Fuller v. Knapp
| Citation | 24 F. 100 |
| Parties | FULLER and others v. KNAPP and others. |
| Decision Date | 01 January 1885 |
| Court | United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York |
The complainants' motion is, in substance, one to remove a demurrer from the files. The defendants demurred to the bill for want of equity, and the demurrer was set down for argument, and was overruled. The defendants then answered and at the same time demurred again to the whole bill. A defendant cannot at the same time answer and demur to the whole bill, though he may demur to part and answer to the residue. Equity rule 32. After a demurrer has been overruled a defendant may insist upon the same matters by way of defense in his answer. This has not been attempted here. The defendants cannot be permitted, after a demurrer has been overruled which goes to the whole bill, and leave has been given them to answer, to avail themselves a second time of the demurrer. The motion is therefore granted. The complainants also move to compel the defendants to answer certain interrogatories annexed to the bill. This is not correct practice. If the answer is deemed to be insufficient the complainant must present exceptions stating the charges in the bill, the interrogatories applicable thereto to which the answer is responsive, and the terms of the answer verbatim so that the court may see whether it is sufficient or not. Brooks v. Byam, 1 Story, 296.
As the question of the sufficiency of the answer has been fully discussed by counsel, and elaborate briefs have been submitted asking for a consideration of the merits, it is deemed proper to indicate what disposition should be made of the exceptions when they are formally presented. The bill is for discovery and relief. It seeks an accounting concerning a fund in which the complainants have an interest, and a discovery of facts upon which the amount of the fund and the complainants' interest depends. It is founded upon a policy of insurance issued by the Metropolitan Life Insurance Company, one of the defendants, March 2, 1874, upon the life of Austin B. Fuller to Harriet A. Fuller, his wife. The other defendant, Knapp, is the president of that company. The bill alleges that the company, by the terms of the policy, in consideration of certain payments made and to be made by Harriet A. Fuller, agreed that, should Austin B. Fuller die within 10 years from March 2, 1874, it would pay to Harriet A. Fuller the sum of $10,000; and that, should he survive the said 10 years, the company would pay the said Harriet A. Fuller the sum of $1,231 as a reserve endowment; and also agreed that said policy was issued on the 'reserve dividend plan,' and that should the premiums be paid as stipulated for 10 years from the date thereof, and should said Austin B. Fuller survive that period, it would pay the said Harriet A. Fuller her equitable proportion of 'the reserve dividend fund' in cash.
Further averments are intended to show what is meant by the terms 'reserve dividend plan' and 'reserve dividend fund' as used in the policy. These averments are to the effect that the company issued certain printed instructions to its agents, and especially to the agent through whom the complainants obtained the policy in suit, containing an explanation of the scheme of insurance, and an exposition of the rights of the assured, and the obligations of the company under a policy issued on the reserve dividend plan. It is alleged that in these instructions the company represented that all persons who take policies within the same year form a class, which is treated by the company as a distinct body for 10 years; that the company guaranties to the policy-holders an equitable share in all the surplus earnings of the company which are to be divided at the end of each year. But the policy-holders stipulate among themselves that all these dividends shall be retained by the company at the average rate of interest obtained on all its investments, and be divided at the end of the 10 years between the policy-holders of the class then living; that if any policy is forfeited for non-payment of premiums, the dividends which have already accrued upon it inure to the benefit of the other policy-holders of the class, and are to be retained by the company, invested and divided at the end of the 10 years among the living members of the class; and that death-claims are paid out of the general funds of the company, and not out of the class fund exclusively. It alleges that the company also represented in these instructions that the reserve fund under the reserve dividend plan is accumulated from several sources: from ordinary dividends arising from the general earnings of the company; from the dividends which lapsed to the class by the death of members before the expiration of 10 years; and from the dividends forfeited to the class by non-payment of policies, and by retiring members.
The bill alleges that the complainants accepted their policy upon the faith of these representations as to the character and incidents of 'the reserve dividend plan,' and that these representations are in fact a correct statement of the plan as the term is used in the policy. It further alleges that many other persons became insured in the same class with complainants, upon the reserve dividend plan; some of whom died within the 10 years, whereby the accumulated dividends upon their policies accrued to the general fund; some of whom retired, and thereby forfeited their dividend; and that the policies of others lapsed. That interest was earned by the company upon its investments, and defendants are now in possession of the whole fund accruing to the class. That the defendants have in their possession books and records showing all these facts, details of which are not known to complainants, and without a discovery of which complainants cannot prove the facts upon which their rights to relief depend.
The bill contains appropriate allegations to show that complainants duly paid the premium upon the policy during the 10 years, and that Austin B. Fuller survived the 10 years of its duration, and the complainants became entitled to the equitable proportion of the reserve dividend fund in cash due to policy-holders of the class of 1874. Interrogatories are propounded to the defendant calling for a statement of the earnings of the company during the 10 years, and incidentally of the receipts, expenses, and losses; a statement of the average interest received by the company on its investments during the 10 years; a statement of the names of policy-holders in the class of 1874; and how long each policy continued in force, what premiums were paid upon it, what dividends were earned when it lapsed or matured, what interest was earned by the fund, and what payments had been made from it. The defendants are also interrogated whether the company issued to their agents, or to the agent through whom the complainants insured, the instructions explaining the reserve dividend plan as set...
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Fuller v. Metropolitan Life Ins. Co.
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