citizen of New York in 1851, on the bond of a citizen of this state, payable sixty days after the death of Dr. Statham, on the consideration of an annual payment of $200 ? It would not be asserted that the war, propria vigore, annulled the contract. It was legal when made. There was no legal -impediment in the way when entered into. The war could have no other effect than to suspend remedy upon it or performance of it, because of the interdict of all commerce and intercourse between the parties. But the contract between the insurance company and complainant’s mother has an additional feature; that, if the annual premiums are not punctually paid, the policy should be of no effect, but shall cease and determine. But the bill alleges that a tender was made tb the agent of the defendants of the premium on the 8th December previous to the death of Dr. Statham. The war did not put an end to his agency. In Morey v. Clark, 10 Johns. 69, it was determined that an alien enemy, resident in the United States during a -war between his country and the United States, could sue and be sued. If he may sue for a debt, a fortiori, he may receive it without suit. It was ruled on the Pennsylvania circuit, by Judge Washington, in Cow v. Penn and Denniston, and McGregor v. Imbrick, that debts might well be paid to the agent of an alien enemy residing in the United States. But that ‘ remittance” to the principal could not be made pending the war. In Buchanan v. Curry, 19 Johns. 140, arising upon a contract for the sale and delivery of lumber, made between a British subject and a citizen of New York just before the war of 1812, it was held that the delivery of the lumber after the war begun, to a resident agent of the alien enemy, was a valid act, not inhibited by the international law. It was pressed by counsel that the war revoked the agency, and made all dealings, directly or indirectly, with an alien ■ enemy illegal. To that the very able judge, responding for the court, said, “the rule (invoked) is founded in public policy which forbids, during war, that money or property, or other resources, shall be transferred so as to aid" or strengthen the enemy.” The evil and mischief which the principle condemns is, the “exportation” of money or resources, and not in delivering or paying them to an alien enemy residing here, or his agent, under the control of the government. To the same effect is Denniston v. Imbrie, 3 Wash. C. C. 396, supra; Paul v. Christie, 4 Harris & McHenry, 161; Ward v. Smith, 7 Wall. 452; United States v. Grossmeyer, 9 ib. 75.

The war then did not, per se, revoke the agency of Brown, nor make it unlawful for him to receive the premium which was tendered December 8th, 1861. A payment to him would have been a discharge of the debt. The policy of war interdicted his remittance of the money to his principal, for that would have implied intercourse, and would have aided the other belligerent with the sinews of war. His performance of that duty would be “ suspended” until the war was over.

Griswold v. Waddington, 16 Johns. 438, is a most exhausting research into the authorities, as to the effect of war upon the relations of the inhabitants of the respective belligerents. As a general proposition, war suspends the performance of ante helium contracts, and denounces as illegal and invalid those made pendente hello. If an ante helium contract is dissolved at all, it is because its performance is inconsistent with the duties and allegiance which the parties owe to their respective countries, and involves some violation or infringement of these, and which has not been performed in whole or in part by either party. The annihilation of such a contract would not be injurious to either party, but would rather dissolve their inconvenient relations. But if the contract has been partly executed by one party, by parting with money or other valuable things, on the consideration and promise that the other will perform his part of the engagement, it Tfy'ould be gross injustice, and repugnant to reason that intervening war should destroy the contract, devolving all the loss upon one party to the gain of the other. Nor should that be so unless an overruling policy should so require. Such as to continue the contract in force, or to attempt its performance, would necessitate intercouse, commerce or the exchange of money or property between the respective parties, which would be inconsistent with their changed relations superinduced by the war. If the contract may be preserved or performed without the transmission of money or property from one enemy to the other, or without their intercourse or correspondence, then no principle of law or policy, arising out of a state of war between their respective countries, would demand an abrogation of the contract, or its non-performance. Reason is the life of the law, and when it .ceases the law itself dies. A contract made in 1860, by a citizen of this state, to deliver cotton to a citizen of New York, on the 1st day of October, 1861, at Vicksburg, is not necessarily annulled by the war. If delivery bad been made to the agent of the purchaser at Vicksburg, it would have been a legal act contravening no policy or law of war, and the right of the seller to recover the price, after the war, could not be disputed. If the agent had attempted to transport the cotton to New York, pending the. war, then and not until then would criminality attach.

But there is another view of the subject arising out of the statute regulating foreign insurance companies doing business in this state. Code of 1857, p. 303. They are required to file in the office "of the auditor of public accounts a statement of their capital stock and resources, appoint an agent before they begin to do business. This agent as fully represents the corporation here as their officers in the state of their domicile. Service of legal process upon him is of the same virtue as if upon the corporation. In effect the corporation acquires a qtoasi domicile here, and through its resident agent must transact its business. It is not permitted to withdraw its fund derived from premiums upon risks until losses have been adjusted. The defendant assumed the risk in dispute under the terms and responsibilities of this law, among which was the condition that it shall appoint an agent, through whom contracts of insurance shall be made, to whom premium payments may be made, and by whom obligations incurred by them shall be discharged and paid. The plain intent of the statute is to localize the contract, in its inception, and in the several stages of its performance. It may.be seriously doubted whether, since this contract was made under this condition, of the law, the defendants ought to be heard to insist upon a forfeiture of the policy for non-payment of the premium at their home office, when there was no legal impediment to the continuance of an agency here. Foreign companies, dealing with our citizens under this law, must be considered as engaging to accept performance from the assured here, and on their part to pay ■ losses here. These views are in the main sustained by New York Life Ins. Co. v. Clopton, 7 Bush. (Ky.) 179, and the Manhattan Co. v. Warwick, 20 Gratt. 614, by a majority of the court, andby Hamilton v. Mutual Ins. Co. of New York, by Judge Blatchford in the circuit court of United States for the southern district of New York, whose opinion we have seen.

But it is said by counsel for appellees that the demurrer ought to have been sustained, because the bill does not negative and obviate all the conditions of the policy, upon non-compliance with which it became void and of no effect. In order to indicate this infirmity in the bill, resort is had, by counsel, to the policy, which is made an exhibit thereto. It was recently determined by this court that a demurrer only 'brought into review the allegations of the bill, and that the chancellor was confined to them in determining whether the exceptions made in the demurrer were well taken or not; that the exhibits could not be looked to, either to aid a defective and insufficient statement of the title to relief and discovery, or as taking away and defeating such right. They were rather evidence than pleading.

We are not permitted, therefore, to depart from the allegations of the bill, or to consider them in connection with the exhibits, in determining whether the demurrer should be sustained or not. Looking to the bill in this aspect, it does disclose a prima facie right to relief, and that is all that is required. The assurer may overcome this prima facie case by averring and proving a forfeiture of a right to the money, by non-compliance with one or more of the conditions imposed on the assured, which, by the contract, would produce that result.

These views embrace all the points necessary to be considered in order to dispose of the case. It would be unnecessary to consider separately the numerous causes assigned in the demurrer.

Wherefore the decree of the chancellor, sustaining the demurrer and dismissing the bill, is reversed, judgment rendered here, overruling the demurrer, and cause remanded.