Smith v. Nw. Nat. Life Ins. Co. of Minneapolis, Minn.

Decision Date10 January 1905
Citation102 N.W. 57,123 Wis. 586
PartiesSMITH v. NORTHWESTERN NAT. LIFE INS. CO. OF MINNEAPOLIS, MINN.
CourtWisconsin Supreme Court

OPINION TEXT STARTS HERE

Appeal from Circuit Court, Dane County; Warrant D. Tarrant, Judge.

Suit by David N. Smith against the Northwestern National Life Insurance Company of Minneapolis, Minn. From a judgment for plaintiff for less than claimed, he appeals. Modified.

For a number of years prior to 1893 there had existed a mutual insurance assessment company under the laws of Wisconsin, known as the Northwestern Mutual Relief Association of Madison, Wis., hereinafter called the “Madison Company.” That company reorganized under the provisions of chapter 440, p. 443, Laws 1891, and while so existing issued to the plaintiff its policy or certificate of membership dated February 24, 1883, agreeing, among other things, that upon January 18, 1902, he being then alive, they would pay to him 80 per cent. of an assessment levied and collected therefor, not exceeding $2,000. The by-laws provided for assessment upon all members of the association upon the maturity of any certificate, according to a specified table graded according to the amounts of the respective policies and according to the age of the members. These assessments were, by the by-laws, to be divided, 20 per cent. to a reserve fund, out of which was to be paid the expenses of the company, and 80 per cent. to a relief fund, out of which was to be paid the policy holder an amount not exceeding such 80 per cent., nor exceeding the stipulated maximum of his policy. In 1899 (Laws 1899, p. 460), by chapter 270, authority was given to existing companies like the Madison Company, upon declaring their intention so to do, to conduct business upon a stipulated premium basis. At that time the Madison Company had a membership such that 80 per cent. of an assessment upon all its members, at the rates specified in the by-law tables, largely exceeded the maximum amount payable to a certificate holder; but the amounts which had been accumulated into the reserve and relief funds at that time is not shown. The Madison Company took the steps necessary to authorize it to do business under the provisions of chapter 270, and thereafter received no new members upon an agreement to pay assessments, but solely upon the agreement to pay stipulated premium; and, shortly after such reorganization, induced a large number of its old members holding assessment certificates to surrender them and take out membership upon a basis of stipulated premium, but gave them, as an advantage resulting from their old membership, a rate of premium based upon their ages at the time of originally becoming members instead of at the higher rate which would have pertained to their ages at the time they made application for the change. It was stipulated, for the purposes of this case, that the average per capita assessment upon the assessment basis was 82 cents to meet each maturing certificate like plaintiff's, and that the average monthly stipulated premium was 82 cents.

On August 29, 1901, the defendant, a Minnesota corporation, originally authorized to write insurance on the assessment plan, but afterwards on the stipulated premium plan, and which then had no members upon the assessment plan, entered into a written contract with the Madison Company, which recited that the two companies had agreed to consolidate, and that the defendant reinsured all of the insurance outstanding against the Madison Company, took all the assets of that company, and took over all its members as members of the defendant. The findings declare, without exception by the defendant, that the defendant “thereby assumed all liabilities under the terms and conditions of the plaintiff's certificate of membership above mentioned.” There is no evidence as to the amount of the assets of the Madison Company, either in its reserve, relief, or mortuary funds, which were taken over by the defendant. At the time of such consolidation and reinsurance there were about 3,400 members of the Madison Company, of whom about 300 held assessment certificates generally like the plaintiff's, and the rest held stipulated premium policies or certificates. Eighty per cent. of an assessment, according to the table rates upon all of the members of the Madison Company existing on April 12, 1902, would have produced a sum largely in excess of the $2,000 maximum of plaintiff's certificate. Eighty per cent. of an assessment merely upon those members who held assessment certificates would have produced $188.60. It was conceded upon the trial by the defendant's attorney that the defendant was willing to pay the amount which an assessment would produce on the membership of the Madison Company, but contended that no assessment could be levied upon the stipulated premium members. The trial court held in accordance with this contention, and rendered judgment in plaintiff's favor for the $188.60, with interest from January 20, 1902, from which judgment plaintiff appeals. There were also allegations, prayer, and judgment for relieving plaintiff from a forfeiture and requiring his reinstatement, from which neither party appeals.Frank E. Parkinson, for appellant.

Burr W. Jones (Brown & Kerr, of counsel), for respondent.

DODGE, J. (after stating the facts).

The Madison Company entered into an agreement with plaintiff that, if he paid the specified assessments as called for up to January, 1902, it would pay him the amount of $2,000, provided 80 per cent. of an assessment, at the specified rates, on all its members, would produce that amount. Plaintiff has performed his part of the agreement, and defendant now contends, and the trial court has held, that he must be satisfied to receive the amount of an assessment on only about one-tenth of all the members. The inquiry is at once suggested, what has occurred to accomplish such modification? Not much aid is offered by respondent's brief in discovering an answer to that query. The burden of the argument is cast in support of the contention that it might have been accomplished by a by-law or by a statute without invasion of constitutional prohibition against impairing obligation of contract; the former under reserved power to make or change by-laws, the latter under reserved power in Legislature to change corporate charters. As to the first of these it is sufficient to note, first, that the reservation of power...

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7 cases
  • Fed. Life Ins. Co. v. Kerr
    • United States
    • Indiana Supreme Court
    • October 15, 1909
    ...knowing that some were good and some were bad, and reliance is on the average. Cahen v. Continental Co., 69 N. Y. 305;Smith v. Northwestern Co., 123 Wis. 586, 102 N. W. 57. In view of our conclusion in the matter, it is immaterial whether the insured had notice of the terms of the reinsuran......
  • Federal Life Insurance Company v. Kerr
    • United States
    • Indiana Supreme Court
    • October 15, 1909
    ... ... 138, 56 N.E. 129; ... Phoenix Ins. Co. v. Stark (1889), 120 Ind ... 444, 22 N.E. 413; ... 592, 47 N.E ... 342; State Nat. Bank v. United States Life Ins ... Co. (1909), 238 ... Co ... (1877), 69 N.Y. 300; Smith v. Northwestern, ... etc., Ins. Co. (1905), 123 Wis ... ...
  • McMillan v. Barber Asphalt Paving Co.
    • United States
    • Wisconsin Supreme Court
    • October 29, 1912
    ...are as various as the transactions investigated and regulated in equity. Chippewa Bridge Co. v. Durand, supra; Smith v. Northwestern Nat. Life Ins. Co., 123 Wis. 586, 102 N. W. 57;Ward v. Billups, 76 Tex. 466, 13 S. W. 308;Morris v. Bradford, 19 Ga. 527;Rowell v. Rowell, 122 Wis. 1, 99 N. W......
  • Meyer v. Meyer
    • United States
    • Wisconsin Supreme Court
    • January 10, 1905
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