Israel v. Northwestern National Life Insurance Company
| Citation | 127 N.W. 187,111 Minn. 404 |
| Decision Date | 15 July 1910 |
| Docket Number | 16,607 - (150) |
| Parties | GRACE D. ISRAEL v. NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county by the administratrix de bonis non of the estate of Francis M Israel, deceased, to recover $8,000 for commissions earned in the service of defendant's assignor by plaintiff's intestate and for damages to the business of the intestate caused by the assignment. The substance of the answer, which alleged a counterclaim of $182.17, is stated in the opinion. The reply was a general denial. The case was tried before Booth, J., who made findings and ordered judgment in favor of plaintiff in the sum of $1,824.41. From judgment entered pursuant to the order, defendant appealed. Affirmed.
Liability after rendering performance of contract impossible.
The rule that, when a party to an agreement voluntarily places it beyond his power to perform, he is liable to the other in an action for damages for the anticipatory breach before the time of performance arrives, applies to a contract between an agent of a life insurance company, when the latter sells out its business and thereby incapacitates itself to fulfil its obligations to its policy holders, and to collect premium notes upon which the agent's commission depends. Crowell v. Northwestern Nat. Life Ins. Co., 99 Minn 214, followed, and Moore v. Security Trust & Life Ins. Co., 168 F. 496, distinguished.
Liability after rendering performance of contract impossible -- liability of assignee.
A life insurance company, which purchases the business and assets of another life insurance company, and agrees to underwrite, assume, reinsure, and guarantee all of the insurance or investment contracts and policies of the selling company, thereby becomes liable to an agent of the selling company in an action to recover the present damages occasioned by the breach of the contract by the sale, and the burden is upon the purchasing company to show that the policy holders did not reinsure, or that they were insolvent.
Liability after rendering performance of contract impossible -- presumption.
In such an action, brought by the agent against the purchasing company, the makers of installment premium notes are not presumed to be insolvent with respect to installments not due, although at the time of the sale one or more installments had become due and were not paid.
John T. Baxter and Daniel Fish, for appellant.
Jay W. Crane and C. H. Slack, for respondent.
On and prior to the month of June, 1902, the Northwestern Life & Savings Company, of Des Moines, Iowa, was a corporation engaged in the business of life insurance. Respondent's intestate was operating as its exclusive agent in the state of Michigan, under a contract executed on June 25, 1902, which provided that either party might terminate the agreement thirty days after giving the other notice to that effect, after May 1, 1903. While this contract was still in force and on August 22, 1903, the Iowa company entered into a written contract with appellant, a Minnesota corporation, whereby the latter agreed to "underwrite, assume, reinsure, and guarantee all of the insurance and investment contracts and policies" of the Northwestern Life & Savings Company already issued or thereafter to be issued upon applications already made, and agreed to pay all valid legal outstanding contractual liabilities of such company. The Iowa company transferred its business and assets in the following terms: "The party of the second part, in consideration of the foregoing, hereby sells, transfers, assigns, and conveys to the party of the first part all of its mortgage loans, notes and collaterals, accounts, cash, agents' balances, and other evidences of debt or credit, and all leases, furniture, and fixtures, and all and singular its property and assets of every kind and character whatsoever and wheresoever situate." Before the execution of this contract, Mr. Israel had procured applications, with which notes had been given by the insured for first-year premiums aggregating $4,400, and according to his contract with the Iowa company, if the notes were paid to that company while still in business, he would have been entitled to receive commissions thereon amounting to $1,425.01. His contract provided that no commission became due until the premiums were paid in cash, and he was required to collect all premiums at his own expense.
This action was brought by respondent, as administratrix, against the Minnesota company, for the purpose of recovering damages for the breach of his contract of agency by the sale and transfer of the business to the Minnesota company, which liability, it is claimed, the latter company assumed. The answer admitted the execution of the contract of purchase and that it became the owner of the notes which had been taken by the Iowa company for premiums upon policies issued by it, and pleaded a counterclaim of money collected by Mr. Israel for appellant upon notes which had been sent to him for that purpose. The trial court found that there had been procured to be written by Mr. Israel, between June 25, 1902, and August 23, 1903, for which there had been received and accepted by the Iowa company as and for the first year's premiums on such policies notes aggregating in amount $4,400, which notes and parts of...
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