Statham v. New York Life Insurance

1. Attachments in chancery — when they tie.—Tbe basis of tbe jurisdiction of tbe cbancery courts to maintain attachment under art. 60, p. 519, Rev. Code, 1857, is purely statutory, and depends on tbe condition of facts stated in tbe statute, to wit, tbe absence of tbe debtor; tbe presence of effects here belonging to, or a debt due to him; or bis owning lands and tenements in this state. 2. Thee insurance—agency—eeeect oewae on agency.—Where, at tbe opening of tbe war, a life insurance company of New York bad an agent in Mississippi, who remained during, tbe war, tbe war did not, per se, revoke, tbe agency, nor make it unlawful for tbe agent to receive premiums which were tendered. A payment to him would have been a discharge of tbe debt, and a tender to him of tbe annual premium due 8th December, 1861, saved tbe assured from being in default as to payment of premiums. 3. Same—eeeect oe war on contract oe insurance.—Unless for their completion, it be necessary that some act be done, calculated to lend aid and comfort to tbe enemy, partly executed contracts, as life insurance policies, on which the premiums have, up to tbe war, been regularly paid, are not annulled' by the war, but are suspended until its conclusion. A Agencies oe eoreign insurance companies in this state—eeeect oe our statutes. — Foreign insurance companies, dealing with our citizens under Revised Code of 1857, p. 303, § 11, must be considered as engaging to accept performance from tbe assured here, and on their part to pay losses here. 5. Equity pleading—exhibits eorm no part oe bill on demurrer.— Exhibits cannot be looked to, either to aid a defective and insufficient statement, of tbe title to relief and discovery, or as taking away and defeating such right.

Error to the chancery court of Hinds county. Watts, J. The facts appear in the opinion of the court. The process, .by which the funds of the company in this state were seized, was a writ of attachment and sequestration, issued from the chancery court. The several causes of demurrer assigned may all be considered under two heads, viz. : 1st. The complainant had an adequate remedy at law. 2d. Complainant forfeited all right to the amount of the policy by the non-payment of the premium, due on the 8th of December, 1867, and the excuse set up in the bill is not sufficient to induce a court of equity to relieve against a forfeiture. In answer to the first cause of demurrer, it is sufficient to state that this is an attachment in chancery, begun by a resident complainant, to reach assets belonging to a non-resident debtor in the hands of resident defendants. The direct question here presented was made in the case of Freeman v. Gruion et al., 11 Smedes & Marsh. 58, and the jurisdiction in an attachment suit in equity on legal demands by resident creditors, against non-resident debtors was fully sustained. This case was decided in 1848, and arose under the act of June 7, 1822. The provisions in the Eev. Code of 1857, relative to attachments in chancery against non-resident debtors, contains the same provisions as the act of 1822, and must be considered as having been adopted with the construction placed by the court upon the act of 1822. The cases of Comstock v. Eayford, 1 Smedes & Marsh. 423, and Zacharie v. Bowers, 3 ib. 641, and Freeman v. Malcolm, 11 ib. 53, cannot be distinguished in principle from the case of Freeman v. Gruion. The jurisdiction in chancery by attachment in a similar statute was maintained in Virginia. 3 Mumf. 94 ; 7 Cranch, 202 ; 3 Leigh, 300 ; 10 ib. 507 ; 12 ib. 406 ; 2 Eob. (Va.) 206. The jurisdiction to proceed by attachment in chancery in the case presented by the bill, if the demand were purely legal, is placed beyond doubt by the case in 11 Smedes & Marsh. 58, which was fully considered by the court, and has never been modified, but sustained in the case of McKay v. Cobh & Manlove, 33 Miss. 533. Opposing counsel cite and rely on Judge Sharkey’s dissenting opinion in this case. In reply to this, I need only refer to the opinion of Judge Sharkey, himself, in Planters’ Bank v. Sharp, 4 Smedes & Marsh. 83, in which he states that the law is to be taken as established by the opinion of the majority of the court, and not by the dissenting opinion. But the jurisdiction of the court of equity is applicable in every case where the remedy at law is not plain, adequate and unembarrassed. Although, on the facts presented by the bill, it might be that a court of law would take jurisdiction ; yet, the remedy was not plain and unembarrassed. Payment of the premium due in December, 1861, had not been made in fact. It is true that an offer to pay it was made to the party who had acted as agent of the insurance company before the war. But that agent had declined to receive the payment upon the ground that it would be unlawful in him to do so. Whether, at law, such an offer to pay would be held equivalent to payment, and thus relieve the complainants from the effect of a forfeiture, was not free from doubt. That such an offer, coupled with the other facts, would relieve in equity there seemed to be no doubt. It was a clear case for a court of chancery to exercise one of its original, inherent powers, which is to relieve against forfeitures, where the party is in no default, and which are the result of accident. A court of law, since recent decisions in the supreme court of the United States, might hold, that the offer to pay to the agent would entitle the party to maintain a suit at law for the amount of the policy. But even if it would, it would not take away the concurrent jurisdiction of a court of equity. But if a court of law would not relieve, the case made by the bill is one which addresses itself, with peculiar force, to the consideration of a chancellor. It is said by Lord Coke, that the original foundation of jurisdiction by courts of equity is to be found in fraud, accident and confidence. 4 Inst. 84; Story’s Eq., § 76. The term “accident,” in the meaning of a court of equity, is not merely inevitable casualty, or the act of Providence, or what is technically called ms major, or irresistible force; but such unforeseen events, misfortune, losses, acts or omission as are not the result of any negligence or misconduct in the party. Story’s Eq., § 78. The rules of law were formerly so rigid that, in many cases which can now be relieved against at law, relief could only be obtained in equity. This is particularly the case in reference to the loss of deeds, mistakes in receipts and accounts, wrong payments or deaths, which made it impossible to perform a condition literally, and also in many other contingencies. But though in many of these cases law will now relieve, the ancient jurisdiction of a court of equity is not thereby lost, and may be properly invoked where the remedy at law might possibly be given, but would not be plain, adequate and complete and free from doubt. Story’s Eq., §§ 79, 80. The contract upon the part of the insurance company in this case was a contract to pay the sum of $5,000 to Mrs. Statham, upon the death of her husband, in consideration of the payment of a sum of money paid by her at the date of the contract, and annual premiums thereafter to be paid by her. These payments were regularly made for a period of ten years, and amounted to upward of $2,000 of principal, exclusive of interest, before the death of Dr. Statham. The use of this money the company has had to the present time, and it will amount, principal and interest, to much more than the $5,000 of principal stipulated to be paid by the policy. This money the company retains, and most unconscientiously refuses payment of the amount of the policy, because it is said, that it contained a condition that this sum should be forfeited in the event Mrs. Statham failed to pay the several premiums on or before the day mentioned in the policy. It is true that the policy does contain this condition, and it is also true that the premium falling due on December 8, 1861, was not paid in fact; but the non-payment did not arise from any neglect on the part of Mrs. Statham or her representatives. Every effort was made by them to make the payment. It was offered to the agent of the company with whom the insurance was effected, and to whom the ten previous annual premiums had been paid. His agency had not been specially revoked, but he declined to receive it, upon the ground that the existence of the war rendered it unlawful for him to receive it; that, in consequence of the war, he could not communicate with his principal; and that proper receipts had not been furnished to him by the insurance company, to be given to the complainants for the money they proposed to pay. • The question then arises, whether a court of equity will permit a forfeiture, arising from such causes, to be-insisted upon. The condition which was to defeat the right j of Mrs. Statham to demand performance of the contract was a condition subsequent to the promise and undertaking on the part of the company to pay ; but whether precedent or subsequent, as the performance of the condition was j rendered impossible by the act of the law, as it would have; been illegal on the part of Mrs. Statham to pay, as well as ' on the part of the company to receive payment, during the ■ existence of the war, the case presented to the court is one in which a court of equity has uniformly granted relief, [ Even at the common law it has been held, that conditions : are void and cannot be insisted upon, if they be impossible ! at the time of their creation, or afterward become impossi- ; ble by the act of God or of the law or of the party who is entitled to the benefit of them, or if they are contrary to law, or if they are repugnant to the nature of the estate or grant. Story’s Eq., § 1304; Coke’s Com. (Co. Litt.) 206 a; Story’s Eq., § 1307; Walker v. Osgood, 53 Me. 432; Glover v. Taylor, 41 Ala. 124. Similar decisions have been made in nearly every state and they only declare the well-known rule of the common law. See, also, 2 Pars, on Cont. 672, 673, 674; Story’s Eq., § 1307. But courts of equity in relieving against penalties and forfeitures proceed upon more liberal rules than courts of law, and will grant relief in many cases where, by the rigid rules of the law, relief would be refused. Thus it relieves against penalties, the design of which is to secure the due fulfillment of the principal obligation, where the penalty was only accessory and intended to secure the performance of a collateral object. Story’s Eq., § 1312, et seq. Belief is given in these cases even where the mere performance was the act of the party, and where compensation can be made to the opposite party, and no distinction is taken in such cases between conditions precedent and subsequent. Story’s Eq., §§1314, 1315. But the rule in equity of late years is less liberal than formerly, particularly in England, and to some extent in this country, and there is a tendency not to grant relief where the mere performance of the condition has resulted from the carelessness or negligence of the party. Story’s Eq., §§ 1321,1325; 13 Yesey, 433, 434; 1 Younge and Coll. 98, 110, 112. But no restriction of the rule has ever been made or ever will be made by which a party is refused relief in equity, where the performance of the condition has been rendered impossible by the act of God or of the law, or by inevitable and overruling necessity. The supreme court of the United States have, in the action at law, applied the principle we contend for. It there holds that the time in which the courts were closed by war was not to be computed in the time fixed by the statute of limitations for the commencement of suits, although the statutes themselves contained no such exception. 6 Wall. 532. So, too, it has been held, that war between one country and the country where the note is payable excuses immediate notice of non-payment to the drawer or indorser, but notice should be given in a reasonable time after peace. 2 Broch. Ch. 20; 16 Johns. Ch. 438; 7 Pet. Ch. 586. The effect of war upon contracts is not to annul, but only to suspend them. We suspend the right of the enemy to the debts which one trader owes to another, but we do not annul the right. 6 Wall. 532. A law may suspend the performance of an agreement originally valid by making it impossible without a violation of the law, and yet leave the contract so far subsisting that, on a repeal of the law, the force and obligations of the contract remain. 2 Pars, on Cont. 674; Baylier v. Fettyplace, 7 Mass. 325; Cadley v. Clark, 8 Tenn. Rep. 259. It certainly has not been settled by any adjudication that the effect of the non-intercourse acts and the war was to revoke the agency. On the contrary, in the case of Ward v. Smith, 7 Wall. 447, the supreme court of the United States have held that such agency was not revoked. A very analogous case has been decided lately by Judge Blatchford in the circuit court of the United States, for the southern district of New York. A mortgage was given in 1854 to secure certain debts, and in 1863, the creditor, domiciled in New York, obtained a decree in a United States court to sell the property, the defendant residing in the territory of the Confederate States. Judge Blatchford says: “ As it was unlawful for the debtors to pay the debt to their enemy creditor during the war, it would be subversive of the first principles of justice to permit the creditor at the same time to enforce the payment of the debt by a sale of lands, especially so when the debtors were, by the terms of the contract, entitled to a notice of sixty days, which it was unlawful for them to receive or the trustees to give.” Kanawha Coal Co. v. Kanawha and Ohio Coal Co., Law Review for Oct., 1870, p. 184. [Note. Since this case was argued and submitted, the main questions involved in it have been fully examined and decided by the supreme court of Virginia, in the case of Manhattan Life Insurance Company v. Warwick, 20 Gfratt. 614; by the supreme court of Kentucky, in the case of the New York Life Insurance Company v. Clopton, 7 Bush. 179; and, by Judge Blatchford, in the circuit court of the United States for the southern district of New York, in the case of Hamilton, executor, v. Mutual Life Insurance Company, and in all these cases the court held, that the war did not dissolve the contract of insurance, but merely suspended it and the remedies upon it, and, that a failure to pay the premiums during the war did not forfeit the policy, where such payment could not be made, in consequence of the attitude of the respective parties as belligerents, without violating the law.] In addition to an elaborate oral argument, filed a written brief, to the following effect: 1. Appellants are not entitled to any relief in equity, because they have full remedy at law, by attachment and garnishment; and the demand set forth in their bill of complaint is strictly of a legal character. Code of 1857, p. 372, arts. 1 and 2; Hutch. Code, 1848, p. 802, § 11 ; Echols v. Hammond et al., 30 Miss. 177, 178. The decision here referred to overrules that in Freeman v. Guión et al., 11 Smedes & Marsh. 58. We suppose that article 60, on page 549 of the Code of 1857, is the provision of our statutes on which appellants rely to sustain their case in a court of equity. Neither this nor the decision in Echols v. Hammond et ah, supra, makes the attachment process a means of conferring jurisdiction upon courts of equity over purely legal demands; on the contrary, this remedy is but for the enforcement of demands of a purely equitable character. Besides, this provision of our statutes is only intended as a remedy in aid of a pending suit, and not as a means of conferring jurisdiction upon courts of equity. 2. Under the terms of the policy of insurance in this case, the bill of complaint is fatally defective in not averring that A. D. Statham died from some cause against which his life was therein insured, and that he did not travel beyond the geographic limits therein specified. This bill of complaint is silent as to each of these matters, and only alleges that he “ departed this life on or about the 20th day of July, in the year 1862.” Bowman v. O’Riley, 31 Miss. 261, 261. 3. Appellants are only entitled to a recovery in this action upon sufficient allegations and proof that they, or those under whom they claim, have complied with every one of the conditions specified in the policy of insurance specified in their bill of complaint; and yet their said bill of complaint shows a default in the payment of the premium due on the 8th day of December, 1861, without assigning any such excuse for such default as was provided for in said policy of insurance, and that any default of such payment operated, by express stipulations contained in said policy of insurance, to render null and void such policy of insurance. The policy of insurance in this case constitutes the only contract between the parties to this suit, and appellants are not entitled to any recovery against appellees, except upon sufficient allegations and proof that the default in the payment of the premium due on the 8th day of December, 1861, had been waived by appellees. The non-intercourse acts of congress, relied on in the bill of complaint as an excuse for such default as to this payment, cannot avail appellants for the following reasons: 1st. Neither such acts of congress nor the civil war referred to in the bill of complaint was provided against in said policy of insurance; 2d. It was no fault on the part of appellees that appellants, and those under whom they claim, continued to reside in portions of the territories of the United States which, under said acts of congress, debarred them of the opportunity or privilege of paying the premium so due on the 8th day of December, 1861. Such residence being the voluntary acts of said appellants, and of those under whom they claim, appellants must suffer any loss which could happen to them as results of such non-intercourse acts of congress. The offer to pay this premium, so due on the 8th of December, 1861, to A. S. Brown, did not, either at law or in equity, operate as a valid tender of such premium, for the following reasons, as shown by said bill of complaint: 1st. Because said Brown was not then acting as the agent of appellees; 2d. Appellants’ mother was then, under said non-intercourse acts of congress, prohibited from making any such payment; and appellees, for the same reason, were prohibited from then accepting the payment of the premium then so due. See Liddell v. Sims, 9 Smedes & Marsh. 596, 609 ; 1 Story’s Eq. Jur. 741, § 776, and note 1; Jamison v. McDaniel, 25 Miss. 83, 86; Hammon et al. v. Fleming, ib. 135, 142, 143; 1 Mad. Ch. 330; Story’s Eq. Jur. 8; 7 Paige, 548; Fultz v. Horse, 6 Smedes & Marsh. 404, 410; Arnold on Ins. 88; Griswolds v. Waddington, 16 Johns. 438 ; Adams v. Nichols, 19 Pick. 275; Horning v. Bingham, 2 Kern. 99 ; Tompkins v. Dudley, 25 N. Y. 275; School District No. 1 v. Dauchy, 25 Conn. 530; School Trustees of Trenton v. Bennett, 3 Dutch. (N. Y.) 514. As it was expressly provided in the policy of insurance, in this case, that such policy should be null and void in case of default in the payment of any of'the premiums therein provided for, and no provision whatever was therein inserted by which any such default of such payments of premiums could be excused, it follows, from the authorities before cited, that such policy of insurance became null and void, on the 8th day of December, 1861, by reason of the non-payment, on that day, of the premium therein expressly provided to be then paid. In such state of case, and under the authorities before cited, it'is wholly immaterial what cause operated to prevent the payment of the premium due on the 8th day of December, 1861, as neither a state of war nor non-intercourse acts of congress, nor even the acts of God, had been provided against by the assured as a cause or causes to excuse such default in such payment. This is certainly correct, unless the courts will go beyond their legitimate powers, and, instead of enforcing contracts as made between the parties litigant, make other and entirely conflicting contracts for them. But it is contended by appellants’ counsel that the right to pay the premium which was due on the 8th December, 1861, revived to appellants after the expiration of the non-intercourse act of congress before referred to. We deny that this position is sustained either upon any principle of law or the rulings of any court of acknowledged reputation. We would not use language expressive of so much confidence, if the payment of such premiums could, under the ’ contract between the assured and the insurer in this case, to wit, the policy of insurance before referred to, be regarded in the nature of a debt due from the assured to the insurer. It is manifest from the provisions of this policy of insurance, that the payment of such premiums was intended to be only a voluntary act on the part of the assured. It was no more an obligation on the part of the assured to pay these premiums than it was to have made the application for the issuance of .such policy of insurance. The only inducement held out by the insurer to the assured to pay these premiums was the forfeiture of the policy of insurance in case of default of such payments. In such state of case it is idle and useless to contend for such revival of the right to pay the premium due on the 8th day of December, 1861, so long as Mr. Justice Blackstone and Chancellor Kent shall be regarded by the courts as profoundly learned in the science of the law. Chancellor Kent, in speaking of the effects of a treaty of peace, as regards the rights of individuals, states the rule of law thus: “The peace does not affect private rights which had no relation to the war. Debts existing prior to the war, and injuries committed prior to the war, but which made no part of the reason for undertaking it, remain entire, and the remedies are revived. 1 Kent’s Com. (ed. of 1836), top p. 168. And Mr. Justice Blackstone, in the third book of his commentaries, marginal page 154, thus defines a debt: “The legal acceptation of debt is a sum of money due, by certain and express agreement,” etc. In this case the assured never did contract to pay any of these premiums as a debt, but only as a condition upon which said policy of insurance should remain in force and effect.