Laun v. Pac. Mut. Life Ins. Co. of Cal.

• Decision Date: 30 April 1907
• Parties: LAUN v. PACIFIC MUT. LIFE INS. CO. OF CALIFORNIA.
• Court: Wisconsin Supreme Court

131 Wis. 555

111 N.W. 660

LAUN

v.PACIFIC MUT. LIFE INS. CO. OF CALIFORNIA.

Supreme Court of Wisconsin.

April 30, 1907.

Appeal from Circuit Court, Calumet County; Geo. W. Burnell, Judge.

Action by Alfred A. Laun against the Pacific Mutual Life Insurance Company of California. From an order sustaining a general demurrer to the complaint, plaintiff appeals. Affirmed.McGee & Jeger (C. A. W. McGee, Jackson B. Kemper, and Bloodgood, Kemper & Bloodgood, of counsel), for appellant.

Winkler, Flanders, Bottum & Fawsett (Cratty Bros., Jarvis & Sample, Herbert J. Goudge, and James G. Flanders, of counsel), for respondent.

TIMLIN, J.

As shown by the complaint, the Conservative Life Insurance Company was a life insurance corporation of California licensed to carry on its business in this state, and on or about May 20, 1902, it made with the plaintiff, a resident of this state, in this state a contract whereby it undertook to issue to the plaintiff a policy of insurance for $5,000 upon his life for an annual premium of $143.40 to be paid by the insured. The plaintiff was induced to assent to the receipt of this policy and the payment of said premium by means of an offer made by the insurance company to appoint the plaintiff one of a board of local advisers of said company for the state of Wisconsin, which board should in no event exceed 300 in number and which appointment involved the doing of no actual work or labor on the part of the assured, but, in consideration of the use of his name as one of said board of local advisers, the assured would receive certain deductions and rebates from the amount of his annual premium to be paid to said insurance company; the amount of such deductions or rebates depending upon the number of local advisers to be appointed by said company in this state. Moved and induced by such representations, the plaintiff, on or about May 20, 1902, made application for a policy of insurance in the amount of $5,000, at an annual premium of $143.40, to be paid for a period of 20 years, and at the same time made application for his appointment as one of said local board, and at the same time paid the first premium of $143.40 on the policy. Consequently on May 28, 1902, there was delivered to the plaintiff a policy of life insurance as described, together with a paper entitled, “Contract of Local Advisers--Limited to 300.” This last purported to appoint the plaintiff a local adviser of said company subject to the insurance statutes and certain express provisions of the contract as follows: “(1) The board of said Local Advisers appointed in the state of Wisconsin shall not exceed three hundred. (2) On the first day of February of each year during the continuance of this contract the company shall compute the number of thousands of insurance in force written for a period of ten years from and after February 1, 1902, in the state of Wisconsin, upon which there shall have been paid in cash during the preceding year one full annual premium, two semi-annual or four quarter annual premiums. (3) The company further agrees on the dates aforesaid (February 1 in each year) to credit said Local Adviser with such a sum of money from the expense element of premiums paid on insurance written in said state, during said period, after said date, as shall be obtained by dividing an amount of money equal to one dollar for each $1000 of insurance in force at said dates, written during said period, after February 1, 1902, by the number of said Local Advisers' contracts in force at the time of such distribution. The amount so credited to said Local Advisers shall each year on the anniversary of the date of this contract or within thirty days thereafter, provided this contract be then in force, be paid to him by said Conservative Life Insurance Company subject to the agreements of said Local Adviser in his application therefor. And said payment shall be in compensation for his services as Local Adviser and for no other consideration.” Thereafter, in pursuance of this agreement, upon said annual premium of $143.40, the plaintiff received for such alleged services on May 23, 1903, a rebate of $5.37, he paying only $138.03, on May 27, 1904, a rebate of $6.50, he paying only $136.90, on May 28, 1905, a rebate of $8.24, he paying only $135.16. These sums paid, together with the first full premium of $143.40, aggregating $553.49, make up the sum sought to be recovered in this action. It is averred that said policy of insurance and supplemental contract of local adviser constituted but a single contract, and constitute an agreement for rebate contrary to the laws of the state of Wisconsin, and that said contract of insurance so entered into between this plaintiff and said Conservative Life Insurance Company was and is wholly void and of no effect, and that said Conservative Life Insurance Company thereupon became and was indebted to the plaintiff in the said sum of $143.40, paid, as aforesaid, for the year beginning May 28, 1902, and the other items for 1903, 1904, and 1905 above mentioned. It is then averred that on or about March 12, 1906, the defendant by agreement of consolidation with said Conservative Life Insurance Company took over and became possessed of all the assets of said Conservative Life Insurance Company, and in consequence thereof is obligated to, and has assumed and agreed to, pay and discharge all and singular the contracts, liabilities, and obligations of any name and nature of the said Conservative Life Insurance Company, and that, upon its so doing, the Conservative Life Insurance Company and the defendant delivered to the plaintiff a certain contract under seal, which is annexed to the complaint and made part thereof, and which recites a consolidation of business between these companies, and that the defendant has acquired the assets and business of the Conservative Life Insurance Company, and that the defendant, therefore, assumes and guaranties the fulfillment of all existing contracts and obligations of the Conservative Life Insurance Company. The complaint avers a demand upon the defendant for the return of the sums of money so paid to the Conservative Life Insurance Company, and that the defendant neglects and refuses to return the same.

During the time covered by these transactions there was and now is in force in the state of Wisconsin section 1955o, St. 1898, as follows: “No life insurance company doing business in this state shall make or permit any distinction or discrimination in favor of individuals between insurants of the same class and equal expectation of life in the amount or payment of premiums or rates charged for life or endowment policies, or in the dividends or other benefits payable thereon or in any other of the terms and conditions of the contract it makes; nor shall any such company or any agent thereof make any contract or agreement as to such contract other than as plainly expressed in the policy issued pursuant thereto, nor pay or allow, or offer to pay or allow, as an inducement to insurance, any rebate of premium payable on the policy, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever not specified in the policy. Whenever it shall appear to the satisfaction of the commissioner of insurance, after a hearing before him upon notice, that any company, officer, or agent, subagent, broker or solicitor has violated any provision of this section he shall revoke the license of any such company or person to transact business in this state, and no other license shall be issued to any such company or person within three years after such revocation.” This act is very like chapter 281, p. 247, Pub. Laws of Maine for 1889, which was construed in the case of State v. Schwarzschild, 83 Me. 261, 22 Atl. 164, on April 6, 1891, a few days before its adoption in this state as chapter 267, p. 327, Laws Wis. 1891. The Maine statute is unlike ours, in that it imposes a penalty by fine, as well as the revocation of license. The case last cited construed chapter 281, p. 247, Pub. Laws of Maine for 1889, to mean that the rebate of premium is not illegal if such rebate is specified in the policy. It is not necessary to determine in this cause whether this is the correct construction of our statute, and we express no opinion thereon. Where a contract is expressly declared void by statute, or where the law declares the making of the contract a misdemeanor, or imposes a penalty upon the parties to the contract for the act of contracting, there is no doubt of the general rule of law that the courts will neither enforce that contract at the suit of one party, nor, if the contract has been executed, aid either party to recover back anything he may have paid thereon. Clarke v. Lincoln Lumber Co., 59 Wis. 655, 18 N. W. 492, and cases cited at page 658 of 59 Wis., page 193 of 18 N. W. Where the contract is declared void by statute, and the statute is within the power of the Legislature to enact, there is not much room for discussion, although even then the whole purview of the statute may indicate that the word “void” is used in the sense of “voidable.” French Lumbering Co. v. Theriault, 107 Wis. 627, 83 N. W. 927, 51 L. R. A. 910, 81 Am. St. Rep. 856. Where the statute does not expressly declare the contract void, but prohibits by penalty the making thereof, the courts infer a legislative intent that the contract shall be void, because to enforce the contract would practically set the statute at naught. “But these rules do not obtain where the contract itself is not prohibited by law, but is declared to be void because not made or evidenced in the manner prescribed by law, or where the contract is declared void by law as to one party in order to protect the other against injustice or oppression. Brandeis v. Neustadtl, 13 Wis. 142, marg., Tollensen v. Gunderson, 1 Wis. 110, marg., and Thomas v. Sowards, 25...