Ellis v. Mutual Life Ins. Co. of New York
Decision Date | 09 February 1939 |
Docket Number | 6 Div. 327. |
Parties | ELLIS v. MUTUAL LIFE INS. CO. OF NEW YORK. |
Court | Alabama Supreme Court |
Rehearing Denied March 30, 1939.
Appeal from Circuit Court, Jefferson County; J. Edgar Bowron, Judge.
Bill for declaratory judgment as to distribution of dividends to policyholders by William H. Ellis against the Mutual Life Insurance Company of New York, to which respondent filed pleas to the jurisdiction. From a decree overruling a demurrer to pleas and dismissing the bill, complainant appeals.
Affirmed.
Where New York mutual life insurance company, whose corporate powers were by charter vested in board of trustees, had provided in member's policy pursuant to New York statute that shares of divisible surplus should be allotted as a dividend annually, member's suit challenging legality of distribution of divisible surplus constituted attempt to have court exercise "visitorial powers" over company and could not therefore be maintained. Insurance Law N.Y. § 83.
Further provision is made for the number of trustees, their selection, and terms.
Section 13 of the original charter, and as amended by Act of 1851, Laws 1851, c. 60, provides for periodic striking of balance by the officers of the company and credit of each member with an equitable share of the profits of said company. By further amendment of § 13, by Act of 1862, Laws 1862, c. 131, it is provided that the company "may appropriate its dividends either to the purchase of additional insurance payable with the policy or at the option of the insured, in reduction of, or towards the annual payment of premiums on policies," with the consent of the superintendent of insurance; and that dividends may be declared every five years or oftener, at the option of the Company.
By amendment of the charter, by resolution of the Board of Trustees, in 1916, approved by the Attorney General and Superintendent of Insurance, it was provided that the Company should have power to make additional kinds of insurance, authorized by subdivision 2, Section 70 of the Insurance Law, of New York, Consol.Laws N.Y. c. 28, viz., disability resulting from sickness, etc.
By-laws of the Company, as amended in 1933, provide for election of Trustees, the time of meetings, and for certain standing committees of the Board of Trustees. It is provided that one such committee shall be the "Committee on Insurance and Agencies," and "This Committee shall have supervision of all questions relating to the distribution of surplus."
Section 83, Insurance Law of New York, is in pertinent part as follows:
Wm. H. Ellis and Talbot Ellis, both of Birmingham, for appellant.
Douglas Arant and Bradley, Baldwin, All & White, all of Birmingham, and Louis W. Dawson, of New York City, for appellee.
The suit in equity was by complainant as a member and policyholder of respondent, a mutual life insurance corporation, existing under the laws of New York, and qualified to transact its business in Alabama, and was so engaged in this state when notice was issued and suit brought. There is no question presented as to the sufficiency of service of process upon the respondent.
The bill of complaint avers that the suit is filed in behalf of complainant and all other persons similarly situated; and the object was to have declared illegal the allotment and distribution by the non-resident mutual insurance corporation of its divisible surplus as dividends for the year 1937 and years subsequent thereto, and to obtain a decree against the respondent for alleged dividends which complainant claims he was deprived of on account of the alleged illegal and unlawful distribution to other classes of policyholders.
It is thus averred:
It is further averred that: "* * * on the policy here involved the annual dividend, notice of which was given Complainant in the premium policy notice due November 24th, 1936, was in the sum of $11.85, which your Complainant had the option of accepting in cash, or using for the purpose of an additional $29.00 paid up insurance or using toward payment of premium but that after the illegal and unlawful change whereby said dividends were reduced for the calendar year 1937 that the cash value of the dividend applied to said policy for said year was only $7.94 which your Complainant could take out at his option either in cash or which he could use for the purchase of additional paid up insurance in the sum of $19.00, or apply toward payment of premium." Paragraphs 7 and 8, Bill of Complaint.
The respondent filed several pleas challenging the jurisdiction of the court over the subject-matter of the suit because the courts of Alabama are without power to exercise visitorial powers over the respondent foreign corporation or interfere with the management of its internal affairs. The complainant interposed a demurrer challenging the legal sufficiency of the pleas to the jurisdiction. The trial court overruled the demurrer to the pleas to the jurisdiction, holding that the pleas were sufficient, and dismissing the bill. From the final decree dismissing the bill for want of jurisdiction the court over the subject-matter of the suit, this appeal was prosecuted, based on the ruling as the case was tried.
A statement of the pleading will be adverted to as follows: the complainant in his bill alleged in substance that on November 24, 1926, the respondent, a mutual life insurance corporation existing under the laws of the State of New York, executed and delivered to him in Alabama an ordinary policy of life insurance for the face amount of $2,000 with provisions for double indemnity in the event of accidental death and for benefits in the event of total and permanent disability. The entire policy was incorporated in the bill as an exhibit and supports the same. Grimsley v. First Ave. Coal & Lumber Co., 217 Ala. 159, 115 So. 90.
It was averred that no loan had been obtained on the policy; that all dividends thereon allotted by the respondent had been left with the respondent for the purpose of purchasing paid-up insurance in accordance with the terms of the policy, and that the total annual premium of $50.36 had been paid on the policy each year since its effective date.
The provisions relating to benefits in the...
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