Mutual Life Ins. Co. of New York v. Griesa

• Decision Date: 14 September 1907
• Docket Number: 8,560.
• Citation: 156 F. 398
• Court: U.S. District Court — District of Kansas
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. GRIESA et al.

156 F. 398

MUTUAL LIFE INS. CO. OF NEW YORK v. GRIESA et al.

No. 8,560.

United States Circuit Court, D. Kansas, First Division.

September 14, 1907

John S Dean, Bishop & Mitchell, and Ferry & Doran, for complainant.

Geo. J Barker, C. F. Hutchings, and S. A. Riggs, for defendants.

SMITH McPHERSON, District Judge.

This bill in equity is based largely on the alleged right to cancel a policy of life insurance for $100,000 issued in December, 1906, payable to the estate of Lucius H. Perkins the insured, who died June 1, 1907. The policy was issued on annual premiums to be paid of $6,900, the first of which was paid to the company in cash by the agent, who took the note of the insured due a few days after his death. At about the same time the insured applied to other companies for other insurance of more than $1,000,000. Part of these applications were refused, and some issued and afterwards canceled, which denials and cancellations were concealed from complainant when the policy in suit was issued. When he died, there were policies apparently in force aggregating $540,000, calling for annual premiums of about $30,000, several times more than his income, and which he could not pay without converting his estate into money, and then only for a few years. About the time he was taking out this policy he was in correspondence with a chemist as to the uses and effects of poisons, learned by some of the companies, which denied the applications, but unknown to this complainant until after the death of the insured. The day of his death he purchased morphine poison and that evening fell from the roof of his house, and when reached was unconscious, remaining in that condition until his death, a few hours thereafter. This bill of complaint was not filed until after the death of the insured. Many other allegations of fraud are made. Suffice it to say that the agreement of the insured in his application was that the policy was to be void in case of suicide within two years and aside from that such frauds are alleged as to bring the case within the case of Ritter v. Insurance Company, 169 U.S. 139, 18 Sup.Ct. 300, 42 L.Ed. 693, and which allegations, if true, prevent a recovery. To this bill a demurrer has been interposed, and a plea to the jurisdiction filed mainly on the ground that the case is not cognizable in equity; the contention being that the company has a plain, adequate, and complete remedy at law by defense to an action on the policy.

Whatever the rule may be in the several states and England, the rule now is in the United States courts that where the policy is for the payment of money, and is obtained by fraud, that the cause is not cognizable in equity when the bill is not filed until after the death of the insured. Cable v. Insurance Co., 191 U.S. 288, 24 Sup.Ct. 74, 48 L.Ed. 188; Riggs v. Insurance Co., 129 F. 207, 63 C.C.A. 365. Such a bill in equity can be maintained if brought in the lifetime of the insured, and his subsequent death will not abate the action. Life Insurance Co. v. Blair (C.C.) 130 F. 971. It is contended that, as the policy was for the delivery of bonds, the estate has the right to a decree for specific performance of the contract or policy, and that, being an action in equity, the company has the right to have the controversy determined on the equity side of the docket. The policy makes certain recitals on the back thereof of binding effect, one of which is as follows:

'When this contract matures, the beneficiary will be entitled, in lieu of settlement by delivery of the several $1,000.00 bonds herein provided for, to receive either (1) the whole amount in cash, or (2) any part thereof in bonds, and the reminder in cash. Should either of such settlements be made, the amount of cash payable will be computed at $1,305 in lieu of each $1000 bond undelivered.'

The answer to this is that the estate does not have the right to coerce the delivery of the bonds by a decree for specific performance. The estate has the right of election to either take the bonds, or, in lieu thereof, money calculated as above stated, as in the policy set forth. But, aside from that, the facts are that the company repudiates the policy, and refuses to deliver the bonds. And when the company refused to deliver the bonds a mere naked money demand was created, if the policy is valid. Such is the recently announced rule by the Supreme Court, after reviewing all the authorities, English and American. Roehm v. Horst, 178 U.S. 1, 20 Sup.Ct. 780, 44 L.Ed. 953. Nearly all the cases upholding the right of specific performance of contracts are with reference to real estate. Hyer v. Richmond Company, 168 U.S. 471, 480, 18 Sup.Ct. 114, 42 L.Ed. 547; City of Memphis v. Brown, 20 Wall. (U.S.) 289, 304, 22 L.Ed. 264; Marble Company v. Ripley, 10 Wall. (U.S.) 339, 356, 19 L.Ed. 955; The Mechanics Bank v. Seton, 1 Pet. (U.S.) 304, 305, 7 L.Ed. 152. And such actions cannot be maintained on contracts relating to personal property, except when such personal property has a value other than a money value, such as an heirloom, family relic, a present from a friend, and the like. But in this case the bonds called for by the policy have no value, and are of no concern other than their money value, the ascertainment of which is a mathematical proposition. And without doubt this company will promptly pay in money any amount adjudged by final judgment. So that the estate has no claim that can be enforced, aside from its money demand for the value of the bonds provided for in the policy, and that money demand is cognizable in an action at law, in which both parties have a plain, adequate, and complete remedy.

The insured left a will, which has been admitted to probate, from which it appears that the 100 bonds provided for by the policy were specifically bequeathed, some to the widow, and the others to the heirs. As this was an assignment of the bonds to the several beneficiaries, the contention is that there will be a multiplicity of suits, which can and should be avoided by a bill in equity. The general rule is that the executors take the legal title to all personalty, sue for and recover the same, convert the same into money, and make distribution thereof under the will, pursuant to the orders of the probate court. Such is the rule in Kansas as appears from section 4895 of the General Statutes of Kansas (1905 Ed.), which is as follows:

'An executor, administrator, guardian, trustee of an express trust, or a person expressly authorized by statute, may bring an action without joining with him the person for whose benefit it is prosecuted.'

So that there can and will be but one action to recover the money called for by the policy. Soon after this bill in equity was filed, the executors herein brought an action at law on the policy; they alone, and properly so, being the only plaintiffs.

The insurance company made application in both cases for an order to exhume the body of the insured. Both applications were heard together on the same evidence. The executors protested against making the order in the action at law for two reasons: (1) Section 724 of the Revised Statutes (U.S. Comp. St. 1901, p. 583) provides only for the production of papers and writings, when such was formerly allowable under the chancery practice. And it is believed that such contention is correct, and that a court of law has no power to order the production or inspection of inanimate objects in the possession or control of a party in advance of the trial. This court is mindful of the statement in the opinion of the Circuit Court of Appeals for this circuit in the case of Penney v. Central Coal Company, 138 F. 769, 775, 71 C.C.A. 135. The point was not discussed, and no authorities were cited. It was a mining case. Giving full weight to that decision, it must be limited to mining cases only, and then only, as this court believes, to cases arising in states having statutes providing for such inspection. (2) But, whatever the law is as to the point noticed, there is an insurmountable objection to making the order in the law action in the case now before the court; and that is that the widow is not a party to the law action, and cannot be made a party to the law action. She is a defendant to the action in equity. The widow has the control of the body of her deceased husband, and the executors do not have. Griffith v. Railroad (S.C.) 24 Am. Law Reg. (N.S.) 586, and other cases cited in note; Larson v. Chase, 47 Minn. 307, 50 N.W. 238, 14 L.R.A. 85, 28 Am.St.Rep. 370; Young v. College, 81 Md. 358, 32 A. 177, 31 L.R.A. 540; Petigrew v. Petigrew, 207 Pa. 313, 56 A. 878, 64 L.R.A. 179, 99 Am.St.Rep. 795. The annotations to these cases show that proposition cannot be in doubt, and counsel herein agree to its correctness; so that, if the order is made, it must be in the action in equity.

In nearly all cases, with but few privileged exceptions, and a few prohibitions, all persons are competent witnesses. And by reason of section 724 of the Revised Statutes, and by reason of interrogatories calling for answer that...