Eberhard v. Northwestern Mut. Life Ins. Co.
Decision Date | 19 January 1914 |
Docket Number | 90. |
Citation | 210 F. 520 |
Parties | EBERHARD et al. v. NORTHWESTERN MUT. LIFE INS. CO. |
Court | U.S. District Court — Northern District of Ohio |
Wing Myler & Turney, of Cleveland, Ohio, for plaintiff.
Squire Sanders & Dempsey, of Cleveland, Ohio, and George H. Noyes of Milwaukee, Wis., for defendant.
A demurrer was filed to the bill of complaint herein, and overruled on the theory that the relationship existing between the company and the complainants was not that of debtor and creditor, and that therefore the action would lie. The petition for rehearing was allowed, and the question is now presented that the demurrer should be sustained, inasmuch as the granting of the relief prayed for in the bill of complaint would require an inquiry into the internal affairs of the corporation, and that for such purpose the court sitting in Wisconsin is the only proper forum having the right and jurisdiction to entertain the suit. The complainants herein filed the bill as members of the corporation--
'not only on their own behalf, but also in behalf of those members of the defendant corporation who have held, or who are now holding, matured or unmatured semitontine policies issued by the defendant, who may wish to participate in the relief herein prayed against the Northwestern Mutual Life Insurance Company.' They allege that each is a member of the corporation, by reason of having had issued to each an insurance policy by the defendant company on the semitontine plan. The bill further alleges:
The so-called reserve fund is then described, which is alleged to be placed in a fund, for the tontine dividend fund--
'which, with its accumulations of interest, is held in trust, to be divided among those who may survive the tontine period, and who shall have paid the premium, according to the terms of their policy.'
There follow allegations of misconduct on the part of the officers of the defendant company, in connection with said alleged trust fund, of an inequitable distribution of the semitontine funds; that the apportionment of this fund among the members entitled thereto is based upon erroneous principles, and there are other allegations of fraud, misconduct, and mismanagement on behalf of the company, its officers and trustees, in connection with said fund.
The bill prays:
'That an account may be taken of the various amounts which have been diverted by the defendant from the tontine dividend fund in violation of its trust, and of the various amounts which have been wrongfully withdrawn from said fund by the defendant, and the amounts which have been earned and received as interest from the investment of said bond, and the amounts which have been wrongfully charged to said tontine dividend fund, under the guise and pretense that such amounts have been expended for the benefit of such fund, when in truth such charges were not based upon any expense whatsoever pertaining to said fund, and of the savings made by said defendant on account of the loaning of premiums upon the basis of the mortuary tables, different from the actual rate of death of those insured, as experienced by the defendant among those to whom it issued policies on the semitontine plan, and the amounts that said defendant has withdrawn from said tontine dividend fund for the purpose of paying dividends to the holders of annual dividend policies, and the amounts paid to agents by the defendant, which have been taken from or charged to the tontine dividend fund, and that said defendant, its officers, agents, and servants, be enjoined from making further diversions of said fund, etc.; that the defendant be required to make a full and complete disclosure of the manner in which it has conducted its said trust with respect to said tontine dividend fund; that a mandatory injunction be issued commanding said defendant to restore to said fund all amounts found by a proper accounting and under the direction of the court, to have been wrongfully withdrawn and diverted from said fund; and that said defendant be...
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