Lewis v. Atlas Mut. Life Ins. Co.

• Decision Date: 31 January 1876
• Citation: 61 Mo. 534
• Parties: THOMAS LEWIS, Appellant, v. THE ATLAS MUTUAL LIFE INSURANCE COMPANY, Respondent.
• Court: Missouri Supreme Court

61 Mo. 534

THOMAS LEWIS, Appellant,

v.THE ATLAS MUTUAL LIFE INSURANCE COMPANY, Respondent.

Supreme Court of Missouri.

January Term, 1876.

Appeal from St. Louis County Circuit Court.

Martin & Lackland, for Appellant.

I. There was a legal obligation on the part of the Atlas Life Insurance Company, to fulfill its contract for the term of five years--that is, to employ and keep the appellant in their employment for that period of time. This is the legal implication of the contract, although not expressed.

II. Neither inability or insolvency constitute a legal excuse for the non-performance of a contract. The legal obligation continues notwithstanding inability to perform. (Pothier Oblig., 133; 2 Par. Con., 672; Huling vs. Craig, Addison R., 342; Paradine vs. Jane, Aleyn, 26; Worsley vs. Wood, 6 T. R., 718; Hibbelwaite vs. Main, 5 Mes. & W., 462; Tufnell vs. Constable, 7 Ad. & E., 798; Booth vs. Spuytin, 3 Thomp. & Co., N. Y. S. Ct., 368; Harmony vs. Bingham, 12 N. Y., 99; Tompkins vs. Dudley, 25 N. Y., 272; Worth vs. Edmunds, 52 Barb., 40; White vs. Main, 26 Me., 361; Niblo vs. Binose, 44 Barb., 54.)

III. There is an implied obligation on the part of all parties to contracts that they will perform what they undertake. States are not at liberty to impair this. (McCracken vs. Hayward, 2 How., [U. S.] 612; Curran vs. Ark, 15 How., [U. S.] 304; Walker vs. Whitehead, 16 Wall., 314; Sedg. Stat. & Const. Law, 603, n. a. [2d. Ed.]; Metc. Contr., 317.)

IV. Whenever the undertaking requires pecuniary means for its performance, there is an implied obligation of solvency and sufficiency of means. This is only a part of the obligation to perform, and is implied in it.

V. Insolvency and inability not being a defense or excuse for non-performance, they are equally inadmissible in mitigation of damages. To permit these facts in mitigation of damages, would be equivalent to allowing them as a defense. They would amount to a defense if permitted in mitigation.

VI. Insolvency so far from being a defense on a contract, is in itself the legal breach of a contract requiring pecuniary means for performance. It breaks up the contract of factorage. (Sto. Agency, § 486.) It is a ground for arresting delivery of goods sold. (Story Sales, § 318.)

VII. In an action against a notary for failure to protest, he is at liberty to show insolvency of the indorser in mitigation. (Sudan vs. Allen, 20 Wend., 321.)

In trover for conversion of paper negotiable, the defendant can show the insolvency of the maker. (Sedg. Meas. Dam., 488; Menkins vs. Menkins, 23 Mo., 252; Bredow vs. M. S. I., 28 Mo., 181.) But in these cases the suit was not against the maker of the obligation. He can never show insolvency of himself as an excuse or defense.

VIII. The method of reaching the value of renewals by the calculations of actuaries is too well established to admit of question. (Ensworth vs. N. Y. Life Ins., 7 Am. L. Reg., 332; S. C., 1 Bigelow, 645; Stagg vs. Conn. Mut., 1 Ins. L. J., 9; Griffin vs. Calvis, 16 N. Y., 489; Newburg vs. Walker, 8 Gratt., 16; Rhodes vs. Baird, 16 Ohio, 573.)

Cline, Jamison & Day, for Respondent.

WAGNER, Judge, delivered the opinion of the court.

This was an action to recover damages for breach of a contract of agency. By virtue of the contract the plaintiff became the general agent of the defendant for the State of Illinois, for the term of five years. By the provisions of the contract the plaintiff agreed to work exclusively for the company during its continuance. He was also bound to work the territory with a full corps of energetic and reliable agents. He had all the authority of a general agent in soliciting insurance and collecting premiums. His remittances were to be on the 10th of each month, at the time of his monthly reports. As a compensation for his services and expenditures, he was to have 35 per cent. on first premiums, prior to July 1st, 1870, and 30 per cent. after that, ten per cent. on term insurance and paid up policies, and ten per cent. on all renewals. These premiums on renewals were to be paid to him and his heirs after the expiration of the five years, provided he continued to be the agent of the company for that term, and performed the conditions of the contract required of him. He was also to have $250 per year, for rent of office at Springfield, Illinois. It is averred in the petition that the plaintiff discharged the duties of the contract devolving upon him, until the 2d day of March, 1872, at which time the defendant discontinued its business in Illinois, and failed and refused to permit plaintiff to further prosecute the duties as agent there; that on the 24th of April, 1872, the defendant voluntarily sold and transferred the whole of its business and its assets to the St. Louis Mutual Life Insurance Company, thereby discontinuing its business and depriving itself of the power to keep and perform its part of the contract.

The answer denies the breaches, and also sets out, as an excuse for the discontinuance of its business in Illinois and elsewhere, that on account of the insufficiency of its assets and property, it was unable to comply with the laws of Illinois and Missouri, and that on the 24th of April, 1872, it caused all its policies to be re-insured in the St. Louis Mutual Life Insurance Company, and that the plaintiff sanctioned the re-insurance. The evidence showed conclusively, and about that there is no question, that the defendant discontinued its business in Illinois on the 2d of March, 1872, and that it sold out entirely to the St. Louis Mutual Life Insurance Company on the 24th of April, 1872.

It was an unqualified sale of all its property and rights. The cause was tried before the circuit court with a jury, and a verdict was found for the plaintiff, upon which judgment was rendered. At general term this judgment was reversed, and plaintiff prosecuted his appeal to this court.

There are but two questions arising on the record of any importance, and the first is, whether the insolvency and inability of the company to carry on its business, is any legal excuse for the breaches of the contract; and the second relates to the measure of damages. The court held, by its instructions, that the inability of the defendant to continue its business, was no excuse for its breach of contract with the plaintiff.

It appeared at the trial that the plaintiff was only permitted to conduct his agency about half the time agreed upon by the stipulation. During that time he procured a large number of policies and the annual renewals were shown to be very valuable.

It is now argued on behalf of the defendant, that by the...