Equitable Life Assur. Soc. v. Clark

• Decision Date: 12 May 1902
• Citation: 31 So. 964,80 Miss. 471
• Court: Mississippi Supreme Court
• Parties: EQUITABLE LIFE ASSURANCE SOCIETY v. ELIZA J. CLARK

31 So. 964

80 Miss. 471

EQUITABLE LIFE ASSURANCE SOCIETY v. ELIZA J. CLARK

Supreme Court of Mississippi

May 12, 1902

FROM the chancery court of, second district, Coahoma county. HON A. McC. KIMBROUGH, Chancellor.

Mrs Clark, appellee, was complainant in the court below; the Equitable Life Assurance Company, appellee, was defendant there. From a personal decree, rendered under the provisions of the act of March 10, 1900, for $ 15,000 in complainant's favor, the defendant appealed to the supreme court.

Section 927, code 1892, is as follows:

"927 (2277). Copy of books, papers, or documents furnished.--The court in which any action or suit is pending may, on good cause shown, and after notice of the application to the opposite party, order either party to give to the other within a specified time and on such terms as may be imposed an inspection and copy, or permission to take a copy, of any books, papers, or documents in his possession or under his control containing evidence relating to the merits of the action or proceeding or of the defense thereto; and if compliance with such order be refused, such books, papers, or documents shall not be given in evidence in the action or proceeding by the party so refusing; and the court may punish the recusant party as for a contempt of court."

The act of March 10, 1900 (laws 1900, p. 136), amends said section by omitting the word order, in italics, and by adding to the end of the section these words: "And if a complainant, or plaintiff, fails to comply with such order, the court may, on motion, give the like judgement for the defendant as in cases of non-suit or dismissal; and if a defendant fails to comply with such order, the court may, on motion, give judgment or decree against him by default or confession."

The husband of Mrs. Clark, the appellant, complainant in the court below, nearly thirty years ago took out a policy of insurance in the Equitable Life Assurance Society, the appellee, for the sum of $ 10,000, and before his death he had paid the company nearly that sum. By the application for insurance, the husband requested that he be put in what is called the southern class of policy holders, and the policy issued recites that he was put in that class at his request and the policy on its face discloses that he, as a policy holder, was to participate in profits. The extent of this participation in profits to the holders of this class is stated in the policy itself, to be determined in this way; the participation was to be in the proportion that the rate of mortality of the southern class bore to the rate of mortality of the others assured by the society, but not in the southern class.

When Mr. Clark died, Mrs. Clark applied for the fruits of the policy, and requested the company to notify her what the policy was then worth. She knew it was worth $ 10,000, as the policy on its face stipulated for payment of that sum, but, under the participation in profits clause, she expected a great deal more. She received a letter from the company stating there were no profits, and nothing in which to participate. She had further correspondence on the subject, but with no satisfactory results. At length she was led to believe that the representations of the company were true, and so she surrendered the policy and received $ 10,000 in full payment of the company's obligation.

Thereafter she filed her bill in this cause, seeking to have cancellation of the receipt in full given by her to the company on the surrender of the policy, on the ground that she was misled by false statements made to her by the company at the time of the surrender; statements untrue, as she avers in the bill, both in law and fact. She sought by this cancellation, to be put in position as if she had not surrendered the policy and receipted the company in full payment of the obligation. She prayed an accounting with the company, by which she may see what they owe her. The bill avered that complainant did not know what the company owed her, but she avered that the company owed her a considerable sum, believed to exceed $ 10,000; that she had not the data with which to ascertain the true amount. Complainant sought an accounting, averring that in determining she had no right to participation in profits, the company had proceeded along erroneous lines, it having based its calculations on the theory that she was entitled to participate only in profits made in the business of the southern class, whereas, according to the terms of the policy, she was entitled to participate in any profits made by the company generally, limited only by the proportion that the rate of mortality of the southern class bears to the rate of all other assured by the society.

The case was twice before in the supreme court, and is reported, first appeal, Clark v. Equitable Life Assurance Society, 76 Miss. 22, which overruled a demurrer to the bill. When the case was remanded to the chancery court complainant's counsel presented an unsworn petition asking that defendant be required to submit its books to her, the material averments of which are as follows: "Complainant alleges that it is necessary for her to have an inspection of said books, for the reason, that, otherwise, the defendant refuses permission to the complainant to examine any of its books or documents relative to the merits of this suit, and necessary to be examined in order that a correct account may be taken by the commissioner heretofore appointed by decree of this honorable court to take and state an account between complainant and defendant. She avers that from no other source can she secure positive and direct testimony, whereby a just, true, and correct account between complainant and defendant can be stated; that an examination of the said books, papers, documents, and records will disclose the fact, upon the taking and stating of an account between complainant and defendant, by the commissioner heretofore appointed, and as heretofore directed and decreed to be taken and stated, that she is entitled to certain dividends, earnings, and profits, which by right she should have and recover of the defendants by reason of the application for insurance, and insurance effected on the life of the late John Clark, deceased, by the said defendant, according to the terms of the certain policy of insurance mentioned in the original bill of complaint herein filed."

On this petition, against the protest of the defendant, the chancery court made the following order:

"The court being fully advised, doth order, adjudge, and decree: That the said defendant be and is hereby directed to allow said complainant herein to examine and take copies of all books, papers, and documents in the possession of said defendant or under its control as relates to its business of insuring lives between the dates of March 3, in the year 1869, and July 23, 1892, upon reasonable notice given by complainant to defendant of the time when complainant desires to examine and take copies of said books and papers and documents.

"Ordered, adjudged, and decreed, this 13th day of July, in the year 1899."

The defendant appealed from this order to the supreme court--the second appeal--but the appeal was dismissed by the court, without a written opinion, on the ground that it was not an appealable decree. Thereafter, some effort having been made to execute the order, the complainant moved the court for a decree, as of a pro confesso, against the defendant under the statute above quoted: The complainant seems to have insisted that she had the right under the order to employ whomsoever she pleased to aid her in examining defendant's books; the defendant was perfectly willing for the complainant herself or her solicitor to make the examination, but would not consent for accountants of rival insurance companies, and persons who were likely to make profit from the information which they would obtain from an access to its books to examine them. The court below concurred in complainant's contention, adjudged the insurance society in fault, sustained the motion, and rendered the personal decree for $ 15,000, now appealed from, against defendant.

Decree reversed and cause remanded.

Mayes & Harris, for appellant.

1. The court below erred in making the order of July 13, 1899, because there was no "good cause shown" therefor, as was required by the statute to be done.

The statute provides that whatever order the court may make for an inspection shall be made "on good cause shown." Such preliminary is by the statute made a condition precedent to the right of the court to make any order whatever. The cause had been on the 28th of August, 1898, referred to the commissioner to state an account. Afterwards the complainant made a written motion for the order. The court will see that it is a mere pleading, signed by the solicitor for the complainant, and is not sworn to or proven in any way.

Even under the statutes which do not in express terms require that cause shall be shown for the making of orders akin to this and which are much less drastic than is this, in that they only authorize orders requiring the production of books and papers on the trial of a cause, it has been commonly held that still cause must be shown; and such requirement is not met by a mere unsworn pleading containing averments drawn by astute counsel. To permit a showing of this nature by way of fulfillment of the statutory requirement, or by way of fulfillment of the requirement which the court imports into such statutes by construction, would be to nullify the requirement itself, to all practical intent and purposes; and it would lay bare the privacy of every litigant's financial affairs at the mere turn of an adroit lawyer's pen. 6 Enc. Pl. and Pr., p....