Wall v. Equitable Life Assur. Soc., 32 F. 273

Wall v. Equitable Life Assur. Soc.

32 F. 273 | U.S. Circuit Court for the District of Western Missouri | 1887

Brewer, J.

This case is submitted on a motion to strike out parts of the answer. Involved in this motion are two questions: First, is the contract sued'on governed and to be construed by the laws of the state of New York or by the laws of the state of Missouri? Second, if subject to the laws of Missouri, is the stipulation in respect to forfeiture legal and binding as a waiver of the provisions of the Missouri statutes? In respect to the first question, these, I think, must bo taken as the accepted facts: The defendant is a New York corporation doing business in the state of Missouri; the insured was a citizen and resident of Missouri, and made his application here, which was forwarded to New York; the application was accepted, the policy fully prepared and signed in that state, and sent to Missouri, and delivered to the applicant here. By the terms of the policy, all premiums are payable at the defendant’s office in Now York. If the sum insured should become payable, the payment is to be made at its office in New York. None of the terms of the policy can be modified except by one of the four general officers of the society, and no modification is claimed. Under these facts I have little doubt as to the true answer to be made to this first question. In White v. Insurance Co., 4 Dill. 177, it was held that the act of the legislature of the state of Missouri of March 23, 1874, in respect to policios of life insurance, extends to all policies delivered in this state after the act went into effect. That was a suit against a foreign insurance company doing business in this state. In Fletcher v. Insurance Co., 13 Fed. Rep. 526, it was held that a foreign insurance company cannot withdraw itself from the operation of the statutes of a state in which it does business, by the insertion of clauses in its policies. That was a case in which the defendant company insisted that, by virtue of certain clauses in the application, the contract was to be finally and fully executed in New York. In his opinion, an opinion concurred in by Circuit Judge McGraRY, Judge Treat uses this language:

“The defendant corporation, having been permitted to do business in Missouri under the statutes of the latter, was bound by all the provisions of those *276statutes, and could not, by the insertion of any of the many clauses of its forms of application, etc., withdraw itself from the obligatory force of the statute. The contract of insurance, therefore, is a Missouri contract, and subject to the local law. ”

This case was taken to the supreme court of the United States and is reported in 117 U. S. 519, 6 Sup. Ct. Rep. 887. The case was there decided upon a different question, but in the statement of facts, which, ns it appears, was prepared by the justice writing the opinion, is this language:

“The company is a corporation under the laws of New York, but it also transacts business in Missouri, through agents residing there, and, of course, with reference to the business done in that state, is subject to its laws.”

In view of these authorities, and considering the reasoning of Judge Treat in the opinion above referred to, I deem it unnecessary to discuss this question further, and simply hold that the Missouri statute controls. See, also, Ehrman v. Insurance Co., 1 McCrary, 128, 1 Fed. Rep. 471; In re Insurance Co., 22 Fed. Rep. 109; Paul v. Virginia, 8 Wall. 168.

In respect to the second question, the following are the two sections of the statutes which are applicable:

Section 5983, 2 Rev. St. “No policy of insurance on life hereafter issued by any life insurance company authorized to do business in this state, on and after the first day of August, A. D. 1879, shall, after payment upon it of two full annual premiums, be forfeited or become void, by reason of the non-payment of premium thereon, but it shall be subject to the following rules of -commutation, to-wit:” [Then follows a statement of the mode of computing the amount payable in such case.]

Section 5985. “If the death of the insured occur within the term of temporary insurance covered by the value of the policy as determined in section live thousand nine hundred and eighty-three, and if no condition of the insurance other than the payment of premiums shall have been violated by the insured, the company shall be bound to pay the amount of the policy, the same as if there had been no default in the payment of the premium, anything in the policy to the contrary notwithstanding.”

Now, in the policy sued on there is anon-forfeiture clause, but containing a different provision, and it is alleged that in the application the insured waived and relinquished all right or claim to any other surrender value than that provided in the policjq whether required by the statute of the state or not. This is the doubtful question. It is strenuously insisted by the defendant that the statute of Missouri neither forbids, nor declares null, nor makes anywise illegal, such a waiver as the one in question; that it merely gives a right or privilege to the insured which, like any other personal right or privilege, lie may for sufficient consideration waive, and that such a waiver, not being forbidden by the statute, is not contrary to public policy in any such sense as that the courts should refuse to enforce it. Back of this argument and strongly supporting it is that liberty of contract which courts are so strenuous to uphold.

While I am constrained to hold adversely to the defendant, it is with grave doubts as to the correctness of my conclusion. In the first place, a technical argument can be made on the language of the statute. It *277says the value of the policy shall be determined in a certain way, and then that, if the death of the insured occur during the term of temporary insurance covered by the value of the policy thus determined, the company shall be bound to pay the amount of the policy, “anything in the policy to the contrary notwithstanding.” This language is broad enough to include a waiver, and may be construed as moaning that no stipulation, no waiver, no agreement for a different forfeiture, — in fact nothing that a party can put into a policy, — shall defeat the right to recover the full amount, if death occurs during this time of temporary insurance. Of course, this is a purely technical construction of the statute, and I am disposed to rest my conclusion more upon the matter of public policy. And here the history of insurance must be taken into consideration. It is notorious that many insurance companies were rigorous in insisting upon forfeitures, sometimes under very inequitable circumstances, and there was no little public clamor by reason thereof. Such clamor prompted many legislatures to interfere, and to seek by legislation to protect what they supposed the rights of the insured. Such seems to have been the thought of the Missouri legislature, and it evidently intended by its legislation to provide a fixed and absolute rule applicable to all cases, — absolute and universal, because if it applied only' in cases in which the policies were silent, or if it could bo waived or changed, a child can see that it would protect only so far as the insurance companies were willing. So, although no words of penalty are attached, no express denial of the right to waive, in fact no words of negation in any direction, yet it seems to me fair to say that the affirmative language of this statute discloses a public policy which no court ought to question or refuse to enforce. Railway Co. v. Peavey, 29 Kan. 169. The legislature has by this language declared a rule in respect to forfeitures in life insurance policies; it has thus established the policy which it believes should obtain in this state, and, though sitting on the federal bench, it is my duty to administer the laws of this state in the spirit in which they were enacted, and to uphold both their letter and their spirit. It is voluntary with any foreign insurance company whether it shall come into this state to transact business; coming in, it should be willing to comply with all the statutes as to all business arising within this state, and no court, least of all a federal court, should hasten to release it from this obligation. From those views and with this feeling, I am constrained, though with grave doubts, to sustain the motion to strike out.