Brockenbrough v. Mutual Reserve Life Ins. Co.
| Decision Date | 06 November 1907 |
| Parties | BROCKENBROUGH v. MUTUAL RESERVE LIFE INS. CO. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Mecklenburg County; Peebles, Judge.
Action by C. H. Brockenbrough against the Mutual Reserve Life Insurance Company to recover damages for the cancellation of an insurance policy. From a judgment for defendant, plaintiff appeals. Affirmed.
Defendant a mutual life insurance company, in 1897 adopted a resolution assessing plaintiff, a member, according to the table for attained age indorsed on his policy. He paid the first assessment on this basis under protest, and thereafter paid such assessments without objection until February, 1899, when he dropped out of the company without making any complaint or demand. In January, 1906, he instituted an action for wrongful cancellation of his policy. Held that, although limitations had not run in favor of the defendant, a nonresident, plaintiff, by his delay of seven years, was estopped to assert any rights under the policy.
Chase Brenizer, for appellant.
John W Hinsdale, for defendant.
On December, 15, 1897, the defendant adopted a resolution under which it would assess the plaintiff according to the table for "attained age" indorsed on his policy. He paid the first assessment made upon that basis under protest, and thereafter paid them without objection till an assessment was levied February 1, 1899, when he quietly and silently dropped out, making no complaint or demand, till the summons was issued in this action January 18, 1906. In Green v Insurance Co., 139 N.C. 312, 51 S.E. 887, 1 L. R. A. (N. S.) 623, it is said that
It is true that the statute of limitation does not run in favor of the nonresident defendant (Green v. Insurance Co., supra), but the plaintiff, having abandoned his policy and stopped payment thereon in February or March, 1899, cannot be heard to assert any rights thereunder in this action, nearly seven years thereafter. He is estopped by his abandonment and delay. 2 Pom. Eq. § 818, says upon this head: To same purport many other authorities can be cited. An insurance company exists by means of the payments it receives. These must be regular that it may meet its liabilities. A member cannot drop out, disregard his duties, and make no payments for nearly seven years, and then assert by action a claim that the other members be assessed to pay him what possibly he might have recovered, if he had asserted his claim in apt time. Many thousands of new members have come in who ought not to have the fund, created almost, if not entirely, of payments made since the plaintiff dropped out, subjected to payment of claims of which they had no notice, and which may be thousands in number, and aggregate hundreds of thousands of dollars in amount. If seven years' acquiescence and nonpayment of assessments do not estop the plaintiff, then there is no limit of time or of nonpayment that will bar. No one would be safe in becoming a member of a mutual life insurance company under such circumstances. "Leges subveniunt vigilantibus non dormientibus." The court properly sustained the demurrer to the evidence.
No error.
The defendant contracted to insure the life of the plaintiff for the benefit of his wife on March 10, 1888, for the sum of $5,000, in consideration of an admission fee, annual dues, and death fund assessments to be levied from time to time and called mortuary premiums, which were payable at stated intervals, the amount of the premium varying according to the number of death losses, and depending upon the "sum which the executive committee may deem sufficient to meet the existing claims by death" for the period immediately preceding the date of the assessment, but the rate of assessment was fixed at $1.20 per $1,000 of insurance, that being the rate fixed by the schedule as of his then attained age, 34 years, the maximum amount to be collected annually being $11.77 on each $1,000 of insurance. This was to be the permanent rate. The plaintiff paid the admission fee, the annual dues, and the assessments regularly for more than 17 years, when the defendant, without his consent, and, as will appear hereafter, against his protest, which was made when he was apprised of the fact, changed the rate of assessment by increasing it in June, 1895, and again in January, 1898, not content with having once grossly and arbitrarily violated its contract with the plaintiff, the terms of which had been clearly and irrevocably settled by itself in the contract, the defendant again raised the rate of assessment considerably and much higher in proportion than the increased rate of 1895. The plaintiff then protested against the increase of his rate, which the company had solemnly agreed should remain at the figure stated in the schedule for his age of entrance as a member of the company, telling the defendant at the time that he considered the increase as illegal. The company notified him that, if he did not pay what was clearly an extortionate amount, his policy would be forfeited, and, under the compulsion of this unwarranted and inexcusable threat and under his protest, he continued to pay the unlawful assessments for the short period of the year 1898 between March and December, when he refused to pay any longer. He testified that he thought the assessment was illegal, but he paid under protest because the company threatened, in its notice to him, that, if he did not pay the assessments, his policy would be forfeited, and that he thought his protest against the illegality of the increase was sufficient to protect him. He was corroborated by the agent of the company to whom he paid the assessments. And yet it is decided that the plaintiff is equitably estopped to recover damages for this arbitrary conduct of the company and its willful breach of the contract, because, having paid the increased premium for a few months, under protest, he refused in January to be longer imposed upon by the defendant through its illegal exactions or to be intimidated by its threats, and failed after January, 1899, for a few years, or until this action was brought, to pay the unlawful assessments. It is said that these premiums are necessary to the continued existence of the company. Surely it cannot be meant that the law regards illegal assessments in this light. But there is one thing that is essential to the maintenance of insurance companies of every kind and of every other legitimate enterprise, and this is honesty and integrity in the administration of its affairs, and recent events have convinced us, more and more, if we needed any such proof, of the truth of the assertion. And I may say that it applies with peculiar force to insurance companies, as the contract on the company's part is to be performed at a time when the member or policy holder may not be present to vindicate his rights, or those of the beneficiary or object of his bounty, under the contract. He must rely very largely upon the good faith of the company, and, unless by a careful regard for their obligations, a strict compliance with their engagements and a faithful fulfillment of their promises, the confidence of those whose patronage they seek, is secured, they will in very truth find their career eventually cut short for the lack of premiums to pay expenses, much less of profits.
With profound respect for my Brethren from whom I greatly differ the doctrine of equitable estoppel has nothing to do with the facts of this case, when they are properly considered, than the doctrine of contingent remainders. To apply it will produce the very wrong which was sought to be avoided when it was first adopted. It is founded, in part, upon the maxim of the law that no man shall be permitted to take advantage of his own wrong; and yet, if it is to control the decision in this case, the defendant will be permitted to do that very thing. In Farmers' Ins. Co. v. Knight, 162 Ill. 470, 44 N.E. 834, decided by a court whose opinions are entitled to the greatest weight, it was said: ...
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