Judge Parker, which we wish expressly to disallow. We have never at any stage of this case taken the ground "that the owner of the monopoly can, without special agreement, dictate the price at which the article shall be sold at retail." As this case refers to the validity of an agreement, it would have been unnecessary and useless to attempt so to interpret Judge Parker's decision. Nor is there any instance, so far as we are aware, where in the various preliminary motions or the final trial of the case upon the merits the Supreme Court either at Special Term or in the Appellate Division adopted the views imputed to them by counsel at page 19
B.—At pages 23 and 24 it is suggested that the distinction between the Bobbs-Merrill case and the Scribner case was that in one case a notice was printed in the book, and in the other on the invoices and bills of the plaintiffs, and the suggestion is made that Messrs. Scribner's counsel acceded to this view.
The nature of the claim made in this regard before the Supreme Court of the United States by Messrs. Scribner's counsel can best be shown by an extract from their brief. In the Bobbs-Merrill Company case, page 1, it is said:
"The suit of Charles Scribner's Sons against Straus is distinguishable on the facts from Bobbs-Merrill Company against Straus, in that the Scribners sold copyrighted books only by a restricted sale to wholesale dealers, who undertook to be bound by the restriction. The defendants purchased these copyrighted books from these wholesale dealers with knowledge of the restriction and in violation of it, and these facts bring the Scribner case within certain authorities relating to direct and indirect infringement of a monopoly, providing that the authorities in the patent eases apply in a copyright case. Leaving out of sight these distinctions, the Scribner case rests upon the same fundamental principle as the Bobbs-Merrill case; and we therefore ask leave to file this hrief relating to the general rules of law so far as they are common to the Scribner cases and the Bohhs-Merrill case, taking pains not to intrude upon the questions peculiar to the case at bar."
In the brief in the Scribner case, it is said at page 23:
"POINT I.
"This case is distinguished from Bobbs-Merrill Co. v. Straus (147 Fed., 15) upon the facts.
In these essential particulars the case at bar differs from the Bobbs-Merrill case. The Scribners made a restricted sale, retaining a control over the retail price. The maintenance of this price was by the bill-heads made an express condition of the sale. The dealers to whom the Scribners sold were under an absolute obligation stated in the admitted portions of paragraphs VI and IX of the bill of complaint and stated in the answer as follows:
"Neither of said associations, nor any of the members thereof, including the complainants, would or will now, sell or supply any books at any price to any dealer * who did not maintain said arbitrary retail -price on copyrighted books, or who would resell or was suspected of reselling such copyrighted books to any dealer who thereafter sold the same at less than the arbitrary price fixed by such unlawful combination" (Record, p. 98).
There was a contract between the Scribners and the original vendees, conditions were imposed and rights asserted which in each case were brought home to the knowledge of Macy & Co., and the complainants assert their right by virtue of the specific statutory protection of the sole liberty of vending under the copyright law.
In the Bobbs-Merrill case it was held that the mere printing of the notice did not make the sale by complainants a restricted or conditional sale, and it was conceded that the dealers to whom complainant sold the books were under no agreement or obligation to restrict their sales.
In the Scribner case the answer admits that the sales by the Scribners were restricted sales, it is shown by uncontroverted proof that they were expressly made on condition and it is conceded and expressly alleged by the defendants that the purchasers from the Scribners were under obligation to restrict their sales."
C—At page 26 of appellant's brief a reference is made to Section 4955. It is to be noted:
(1) This statute was not referred to by Mr. Justice Day;
(2) Statute 4955 relates solely to assignments of copyrights;
(3) If, as is conjectured, counsel refer to Section 4964, the conditions of that section are entirely misstated in the brief and the section is wholly irrelevant since it provides damages for certain infringement of copyright which have been held not to be recoverable in equity.
The Bobbs-Merrill case was brought under Section 4970 of the United States Compiled Statutes to enforce the rights given under Section 4952, as Mr. Justice Day points out.
D.—A reference to Judge Ray's opinion at page 38 makes it proper to refer to these facts:
The case of Scribner v. Straus, as will appear from the record thereof, was begun on November 10, 1903. An answer was filed on February 23rd setting up the illegality of the agreement constituting the American Publishers' Association. On March 22, 1904, exceptions to this answer were filed and were sustained on April 28, 1904, by Judge Lacombe on the ground "that the complainant is a member of an illegal combination in violation of the Anti-Trust Laws, State or Federal, is no defense to a suit for infringement of a copyright."
130 Fed., 389.
On July 14, 1904, the case of Bobbs-Merrill v. Straus was begun. On August 3rd, 1904, an answer was filed containing the same allegations which had been stricken out by Judge Lacombe in the Scribner case. The Bobbs-Merrill Co., however, did not except to this impertinent defense, but, on the contrary, stipulated that the allegations of the answer were true.
Judge Ray's decision, therefore, was based upon a state of facts submitted by consent, and was made without hearing of any counsel on behalf of the American Publishers' Association. Tho Circuit Court of Appeals, Judge Wallace, refused to permit the point to be argued as being one too well settled for discussion.
Respectfully submitted,
Stephen H. Olin, Of Counsel for Respondents.
Statement required by Rule 41 1
Notice of Appeal 3
Sum mons 4
Amended Complaint 5-19
Answer 20-32
Extracts from Minutes 32a
Case 33-120
Judgment 32a
Stipulation settling case 122
Order settling case 122
Stipulation waiving certification 123
Order filing Record Appellate Division 123
Affidavit of No Opinion 122
All Witnesses Called By Plaintiff.
Witnesses.
Bertha Delmore Thompson, Plaintiff. 35, 46, 55, 69, 75
William George Kochner, Clerk from Presbyterian Hospital, producing books 38
Monroe B. Long, Physician 40
Orlando S. Rich, Consulting Physician 42
Joel G. Van Cise, Actuary of Equitable.. .56, 69, 72
Samuel S. McCurdy, Director Equitable 70
Gerald F. Brophy, "" 70
James J. Whitaker, Accountant 71
Exhibits.
Plaintiff's Exhibits.
KOL.
No. 1. Death Certificate Health Department. Admitted fol. 97; printed 220
No. 2. Copy Policy 555,915. Admitted fol. 98; printed 48
No. 3. Copy Policy 555,916. Admitted fol. 98; printed 24, 148 FOL.
No. 4. Assignmeut Policy 555,915 to Bertha L. Thompson. Admitted fol. 99; substance given, not printed in full.
No. 5. Assignment same policy to American Deposit & Loan Co. Admitted fol. 99; substance given, not printed in full.
No. 6. Request for change Policy 555,915. Admitted fol. 99; printed 234
No. 7. Receipt for $875 60 by American Loan Co. Admitted fol. 100; printed 236
No. 8. Assignment Policy 555,916 to Margaret M. Duncan. Admitted fol. 101; substance given, not printed in full.
No. 9. Assignment Policy 555,916 to American Loan & Deposit Co. Admitted fol. 101; substance given, not printed in full.
No. 10. Receipt $875.60 by American Loan Co. Admitted fol. 101; printed 238
No. 11. Policy sued on, 555,915. Admitted fol. 102; printed 48
No. 12. Loan Contract, March 8, 1900. Admitted fol. 10'2; printed in full 240
No. 13. Contract, December 29, 1899. Admitted fol. 103; printed 244
No. 14. Policy 555,916, policy sued on. Admitted fol. 103; printed 24, 48
No. 15. Contract loan, March 8, 1900. Admitted fol. 104; printed 248
No. 16. Contract, Dec. 29, 1899. Admitted fol. 104; printed 252
No. 17. Letter, January 11, 1900, Brophy to Thompson. Admitted fol. 104; printed.. 256
No. 18. Letter, January 5, 1900, Same to Same. Admitted fol. 105; printed 259
No. 19. Record hospital (Surgical history). Marked for Identification fol. 112; not printed.
No. 20. Record hospital (Medical history). Marked for Identification, fol. 113; not printed.
No. 21. Contract between Equitable and W. H. Thompson. Admitted fol. 129; printed. 262
No. 22. Account 1899 to 1902. Admitted fol. 130; printed 301
No. 23. Application for policy. Same as Ex. A, attached to complaint 321
No. 24. Letter, April 21, 1903, Tarbell to Thompson. Admitted fol. 149; printed.. 321
No. 25. Letter, April 28, 1903, Tarbell to Thompson. Admitted fol. 149; printed.. 325
No. 26. Letter, Thompson to Tarbell, April 25, 1903. Admitted fol. 150; printed
No. 27. Memorandum at foot letter. Marked for identification, fol. 139; not printed.
No. 28. Check, January 13, 1900. Admitted fol. 204; printed..." 32S
Defendant's Exhibits.
Exhibit A. Check, December 21, 1899, American Loan & Deposit Co. to Bertha L. Thompson, for $183.40. Marked for identification, fol. 136; not printed.
Exhibit B. Letter, Brophy to Thompson, dated Oct. 23, 1900. Admitted fol. 139; printed. 331
Exhibit C. Letter, Thompson to Tarbell, Oct. 5, 1908. Admitted fol. 14T; printed 334
Exhibit D. Letter, Thompson to Wilson, Dec., 1899. Admitted fol. 147; printed 337
Exhibit E. Letter, Same to Same, March 27, 1900. Admitted fol. 148; printed 310
Exhibit F. Letter, Thompson to Tarbell, February 7, 1903. Admitted fol. 148; printed 313
Exhibit G. Letter, Thompson to Equitable Life, August 24, 1903. Admitted fol. 148; printed .' 346
Exhibit H. Letter, Thompson to Taylor, October 30, 1903. Admitted fol. 148; printed. 319
Statement required by Rule 41.
This action was commenced by service of summons and complaint, March 25, 1904. The amended complaint served April 19, 1904, and the answer July 14, 1904. The names of the original parties in full are the plaintiff. Bertha Delmore Thompson, as administratrix of the goods and chattels, rights and credits of William H. Thompson, deceased, and the defendant. The Equitable Life Assurance Society of the United States. There has been no change in the parties. The only opinion given by the Court is set forth in the case hereto attached.
Sir:
You will please take notice that the plaintiff, Bertha D. Thompson, as administratrix of the goods, chattels, rights and credits of William H. Thompson, deceased, appeals to the Appellate Division of the Supreme Court in the First Department from the judgment entered herein on the 20th day of October, 1906, and filed and docketed in the office of the Clerk of New York County, at the County Court House of New York County, in the Borough of Manhattan, City of New York. Dated New York, October 20, 1906.
Raphael J. Moses, Attorney for Plaintiff, Office aud P. O. address, 46 West Ninety-seventh Street, Borough of Manhattan, City of New York, N. Y. To Alexander & Green,
Attorneys for Defendant,
120 Broadway, Borough of Manhattan
New York City, Peter J. Dooling,
County Clerk.
TO THE ABOVE NAMED DEFENDANT:
You are hereby summoned to answer the complaint in this action and to serve a copy of your answer on the plaintiff's attorney within twenty days after the service of this summons, exclusive of the day of service; and in case of your failure to appear, or answer, judgment will be taken against you by default for the relief demanded in the complaint.
Dated March 25, 1904.
Raphael J. Moses
Plaintiff's Attorney,
Office and Post Office address,
No. 46 West Ninety-seventh Street,
New York City.
The above named plaintiff, for her amended complaint, by Raphael J. Moses, her attorney, alleges:
For A First Cause Of Action:
1. That defendant is a domestic corporation, and at all the times hereinafter mentioned transacted the business of life insurance under the insurance 9 laws of this State.
2. That plaintiff is the administratrix of the goods, chattels and credits of William H. Thompson, deceased, duly appointed by the Surrogate's Court of New York County, on the 16th day of March, 1904, and that she has duly qualified as such administratrix.
3. Upon information and belief that heretofore and on or about the 7th day of September, 1891, William H. Thompson, the decedent, made application to the defendant in words and figures as set out in Exhibit "A" hereto attached.
4. Upon information and belief that heretofore and on or about the 9th day of October. 1891, defendant issued its writing obligatory or policy of insurance, No. 555,915, for the sum of $10,000, a copy of which is set out in Exhibit "B " hereto attached.
5. Upon information and belief that the said William H. Thompson paid nine annual premiums on said policy, each for the sum of $508, on or about the respective due dates thereof, for the years 1891 to 1899 inclusive, and kept and performed all the conditions on his part to be kept and performed.
6. Upon information and belief that on or about the day of , 1898, the decedent, William H. Thompson, delivered the said policy to the American Deposit and Loan Company, under a certain agreement, and failed to pay the premium due on the 9th day of October, 1899.
7. Upon information and belief that on or about the 20th day of December, 1899, the said policy was surrendered to defendant by the saidAmerican Deposit and Loan Company, and said defendant paid off the loan of $508, which had previously been obtained from said American Deposit and Loan Company, and thereupon defendant was obligated to issue a paid-up policy for the entire amount which the full reserve on the policy, according to the then legal standard of the State of New York, would purchase as a single premium, calculated by the regular table for single premium policies, published by the defendant in 1891.
8. Upon information and belief that the amount of such paid up policy which the said reserve would have purchased on the 20th day of December, 1899, according to the legal standard of the State of New York, calculated by the regular table for single 13 premiums, as aforesaid, was the sum of $2,695, of the then cash value of $2,032.
9. Upon information and belief that thereafter and on or about the loth day of January, 190o, defendant agreed to and did loan William H. Thompson, the decedent, the sum of $1,040, and the said sum so loaned was used by decedent to reimburse defendant for the amount paid by it to the American Deposit and Loan Company, and also to pay the premium due on said policy, to-wit, the sum of $508, on the 9th day of October, 1900. That the check given decedent was endorsed directly by him to the Superintendent of the Loan Department of defendant, and the said policy was thereupon reinstated by defendant.
10. Upon information and belief that thereafter and on said 15th day of January, 1900, decedent delivered said policy so reinstated to defendant, under and pursuant to an agreement of which Exhibit "C " hereto attached is a copy.
11. Upon information and belief that thereafter and on or about the 3d day of March, 1900, said policy, No. 555,915, was rewritten by defendant at the request of the decedent, without change except to omit the words contained in the margin of same as per Exhibit " B."
12. Upon information and belief that on or about the 8th day of March, 1900, without further consideration, a new loan contract was signed by decedent, taking the place of the previous loan contract of January 15, 1900, so that the same should apply to the policy issued on March 3, 1900, which had been substituted for a previous policy, identical with Exhibit " C " except as to date.
13. Upon information and belief, that on or about the 15th day of January, 1900, for value received, the defendant agreed with decedent, upon receipt of the original policy reinstated, that defendant should hold the said policy and that the same was to be in full force at all times for the beneficiaries of the said decedent on said policy.
14. Upon information and belief, that the premium due on said policy in October, 1900, was not paid nor was the loan of $1,040, due December 29, 1900.
15. Upon information and belief, that no notice to pay such premium was served on either the decedent William H. Thompson or the assignee of said policy in the form and manner required by law, and that the defendant had knowledge of such assignment.
16. That the defendant has canceled said policy and denies any liability thereunder, and has not given notice of any premium due on the same after October 9, 1900.
17. Upon information and belief, that the amount of the paid-up policy to which decedent was entitled on the loth day of October, 1000, calculated by the regular table for single premium policies, published by defendant in 1891, as the full reserve on the policy according to the then legal standard of the State of New York, was the sum of $3,000, of the then cash value of $2,352.
18. That on the 15th day of January, 1900, and also on the 9th day of October, 1900, decedent William H. Thompson was in greatly impaired health, and his mind enfeebled, and he was wholly uninsurable, and had been for a long time almost at death's door and suffering from nervous prostration.
19. Upon information and belief, that the reserve value on said policy according to the American Experience Tables of Mortality, at 4 per cent, interest, as contemplated by the contract on the 9th of Octo- 19 ber, 1900, the decedent having then completed his ninth policy year, was the sum of $2,146.10, and the actual value of said policy on the 9th day of October, 1900, was the amount, $10,000, less interest to the date satisfactory proofs of death were furnished the defendant, less the annual premiums, or $8,281.57; and the actual value of the premiums to be deducted, using the legal rate of interest, 6 per cent., was the sum of $1,871.31, leaving the actual value or the policy the sum of $6,410.26.
20. Upon information and belief, that on the 15th day of January, 1900, when said alleged loan contract was made, and also on the 8th day of March. 20 1900, when the subsequent loan contract was made, by reason of the reinstatement of the original policy, the said two loan contracts both original and renewal, were made with the intent and for the purpose of thereby securing to the defendant for the loan and forbearance of the sum of $1,040 from the 15th day of January to the 29th day of December, 1900, a sum in excess of the lawful interest at 6 per cent. by the provisions of said contracts, both of January and March reading that the defendant might cancel said policy and apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest, the words, "Cash surrender value" indicating an arbitrary sum, less 21 than one-half the reserve value and less than one-sixth the actual value of said policy, and so used with the intent and for the purpose of concealing the said usurious agreement.
21. Upon information and belief, that at the time of the making of said contract, there existed between decedent and the defendant a contract of employment, under which decedent was to receive and did annually receive, renewal commissions in excess of the sum of $2,500 annually, which defendant became liable for and subsequently did pay to decedent during his lifetime, and by reason of such counter obligation on the part of defendant, defendant undertook and agreed to collect the premiums which might become due, out of the account, and not cancel the policy, but has violated its agreement so to do.
22. That said William H. Thompson died in the City of New York on the 28th day of February, 1904, and the original letters of administration granted to plaintiff were exhibited to defendant, and satisfactory proofs of death furnished, but not in the form of proof used by defendant, as defendant declined to give the same, affirming that they had canceled said policy and there was no occasion for proofs of death, as all liability on their part had been satisfied and extinguished.
23. Wherefore, plaintiff demands judgment against defendant on this cause of action, for the sum of $6,459.28, being the difference between $10,000, the face of the policy, and the sum of the amount loaned, $1,040 with interest at i> per cent., and the amount of premiums due, with interest at 6 per cent.
For A Second Separate And Distinct Cause Of Action:
Plaintiff alleges the matter set up in the paragraphs numbered "1" and "2" of the first cause of action, and repeats and realleges each and every allegation set up in the said first cause of action, for her second cause of action, with the exception of the number of the policy, the same being numbered 555,916, and having been issued upon the same application, the same facts as to the policy and each contract set out in the first cause of action, and of a like amount.
Wherefore plaintiff demands judgment against defendant on this second cause of action for the sum of $6,459.28, and on both causes of action for the 25 sum of $12,918.56, with interest and costs.
Raphael J. Moses,
Attorney for Plaintiff.
Office and Post Office address,
No. 46 West Ninety-seventh Street,
New York City.
City Of New York,
County of New York,, ss.:
Borough of Manhattan,
Bertha D. Thompson, being duly sworn, deposes and says that she is the plaintiff in the above entitled action; that she has read the foregoing amended complaint and knows the contents thereof, 26 and that the same is true of her own knowledge, except as to the matters therein stated to be alleged upon information and belief, and as to those matters she believes it to be true.
Bertha D. Thompson. Sworn to before me this {19th day of April, 1906,}
A. E. ACKERMAN,
Commissioner of Deeds,
N. Y. City.
Exhibit "A."
APPLICATION FOR FREE TONTINE POLICY.
I hereby apply to the Equitable Life Assurance Society of the United States, for $20,000 of assurance on my life, on the plan described in the " privileges " below, and known as the Free Tontine.
PRIVILEGES.
I. Incontestability.
After two years from the date of issue, the only conditions which shall be binding upon the holder of the policy are that he shall duly pay the premiums and observe the regulations of the Society as to age and service in war. In all other respects, if the policy matures after the expiration of the said two years, the policy shall be Indisputable.
II. Non-forfeiture.
If premiums upon the policy, for not less than three complete years of assurance, shall have been duly received by the Society, and default shall be made in payment of a subsequent premium, the policy may be surrendered for a non-participating paid-up policy, for the entire amount which the full reserve on the policy, according to the present legal standard of the State of New York will then purchase as a single premium, calculated by the regular table for single premium policies, now published by the Society; providing, that the policy be returned to the Society duly receipted within six months after the date upon which the last premium in default has fallen due; otherwise the policy shall cease and determine and all premiums paid thereon shall forfeit to the Society.
III. Freedom Of Travel And Occupation.
After one year from the register date of issue of the policy there are no restrictions upon travel, resi30 dence or occupation, except that military service in time of war is forbidden unless a permit has been previously obtained. In case of death from service in war without such permit the net reserve of the policy (computed according to the American Experience Table of Mortality, taking interest at four per centum per annum) will be paid.
IV. Facility In Making Payments.
Although all premiums are due in the City of New York, payments may be made in other places on or before the due dates to persons authorized to receive the same, on the production of the Society's 31 receipt therefor, signed by its Secretary, and countersigned by the authorized person to whom the payment is made. Although the contract is based on the receipt of premiums annually in advance, the premium may be made payable in semi-annual or quarterly instalments, but in such case that part of the full year's premium, if any, which remains unpaid at the maturity of this contract, shall be deducted from the amount of the claim.
V. Admission Of Age.
The age of the person upon whose death the policy matures will be admitted in advance by the Society on due proof, and after being thus admitted no deduction shall be made to adjust the amount of assurance which at the correct age would have been purchasable with the premium paid.
VI. Tontine Profits.
At the end of the Tontine Period, if the person proposed for assurance be then living, and the policy in force, the policy shall participate in the accumulated surplus derived from policies on the Free Tontine plan, both existing and discontinued, as may then be apportioned by the Society.
VII. Choice Of Privileges At The End Of The Tontine Period.
The policy may then be surrendered for its full value, consisting of the entire Reserve and the SurPlus then apportioned by the Society—
Either in 1. Cash.
or 2. Paid-up Assurance,
or 3. An Annuity For Life. or, if the policy is not an endowment maturing at the end of the Tontine Period, it may be continued and the surplus taken—
Either in 1. Cash, or 2. Paid-up Assurance,
(to be added to the policy) or 3. An Annuity.
(to reduce or extinguish premiums if still payable.)
(Reverse Side)
1. Full Name of person for whose benefit assurance on the PLAN DESCRIBED ON THE REVERSE SIDE OF THIS SHEET IS APPLIED FOR
Myself.
Residence Relationship to the person to be assured
Has the person in whose favor the assurance is to be effected an interest in the life of the person to be assured equivalent to the amount of the assurance applied for?
2. Full Name of person whose life is assured William H. Thompson.
Occupation, State it in detail; if mercantile, state if it involves traveling as a buyer or seller Insurance. Place of business 120 Broadway,
N. Y. Residence: Town, Brooklyn, County, Kings,
State, N. Y. Shall notices of Premiums coming due be addressed to last named person at place of business as stated? Yes.
The "Place of Business" if not specially given, will be assumed to be the same as "Residence."
If, (in the event of the stipulated age or period being attained) the sum assured or cash value is not to be paid to the person whose life is to be assured, state to whom payment is to be made.
3. Place and date of Birth of the person to be assured Place, St, Stephen, County, Charlotte, State, New Brunswick, Year, 181^0, Month, May, 37 Day, 13, Age at nearest birthday, 51 40 date, providing the risk is assumed by the Society?
4. Sum to be assured, $30,000. Kind of policy desired? (*. e. Whether Endowment or Life, etc. Answer as to Tontines at queries 6 and 7 only.)
Ord. Life.
5. Is the Premium to be paid annually, semi-annually or quarterly? Annually. Amount of each premium, $1,016.
6. Is the Tontine Period to be ten, fifteen or twenty years? 15.
7. Is it agreed, in consideration of the Privileges as to paid-up assurance stated on the reverse side of this application, that all right or claim to temporary ^ assurance or any other surrender value than that provided in the said privileges, are hereby specifically waived and relinquished, whether required by the statute of any State or not; and that at the end of the Tontine Period, for all paid-up assurance in excess of the amount of the original policy, or issued in lieu of a matured Endowment, a satisfactory medical certificate shall be furnished to the Society? Yes.
8. It is agreed that for one year after the date of issue of the policy, travel and residence in Mexico and the Torrid Zone, and engagement in any of the following occupations or employments: Blasting, mining, submarine labor, aeronautic ascensions, the manufacture, handling or transportation of inflammable or explosive substances, service upon any railroad train, or in switching, or in coupling cars, or on any steamboat, or other vessel or boat, will lender the policy void; and that self-destruction, sane or insane, and death in consequence of violation of law, within one year from the date hereof, are not risks assumed by the Society in the contract? Yes.
9. What cash premium has been paid to make the assurance under this application binding from this
A annual premium of $ has been paid upon condition that if the risk is Not Assumed by the Society, this sum is to be returned, in accordance with the provisions of the Society's Official receipt No given as voucher for said payment.
It is hereby agreed that all the foregoing statements and answers, as well as those made or to be made to the Society's Medical Examiner, are warranted to be true, and are offered to the Society as a consideration of the contract, which shall not take effect until the first premium shall have been paid during the life and good health of the person herein *' proposed for assurance.
Note here (not in accompanying letter) any special clause or provision desired in policy—2 Policies of $10,000 each.
Dated at Brooklyn, Sept 7, 1891. Note before signing. The husband may sign for his wife or the father for his children.
(Signature of person for whose benefit assurance is made.
William H. Thompson, 4-2 Person whose life is to be assured.
This risk is approved and recommended by
i Soliciting Agent.
William H. Thompson,
General Agent.
Officer's Check.— Conditioned for six months.
That assured is to present himself to the Medical Directors at the end of six months from this date and if he fails to pass a satisfactory examination the policy to be null and void.
Exhibit " B." 43
The EQUITABLE LIFE ASSURANCE SOCIETY Of The United States,
120 Broadway,
New York.
Premium, $508.
Amount, $10,000.
Age, 51.
No. 555,915.
In Consideration Of the written and printed application for this policy which is herehy made a part of this contract, and of the payment in advance of
Five hundred and eight dollars and cents, and of the annual payment of Five hundred and eight dollars and cents to be made thereafter at the Office of the Society in the City of New York, on or before the ninth day of October in every year, during the continuance of this contract;
Does Promise To Pay to William H. Thompson, his executors, administrators or assigns at the office of the Society in the City of New York, Ten thousand dollars, upon the receipt of satisfactory proofs of the death of said William H. Thompson of Brooklyn, in the County of Kings, State of New York.
New York, the Third day of March, 1900.
H. B. Hyde, President. 45
(In margin) Provided that W. H. Thompson is to present himself to the Medical Directors at the end of six months from this date and if he fails to pass a satisfactory examination the policy is null and void.
(Endorsements on following page.)
Endorsements On Policy.
List Of Privileges And Conditions, the details of which will be found in the application. This Policy becomes Incontestable and grants 46 Freedom of Residence, Travel and Occupations One second party the sum of Ten hundred and forty and ±9 00/100 dollars, the receipt of which by the party of the second part is hereby acknowledged; and the said party of the second part agrees to repay the same to the said party of the first part at the office, 120 Broadway, New York City, on the twenty-ninth day of December, 1900.
YEAR FROM ITS DATE OF ISSUE.
If, after having been in force for three years, it should lapse in consequence of non-payment of any premium, it will have a surrender value in paid-up assurance, providing this Policy be surrendered within six months after the date of such lapse.
It gives to William H. Thompson a choice of six methods of settlement upon the completion of the Tontine Period, on the 9th October, 1906; ninth October nineteen hundred and six, namely,
I. The continuance of the Policy, and the withdrawal of the accumulated Surplus,
Either in 1. Cash, *" 2. Paid-up Assurance,
3. An Annuity, or
II. The surrender of the policy for its full value, consisting of the entire reserve amounting to $3,647, Thirty six hundred and forty seven dollars, together with the surplus then apportioned by the Society.
Either in 1. Cash,
2. Paid-up Assurance,
3. A Life Annuity.
H. B. Hyde, President.
W. Alexander, Sec'y.
In Consideration Op said loan the party of the second part hereby assigns, transfers and sets over all his right, title and interest in policy No. 555,915, on the life of William H. Thompson issued by said party of the first part, together with all money which may be payable under the same to the said party of the first part as collateral security for the repayment of said loan.
In The Event Of Default in the repayment of said loan upon the date hereinabove mentioned, the party of the first part is hereby fully authorized and empowered, without notice to and without demand for payment by the party of the second part, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest. Should the surrender value of said policy exceed the amount of above loan with interest at five per cent. thereon, then and in that case the excess value above the loan and interest shall be due and payable to the legal owner or owners of the policy on demand. 51
In Witness Whereof I have hereunto set my hand and seal.
(Signed) William H. Thompson. [l. S.]
In the presence of—
The defendant answering the amended complaint herein by Alexander & Green, its attorneys, alleges upon information and belief:
Answering The Allegations Set Forth In The Alleged First Cause Of Action:
1. Defendant admits the allegations contained in the first paragraph or subdivision of the amended complaint.
2. Defendant has not knowledge or information sufficient to form a belief as to the allegations contained in the second paragraph or subdivision of the amended complaint.
3. Answering the allegations contained in the third paragraph or subdivision of the amended complaint, the defendant admits that, on or about the 7th day of September, 1891, William H. Thompson, the decedent, made application to the defendant, 55 but for the words and figures of said application refers to the original of said application, to be produced on the trial of thi1? action.
4. Answering the allegations contained in the fourth paragraph or subdivision of the amended complaint, the defendant admits that on or about the Dth day of October, 1891, it issued its written policy of insurance No. 555,915 for the sum of $10,000, but for the words and figures of said policy refers to the original thereof to be produced upon the trial of this action.
5. Defendant denies each and every allegation 56 contained in the fifth paragraph or subdivision of the amended complaint, except that the defendant admits that the said William H. Thompson paid nine annual premiums on said policy, each for the sum of $508, on or about the respective due dates thereof, for the years 1891 to 1899, inclusive.
6. Defendant admits the allegations contained in the sixth paragraph or subdivision of the amended complaint.
7. Defendant denies each and every allegation contained in the seventh paragraph or subdivision of the amended complaint, except that it admits r_ that on or about the 19th day of December, 1899, the said policy was surrendered to defendant by the American Deposit and Loan Company.
8. Defendant denies each and every allegation contained in the eighth paragraph or subdivision of the amended complaint.
9. Answering the allegations contained in the ninth paragraph or subdivision of the amended complaint, the defendant admits that on or about the 29th day of December, L899, the defendant agreed to and did loan William H. Thompson, the decedent, the sum of $1,040, and the said sum so loaned, together with other sums of money, were used by decedent to reimburse the defendant for the amount paid as aforesaid by it to the American Deposit and Loan Co., and also to pay the premium due on said policy on the 9th day of October, 1899, to wit, the sum of $508, and that the said policy was thereupon reinstated by defendant, and, except as hereinbefore specifically admitted, defendant denies each and every allegation contained in the ninth paragraph or subdivision of the amended complaint.
10. Answering the allegations contained in the tenth paragraph or subdivision of the amended complaint, the defendant admits that thereafter and on or about the 29th day of December, 1899, the decedent delivered said policy, so reinstated, to defendant under and pursuant to an agreement bearing date on said day, for the words and figures of which agreement defendant refers to the original of said agreement, to be produced upon the trial of this action, and, except as hereinbefore specifically admitted, denies each and every allegation contained in said paragraph or subdivision of tho amended complaint, and denies that Exhibit "C," attached to the amended complaint, is a copy of the agreement pursuant to which the policy was so delivered to the defendant.
11. Defendant admits the allegations contained in the eleventh paragraph or subdivision of the amended complaint.
12. Answering the allegations contained in the twelfth paragraph or subdivision of the amended complaint, the defendant admits that on or about the 8th day of March, 1900, without further consideration, a new loan contract was signed by decedent, taking the place of the previous loan contract of the 29th day of 61 December, 1899, so that the same should apply to the policy rewritten on March 3, 1900, which had been substituted for the previous policy, and that Exhibit " C," annexed to the complaint, is a copy of said new loan contract, and, except as hereinbefore specifically admitted, defendant denies each and every allegation contained in said twelfth paragraph or subdivision of the amended complaint.
13. The defendant denies each and every allegation contained in the thirteenth paragraph or subdivision of the amended complaint, except that it admits that the defendant agreed with decedent upon receipt of the original policy reinstated that 62 defendant should hold the said policy.
14. The defendant admits the allegations contained in the fourteenth paragraph or subdivision of the amended complaint.
15. The defendant denies each and every allegation contained in the fifteenth paragraph or subdivision of the amended complaint, except that it admits that no notice to pay the premium which became due on October 9, 1900, was served on the decedent, William H. Thompson.
The defendant denies each and every allegation contained in the nineteenth paragraph or subdivision of the amended complaint.
20. The defendant denies each and every allegation contained in the twentieth paragraph or subdivision of the amended complaint.
21. Answering the allegations contained in the twenty-first paragraph or subdivision of the amended complaint, this defendant admits that at the time of the making of said contract there existed between the said decedent and defendant a certain contract of agency under which decedent was to receive, and did annually receive, certain renewal commissions, which defendant became liable for and subsequently did pay to decedent during his lifetime, and except as hereinbefore specifically admitted, this defendant denies each and every allegation contained in the twenty-first paragraph or subdivision of the amended complaint.
22. Answering the allegations contained in the twenty-second paragraph or subdivision of the amended complaint, defendant has not knowledge or information sufficient to form a belief as to when or where said William H. Thompson died, or whether the original letters or any letters of administration granted to plaintiff were exhibited to defendant; and denies that satisfactory proofs of death were furnished.
Second.
For a separate defense to the alleged first cause of action set up in the amended complaint, the defendant alleges:
23. Upon information and belief, that on or about the 20th day of July, 1895, the said William H. Thompson, for a valuable consideration, by an instrument in writing bearing date on said day, as signed, transferred and set over all his right, title and interest in said policy of insurance No. 555,915 on the life of said William H. Thompson, being the policy mentioned and described in the fourth paragraph or subdivision of the amended complaint, and all money which might be payable under the same to the American Deposit and Loan Co. of New York City, and thereupon delivered said policy to said American Deposit and Loan Co. of New York City, which said company thereupon became the owner and holder of said policy and continued to be such owner and holder down to about the 19th day of December, 1899.
21. That in and by said policy and as a part of the consideration therefor it was provided that an annual premium of $508 should be paid to the defendant on or before the 9th day of October in every year during the continuance of the said contract or policy. That in accordance therewith a premium of $50S became due on the 9th day of October, 1899, which said premium was not paid, nor any part thereof, although due notice thereof was given by the defendant to said William H. Thompson and said American Deposit and Loan Company.
25. That on or about the 19th day of December, 1899, the said American Deposit and Loan Company delivered and surrendered to defendant the said policy of insurance No. 555,915, and thereupon and 69 at the request and upon the demand of said American Deposit and Loan Company, the defendant paid to said American Deposit and Loan Company the full surrender value of said policy, amounting to the sum of $S75.(50, and thereupon the said policy was canceled and all obligation thereunder upon the part of the defendant ceased and terminated.
26. That thereafter and on or about the 29th day of December, 1899, upon the request of the said William H. Thompson and upon his agreement to pay the said premium which had fallen due on said policy on the 9th day of October, 1899, with interest thereon, and to repay to the defendant the amount paid by it to the said American Deposit and Loan Company, with interest thereon, the defendant agreed to, and did, reinstate said policy.
27. That on or about the 29th day of December, 1899, the defendant loaned and advanced to said William H. Thompson the sum of $1,040 and certain further sums of money in addition thereto, and thereupon and in consideration of said loan, by an instrument in writing bearing date on said day, the said William H. Thompson, together with one Bertha D. Thompson, agreed to pay the said sum of $1,040 to the defendant on the 29th day of December, 1900, and assigned, transferred and set over to defendant all their right, title and interest in and to said policy No. 555,915, together with all money which might be payable under the same, as collateral security for the repayment of said loan, and said William H. Thompson and Bertha D. Thompson in and by said instrument further agreed that in the event of default in the repayment of said loan upon the 29th day of December, 1900, that the defendant was authorized and empowered, without notice to and without demand for payment by them, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest, and thereupon said William H. Thompson delivered the said policy to the defendant and the defendant has ever since continued to hold the same.
28. That thereafter and on or about the 3d day of March, 1900, upon the request of said William H. Thompson and others the said policy was rewritten by the defendant in the form set forth in Exhibit "B," annexed to the amended complaint, with the omission of the words contained in the margin thereof.
29. That thereafter and on or about the Sth day of March, 1900, the said William H. Thompson, by an instrument in writing, which was intended to and which did take the place of the said instrument in writing, or loan agreement, hereinbefore referred to bearing date the 29th day of December, J899, agreed in consideration of said loan of $1,040, to lepay the same to the defendant on the 29th day of December, 1900, and assigned, transferred and set over to defendant all his right, title and interest in said policy No. 555,915, as rewritten, together with all money which might be payable under the same as collateral security for the repayment of said loan, and said William H. Thompson in and by said instrument further agreed that in the event of default in the repayment of said loan upon the 29th day of December, 1900, that the defendant was authorized and empowered without notice to and without demand for payment by said "William H. Thompson, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest.
30. That in accordance with the terms of said policy an annual premium of $508 became due and payable thereon to the defendant on the 9th day of October, 1900. and upon the request of the said William H. Thompson, defendant agreed with him to accept payment of said premium on or before the 9th day of January, 1901, with interest, on the express condition that if the said premium should not be paid, the value of the assurance for the extended time should be deducted from any cash or paid-up value to which the policy might be entitled.
31. That neither said premium nor said sum of $1,010 loaned as aforesaid by the defendant to the said William H. Thompson, nor any part of either thereof, has been paid.
32. That subsequent to the 29th day of December, 1900, when said loan became due and payable, and after giving notice to the said William H. Thompson of its intention so to do, defendant cancelled said policy and applied the full cash surrender value thereof to the payment of said loan and unpaid interest, the amount of said cash surrender value being less than the amount of said loan and the unpaid interest thereon, and thereupon the said policy became null, void and of no effect and all the rights of the said William H. Thompson therein and obligations of the defendant thereunder ceased and terminated.
Third. Answering The Allegations Set Forth In The Alleged Second Separate And Distinct Cause Of Action Contained In The Amended Complaint—
33. Defendant here repeats and makes a part of its answer to the alleged second separate and distinct cause of action, each and every admission, allegation or denial set up by the defendant in paragraphs or subdvisions oue to twenty-two inclusive of its answer to the alleged first cause of action, substituting in each of said admissions, allegations and denials as and for the number of the said policy the number 555,916, instead of number the 555,915.
Fourth. For A Separate Defense To The Alleged Second Cause Of Action Set Up In The Amended Complaint, The Defendant Alleges—
34. Upon information and belief, that on or about the 20th day of July, 1895, the said William H. Thompson, for a valuable consideration, by an instrument in writing bearing date on said day, assigned, transferred and set over all his right, title and interest in said policy of insurance No. 555,916 on the life of said William H. Thompson, being the policy mentioned and described in the second alleged cause of action set up in the amended 79 complaint, and all money which might he payable under the same to the American Loan and Deposit Company of New York City, and thereupon de livered said policy to said American Deposit and Loan Company of New York City, which said company thereupon became the owner and holder of said policy and continued to he such owner and holder down to about the 19th day of January, 1899.
35. That in and by said policy and as a part of the consideration therefor it was provided that an annual premium of $508 should he paid to the defendant on or before the 9th day of October in every year during the continuance of the said contract or S0 policy. That in accordance therewith a premium of $508 became due on the 9th day of October, 1899, which said premium was not paid, nor any part thereof, although due notice thereof was given by the defendant to said William H. Thompson and said American Deposit and Loan Company.
30. That on or about the 19th day of December, 1899, the said American Deposit and Loan Company delivered and surrendered to defendant the said policy of insurance No. 555,916 and thereupon and at the request and upon the demand of said American Deposit and Loan Company the defendant paid to said American Deposit and Loan Company the full 8. surrender value of said policy amounting to the sum of $875.60, and thereupon the said policy was cancelled and all obligation thereunder upon the part of the defendant ceased and terminated.
37. That thereafter and on or about the 29th day of December, 1899, upon the request of the said William H. Thompson and upon his agreement to pay the said premium which had fallen due on saiJ policy on the 8th day of October, 1899, with interest thereon and to repay to the defendant the amount paid by it to the said American Deposit and Loan Company, with interest thereon, the defendant agreed to and did, reinstate said policy.
33. That on or about the 29th day of December, 1899, the defendant loaned and advanced to said William H. Thompson the sum of $1,040, and certain further sums of money in addition thereto, and thereupon and in consideration of said loan, by an instrument in writing bearing date on said day, the said William H. Thompson, together with one Margaret M. Duncan, agreed to repay the said sura of 91,040 to the defendant on the 29th day of Decemher, 1900, and assigned, transferred and set over to defendant all their right, title and interest in and to said policy No. 5r>5,916, together with all money which might be payable under the same, as collateral security for the repayment of said loan, and said William H. Thompson and Margaret M. Duncan in and by said instrument further agreed that in the event of default in the repayment of said loan upon the 29th day of December, 1900, that the defendant was authorized and empowered, without notice to and without demand for repayment by them, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest, and thereupon said William H. Thompson delivered the said policy to the defendant, and the defendant has ever since continued to hold the same.
39. That thereafter and on or about the 3d day of March, 1900, upon the request of said William H. Thompson and others the said policy was rewritten by the defendant in the form set forth in Exhibit "B," annexed to the amended complaint, with the omission of the words contained in the margin thereof, and except that the number thereof was 555,916.
40. That thereafter and on or about the 8th day of March, 1900, the said William H. Thompson, by an instrument in writing which was intended to, 85 and which did, take the place of the said instrument in writing or loan agreement hereinbefore referred to bearing date the 29th day of December. 1899, agreed in consideration of said loan of $1,040, to repay the same to the defendant on the 29th day of December, 1900, and assigned, transferred and set over to the defendant all his right, title and interest in said policy No. 555,916, as rewritten, together with all money which might be payable under the same as collateral security for the repayment of said loan, and said William H. Thompson in and by said instrument further agreed that in the event of default in the repayment of said loan upon the 29th day of December, 1900, that the defendant 8g was authorized and empowered, without notice to and without demand for payment by the said William H. Thompson, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest.
41. That in accordance with the terms of said policy an annual premium of $508 became due and payable thereon to the defendant on the 9th day of October, 1900. and upon the request of the said William H. Thompson, defendant agreed with him to accept payment of said premium on or before the 9th day of January, 1901, with interest, on the express condition that if the said premium should not be paid, the value of the assurance for the extended time should be deducted from any cash or paid-up value to which the policy might be entitled.
42. That neither said premium nor said sum of $1,040, loaned as aforesaid by the defendant to the said William H. Thompson, nor any part of either thereof, has been paid.
43. That subsequent to the 29th day of December, 1900, when said loan became due and payable, and after giving notice to the said William H. Thompson of its intention so to do, defendant cancelled said policy and applied the full cash surrender value thereof to the payment of said loan and unpaid interest, the amount of said cash surrender value being less than the amount of said loan and the unpaid interest thereon, and thereupon the said policy became null, void and of no effect, and all the rights of the said William H. Thompson therein and obligations of the defendant thereunder ceased and terminated.
Wherefore, the defendant demands that the amended complaint herein be dismissed, with costs. Alexander & Green,
Attorneys for Defendant. Office and P. O. address, No. 120 Broadway,
Borough of Manhattan, New York City, N. Y.
State Of New York, County of New York,
William Alexander, being duly sworn, deposes and says: That he is an officer, to wit, the Secretary The Equitable Life Assurance Society of the United States, the defendant named in the above entitled answer; that he has read the said answer and knows the contents thereof and that the same is true of his own knowledge, except as to the matters therein stated to be alleged upon information and belief, and that as to those matters he believes the same to be true.
William Alexander.
Sworn to before me this 9th ) day of July, 1904.
John B. Russell, [seal.] Notary Public (125),
N. Y. Co.
Extract from Minutes. 90a
SUPREME COUET, Trial Term, Part 10.
Bertha D. Thompson
Against f Present,
Hon. Edward B. Equitable Life Assurance ( Amend, Society Of The United \ Justice.
States.
I hereby certify that this cause was on the 16th, 17th and 18th days of October, 1906, heard by this qoft Court and a jury, and the complaint therein dismissed.
Forty days to make a case.
Thirty days' stay of execution.
Peter J. Dooling.
Filed Oct. 20, 1906, llh. 12m.
NEW YORK SUPREME COURT, New York County.
Bertha D. Thompson, as Administratrix of the goods,
chattels and credit of Wm. / 90c
H. Thompson, deceased,
Plaintiff,
Against / Judgment,
The Equitable Life Assurance Society Of The United States,
Defendant.
The issues in the above entitled action having been duly brought on for trial before Mr. Justice
90(1 Edward B. Amend, one of the Justices of the Supreme Court of the State of New York, and a jury, at a Trial Term, Part X., of said Court, held in and for the County of New York, on the 17th and 18th days of October, 1906, at the County Court House of New York County, in the Borough of Manhattan, City of New York; and the allegations and proofs on the part of the plaintiff having been heard and considered; and a motion having been made on behalf of the defendant at the close of plaintiff's case thnt the complaint herein be dismissed, and said motion having been granted, and the Court having directed judgment herein in favor of the defendant, dismissing the complaint herein, with costs, and the costs of the defendant having been duly adjusted by the Clerk of this Court at the sum of one hundred ten and 33/100 dollars ($110.33); now, on motion of Alexander & Green, attorneys for the defendant, it is hereby
Ordered and adjudged, that the complaint herein be and the same hereby is dismissed, and that the defendant The Equitable Life Assurance Society of the United States recover from the plaintiff, Bertha B. Thompson, as administratrix of the goods, chattels and credits of Wm. H. Thompson, deceased, the sum of one hundred ten and 33/100 dollars ($110.33) costs, and have execution hereon therefor.
Dated New York, October 20, 1906.
Peter J. Dooling, Lseal.] Clerk.
NEW YORK SUPREME COURT,
Trial Term, Part X.
Bertha Delmore Thompson, as Administratrix of William H. Thompson, deceased,
Against ) Plaintiff Case.
Equitable Life Assurance Society Of The United States. I 92
Proceedings before Hon. Edward A .amend, J., and
a Jury.
New York, Tuesday, October 16, 1906.
Appearances:
Raphael J. Moses, Esq., for Plaintiff.
Messrs. Alexander & Green, by Charles W.
Pierson, Esq., and W. L. Kitchel, Esq.,
for Defendant.
no
Mr. Moses opens the case for plaintiff.
Mr. Pierson: The defendant moves that the plaintiff be compelled to elect upon what theory he proposes to rely, whether on the theory that the loan agreement was usurious or on the theory that Captain Thompson was incompetent to make any agreement by reason of paresis, or whether on the theory that the defendant agreed to carry Captain Thompson's policies and charge them against his renewals.
Mr. Moses: We claim that it was usurious.
The Court: Do you claim that this contract was in any way usurious?
94 Mr. Moses: Yes. that is exactly my claim.
The Court; If that is so why do you bring in the other about the incompetency of the deceased?
Mr. Moses: I am bringing it in because the question of incompetence relates to the question of usury, that is, his physical condition.
The Court: The point pressed by the other side is that they want you to state whether you are going to hold that this contract was usurious or whether it was voidable because the party, Mr. Thompson, who made it, was not mentally in a position to make it.
Mr. Moses: That, I say, we have a right to. I say it was void for usury.
The Court: Do you stand on that?
95 Mr. Moses: 1 stand on that. My original complaint was on the subject of paresis, and I withdrew it and put it on this other ground. There has never been any question about it at all.
The Court: Do I understand you to say you now claim this contract was usurious?
Mr. Moses: Certainly; I claim it is shown to be usurious by his condition, it being an utterly uninsurable life.
The Court: Is that satisfactory to you, Mr. Pierson?
Mr. Pierson: What I ask is that the plaintiff be compelled to elect. If that is to be interpreted as an election to stand on the ground of usury here and
96 try this case on that theory, that is all I want.
Mr. Moses: There is no other election but usury. If your Honor will take the original complaint you \ will see I struck all the rest out. I did not feel satisfied with it.
Mr. Pierson: Then I understand your Honor does direct the plaintiff to elect to proceed on the question of usury?
The Court: I understand that the plaintiff elects, without any direction.
Mr. Moses: There is not any alternative in the complaint whatever. The complaint is an election to proceed on usury.
Bertha Delmore Thompson, the plaintiff, called 97 in her own behalf and sworn, testified as follows:
Direct-examination By Mr. Moses:
I am the plaintiff in this action, widow of William H. Thompson, deceased in February, 1904.
Mr. Moses: I offer in evidence a certificate of his death.
Same marked Plaintiff's Exhibit 1.
Mr. Pierson: We concede that she is the administratrix. The date of the letters is the 16th of March, 1904.
Mr. Moses: I now offer in evidence the policy of 98 insurance No. 555,915 for the sum of $10,000.
Same marked Plaintiff's Exhibit No. 2. (Copy attached to complaint.)
I also offer in evidence policy 555,910.
Same marked Plaintiff's Exhibit 3. (Copy attached to complaint.)
I am Bertha Louise Thompson.
Mr. Moses: I offer the assignment from William H. Thompson, dated the 4th day of November, 1898, to Bertha Louise Thompson, subject to a prior assignment to the American Deposit and Loan Company of policy No. 555,915. I also offer in evidence"" an assignment by William H. Thornpson to the American Deposit and Loan Company of the same policy, 555,915, dated July 20, 1895.
Same marked Plaintiff's Exhibits 4 and 5.
Mr. Moses: I offer a request for the change signed by William H. Thompson on policies 555,915 and 555,916.
Same marked Plaintiff's Exhibit C. (Copy is among exhibits.)
100 I am familiar with the handwriting of Margaret Duncan and William H. Thompson's; those three signatures are in their and my writing.
Mr. Moses: I offer in evidence the endorsement of the first policy of December 19, 1899, of the American Deposit and Loan Company,acknowledging receipt from the Equitable Life Assurance Society of the sum of $875.60.
Same marked Plaintiff's Exhibit 7. (Copy in exhibits.)
And the assignment of William H. Thompson to Margaret M. Duncan, policy 555,916, subject to a prior assignment to the American Deposit and Loan Company, dated the 4th of November, 1898. Also the assignment of William H. Thompson to the American Deposit and Loan Company of the same policy, dated the 20th of July, 1890.
Also the endorsement of the receipt December 19, 1899, $875.60, by the American Deposit and Loan Company from the Equitable Life Assurance Society.
Same marked Plaintiff's Exhibits 8, 9, not printed in full, and 10. (Copy in exhibits.)
Mr. Moses: I offer now the policy sued on in the action, 555,915.
The same marked Plaintiff's Exhibit 11.
Plaintiff's Exhibit 11 is in the same language as Exhibit B, attached to the complaint, except that the provision inserted in the margin of Exhibit B (attached to the complaint) does not appear on Plaintiff's Exhibit 11.
Also the contract signed by William H. Thompson on the 8th day of March, 1900, a contract by Captain Thompson in which he borrowed $l,04o from the Equitable Life.
Same marked Plaintiff's Exhibit 12. (Copy in exhibits attached.)
Also the contract on the 29th day of December, 103 1899.
Same marked Exhibit 13. (Copy in exhibits.)
Also the policy No. 555,916.
Same marked Plaintiff's Exhibit 14.
Plaintiff's Exhibit 14 is in the same language as Exhibit B, attached to the complaint, except that the provision inserted in the margin of Exhibit B (attached to the complaint) does not appear on Plaintiff's Exhibit 14, and Plaintiff's Exhibit 14 bears the number 555,916.
Also the contract of the 8th of March, 1900.
Same marked Plaintiff's Exhibit 15. (Copy in exhibits.)
Mr. Moses: I offer contract of the 29th of December.
Same marked Plaintiff's Exhibit 16. (Copy in exhibits.)
Mr. Moses: I offer the letter dated January 11th, 1900, addressed to Captain W. H. Thompson, and signed G. F. Brophy, Superintendent.
The same marked in evidence Plaintiff's Exhibit 17. (Copy in exhibits.)
Mr. Moses: I offer the letter of January 15th, 1900. 105
Same marked Plaintiff's Exhibit 18. (Copy in exhibits.)
The memorandum attached to exhibit is my husband's writing. We were married 1896.
Mr. Pierson: I will admit that at the time of the beginning of the action Captain Thompson was dead; we had no doubt of it and have none now.
I have one son, a child of Captain Thompson. Captain Thompson, when I married him, he was in the insurance business, a man of apparently
106 moderate means so far as I knew. When the little boy was about eleven months Captain Thompson was taken seriously ill, that was in 1897; a doctor attended him. I had to give up house and teach riding lessons to support us and have ever since.
Q. I want to know what he made by his business, if you know, after that sickness—new business—not old business? A. Nothing, so far as I knew.
I saw him daily all the time and he lived until his death in 1904.
Court adjourned for the day.
108
107 New York, October 17, 1906.
Mr. William George Koillm, a witness called on behalf of the plaintiff, being duly sworn, testified as follows:
Direct-examination By Mr. Moses:
I reside at 610 East Eighty-fourth street, and am in the Presbyterian Hospital, in Seventieth street, hospital messenger. In obedience to subpoena these records are produced.
This is the surgical history of his case, that is the record.
Mr. Moses: I offer it in evidence.
Mr. Pierson: The defendant asks that the plaintiff state before the Court on what ground he claims this evidence material.
Mr. Moses: I think your Honor asked me that question when you ruled on it yesterday, when we put in the death certificate. The date of the contract question here, January 15, 1900, we are not able to show what his physical condition was on that day because no physcian examined him, but they examined him before and examined him after and we have a right to prove, in the first place, what was the prognosis of his case before and what was the result afterwards. This is No- 109 vember 28, 1900. He died in February, 1904. The testimony your Honor admitted yesterday was that we might prove on February 28, 1904, what his then condition was and what he was suffering from. Now, we propose to carry that back these four months, to November 28, 1903, and show from the surgical examination at that time what the condition was, whether he was as we claim a mere rotting carcass gradually going to pieces or not.
Mr. Pierson: That scarcely answers the inqury; it does not state why the plaintiff deems any evidence about his physical condition material, or on what grounds he claims it is material.
Mr. Moses: We allege he was in this physical H" condition at the time he made this contract; agreed to surrender the policy at half the normal reserve.
Mr. Pierson: This is offered for the purpose of showing that at the time that this agreement was made the decedent was incompetent to make a contract.
Mr. Moses: No; I said that a half a dozen times. I amended the complaint so as to strike that out, and have said that a half a dozen times.
The Court: I understand that that ground of objection is entirely abandoned.
Mr. Moses: I abandoned it when I served my amended complaint.
Mr. Pierson: I want to have that on the record, if 111 your Honor please.
The Court: Yes.
Mr. Moses: I have put it on the record as often as I can.
Mr. Pierson: The defendant objects to the admission of this record on the ground that it is immaterial and irrelevant to any issue in this case or to any issue raised by the pleadings; also on the ground that it is incompetent as hearsay. It is impossible to prove what the condition of Mr. Thompson was from records made in the hospital without producing the people who made them.
112 The Court: I will have to sustain that objection.
Exception.
Same marked Plaintiff's Exhibit 19 for identification.
Q. What is the book which I now show you? A. The medical record of William H. Thompson, Record No. 9.
Q. Will you turn to that record showing the medical history of Captain Thompson case? A. Yes, sir.
Q. How much is it? A. Six pages.
Q. It commenced on page 8 and extends through the following six pages? A. Yes, sir.
Q. Does this record show who was the doctor who attended him?
Mr. Moses: I offer this in evidence as part of the record. Mr. Pierson: Same objection.
Same marked Plaintiff's Exhibit 20 for identification.
Monroe B. Long, a witness called on behalf of the plaintiff, being duly sworn, testified as follows:
Direct-examination By Mr. Moses:
Q. A practicing physician? A. I am admitted to practice in 1875, and practicing at Plainfield, New Jersey. I have been a medical examiner for insurance
For the Etna and the Equitable and the Home Life.
I have been a medical examiner for the Equitable Life I think about twenty years.
I attended William H. Thompson in his lifetime, the first attendance was September 17, 1898; my last attendance in February, 1899.
The attendance began on the 17th of September, 1898, and during that month I made 11 visits; in October 18 visits, in November 19 visits, December11 visits, February 1 visit;this period I called a phy- 115 sician in consultation, Dr. Rich.
Mr. Thompson's condition when I first saw him was extremly nervous condition. He had loss of memory and was confined to his bed.
He resided about three miles from my office. He seemed to have lost memory of everything. He would worry about little matters, he was restless and rather difficult to confine him to bed. Hebecame so restless that we had to employ a nurse, have a nurse in constant attendance. He would talk rather incoherently. I looked upon it as a case of nervous prostration with possible incipient paresis developing, that was my diagnosis of the case, nervous prostration with incipient paresis devel- H6 oping.
His condition grew slightly better probably; my visits became less frequent after the 1st of January.
After consultation with Dr. Rich the visits became less frequent on the ground that them was nothing to do for him, that is about the truth of it, in the way of medication.
The nurse continued, I did not look upon him as a very safe risk. I should say he was not a normal risk.
It occurred to me that he was developing paresis and was not attending to business during this period. He was incapable of doing anything. The condition continued the whole period that I treated him ^ for the four months; his capacity to attend to business had not improved any when I left.
He did improve some after the 1st of January, but he was not capable of transacting any business. He did not even look after the affairs of his home.
Crops Examination By Mr. Pierson:
I do not think that he was capable of writing a business letter; 1 never attended him after February, 1899. I saw him once after that in the Equitable, it was about a year after he left Plainfield, probably in 1900; I saw him then at the office of the Equitable Society; he was out and about at the time I saw him and I dropped in the office to call on him when I was in the Society and saw him there. He was in better condition than when I had last seen him. I am a local examiner in that town for the Equitable.
Bedirect Examination By Mr. Moses:
In 1900 I saw him at the office probably fifteen minutes. I talked with him concerning the bill for my services. He had not paid me and that was the only subject of my conversation. He did not have any clerks in the office, there was no one there excepting himself. H9 I did not go there for any purpose of examining his mental condition or medical condition I simply went there on the subject of trying to collect my bill, $166, it is still unpaid.
Orando S. Rich, a witness called on behalf of the plaintiff being duly sworn, testified as follows:
Direct-examination By Mr. Moses:
I am a practicing physiciam. I was admitted to practice in New York State 1878, and have been practicing in Brooklyn ever since, on Macon street,337a Macon.
I am a member of the State, County and Inter. national Medical Societies and most all of the medical societies.
I knew William H. Thompson in his life time since 1878.
I was called in consultation in reference to a sickness of his, in September, 1898, or somewhere about then at Dunnellan is the name of the town. A suburb of Plainfield.
I think somewhere out there. The occasion of my being called was to consult with Dr. Long, who was in charge. I had a conference with Dr. Chase of the Equitable Life, I believe, at the Equitable. I went out with him and found Mr. Thompson suffer- t« ing from a general constitutional breakdown; his nerves and mind seemed to be a total wreck.
I think in the beginning I went out twice a week and then once a week, later on perhaps once in two weeks.
I believe he came to New York, I also came to New York.
He had a constitutional breakdown, after the acute conditions passed over, that is the first effect of the breakdown where he had been suffering from delirium and a train of symptoms of that kind, he began to quiet down and then he developed or showed symptoms of mental incompetency in that he did not seem to know what he was talking about 122 or did not know the people about him.
I saw him at the Equitable: his condition at that time was incipient paresis. In most cases it is a gradual breaking down of the system. It might produce hemorrhage, but it would probably not be one of the results.
Q. Doctor, can you state from what you saw, from knowledge acquired of his condition up to February 18, 1899, whether at the end of that year, that is, 1900, he would be in an insurable condition?
Mr. Pierson: I object to that as incompetent, irrelevant and immaterial.
124 seem to survive at the expense of the mental faculties. It is merely a matter of individual opinion from the various cases we have to treat; there is no general rule in that respect.
Q. I am not asking for a general rule; I ask you specifically about Captain Thompson, showing his breakdown and of his nervous condition, whether, his physical condition suffering from incipient paresis, would or would not be improved between those periods? A. It would not be improved, as a rule.
Q. Well in his case? You would say it would not be improved? A. Judging from the last time I saw him, that is all I can say.
Cross-examination Ry Mr. Pierson:
The last time I saw him was during the holidays of 1898 and I have never seen him since.
Q. Would you expect a man suffering from incipient paresis at that time to be up and about writing business letters two or three or four or five years later? A. That is not the usual course of the disease.
Q. And suppose that you had found Mr. Thompson in the years 1900 and 1901, 1902 and 1903, attending to business to a certain extent, writing business letters, and making business contracts, would not that have tended to change 126 your view as to what he was suffering from when you saw him? A. If they were valid contracts, certainly they were made by a competent man. If they were crazy contracts, they might be evidence of his paresis.
Q. Well we will assume they were valid contracts, because it has been conceded in this case the contract in question was made by a man who was competent to contract? A. There is but one exception to that, and this is where a man at certain times may be suffering from mental aberration and have lucid moments. If during that particular time these contracts, whatever they may be, were brought to bear and he understands them, that may be so, 127 and he may be incompetent subsequently.
Q. You would not have expected, however, to have found a man whom you say was suffering from incipient paresis in 1898, you would not have expected to find him writing business letters and attending to business affairs from time to time at frequent intervals in the year 1903, would you? A. I would not, no.
Q. So if as a matter of fact Captain Thompson did those things, it is doubtful whether he was suffering from incipient paresis at that time, isn't it? A. It would not be incipient four years afterwards. That was at the beginning, the beginning of the disease. I do not know his physical con- 128 dition four years later. I cannot tell what the result was after the time I saw him.
Q. If he had done the things that I specified, say, in the year 1903, could he have been suffering from incipient paresis in 1898, when you saw him? A. Yes, I think he might.
Redirect-examination By Mr. Moses:
Captain Thompson never paid me for my services. The bill still stands.
130 the Equitable and Thompson commencing in the year 1899 and ending December 31, 1902.
Marked Plaintiff's Exhibit No. 22. Exhibits 21 and 22 are as set out in exhibits attached.
Bertha Delmore Thompson, resumed:
Q. Is that Captain Thompson's signature (showing witness paper)? A. Yes.
Mr. Moses: I offer it in evidence. It is the application for the original policy.
Same marked "Plaintiff's Exhibit No. 23," same set out m exhibits attached.
Cross-examination By Mr. Pierson:
I was married to Captain Thompson in 1896. Captain Thompson was at that time about 56, wasn't he, I think so, and he died about eight years later. At the time this loan was made from the Equitable on the security of Captain Thompson's policies, his financial affairs were embarrassed, so far as I knew. We were living at the time at Dunnellan, New Jersey. We moved away from there in March, 1898, to live in St. Nicholas avenue, New York, in an apartment, we simply hired it by the month. Then we moved to Lexington avenue and occupied an apartment there. We had a lease on that apartment. I made the lease, whether it was signed by Captain Thompson or not I do not remember. I think I made the lease.
Q. Did you live anywhere else, you or Captain Thompson, between 1898 and his death, except these three places you mentioned? A. No. Coming back to the year 1899 to 1900, when Captain Thompson got the loan from the Equitable on the two policies, I remember that transaction. When he got the loan on the policies, I do not remember whether I signed the loan agreement. I signed an agreement simply as I thought transferring the policies, The policy is in my favor, is it not? I think the loan dated before that. The loan on the policies.
Q. Now let me refresh your recollection, Mrs. Thompson. You swore to the complaint in this action, didn't you? A. Yes.
Q. The complaint states, in substance, that there was first a loan made by the American Deposit and Loan Company back in the 90's sometime on the security of these two policies, do you remember that transaction? A. Away in the 90's, when was that made, in the 90's?
By the Court: Q. 1898? A. Yes.
By Mr. Pierson: I swore in the complaint that that loan was made.
Q. Didn't you as a matter of fact execute an agreement yourself pledging the policies to the American Deposit and Loan Company? A. I may have, I really don't know.
I could not say whether that loan by the American Deposit and Loan Company was not paid.
Q. Don't you know, Mrs. Thompson, as a matter of fact, that that loan was not paid, and that the American Deposit and Loan Companysurrendered the policies to the Equitable Society for their cash value? And it paid itself in that way? A. I know the loan was not paid, but so far as any of the business transactions I knew nothing about it. It is a fact that these policies or one of them had at that time been assigned to me subject to a claim of the American Deposit and Loan Company.
Q. And that when the American Deposit and Loan Company surrendered these policies to the Equitable for their cash surrender value and received the balance over and above the amount of their loan, they paid that balance over to you by their check, is not that so? A. I do not remember having done that.
136 (A check of the American Deposit and Loan Company dated December 21st, 1S99, to the order of Bertha L. Thompson for $183.40 shown witness.) That is my endorsement, that is my signature; but I do not remember anything about it. It was given to me to sign. I simply signed it.
Check marked "Defendant's Exhibit A for identification."
Q. The complaint alleges in substance that after the policies had been surrendered by the American Deposit and Loan Company that Captain Thompson obtained a new loan on them from the Equitable itself and the Equitable restored them, put them in force again, do you recall that? A. I had nothing to do with such matters. I really do not know.
Q. Who attended to all those business matters? A. I suppose Captain Thompson. I was employed with my own business at that time. I had no time for anything of that kind.
Q. Then it is a fact, is it, that all these matters of business at that time in regard to his policies were conducted by Captain Thompson himself; is that so? A. Yes, so far as I knew.
Q. The complaint alleges that the premium on this policy due in October, 1900, was not paid, nor was the loan of $1,040 due December 29th paid; you knew that was a fact, didn't you? A. Yes; I knew that, beyond that I did not know.
Q. Don't you know Captain Thompson did not pay it? A. Unless he paid it by some arrangement with the Equitable, which I suppose at that time he had.
Q. Mrs. Thompson, you swore to this complaint, and the complaint says that the premium was not paid nor was the loan paid. Or course, when you swore to that you were satisfied that that was the fact, weren't you? A. I was satisfied that he did not pay it.
Q. The allegation in the complaint is that the premium was not paid nor was the loan, now are you satisfied that the facts are as stated in the complaint when you swore to the complaint? A. So far as I know.
Q. Did not Captain Thompson, when the premium became due in October, 1900, ask the society for an extension of time in which to pay it, and did he not get an extension of time to pay that premium? A. He may have.
Mr. Pierson: Then I offer in evidence a letter of October 23, 1900, addressed to W. H. Thompson and signed " G. F. Brophy, Superintendent."
Same received and marked "Defendant's Exhihit B ". Copy in Exhibits.
Mr. Pierson: I will read the material part of this letter and ask that it be taken on the record.
"October 23, 1900.
Mr. W. H. Thompson, Dear Sir: Replying to your letter of instant requesting an extension of time in the payment of the premiums due October 9th, on policy No. 555,915 and 555,916, on the life of self, we have to say that the Society will accept said premiums if tendered on or before January 9th, 1901, with interest."
As a matter of fact, Mrs. Thompson, was Captain Thompson able, at that time, October, 1900, to pay those premiums, did he have funds to pay them? A. He had no funds other than his interest in the Equitable.
By Mr. Moses:You mean coming to him under his renewal account.
By Mr. Pierson: I knew he was then indebted to the Equitable for advances made to him as agent and his renewals as they accrued from time to time were being applied on that indebtedness, and that his agreement or letters in which the advances had been made provided in substance that they should be paid out of the renewals and constitute a lien on the renewals.
Q. When this loan came due three months later in December, 1900, this loan of about $2,100 which the Equitable had made to Captain Thompson on the pledging of his two policies, was he able to pay off that loan; did he have funds? A. Not other than his—the only funds that 1 knew of that he had was his interest in the renewal account in the Equitable. It is the fact that at the time the loan matured, Captain Thompson had no funds to pay unless his renewal account in the Equitable would furnish such funds, he had no other means of paying.
And the same thing is true about the premiums on his policies, which premiums fell due in October, 1900, amounting to about a thousand dollars or more.
Captain Thompson lived between three and four years after this loan to the Equitable fell due, the loan fell due in December, 1900. He was out and about a good deal at that time.
Q. Improved in health and spirits, wasn't he? A. Physically, yes.
Q. Was not he in better spirits, mentally, did not he contemplate resuming active business? A. I do not think I can say his health was improving.
1Q. show you a letter addressed to the Equitable Life Assurance Society dated February 21, 1900. signed William H. Thompson, and ask you if that is your husband's handwriting? A. Yes.
Same offered in evidence. Received and marked " Defendant's Exhibit 23." (Copy in Exhibits.)
Q. What were the changes that Captain Thompson said were found advisable as to beneficiary during his illness. A. The policies were transferred for my benefit and my stepdaughter in other words during Captain's illness these two' policies on his life had been transferred, one of them in my favor and one 145 of them in favor of Captain Thompson's daughter. Those are the changes which he refers to having been found advisable during his illness. Q. Now he says: "Now that I have practically recovered, it is my wish that the policies are so adjusted that they are all in my name?"
Q. Was that done? A. I don't know; I really don't know anything of Captain Thompson's business arrangements in those days; 1 am not a business woman and did not know what was occuring. So far as I know that was done, yes. But all the business was attended to by Captain Thompson.
Q. "Any signatures necessary to accomplish above and also to protect any claims which the 146 Society may have upon such policies I shall be pleased to secure." As a matter of fact Captain Thompson did secure your signature and his daughter's signature to the papers necessary to retransfer those policies back to him, didn't he? A. Yes.
Q. I notice in this letter Captain Thompson says, "Now that I have practically recovered." Is it not a fact that Captain Thompson has grown very much better than he was at the time you were in Dunnellan? A. He had grown better inasmuch as he was able to go out, and used to go down to his office. His memory never recovered. But at that time he was just getting up again.
A letter, dated October 5, 1903, addressed to G. E. Tarbell, Esq., second vice-president, and signed William H. Thompson, is in my husband's hand-writing.
Same offered in evidence. Received and marked " Defendant's Exhibit C " (Copy in Exhibits).
Letter dated December 18, 1899, addressed to "George T. Wilson, Third Vice-President," signed "William H. Thompson," is my husband's handwriting, and also a letter dated March 27, 1900, beginning, "Dear Mr. Wilson," and signed " William H. Thompson," and marked "private," and also a letter dated February 7, 1903, addressed to "G. E. Tarbell, Esq., Second Vice President," signed "William H. Thompson," and also letter dated August 21, 1903, addressed, "Equitable Life Assurance Society," and signed "William H. Thompson," and also a letter dated October 30, 1903, beginning, "My dear Taylor," signed "William H. Thompson."
Same offered in evidence. Received and marked "Defendant's Exhibits 1), E, F and H " (Copies in Exhibits).
Q- You recollect, don't you, Mrs. Thompson, that about this time, December 18th, 1901, the policies which had been pledged by Captain Thompson with the American Deposit and Loan Company were surrendered by them and cancelled? A. I do not recollect it; no.
Q. Well, when your husband says, "I especially regret that you did not see your way clear to keep my policies in force," what can that refer to, if not!
Mr. Moses: It refers to the cancellation.
Mr. Pierson: Do you concede it refers to the cancellations of the policies?
Mr. Moses: By the American Loan Company.
Mr. Pierson: It is conceded that this refers to the surrender of the policies by the American Deposit and Loan Company to the Equitable and their cancellation?
Mr. Moses: Yes.
Q. I suppose those are your words which I have read, Mrs. Thompson? A. I don't remember those letters, or ever having heard of them, but I have no reason to doubt what my husband says in it is correct.
Q. Now, after that letter was written, the Equitable did, as a matter of fact, restore the policies and loan Captain Thompson some money on them; "1 didn't it? A. I don't remember it; I don't know.
Mr. Moses: I will concede that, but she does not know about it.
By Mr. Pierson: I know Mr. Wilson was third or fourth vice president of the Equitable.
Q. Mrs. Thompson, the advance which Captain Thompson asked for from the society of $500 for the purpose specified in that letter was made, wasn't it? A. That letter was written absolutely without my knowledge. I don't know.
Q. I think it shows on its face that it was? A. I don't know anything about the advance. I only know that such a thing was talked of at the time, and we abandoned it as too expensive.
Recess.
After Recess. Bertha Delmore Thompson, resumed. Cross-examination Continued:
By Mr. Pierson:
Q. Mrs. Thompson, in this letter of March 27, 1900, from your husband to Mr. Wilson, he asks for 1-,;, an advance of $500 to aid in carrying out your plan of taking some horses to Newport. As a matter of fact, the advance was made, wasn't it? A. I don't know.
Q. In the account which your counsel has put in evidence, "Plaintiff's Exhibit 2-2," under date of March 31, 1900, four days after the date of this letter, Captain Thompson is debited with a cash advance of $500. Have you any doubt that that is the advance in question in this letter? A. I have not any doubt, but I do not know for a fact that that is so.
Q. But you have not any doubt about it, is that so? A. I know that he had advances at different times from the Equitable, but I could not say when or the amounts.
Q. Did you as a matter of fact go to Newport that summer? A. No, I did not.
Mr. Pierson: I will now read "Defendant's Exhibit F " to the jury (copy in Exhibits).
Q. The circumstances which he refers to in this letter as weighing against his taking an active part in securing of new business were what? A. I could not say unless it was his health.
Q. In this letter, "Defendant's Exhibit F," Captain Thompson asked for further advances, do you recollect as a matter of fact whether they were made or not? A. I do not.
Q I think you said however that some advances were made from time to time, didn't you? A. Yes.
Q. And they were made at Captain Thompson's request, weren't they? A. I don't know.
Mr. Pierson: I will now read "Defendant's Exhibit G."
I do not recollect whether that advance was made I do not know anything about it really. I do know that advances were made by the Equitable to Captain Thompson from time to time. I know he received money from the Equitable.
Mr. Pierson: I will read "Defendant's Exhibit H"
Q. Who was Mr. Taylor to whom this letter was addressed? A. I don't know, I never saw him.
Q. Don't you know that was Mr. W. E. Taylor, who was connected with the agency department of the Equitable Society? A. No.
Q This letter asked Mr. Taylor to use his good offices to secure an advance to Captain Thompson. Do you know as a fact whether that advance was made or not? A. I do not. That was between Mr. Taylor and Captain Thompson, I never knew 157 about it.
Q. All this time, Mrs. Thompson, you were a good deal interested in the question of the finances of the family, were you not? A. Yes.
Q. As a matter of fact, your own efforts were contributing largely to the support and maintenance of the family, is not that so. A. Yes.
Q. Then is it not reasonable to assume that when Captain Thompson got advances from the Equitable Life Society from time to time you knew about it and were interested in it? A. I knew he got advances from the Equitable from time to time.
Redirect-examinatiox By Mr. Moses: 158
Mr. Moses: I offer in evidence two letters from 6. E. Tarbell, second vice-president of the Equitable, the first dated April 24, 1903, and the second April 28, 1903.
Same marked " Plaintiff's Exhibits 24 and 25." • (Copies in Exhibits.)
Mr. Moses: I offer for identification the paper which is attached to Exhibit 24 and the same is marked "Plaintiff's Exhibit 26 for identification." (Copy in Exhibits.)
Q. I ask you if that is the handwriting of your husband? A. It is. 159
Q. Now I show you attached to Exhibit 25, certain memorandum at the foot of the letter and ask if that is your husband's handwriting? A. Yes.
Same marked "Plaintiff's Exhibit 27 for identification."
Q. I show you at the foot of Exhibit 17, certain memorandum, and I ask if that is your husband's handwriting? A. It is.
Q. Can you tell me whether or not it was the habit of your husband during the latter years of his life to endorse the substances of replies or arrange
160 ments made by him in reference to the subject matters of letters on the letters themselves or attached to them? A. It was, yes.
Q. Do you know whether or not your husband recognized any failure of memory upon his part? A. Yes.
Joel G. Vancise, a witness called on behalf of the plaintiff, being duly affirmed, testified as follows:
Direct-examination By Mr. Moses: I am an actuary and have been for a number of years actuary of the Equitable Life Assurance Society.
Q. I show you now Exhibit No. 11, Policy No. 555,915, and call your attention to certain figures and typewriting, memorandum appearing on the back, and ask you who the "J. B." or whatever the initials are there, is? A. I believe they stand for Mr. Boldt's initials, a clerk in the loan department. Those calculations were made in the surrender value department. Whom they were made by I cannot tell without seeing the original record. They were made in accordance with our tables, but there are a number of clerks who make calculations and they are checked by other clerks. I know they are correct according to our tables. According to that statement there was a cash value given for that policy sometime in 1901, July 12, 1901.
Q. On October 9, 1900, how long had that policy been in force? A. '96, according to that record. The policy I believed lapsed once, and had been restored.
Mr. Moses: I move to strike out the policy lapsed and had been restored, and I object to the witness interpolating matters for the defense. He is a hostile witness.
Motion denied. Exception.
When that policy was reinstated or restored it was reinstated with all the force and effect of the original policy.
Q. Will you tell me what was the legal reserve on that policy on October 9, 1900, computed according to the American experience table of mortality at the rate of 41/2 percent, per annum; that is the legal reserve on that policy on October 9, 1900? A. There is some doubt under the New York law as to what the legal reserve was.
Four and one-half per cent. reserve ceased to be the standard in New York after December 31, 1887, by law. After that the standard was what was called 4 per cent, combined experience or actuary table of mortality.
Q. The reserve on such a policy is more than 4 1/2 per cent. A. A little larger. If I may explain, the law was afterward amended in such a way as tAi6i leave some doubt as to what the standard in New York was, that is the reason I spoke a little while ago, but they have made their calculations since according to the same table, the combined experience at 4 per cent. The reserve on that policy at the end of the ninth year according to the actuaries at 4 per cent, was $2,097.60.
Q. You notice that the policy itself calls at the end of fifteen years for $3,400? A. No; that is a life policy, not an endowment.
O,. Life policies. But they have convertible feature; they may be surrendered at the end of fifteen years and receive the full reserve value? A. That is one of the conditions.
Q. Then it was convertible? A. You speak of an endowment, and that is not correct.
Q. It is a convertible policy? A. If the policy had been kept in force, at the end of fifteen years they promise to pay the reserve or the cash value or certain other options.
Q. You promised to pay the reserve value of $3,643? A. Whatever it is, the contract shows.
Q. You have it right before you? A. $3,647. That is calculated on the American Experience of Mortality at 4 per cent, interest. The terminal reserve on that policy at the end of the ninth year on the American Experience Table of Mortality at 4 percent, would be $2,147.10.
Q. That is the same table upon which the final fifteen-year reserve is calculated? A. Yes.
Q. Now, I find in the correspondence which the defendant has put in, an agreement to extend that policy from October 9, 1000, to January, 1901, the assured in the meantime to pay for the temporary risk. What was the amount of the temporary rate for that period?
Mr. Pierson: Objected to. There is no such agreement to extend the insurance. What was put in evidence was a letter granting the extension of three months to pay a certain premium.
Q. Now, what was the value of that insurance for the extended time for three months? A. I do not know, but as a matter of fact, it seems to have been waived. There is no charge made.
Q. What was the value of the insurance on that life at that age and that class of policy for three months, as the cost of insurance? A. It would have been an inconsiderable amount. I have no tables here, but I say, as a matter of fact, there seems to have been no charge against that policy for that.
Q. Can you telephone down to your office and have brought here your necessary books to answer these questions? A. That would be rather difficult. 168 We change our methods of calculating that class of insurance from time to time; there is no fixed method or table about that, but I say, in point of fact, no charge was made against Captain Thompson's policies for that insurance. He was allowed full value as if he did not have that extension.
Q. Did you sajr that there were no fixed charges for extended insurance? A. There are no fixed term tables, no fixed rules; each company makes its own rules. There is no law governing that matter or regular tables; it is something outside of the contract. It is a matter of contract itself. Some give certain extensions without charge, and some charge interest, and some make certain additional rates. It 169 is not a matter that is fixed or determined; it is something outside of the contract or rate.
Q. As I read the statute in force in 1901 in the case of lapsed policies it is, "the reserve calculated according to the American Experience Table shall be taken as a single premium of life insurance at the published rates of the company at the time the policy was issued, and shall be applied as shall have been agreed in the application and policy either to continue the insurance of the policy in force at its full amount so long as such single premium will purchase temporary insurance for that amount at the age of the insured at the time of such lapse of forfeiture." A. I will explain that that is an en- 170 tirely different matter from the matter we are talking about, entirely different.
Q. Have you a published rate for temporary insurance for policies of this class at that age which was published in 1891?
Mr. Piersou: I object to this as immaterial. It has not any bearing on any question in this case. What happened is this: The premium due on these policies pledged with the Society fell due on October 9, 1900, when our Society gave Thompson an extension of three months to pay the premium and there was nothing charged for the favor. His loan for which these policies were pledged expired in December before this extension ran out, and therefore while the policies were in force so far as the payment of premium is concerned, his loan fell due in December and he did not pay it, and thereupon the Society surrendered the policy and applied its cash surrender value to the loan in pursuance to the term of the loan agreement. Now all that about the tables of temporary insurance is wide of the mark here, because nothing was charged for temporary insurance.
Mr. Moses; I would like while we are making this argument to have Mr. Van Cise send for his tables.
The Witness: If I may be allowed to explain, you are referring to something entirely different in the law, which has nothing to do with this question. That refers to the company's giving an extension on a lapsed policy which Captain Thompson waived in his policy, and all other applicants waive that in their application. These policies contained no conditions nor any of these policies to grant extended insurance in case of lapse. You are referring to an entirely different thing by quoting that law.
Mr. Moses: I understand that was a remark made outside of the testimony, and the jury are not to be bound by it, and there is no such evidence before them.
The Witness: I make it to save you the trouble.
The Court: That may be so considered.
Mr. Pierson: I press my objection.
Objection overruled. Exception.
A. I would ask first if I may be allowed to explain. My answer is we have no table. May I be allowed to explain why we have no such table?
Q. Your answer is you have no such table? A. We have no such table of temporary insurance.
Q. Is not it a matter of fact, Mr. Van Cise, you never had a published table of temporary insurance? A. Not that is spoken of in that law.
Q. Is not it a matter of fact you did not purposely and deliberately ever publish a table giving the rate of temporary insurance on these policies? A. We have rates of temporary insurance, but not rates for paid up temporary insurance, as contemplated by that law where men choose in their application for the policy to take temporary insurance. The law allows a person to take either temporary insurance or paid up insurance under all our contracts the holders agree to take paid up insurance and not temporary insurance. Therefore, they had no right under the law to temporary insurance.
Mr. Moses: I move to strike that out.
Motion denied. Exception.
Q. I understand you, Mr.Van Cise,that you never have published a table of temporary insurance, is that a fact? A. No, I said we had published tables of temporary insurance but not for paid up temporary which I think you contemplate in your question. We have paid up insurance for yearly terms, fifteen or twenty year terms; we have tables published for insurance of that kind.
Q. Annual temporary insurance? A. For a yearly 170, renewal term for periods of ten, fifteen or twenty years.
Q. You had temporary insurance published in 1891, hadn't you, temporary insurance? A. Yes, we did ten, fifteen and twenty years.
Q. I show you a book now, and I ask you what this is? A. A book as its title shows—shall I read it?
Q. Yes. A. Tables for 1891 illustrating advantages of dividend policies and bonds based on results of tontine policies maturing in 1891.
Q. It is a book issued in 1891? A. Yes.
Q. And it give the rates at that time. Do you find any rate on a life policy or a policy of temporary insurance? A. No.
Q. You had such a rate at that time, a yearly renewal rate? A. No, not at that time, we had no yearly renewal at that time. We had ten, fifteen, and twenty years at that time.
Q. You had no yearly renewal? A. Not at that time.
Q. You had not up to that time published any yearly renewal? A. Not according to my recollection.
Q. At the time you issued this policy in 1891, you were aware of the statute which authorized the policyholder to demand temporary insurance, were you not, in case of lapse? A. There is no such statute.
Q. Were you aware of the existence of that statute, which I read to the Court, Section 88, Chapter 118 of the Laws of 1869? A. 1879.
Q. Sections 1 and 2 of 1879, were you aware of that? A. Certainly.
Q. As I understand you, the reason you never made any was you supposed this policy only provided for paid up insurance and not temporary term insurance? A. I already explained the statute allows the policyholder to agree whether we will take temporary insurance or paid up insurance.
Q. And this having in it a provision for paid up insurance is the reason you made no other table? A. Yes. That was the case of all policies issued by the Equitable at that time.
Q. There is nothing written in red ink on the face of that application or in the policy? A. From the records the policies were canceled in July, 1901, that is the date of the entry. The policy went out of force, as I understand it, when the loan agreement was not fulfilled by non-payment of the principal and interest, but the entry in our books seems to have been deferred for some reason until July, 1901. After the 29th day of December, 1900, according to the record, a small amount of interest was charged, $4.48.
Q. For how long at 5 per cent, is $4.48 on $1,040? A. About one month.
The reserved value on that policy, according to the American Experience Table, at 4 per cent, on the 9th day of January, 1901, was practically the same as at the end of the ninth year, which I already stated, $2,147.10. In point of fact, the reserve would have been a little less on account of the increase in interest,
Q. What do you allow as the cash value of the policy? A. $1,044.48,
Q. Where is the difference between $2,147 and 181 $1,014.48? A. The reserve is not the cash value of the policy. There is no promise in this contract to pay cash value before fifteen years, provided the policy shall be in force.
Q. What percentage of the reserve was the amount which you allowed him? A. About 50 per cent.
Q. Less than 50 per cent., isn't it? A. Slightly less. Almost exactly 50 per cent.
Q. 50 percent, would be how much? A. Half the actuary's experience would be $1,048.80, which is the standard in New York. According to the tables on the reserve at the end of fifteen years was calculated, that is, the American Experience Table at 4 1/2 per cent., the reserve end of ninth year would be $2,147.10.
Q. And fifty per cent. would be over half of $2,088? A. 1 don't understand that question. Fifty per cent, would be $1,073 55. Fifty per cent, of $2,147.10.
Q. That is less than one-half. Isn't it a matter of fact that policies where no cash surrender value is distinctly agreed upon in the policy that less than fifty per cent is given as cash surrender value?
Mr. Pierson: I object to that as indefinite by whom given.
A. In the absence of contract and laws, each company makes its own rules apply.
Q. I am asking about the Equitable? A. Our tables vary according to the duration of the policy, according to the kind of policy, the age of the life assured, and different matters.
Q. Take at the age of fifty-nine A. Sixty.
Q. Well, sixty. Have not you a fixed definite rule of deciding what shall be the cash surrender value? A. Yes.
Q. Is not that a percentage of the reserve? A. No.
Q. What date is used in fixing the cash surrender value of a policy at sixty years of that kind? A. Our cash surrender-value tables are determined for paid-up policies. The paid-up assurance value is determined by the contracts and laws of the State, and are published in tables. In this case the value of paid-up insurance is $2,560. We allowed on each $1,000 of paid-up insurance at the age of sixty on the life plan $408. Multiplying $2,560, the value of these policies in paid up assurance under the law and the contract, and that amounts to $1,044.48.
Q. Where do you find the right to paid-up insurance in this policy before the fifteenth year? A. The law of the State requires a paid-up insurance after the premiums are paid for three years or more and the policies surrendered within six months after their lapse. The policyholder can choose in his application which he will take, whether paid-up insurance or temporary insurance. Captain Thompson waived the right to take temporary insurance and choose paid-up insurance in his application.
Q. Is that endorsed in red ink on the face of the policy? A. No, that red ink refers to tontine saving fund policies.
Q. And was the table in 1891? A. Yes.
Mr. Moses: I will offer it in evidence. Mr. Pierson: I object to it. I do not know why we should encumber the record with this.
Offer withdrawn.
The Equitable in 1891 charged for a paid-up policy $821.23 per thousand at age 60.
Q. Taking the age 51, and the policy to have been in force nine years, what was the amount of paid-up insurance to be given for each thousand dollars insurance on an ordinary life policy? A. $256 per thousand. This is an ordinary life policy.
Q. What would be the value of the obligation of the company to pay $3,643, plus a portion of the surplus, at the end of the fifteen years where subsequent premiums would be $508 a year, six additional premiums to be paid?
A. My answer is—it is a matter of opinion, a matter of judgment. The contract allows no value and fixes no value. Therefore, a person who wishes to sell to the company, it is for the company to to make an offer, and for him to accept or not as he chooses.
Q. What sum put at interest on January 1, 1901, would be sufficient to pay the difference between $3,048 and $3,643 in January, 1907, legal interest? A. 1 have no tables to make any calculations of that kind.
Q. What would $1 at 6 per cent, interest for six years yield? A. Simple interest; thirty-six cents for six years. I have no table of compound interest.
The Court: I do not know. Objection sustained.
Q. Did you take into consideration in fixing the cash value of these policies anything in reference to his physical condition, or was it fixed simply by tables applicable to all policies of that age? A. It is computed according to regular tables, not regard to physical conditions. Taken as an average life.
Cross Examination By Mr. Pierson: I was acquainted with Captain Thompson. He had been an agent for the Equitable for a good many years. I am familiar with these two policies in suit. There was no provision contained in these policies for any cash surrender value before the fifteenth year. From my familiarity with the law there is no provision of law which requires a cash surrender value. The society for a long period of years has been in the habit of allowing a cash surrender value on policies of this kind, after three premiums or more had been paid based on methods and table established by the society in use tor along number or years. Those tables were in use and established in 1891 when these policies were taken out and were still in use in 1900 and 1901, when these policies were pledged to the society and when they were surrendered and cancelled we had the same tables in both years.
The loan agreement under which these policies were pledged to the society being Plaintiff's Exhibit 13 in one case, and Plaintiff's Exhibit 15 in the other, provides that in the event of default in repayment of said loans upon the date hereinabove mentioned, being December 29, 1901, the party of the first part, that is, the Equitable Society is hereby fully authorized and empowered without notice to, and without demand for payment on the party of the second part, to cancel such policies and to apply the cash surrender value of such policies to the payment of said loans and any unpaid interest. That expression "cash surrender value" means the cash surrender value computed according to these methods and tables established by the society which I have described. That has always been so understood by the officers of the Equitable. Computed by those tables and methods of the society the cash surrender value on December 29, 1900, on each of these two policies, each being a policy for $10,000 taken out at the age of 51, and on which nine annual premiums had been paid, was $1,044.40. The loan agreement, " Plaintiff's Exhibits 13 and 15," provided on the non-payment of the loan the policy may be cancelled and the cash surrender value applied to the payment of the loan, and unpaid interest; that was in fact done in the case of each policy in the regular way and method of the society in such case. The cash value of each policy I have stated to be $1,014.48. The amount of the loan on each policy as shown by Plaintiff's Exhibits 13 and 15 is $1,040, slightly less than the amount of the cash value. The excess of the cash value over the amount of the loans, namely, $4.48 in each case, was charged as interest. At the time this was done that amount of interest was due from Captain Thompson on the loan. There was more than that amount due at the time the cancellation was made, and so this amount of $4.48, the excess of the cash value over the face of the loan was applied on the account of interest, so far as it would go. The Equitable Society made these loans on these policies at the beginning of the year 1900. I know as a matter of fact that Captain Thompson had previously obtained loans on the policies from the American Deposit and Loan Company. In the case of those loans the policies were surrendered by the American Deposit and Loan Company under their agreement because of their non-payment, surrendered to the society for the cash value of the policies at that time. The cash value of the policies at that time was computed by a regular table. The same table that we used in computing the cash surrender value at the time the policies were finally surrendered and cancelled. The company, at Captain Thompson's request, afterwards consented to reinstate those policies and make loans on them, which it did. The surrender values to be allowed on policies is usually fixed by the actuary, after consulting with the other officers—the president.
Fixed by the actuary means by me and my department. Suppose complaints were received from the policyholders that proper cash surrender values have not been allowed on policies that have been surrendered for their cash values such complaints are quite frequently referred to me for reply. They come into my deparment. The cash surrender values were allowed and these policies were cancelled in July, 1901, no complaint that the proper values had not been given was ever received from Captain Thompon as far as I know. Captain Thompson was at this time, and he bad been for two years, an agent of the society, and he lived for three years and more after this time, between two and three years after cancellation of the policy, according to the records shown here to-day.
And during those two or three years he was frequently at the office of the society, according to my recollection. And had various dealings and correspondence with the society as I understand.
Q. And obtained various loans and advances from the Equitable Society, didn't he?
By Mr. Moses:
Q. Is that your recollection or are you testifying on the statement of counsel? A. I have no recollection of those, I know Captain Thompson was at the office fifteen years. Everybody there knew our rule.
Q. This statement that he had various dealings -1<)-- with the company, have you any memory on that or is it a general understanding you have or a personal knowledge? A. I have personal knowledge gained to-day only as to these letters. I knew nothing of that personally before. I recollect meeting Captain Thompson very frequently while an agent of the Equitable Society for a great many years. I think he was an agent for fifteen or twenty years.
Q. Do you remember those periods? Do you remember the time? A. I could not fix any date.
Mr. Pierson: That is all I want to ask.
Redirect-examination By Mr. Moses:
Q. I call your attention to the provision of the statute: "The net value of insurance given for such single premium under this section, computed by the standard of this State, shall in no case be less than two-thirds of the entire reserve, computed according to the rules prescribed in this section after deducting the indebtedness as specified." In what way did you avoid or comply with that statute in giving two thirds of the reserve after deducting the indebtedness, the indebtedness being $2,143? In what way did you comply with this statute requiring you to give him two-thirds of that value?
Mr. Pierson; Objected to as calling for the witness' 199 conclusion on a point of law. The statute is a matter which the Court will take judicial notice of.
Q. I will change the question so as to save any trouble about it. Did you give any value for that policy over and above the indebtedness, over the reserve and above the indebtedness? A. No.
Adjourned for the day.
New York, Thursday, October 18, 1906.
Bertha Delmore Thompson resumed; by Mr. Moses:
In my testimony yesterday in answer to a question I stated, I believe, my husband had not signed a lease for the premises in Lexington avenue. Since then I have thought over the matter, and I remember that my husband did sign the lease. There was no lease in the first place; there was no lease to the first apartment, but the second one my husband signed. I cannot remember the date, about three years ago.
We stayed in the first apartment two years. We moved there in 1899. No lease was ever signed for that apartment. There was one signed in 1902 by my husband; the second one.
Q. Now, from the time you came to the City of New York to your husband's death, did he ever earn any money or do any business? A. No.
Joel G. Van Cise resumed:
Cross-examination By Mr. Moses:
Q. Mr. Van Cise, what was the value, according to the American Experience Table of Mortality, at 4 per cent. interest, of temporary insurance for a man age 60? A. I have no tables with me, but the value would depend on the length of time for which temporary insurance was to be given.
Q- Per annum, per year, age sixty? A. The policy had no value.
Samuel S. Mccurdy, a witness called on behalf of the plaintiff, being duly affirmed, testifies as follows:
Direct-Examination By Mr. Moses:
I am an officer of the Equitable Life Assurance Society—assistant secretary. I was acquainted with Captain Thompson, the decedent in this case. I knew him between the years 1899 and 1903. I saw him quite frequently all that time. I was familiar with what work he was doing for the society, but not with the amount of business that he wrote. That was not in my particular line of work.
Q. Did you during all of that time know of a single case where he wrote any business? A. I must have known of cases at that time. I cannot recall them at this moment.
Q. Are you prepared to say he ever wrote any business during that period from 1900 to 1904? A. I am not prepared to state.
No cross-examination.
201 Gerald F. Brophy, a witness called on behalf of the plaintiff, being duly sworn, testified as follows:
Direct-examination By Mr. Moses:
Mr. Moses: The defendant produces under a notice a check dated January 13, 1900, and which I offer in evidence. Received.
Same marked "Plaintiff's Exhibit No. 28." (Copy in Exhibits.)
Q. I notice in this letter I show you, which has been put in evidence, a statement that certain policies are held pending the completion of the loan 205 agreement, you observe that, do you not? A. Yes.
Q. There has been put in evidence another instrument showing that the loan agreement was made for $1,040 about that time; in what way was the balance of that money paid to Captain Thompson?
Q. In what way was the additional sum between $621 and $1,040, the loan on that policy, made up?
The Court: That is, if you know.
A. I do not remember the facts of the case with absolute certainty. 1 presume that there was not sufficient in the loan to reinstate the policies, and we advised Captain Thompson he would have to put 206 up the balance which I assume to be the amount of his check.
Q. Do you recall the incident of the loan, Mr. Brophy? A. Yes, in a general way, I do.
Q. Does the memorandum substantially state the agreement that was made at the time; the memorandum by Captain Thompson on the foot of your letters?
Mr. Pierson: I object to it as incompetent.
The memorandum will speak for itself. He cannot get that memorandum in by indirection this way.
Objection sustained. Exception.
The Witness: I know of no memorandum other than the loan agreement.
James J. Whittaker, a witness called on behalf of the plaintiff, being duly sworn, testified as follows:
Direct-examination By Mr. Moses:
I am an accountant, at 154 Jefferson avenue, Brooklyn. I have been engaged as an accountant twenty-five or thirty years, possibly. I am familiar with the calculation of interest and discount computing at single interest of $10,000.
A. I find that $10,000, from January 1, 1901, due March 1, 1904, calculated at the accepted mathematical rules, would be $8,403.36 at that time, at 6% interest. The value of $50S due on the 9th day of October, 1900, on the 1st day of January, 1901, is $514.86. The value on January 1, 1900, of $508 due October 9, 1901, $485 38; $508 due October 9, 1902, $459.06; $508 due on the 9th day of October, 1903, $435.45; adding those figures the sum of $1,040, the loan due on January 1, 1901, give the total amounts of these $2,934.75. Deducting those from the value of January 1, 1901, of $10,000 leave the net balance due $5,468.61 on each $10,000. Two sums of the same amount would total $10,937.22. Taking $10,937.22 as of the date of January 1, 1901, be the interest from that date up to the present date of trial five years and nine months and twenty days on $10,937.22 at straight 6% interest $3,809.75. Add that to the $10,000 and odd principal give $14,746.97 total.
No cross-examination.
Joel G. Van Cise, recalled:
By Mr. Moses:
Q. What was the net cost of temporary insurance for a man at the age of sixty years per thousand by the American Experience Table at 4 per cent.?
Mr. Pierson: Objected to as immaterial.
Objection overruled. Exception.
A. I have the Actuary's table open here. I will have to look for the American Table. It gives the Combined Experience at 4 per cent. and the American at 3 and 3 1/2 per cent. The difference is very slight. The Combined Experience or Actuary's would answer as well.
Q. Have you got the American Experience at 211 4 1/2 per cent.? A. No, only 3 and 3 1/2 American Experience. The Combined Experience, or Actuary's at 4.
Q. Then they are substantially alike, are they not, Mr. Van Cise? A. Yes.
Q. How much would they vary one from the other? A. Very slight indeed on term insurance.
Q. The Actuary's Combined insurance at 4 per cent , give me that per thousand? A. Do you want the net premium?
Q. The net premium? A. You understand every company has a loading on the premium?
Q. Please answer my question. I understand that but I ask you for the net premium. Let Mr. Pierson 212 bring out about loading. What is the net premium at 60 years on $1,000? A. Net annual premium?
Q. Yes. A. For one year $29.17 per thousand.
Q. At the age of sixty-one the net annual premium? A. $31.66.
Q. At sixty three? A. 33.77.
Q. 64. A. $39.26.
Q. The temporary insurance you have given us now for a man born in 1840 would be for the year 1900 at the rate you have given for 60—October, 1900, at 61; 1902, at 62; 1903, 63. What is the sum of those four figures which you have given us? A. $130.68.
Q. Per thousand? A. Yes. 213
By Mr. Pierson:
Q. I show you a paper marked "Plaintiff's Exhibit 23," and ask you if that is the application which Captain Thompson made for these policies? A. Yes.
Q. I call your attention to paragraph seven of this application, which reads as follows:
Mr. Moses: I object. The policy is here and speaks for itself. It is endeavoring to get an explanation from the witness as to the meaning of the policy.
The Court: I do not know what he is trying to get at because it is not finished yet.
Q. "Agreed in consideration of the privileges for paid up insurance stated on the reverse side of this application, that all right and claim to temporary insurance or any other surrender value than provided in said privileges are hereby specifically waived and relinquished." After that language I ask you what words you find written there?
Mr. Moses: I object. In the first place, it is utterly immaterial what is in that application so far as that section is concerned, the statute having expressly provided that it must be noted on the policy in red ink.
Objection overruled. Exception.
The words added are, "Whether required by the statute of any State or not."
Q. What is the answer in handwriting? A. "Yes."
Q. You said something, and you were interrupted, about the net premium and custom of the company to load the premiums, is there anything you want to say about that at this time?
Mr. Moses: I object to that. We have nothing to 210 do with the custom of this company or any other company.
Objection overruled. Exception.
A. It is the custom of all companies to load all their premiums, and the statute expressly allows a loading of 50 per cent., inasmuch as it only requires them to give two-thirds of the net value.
Mr. Moses: My case is closed, with the exception of the doctors, if I can get them. Two physicians whom I expect.
The Court: What do you expect to prove by them?
Mr. Moses: I would like to have until two o'clock.
Mr. Pierson: Perhaps I can concede what Mr. Moses wants.
Mr. Moses: Will you concede he was a patient in the hospital from November 28th, 1903, until the time of his death?
Mr. Pierson: I will concede he was a patient at the Presbyterian Hospital.
Mr. Moses: Do you concede that is the fact?
Mr. Pierson: If you say so, yes.
Bertha D. Thompson recalled:
By Mr. Moses:
Q. Your husband went to the hospital on November 28th, 1903? A. Yes.
Q. Had he been sick at home before that or not? A. About a week he had been helpless. Prior to being helpless there was nothing special the matter. Nothing more than his general health, which was bad at all times. This general badness of health was from the time he came to the city up to this time.
Cross-examination By Mr. Pierson:
Q. But Mr. Thompson wrote these letters which you have already identified, one dated August 21st, 1903, and one dated October 5th, 1903, and one dated October 30th, 1903, didn't he? A. Yes.
By Mr. Moses:
What was Captain Thompson's habit as to letter writing?
Mr. Pierson: I object to that as immaterial.
Objection sustained. Exception.
Q Did Captain Thompson do anything else except write letters during this period of his illness. A. No.
It is consented that Captain Thompson's statement of his account with the Equitable down to the commencement of the action will be considered in evidence.
[plaintiff Rests.]
Mr. Pierson: The defendant moves to dismiss the complaint on the ground that the plaintiff has failed to prove a cause of action, and more specifically on the further ground that it animatively appears that Captain Thompson, the plaintiff's intestate, agreed in writing that the defendant might cancel the policies on default in the payment of the loan, and that the loan was not paid and that the policies were cancelled, and their surrender value applied in payment of the loan.
The Court hears argument.
The Court: I cannot escape the conclusion that the motion must be granted. There is no escape from it in my mind. The motion is granted.
Mr. Moses: Exception.
The Court: You may put the record in any shape you desire to make a record.
Mr. Moses: Exception. I ask leave to go to the jury on the question of whether or not the parties at the time of making the agreement for the loan of $1,040 did not understand that the amount that the company was authorized to cancel the policy for a sum fixed by certain tables of the insurance company then known to both parties and yielding $1,044 as the cash surrender value of that policy. Also in connection therewith that the jury shall decide what additional value the $1,044 would be the equivalent of two-thirds of $2,147 the amount of the reserve less the indebtedness of $1,040. Third, to go to the jury upon the question as to whether or not it was contemplated and agreed between William H. Thompson and this defendant at the time of the making of such loans that William H. Thompson would give and the company would receive the value of this two-thirds over and above the indebtedness in case of non-payment of the loan. Fourth, I ask to go to the jury upon the question of whether or not Captain Thompson at the time of the making of the loan was not in impaired health, a physical wreck and wholly uninsurable. Fifth, I ask to go to the jury upon the question as to whether or not the value of the policy a person in the condition that Captain Thompson was, not the value of the sum insured at $10,000 payable at the date he actually died, less the value of the premiums falling due between the date of such agreement and the death plus the value of the loan made by the company, and that plus the value of the loan made by the company at that time.
Further, I ask to go to the jury as to the question of whether such values are not as follows:
Present Value.
1 January, '01, $10,000 due March 1,
1904,119(10,000) $8,403 30
$508 due 9th Oct., 1900—508—101.35.. . 514 86
508 due 9th Oct.. 11301—508-104.66... 485 38
508 due 9th Oct., 1902-508—110.ti6... 549 06
508 due 9th Oct., 1903—508—116.66... 435 45
Memo.— Policy value 1 Jan'y, 1901 8,403 36
I ask to go to the jury on the question as to whether or not the company did not have in its hands sufficient money belonging to Captain Thompson derived from the renewal contracts at the time of the alleged forfeiture to have paid said indebtedness.
I move to go to the jury upon the question as to whether or not any notice was ever given requiring the payment of the premium on the policy after October, 1901, and whether such policy was not in force then and thereafter with the exception of 2og such effect as would be derivable from the loan agreement.
The Court: The application is denied. The complaint is dismissed. Mr. Moses: Exception.
p. M., and that to the best of my knowledge and belief the cause of his death was as follows:
Cerebral Haemorrhage,
Osteomyeletis,
Amputation of leg.
Witness my hand this 28th day of Feb., 1904.
Signature, Harry M. Keator, M. D.
Residence, Presbyterian Hosp.
Date of Burial, March. 2, 1904.
Residence, 1005 Park ave.
Special Information required in deaths in hospitals and in institutions and in deaths of non-residents and recent residents.
Former or Usual Residence, 612 Lex. ave.
How long Resident
at Place of Death, Nov. 27, to Feb. 28, 1904.
Place of Burial, Greenwood.
Undertaker, James Finary.
Date of Record, Feb. 29, 1904.
A True Copy,
George A. Roberts,
[seal.] Asst. Chief Clerk,
Borough of Manhattan.
Plaintiff's Exhibit No. (Copy.)
REQUEST FOR CHANGE OF POLICY.
The Equitable Life Assurance Society Of The United States is hereby requested to make the following change in Policy No. 555915 & 16:
From Self & assigned to Bertha L. Thompson and Margaret M. Duncan, assg. respectively to Estate of Assured by alteration of original Policy or by issuing new Policy of same number and date in place
Plaintiff's Exhibit No. 7.
(Copy.)
This section to be filled in at Home Office.
$875.60 Premiums paid to 99 10 9
In Force to "12"
New York, Dec 19, 1899
Received of The Equitable Life Assurance Society Of The U. S. Eight hundred & Seventy-five & 60/ dollars, in full of all claims, including profits, under their Policy No. 555.915 on life of Wm. Thompson now surrendered, Policy being in favor 237 of self and assigned to American Deposit & Loan Co.
Signature, American Deposit & Loan Co.
G. D. Hartley, Secretary. Witness,
The Collection of a surrender Value by Draft is not authorized.
The Policy and Assignments, if any, should be returned with this receipt.
Plaintiffs Exhibit No. 10.
(Copy.)
This section to be filled in at Home Office.
$875.60 Premiums paid to 99 10 9
In force to "12 9
New York, Dec. 19, 1899
Received of The Equitable Life Assurance Society or The U. S. Eight hundred Seventy five & 60/100 dollars, in full of all claims, including profits, under their Policy No. 555916 on life of Wm. Thompson now surrendered, Policy being in favor of self and assigned to American Deposit & Loan Co.
Signature, American Deposit & Loan Co.
C D. Hartley, Secretary. Witness
The Collection of a surrender Value by Draft is not authorized.
The Policy and Assignments, if any, should be returned with this receipt.
Plaintiff's Exhibit No. 12.
$1040. (Copy)
This Agreement, made this eighth day of March, 1900, between The Equitable Life Assurance Society of the United States, party of the first part, and William H. Thompson, party of the second part,
WITNESSETH: The party of the first part agrees to loan and does hereby loan to the party of the second part, the sum of Ten Hundred and forty dollars, the receipt of which by the party of the second part is hereby acknowledged; and the said party of the second part agrees to repay the same to the said 241 party of the first part, at its office, 120 Broadway, New York City, on the twenty-ninth day of December, 1900.
In Consideration Of said loan the party of the second part hereby assigns, transfers and sets over all his right, title and interest in policy No. 555,915 on the life of William H. Thompson, issued by said party of the first part, together with all money which may be payable under the same to said party of the first part as collateral security for the repayment of said loan.
In The Event Of Default in the repayment of said loan upon the date hereinabove mentioned, the 9,2 party of the first part is hereby fully authorized and empowered, without notice to and without demand for payment by the party of the second part, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest. Should the surrender value of said policy exceed the amount of above loan with interest at five per cent. thereon, then, and in that case the excess value above the loan and interest shall be due and payable to the legal owner or owners of the policy on demand.
In witness whereof I have hereto set my hand and seal.
(Signed) William H. Thompson, [seal.]
(Name of Assured).
(Address).
In the presence of
Notary Public.
( Notary's ) '( Seal, j
N. B.—If witnessed by the Society's manager or cashier the signature of a Notary will not be required.
Plaintiff's Exhibit No. 13.
$1040. (Copy.)
This Agreement, made this twenty ninth day of December, 1899, between The Equitable Life Assurance Society of the United States, party of the first part, and William H. Thompson and Bertha L. Thompson, parties of the second part,
Witnesseth: The party of the first part agrees to loan and does hereby loan to the parties of the second part, the sum of Ten hundred and forty 00/100 dollars, the receipt of which by the parties of the second part is hereby acknowledged; and the said parties of the second part agree to repay the same to the said party of the first part, at its office, 120 Broadway, New York City, on the Twentyninth day of December, 1900.
In Consideration Of said loan the parties of the second part hereby assign, transfer and set over all their right, title and interest in policy No. 555,915 on the life of William H. Thompson, issued by said party of the first part, together with all money which may be payable under the same to said party of the first part as collateral security for the repayment of said loan.
In The Event Of Default in the repayment of said loan upon the date hereinabove mentioned, the party of the first part is hereby fully authorized and empowered, without notice to and without demand for payment by the parties of the second part, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest. Should the surrender value of said policy exceed the amount of above loan with interest at five per cent, thereon, then, and in that case the excess value above the loan and interest shall be due and payable to the legal owner 247 or owners of the policy on demand.
In witness whereof we have hereto set our bands and seals.
(Signed) William H. Thompson [seal.]
(Name of Assured).
120 Broadway, New York City
(Address).
(Signed) Bertha L. Thompson [seal.]
(Name of Beneficiary).
488 St. Nicholas Ave.,
(Address).
In the presence of Notary's J. R. Boldt Seal i Notary Public.
Notary's
SEAL
Revenue stamp attached 250 )
N. B.— If witnessed by the Society's manager or cashier the signature of a Notary will not be required.
Plaintiffs Exhibit No. 15.
$1040. (Copy.)
This Agreement, made this eighth day of March, 1900, between The Equitable Life Assurance Society of the United States, party of the first part, and William H. Thompson, party of the second part,
WITNESSETH, The party of the first part agrees to loan and does hereby loan to the party of the second part, the sum of Ten hundred and forty 00/100 dollars, the receipt of which by the party of the second part is hereby acknowledged; and the said party of the second part agrees to repay the same to the said party of the first part, at its office, 120 Broadway, New York City, on the twenty-ninth day of December, 1900.
In Consideration Of said loan the party of the second part hereby assigns, transfers and sets over all his right, title and intere't in policy No. 555,910, on the life of William H. Thompson, issued by said party of the first part, together with all money which may be payable under the same to said party of the first part as collateral security for the repayment of said loan.
In The Event Of Default in the repayment of said loan upon the date hereinabove mentioned, the party of the first part is hereby fully authorized and empowered, without notice to and without demand for payment by the party of the second part, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest. Should the surrender value of said policy exceed the amount of above loan with interest at five per cent, thereon, then, and in that case the excess value above the loan and interest shall be due and payable to the legal owner or owners of the policy on demand.
In witness whereof I have hereunto set my hand and seal.
(Signed) William H. Thompson seal.]
In the presence of j Notary's ) \ Seal, j Notary Public.
N. B.—If witnessed by the Society's manager or cashier the signature of a Notary will not be required.
Plaintiffs Exhibit No. 16.
1040 (Copy.)
This Agreement, made this twenty-ninth day of December, 1899, between the Equitable Life Assurance Society of the United States, party of the first part, and William H. Thompson and Margaret M. Duncan, parties of the second part,
Witnesseth: The party of the first part agrees to loan and does hereby loan to the parties of the second part, the sum of Ten hundred and forty 00/100 dollars, the receipt of which by the parties of the second part is hereby acknowledged; and the said parties of the second part agree to repay the same to 253 the said party of the first part, at its office, 120 Broadway, New York City, on the Twenty-ninth day of December, 1900.
In Consideration Of said loan the parties of the second part hereby assign, transfer and set over all their right, title and interest in policy No. 555,916 on the life of William H. Thompson, issued by said party of the first part, together with all money which may be payable under the same to said party of the first part as collateral security for the repayment of said loan.
In The Event Of Default in the repayment of said loan upon the date hereinabove mentioned, the party of the first part is hereby fully authorized and 254 empowered, without notice to and without demand for payment by the parties of the second part, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest. Should the surrender value of said policy exceed the amount of above loan with interest at five per cent, thereon, then, and in that case the excess value above the loan and interest shall be due and payable to the legal owner or owners of the policy on demand.
In witness whereof we have hereto set our hands and seals.
(Signed) William H. Thompson [seal.]
(Name of Assured).
120 Broadway, New York City
(Address).
(Signed) Margaret M. Duncan [seal.]
(Name of Beneficiary).
488 St. Nicholas Avenue, N. Y. City
(Address)
N. B.—If witnessed by the Society's manager or cashier the signature of a Notary will not be required.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States, No. 120 Broadway.
Policy Loan Department. B
New York, Jan. 11, 1900.
Capt. Wm. F. Thompson,
Office. Dear Sir:
re Pols. Nos. 555,915-16
Referring to your visit this morning to this office, at which time you inquired as to the condition of the ahove numbered policies, we have.now to inform you that these policies were purchased by the Society from the American Deposit & Loan Co. on December 20th and are now held by us pending the receipt of the completed loan agreements to secure the loan which the Society is allowing in connection with the reinstatement of these policies.
Yours very truly,
G. F. Brofht,
Supt.
Plaintiff s Exhibit No. 18. 259
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States,
120 Broadway. Loan No. 3952. 3953.
New York,
Jan. 15, 1900. Mr. W. H. Thompson,
120 Bway. Dear Sir:
We beg to acknowledge the receipt of your policy No. 555,915-916 which has been placed with us as 260 security for our loan to you of $2,080. This loan will become due Dec. 29, 1900, and upon repayment of same this policy will be returned.
In case of the death of the assured before the maturity of said loan, the Society, after deducting the amount due under same from the death claim, will pay over the balance to those legally entitled thereto.
If the policy is surrendered on account of failure to comply with the conditions of the agreement, the cash balance, after payment of the loan, will he paid to the parties who transferred the policy to this Society, or to their legal representatives.
Gerald F. Buofhy,
Supt. Policy Loan Dept. Per
Please find herewith the following enclosures: Prem. recpts. for Oct. 99.
Exhibit No. 21.
(Copy.) THIS AGREEMENT, made the Fifteenth day of December, 1899, between The Equitable Life Assurance Society Of The United States, a corporation of the State of New York, party of the first part, and William H. Thompson, of New York, County of New York, State of New York, party of the second part, WITNESSETH, That the said parties agree to transact business upon the following terms and conditions: The party of the second part shall canvass personally and through subordinates for applications for life assurance, and forward the same to the said Society, party of the first part, and if the risks are approved and policies issued by the said Society, the party of the second part shall collect and forthwith pay over to the said Society the premiums on assurances thus effected as shall be directed by the said Society.
1. The said party of the second part is Not AuThorized to make, alter or discharge contracts for said Society, or waive forfeitures, grant permits, name extra rates for special risks, guarantee dividends, or bind said Society in any way, and is not under any circumstances authorized to write receipts for premiums, or make any endorsement on the policies of said Society; and his powers shall extend no further than is herein expressly stated. Said party of the second part shall not receive any moneys due or to become due to said Society, except when holding receipts, or other written authority, signed by one of the principal officers of said Society.
2. The said party of the second part agrees to 265 devote his whole time and all his energies to the service of said Society, and to act exclusively for it; and shall not directly or indirectly engage in any other business, nor submit proposals for life assurance to any other company, unless the same shall first have been declined by said Society.
3. No assignment of the agency or of commissions earned hereunder shall be valid unless authorized in advance, in writing, by an officer of said Society.
4. The said Society reserves the right, and it is understood that it at all times has the right, to reject in its absolute discretion any applicant for as- 266 surance introduced by said party of the second part, personally or through subordinates, and said Society shall not be required to specify any cause for such action.
5. All applications for assurance secured under this contract, as well as medical examination reports, shall be delivered to said Society, whether the same have been reported on favorably or unfavorably by the Medical Examiner. The said party of the second part shall be subject to a penalty at the rate of cost of a given medical examination in all instances where a Medical Examiner may have been employed who was not the proper examiner for the occasion according to the decision of said Society's Medical Director, and also in every case where the Medical Examiner's report had not been received by said Society.
6. Commissions shall accrue only as premiums are paid to said Society in cash.
8. The only expense to be borne by said Society under this contract shall be fees for medical examinations made in accordance with its rules now in force, or which may hereafter be adopted, excepting that in the following cases the cost of medical examination shall be borne by said party of the second part, viz.:
On applications for policies for less than $1,000 (computed value); On policies returned not paid for; and On policies for $1,000 (commuted value) with premiums payable other than annually, except that such fees in connection with such policies where premiums are paid for one full year shall be refunded by said Society.
9. The renewal commissions as above shall, subject to the stipulations and limitations herein contained, continue to be paid to said party of the second part, his executors or administrators, for the term of years hereinbefore stipulated, except as herein provided, on policies in force during said term, provided he conforms to the rules of said Society during the term of this contract.
10. When premiums upon policies secured hereunder are collected by officials of said Society in New York, or by its representatives, one percent. of such premiums shall be deducted from the commissions to be allowed thereon; but said Society will waive said charge to said party of the second part for the collection of such premiums, and any and all other premiums in which he has an interest, when paid direct to said Society's Cashier at its Home Office in New York City, while said party of the second part continues to represent said Society under this contract.
11. Should said party of the second part leave the employ of said Society and enter the employ of another life assurance company, and endeavor to take agents of said Society away from its services, or to 277 induce policyholders of said Society to relinquish their policies in said Society, he shall forfeit any renewal interest that he might otherwise have been entitled to under any and all contracts with said Society.
12. The said party of the second part shall not be entitled to any commissions on assurances, unless, in the opinion of the President of said Society (or in his absence one of the other executive officers), such assurances were fairly effected through the instrumentality of said party of the second part; and in all cases where the claim to commissions is disputed by others, or is otherwise questionable, the decision 278 of the said officer shall be binding and conclusive as to such claim. Should said Society in any case deem it wise to return a premium on a policy and cancel it for any cause, then said party of the second part shall be bound to repay to said Society, on demand, the amount of commissions received on premiums so returned.
13. If any policy obtained through the instrumentality of said party of the second part cease to be in force for a period of six months, and it be subsequently restored, then in such case said Society shall be discharged fully and entirely from any further liability to said party of the second part for commissions on account of such policy, in every manner whatsoever, notwithstanding such restoration, unless such restoration shall have been effected wholly through the instrumentality of said party of the second part.
14. Whenever a policy is terminated and a new policy is issued on the same life, which, in the judgment of said Society, is to take the place of the terminated policy, the new policy shall be regarded as a "changed policy."
15. It is further understood and agreed that said Society may offset against any claim for commissions or other compensation under this contract, any debt or debts due or to become due at any time from said party of the second part to said Society, whether arising under this agreement or otherwise, which debt or debts shall be a first lien thereon; and said party of the second part hereby sells, assigns, transfers and sets over to said Society (as collateral security for the payment of any indebtedness due to said Society by said party of the second part) any and all agency balances and accounts due, or to become due, to said party of the second part from subordinates of said party of the second part.
16. It is understood and agreed that said party of the second part has no claim of any kind or nature whatsoever against said Society under this contract, excepting for commissions acquired hereunder.
17. All collections made under this agreement shall be forthwith paid over to said Society, and said party of the second part agrees to hold all moneys belonging to said Society, whenever they come into his hands, in trust, separate and distinct; be shall in no case make any use of such funds, for any other purposes whatsoever. The said party of the second part shall return at the proper time, or on demand, to said Society, all uncollected policies given or sent to said party of the second part for collection; and shall comply with all such rules for the conduct of its business as said Society may have established, or shall hereafter establish.
18. The said party of the second part agrees to and does hereby become responsible for all moneys passing through his hands, through the hand of persons employed by him, or deposited in Banks or Trust Companies.
19. It is expressly stipulated and agreed between the parties hereto that should said party of the second part withhold any funds or policies belonging to 283 said Society, after such funds or policies shall have been demanded from said party of the second part, in writing, by said Society, then this contract shall, at the option of said Society, be absolutely null and void; and all claims whatsoever accrued or to accrue under the same shall be forfeited to said Society; but nothing herein shall be construed to affect any claim of said Society on said party of the second part.
20. The District in which said party of the second part shall have the privilege of canvassing hereunder shall embrace the New York Metropolitan District, viz.: the counties of Kings, New York, 284 Richmond and Westchester in the State of New York and the county of Hudson in the State of New Jersey; but said district is not assigned exclusively to said party of the second part.
21. Within said district said party of the second part shall have the right to appoint subordinates, subject to existing contracts and to the approval of said Society, and to such rules as said Society has established, or may hereafter establish, but such subordinates shall have no claim against said Society whatsoever; but, in case of the termination of this contract, said Society may, and is hereby empowered to, pay such subordinates any commissions, or other remuneration, which said party of the second part may have agreed to pay such subordinates, and to offset against all claims under this contract such commissions or other remuneration so paid; but nothing herein is to be interpeted as binding upon said Society so to do. The said party of the second part hereby agrees that said Society has the right at all times to limit the compensation to be paid to subordinates or others employed by said party of the second part under this contract. Further, said party of the second part agrees to furnish to said Society an executed copy of every contract made with subordinates at the time such contract is made and entered into. Said party of the second part shall be strictly responsible and liable to said Society for the acts of his subordinates.
22. The said party of the second part shall be careful not to make any misrepresentations in respect to results of, or privileges and obligations under, policies, or any other misrepresentations; and shall watch carefully the conduct of his subordinate in this respect, warning the careless and instructing the ignorant, and shall at once discharge any subordinate who misrepresents.
23. It is understood and agreed that said party of the second part will not, nor will he permit any of bis subordinates to, endeavor to take business from another agent of said Society; if he shall do so, he shall forfeit all claim to such business, and said Society shall have the right, upon proof of this having been done, to require the discharge of the agent for such offense.
24. In the event of any claim being made against said party of the second part by any other representative of said Society, or by any applicant to or policyholder in said Society, or any question or controversy arising between said party of the second and part and any such other party growing out of business transacted under this contract or any other contract between the parties hereto, such claim, question or controversy shall be referred to the President of said Society (or in his absence one of the other executive officers), whose decision shall be binding and conclusive.
25. It is understood and agreed that said party of the second part shall not institute legal proceedings against any applicant for assurance or policyholder in said Society, for any cause growing out of business transactions under this contract, or any other contract between the parties hereto, unless such ac- 289 tion shall have been approved in advance by the President of said Society (or in his absence one of the other executive officers). Should said party of the second part or said Society be sued by any applicant for assurance, or policyholder, because of any alleged act of said party of the second part or any of his subordinates, said party of the second part shall defend the suit, and if said Society shall not be satisfied with the manner in which defense is conducted it may employ counsel and conduct the defense, but all expenses of such suit shall, in any event, be paid by said party of the second part. And it is further understood and agreed that said Society has the right to settle any claim or claims of 290 applicants for assurance, policyholders or others, against said party of the second part, or said Society, in consequence of misrepresentation or fault of said party of the second part, or any of his subordinates, upon receipt of proof satisfactory to said Society of the justice of such claim or claims; and said Society shall be reimbursed by said party of the second part for any amount so paid out.
26. In case at any time it shall be deemed necessary or expedient by said Society to make an examination by an officer of said Society, or a duly authorized representative, into the affairs of said party of the second part, all books of account, bank books, 9gi documents, vouchers or other books or papers relating to or connected with the business of said Society, in any way, shall be open to said Society, or its representative, and freely exhibited; and the cost attending such examination shall be borne by said party of the second part.
27. All books of account, letters, letter books, contracts with agents, files or bound volumes of applications, documents and other archives relating to the business to be transacted under this contract, in the possession of the said party of second part, 292 are the property of said Society, whether paid for directly by said Society or not, as well as all furniture and fixtures in the office of said party of the second part, or at the offices of his subordinates, and paid for by said Society. The accounts of the agency shall be kept in such books and on such a system as may be directed by said Society.
28. The said party of the second part shall be responsible to said Society for any and all Conditional Receipts issued by said Society to any and all persons employed by or under contract with said party of the second part, and shall protect said Society against any claim or claims, and indemnify it for any loss sustained because of improper use, nonreturn or loss of any such Conditional Receipt.
29. In case of the death or, in the opinion of the said Society and notice from it to that effect in writing to the last known address, physical or mental disability of said party of the second part, this contract shall forthwith become void and be terminated, excepting only as to commissions the right to which shall have been previously acquired by said party of the second part, except as herein provided; and as to the repayment of any indebtedness due from said party of the second part to said Society, and as to any liens which said Society may have against any commission interests of said party of the second part.
30. Either party hereto may terminate this agreement by sending the other thirty days' notice, in writing, to the last known address, to that effect, unless otherwise terminated by its own conditions; but it is understood that said party of the second part shall not have the right to terminate this agreement unless all indebtedness due by said party of the second part to said Society, and all policies shall have been fully settled to the satisfaction of said Society.
32. It is understood and agreed between the par- 295 ties hereto that this contract covers and includes all agreements, verbal and written, between the parties to this agreement.
33. It is understood and agreed that for medical examinations made in the Borough Of Manhattan, paragraph No. 8 of this contract is hereby modified as follows:
(a) For examinations made by the Home Office staff of examiners, or by other examiners under direct instructions from the Medical Department,no charge will be made to said party of the second party;
(6) For examinations made otherwise, the said party of the second part shall forthwith pay to said Society fees as per the following scale:
Five dollars ($5) where an application is for a policy for less than $1,000 (commuted value);
Five dollars ($5) where a policy for $1,000 (commuted value) is issued with pre- miums payable other than annually, it being understood that after the pre- miums on such policies shall have been paid for one full year said Society will re- 297 fund to said party of the second part the sum of two dollars ($2);
Three dollars ($3) in all other cases, and an additional two dollars ($2) where a policy is issued and returned not paid for.
34. It is understood and agreed that until any and all indebtedness due or that may hereafter become due to said Society by said William H. Thompson under or by virtue of or in connection with this contractand any and all previonscontractsand agreements between said Thompson and said Society, or in any other manner whatsoever incurred or assumed, shall have been fully repaid, with interest, the same shall constitute a lien upon any and all renewal commissions accruing under this contract and any and all previous contracts and agreements with said Society, or in any other manner whatsoever now or hereafter acquired—interest to be at the rate of five per cent. (5%) per annum, and to be computed up to and paid annually on the 31st day of December in each year; any and all renewal commissions accruing to said Thompson shall be applied first to the payment of interest upon his total indebtedness to said Society on said 31st day of December in each year, and afterwards to the payment of the principal sum then due, until the same shall have been fully paid.
35. This contract shall take effect as of January 1, 1900, and supersedes and annuls any and all previous contracts and agreements hetween the parties hereto, excepting that all obligations to said Society heretofore assumed by said Thompson still exist and his right to commissions heretofore earned is not impaired.
In Witness Whereof, the said Society has caused its corporate seal to be affixed, and these presents to be signed by its Third Vice-President and the said party of the second part has hereunto set his hand on the day and year first above written. (Signed) George T. Wilson,
Third Vice-President. (Signed) William H. Thompson.
Registered Dec. 18/99. by (Sgd.) A. W. Maine,
O. W. K. (Sgd.) W. N. E. [seal.]
(Endorsed)—Copy.—Contract.—The Equitable Life Assurance Society of the United States, 120 Broadway, N. Y., and William H. Thompson, New York City.—Dated December 15, 1899.
Advances made to W. H. Thompson during 1899-19001901 and 1902 by the Equitable Life Assurance Society of the United States, and credits against same during said period.
Nov. 8
Dec. 10, 1901 Jan. 9 Feb. 26 Mch. 27 Apr. 26 May 27 Sep. 25 Dec. 28
1902. Apr. 26
C. L. 22,189
Monthly cash advance
h% contingent percentage advance.... Monthly cash advance
Monthly cash advance.
C. L. 23,329
Ren'l corns, (pd. L. Machenheim A Son) Cash advance C. L. 25,387'
Cash advance. 500 00
$19,170 63
Plaintiff's Exhibit No. 2
APPLICATION FOR FREE TONTINE POLICY.
I hereby apply to the Equitable Life Assurance Society of the United States, for $20,000 of assurance on my life, on the plan described in the "privileges" below, and known as the Free Tontine.
PRIVILEGES. I. Incontestability.
After two years from the date of issue, the only conditions which shall be binding upon the holder of the policy are that he shall duly pay the premiums 307 and observe the regulations of the Society as to age and service in war. In all other respects, if the policy matures after the expiration of the said two years, the policy shall be Indisputable.
II. Non-forfeiture.
If premiums upon the policy, for not less than three complete years of assurance, shall have been duly received by the Society, and default shall be made in payment of a subsequent premium, the policy may be surrendered for a non-participating paid-up policy, for the entire amount which the full reserve on the policy, according to the present legal standard of the State of New York will then pur- 308 chase as a single premium, calculated by the regular table for single premium policies, now published by the Society; providing, that the policy be returned to the Society duly receipted within six months after the date upon which the last premium in default has fallen due; otherwise the policy shall cease and determine and all premiums paid thereon shall forfeit to the Society.
III. Freedom Of Travel And Occupation.
After one year from the register date of issue of the policy there are no restrictions upon travel, residence or occupation, except that military service in time of war is forbidden unless a permit has 309 been previously obtained. In case of death from service in war without such permit the net reserve of the policy (computed according to the American Experience Table of Mortality, taking interest at four per centum per annum) will be paid.
IV. Facility In Making Payments.
Although all premiums are due in the City of New York, payments may be made at other places on or before the due dates to persons authorized to receive the same, on the production of the Society's receipt therefor, signed by its Secretary, and countersigned by the authorized person to whom the payment is made. Although the contract is based on the receipt of premiums annually in advance, the premium may be made payable in semi-annual or quarterly instalments, but in such case that part of the full year's premium, if any, which remains unpaid at the maturity of this contract shall be deducted from the amount of the claim.
V. Admission Of Age.
The age of the person upon whose death the policy matures will he admitted in advance by the Society on due proof, and after being thus admitted no deduction shall be made to adjust the amount of assurance which at the correct age would have been purchasable with the premium paid.
VI. Tontine Profits.
At the end of the Tontine Period, if the person proposed for assurance be then living, and the policy in force, the policy shall participate in the accumulated surplus derived from policies on the Free Tontine plan, both existing and discontinued, as may then be apportioned by the Society.
VII. Choice Of Privileges At The End Of The
TONTINE PERIOD.
The policy may then be surrendered for its full value, consisting of the entire Reserve and the Surplus then apportioned by the Society— Either in 1. Cash,
or, 2. Paid-up Assurance, or, 3. An Annuity For Life, Or, if the Policy is not an endowment maturing at the end of the Tontine Period, it may be continued and the Surplus taken— Either in 1. Cash,
or, 2. Paid-up Assurance,
[To be added to the Policy.]
or, 3. An Annuity,
[To reduce or extinguish premiums if still payable].
515,916. 313
1. Full name of person for whose benefit assurance on the plan described on the reverse side of this sheet is applied for, myself.
Residence, relationship to the person to be assured,
Has the person in whose favor the assurance is to be effected an interest in the life of the person to be assured equivalent to the amount of the assurance applied for?
2. Full name of the person whose life is to be assured, Wm. H. Thompson. Occupation, state in detail; if mercantile, state if it involves traveling as a buyer or seller. Insurance; Residence: Town, Bklyn.; County, Kings: State, N. Y. Place of of Business, 120 Broadway, N. Y. Shall Notices of If Premiums coming due be addressed to last named person at place of business as stated? Yes. Then
"Place of Business," if not specially given, will be assumed to be the same as "Residence." If (in the event of the stipulated age or period being attained) the sum assured or cash value is not to be paid to the person whose life is to be assured, state to whom payment is to be made. Self.
3. Place and Date of Birth of the person to be assured? Place, St. Stephen; County, Charlotte State, New Brunswick; Year, 1840; Month, May; Day, 13; Age at nearest birthday, 51.
4. Sum to be assured? $20,000. Kind of policy desired? (i. e., Whether Endowment or Life, etc. Answer as to Tontines at queries G and 7 only.) Ord. Life.
5. Is the premium to be paid annually, semiannually or quarterly? Annually. Amount of each premium? $1016.
6. Is the Tontine period to be ten, fifteen or twenty years? 15.
7. It is agreed, in consideration of the privileges as to paid-up assurance stated on the reverse side of this application, that all right or claim to temporary assurance or any other surrender value than that provided in the said privileges, are hereby specifically waived and relinquished, whether required by the statute of any State or not; and that, at the end of the Tontine period, for all paid-up assurance in excess of the amount of the original policy, or issued in lieu of a matured Endowment, a satisfactory medical certificate shall be furnished to the Society? Yes.
8. It is agreed that for one year after the date of issue of the Policy, travel and residence in Mexico and the Torrid Zone, and engagement in any of the following occupations or employments:- blasting, mining, submarine labor, aeronautic ascensions, the manufacture, handling or transportation of inflammable or explosive substances, service upon any railroad train, or in switching, or in coupling cars, or on any steamboat, or other vessel or boat, will render the Policy void; and that self-destruction, sane or insane, and death in consequence of violation of law, within one year from the date hereof, are not risks assumed by the Society in the contract? Yes.
9. What cash premium has been paid to make the g18 assurance under this application binding from this date, providing the risk is assumed by the Society?
A annual premium of $ has been paid upon condition that if the risk is Not Assumed by the Society, This Sum Is To Be retuuned, in accordance with the provisions of the Society's Official Binding Receipt No. given as voucher for said payment.
It is hereby agreed that all the foregoing statements and answers, as well as those made or to be made to the Society's Medical Examiner, are warranted to be true, and are offered to the Society as a consideration of the contract, which shall not take effect until the first premium shall have been paid 319 during the life and good health of the person herein proposed for assurance.
Dated at Brooklyn, Sept. 7, 1891.
Note before signing.
The husband may sign for his wife or the father for his children.
William H. Thompson
Signature of person for whose benefit assurance is made.
William H. Thompson
Person whose life is to be assured.
Officer's Check
Note Here (not in an accompanying letter) Any Special Clause Or People
VISION DESIRED IN THE POLICY.
2 policies of $10,000 each. This risk is approved and recommended by
Soliciting Agent. William H. Thompson,
General Agent.
Plaintiff's Exhibit No. 24.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States,
120 Broadway.
New York, April 24, 1903.
Second Vice-President's Office.
Capt. William H. Thompson,
New York. Dear Sir:
Your letter of the 21st reached my office when I was out of the city. You do not mention the amount of money that your daughter asks for, in the extract from her letter. If it were a very small amount, we might feel justified in advancing the same, but as I have written you repeatedly, it is our absolute rule not to make advances to agents having an indebtedness, who are inactive, that is, producing no business. The wisdom of this rule is too apparent to need any further comment. Your account as of the close of the first quarter of this year showed an indebtedness of a little over $7,000, and the amount that we estimate will be credited to your account this year from renewals is $2,800. As you know, your renewal account is growing old, and there is every reason in the world why we should use your renewals first to pay off your indebtedness.
Very truly yours,
G. E. Tarbell,
2nd Vice President.
Plaintiff's Exhibit No. 25.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States,
120 Broadway.
16 New York, April 28, 1903.
Second Vice-President's Office.
Capt. W. H. Thompson,
New York. Dear Sir:
Replying to yours of April 25th would say that I regret I do not feel that I should make so large an advance against your account as you have requested, but I have asked to have a special allowance letter sent you advancing you $250, which I trust will be pleasing to you.
Very truly yours, G. E. Tarbell,
2nd Vice-President,
Plaintiff's Exhibit No. 26. 325
The Vaults of the Safe Deposit Companies in the Equitable Buildings in New York, Boston and St. Louis are the most secure in the World.
Strongest In The World.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States,
Henry B. Hyde, Founder,
No. 120 Broadway, New York.
New York, April 25th, 1903.
Agency Offices: 326
128 Broadway, N. Y. (Name)
G. E. Tarbell, Esq.,
2nd V. P. Dear Sir:
Thanking you for your courteous letter of 24th inst. the present is to intimate that if you will make the advance $500.00 it will cover every requirement for myself and my daughter in view of which I will not ask for anything further in above line during the current year. On the other hand, I will endeavor by results to shew you my personal appreciation of your action. 007 With assurances of Respect,
William H. Thompson.
Plaintiff's Exhibit No. 38.
(Copy.)
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE U. S.
21579 New York, Jan. 13th, 1900.
THE NATIONAL BANK OF NORTH AMERICA
Pay to the order of Wm. H. Thompson Six hundred and twenty one 76/100 Dollars $621.76/100 S. D. Ripley,
J. B. Loring, R Treasurer.
Secretary.
Endorsed on back:
William H. Thompson.
For deposit in
The Western National Bank
Of New York.
Equit. Life Assur. Soc.
T. M. Murray.
Received Payment.
Endorsement guaranteed
Through New York Clearing House
Jan. 17, 1900
Ooq Western Nat'l Bank.
Defendant's Exhibit B. 331
(Copy.)
EXTENSION DEPARTMENT.
Oct. 23, 1900. Mr. W. H. Thompson,
Dear Sir:—
Replying to your letter of the inst., requesting an extension of time in payment of Premium due Oct. 9, 1900, on Policy No. 555j,}ji on the life of self, we have to say that the Society will accept said premium if tendered on or before Jan. 9th, 1901, with ""* interest. It is understood and agreed that this extension is granted by the Society and accepted by the legal owner of the policy on condition that if the said premium shall not be duly paid, the value of the assurance for the extended time shall be deducted from any cash or paid-up value to which this policy may be entitled.
In granting the above extension, we are advised that in view of several decisions of the Court, it is necessary in this connection to call your attention to the fact that this extension in no way binds the Society to make other or further extensions on this policy, and it is not to be construed to be the practice or custom of this Society. 333 Yours truly,
(Signed) G. F. Brofhy, Superintendent.
Interest At The Rate Of 5% Per Annum.
334 Defendant's Exhibit C.
(Copy.)
The Vaults of the Sar Deposit Companies in the Equitable Buildings in New York, Boston and St. Louis are the most secure in the World.
Strongest In The World.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States.
Henry B. Hyde, Founder.
No. 120 Broadway, New York.
335 Agency At 128 Broadway, N. Y.
Oct. 5th, 1003.
G. E. Tarbell, Esq.,
2nd V. P.
My Dear Sir:—
Confirming the pleasure of meeting you, after so long an interval, with the remark made at the time, "I believe, I have got a new lease of life, and look upon my case, as one of a remarable recovery, and from a physical standpoint, quite up to taking the field again." (if the Board of Managers dinner tonight does not knock me out)
It is my intention to earn, if possible, not only the Prize, as offered by Mr. Hyde for results, during the remainder of the year, but to renew, and strengthen if possible the confidence of the officers as a whole.
In the mean time, it would appear that my Renewal Acct. has been reduced from upwards of 4 renewals, to about 1, and it would serve to oil, the rusted machinery and remove any friction, if you will authorize an advance of One thousand dollars. Yours very truly,
William H. Thompson.
Defendant's Exhibit D. 337
(Copy.)
December 18th, 1899.
George T. Wilson, Esq., 3rd Vice-President, 120 Broadway, New York.
Dear Mr. Wilson:
Confirming receipt of your favor of the 13th instant, I have to thank you for extended courtesies embodied therein, but at the same time especially regret that you did not see your way clear to keep my policies in force in view of the fact that the net cost to Society would not be very great while to me or rather to my family who have come to the front so creditably during my illness, it means a great deal which I am sure you will appreciate.
I am of opinion that you can devise a plan which will give due protection to the Society as well as to my family for the present year in the matter of extended assurance, by which time I really feel that I shall be on deck again.
Thanking you for all the past in which my wife joins (in her own words) " I think the Society have treated you very well,"
Yours very truly,
(Sgd) William H. Thompson. 339
340 Defendants Exhibit E.
(Copy.) Private.
New York, March 27th, 1900.
Dear Mr. Wilson:
Thanking you for your courtesy of 2flth inst., re J. B. MacDonald Esq., 1 recognize the merits of your remarks and withdraw the request relating thereto.
I believe I told you that Mrs. Thompson is now and has been for some time past "The Riding Mistress " at "The Riding Club 58th Street." In order that we may at the earliest moment be free from all outstanding obligations.
As you are doubtless aware the members of an exclusive club like the above usually take wings (for which several summer resorts) in a month or so at which time her income would cease until their return in the fall.
Against my expressed wish Mrs. Thompson has said that (until I am fully recovered) she considered it her duty to follow up the advantages already gained to others which may possibly follow in the above connection.
In view of which it has been suggested to her that if she took two or three horses to Newport during the summer months she would not only keep in touch with the present members, but derive a good income as many of the members who used the club house at this point would be without qualified horses there.
To carry out Mrs. Thompsons views it necessitates $500 ready money but 1 pledge my honor I told her I would not and I could not conscientiously ask the Society for any further advances until I became a producer in fact but the fact that I have not kept my word with her in the matter shows that I am but human and place myself in your hands with the above explanation. With assurances of respect,
(Sgd) W. H. Thompson.
Defendant's Exhibit F. 343
(Copy.)
The Vaults of the Safe Deposit Companies in the Equitable Buildings in New York, Boston and St. Louis are the most secure in the World.
Strongest In The World.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States,
Henry B. Hyde, Founder,
No. 120 Broadway, New York.
New York, Feby. 7th, 1903.
O. E. Tarbell, Esq.,
2nd V. P. City.
Dear Sir:
For some time past (even longer than I care to contemplate) circumstances would appear to weigh against my taking an active part in the securing of new business, but I am determined to recover my prestige or withdraw honorably from the Society. In view of which I submit for your consideration that you approve of my taking an appropriate office near the Produce & Maritime Exchanges where I am possibly better known.
That you make me an advance of $100 per month to cover rent and other fixed charges during the next 345 twelve Uros. and which will be a charge against my renewal acct.
That if I succeed in securing not less than $200,000 during the next twelve mos. you will make a special allowance of ten percent, to cover what I believe you term Extra Expense in what I propose to outlay.
That if you will send me new applicants (who may apply for agencies at the Home offices) I will use my best judgment in making them producers for the Society.
With assurances of respect,
William H, Thompson.
346 Defendant's Exhibit G.
(Copy.)
The Vaults of the Safe Deposit Companies in the Equitable Buildings in New York. Boston and St. Louis are the most secure in the World.
Strongest In The World.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States,
Henry B. Hyde, Founder,
No. 120 Broadway, New York.
P. 0. Box 690.
New London, Aug. 81, 1903.
The Equitable Life Assurance Soc., 120 Broadway,
N. Y.
Dear Sirs:
Be good enough to send me your cheque for ($250.00/100) two hundred and fifty dollars or place the same to my credit in the North American Trust Cy, | 135 B'way, N. Y., charging the same to my current account, & oblige,
Yours very truly,
William H. Thompson.
Defendant's Exhibit H. 349
(Copy.)
The Vaults of the Safe Deposit Companies in the Equitable Buildings in New York, Boston and St. Louis are the most secure in the World.
Strongest In The World.
THE EQUITABLE LIFE ASSURANCE SOCIETY
Of The United States,
Henry B. Hyde, Founder,
No. 120 Broadway, New York.
New York, Oct. 30th, 1903. My Dear Taylor:
I am favored by the Society's Special Allowance i 31,252, indicating that your good offices in my behalf was specifically fruitful. Thanking you for your courtesy, Yours very truly,
William H. Thompson.
Defendant's Exhibit 23.
(Copy.)
February 21st, 1900. The Equitable Life Assurance Society, New York, N. Y.
Policies # 555,915-16, $10,000 each.
Dear Sirs:
My attention has been called to the fact that during my illness, some changes were found advisable as to the Beneficiaries under said policies.
Now that I have practically recovered it is my wish that the policies and liens are readjusted, that they are all in my own name.
Any signatures necessary to accomplish above object as also to protect any claims which the Society may have upon said policies, I shall be pleased to secure upon your intimation.
Thanking you in advance.
Yours very truly, (Sgd.) William H. Thompson.
Stipulation waiving Certification.
Pursuant to Section 3301 of the Code of Civil Procedure, it is hereby stipulated that the foregoing consists of true and correct copies of the notice of appeal, the judgment roll and case and exceptions as settled, and the whole thereof, now on file in the office of the Clerk of the County of New York; and certification thereof hy the Clerk of said County, pursuant to Section 1353, is hereby waived.
Dated New York, February , 1907.
Raphael J. Moses,
Plaintiff's Attorney.
Alexander & Green,
Defendant's Attorneys.
Order filing Record in Appellate Division.
Pursuant to Section 1353 of the Code of Civil Procedure, it is
Ordered, that the foregoing printed record be filed in the office of the Clerk of the Appellate Division of the Supreme Court in the First Judicial Department.
Dated New York, February , 1907.
Edward B. Amend, J. 8. C.
County of New York, ss.:
Raphael J. Moses, being duly sworn, says: I am the plaintiff's attorney. No opinion in writing was given by the Judge at the Trial Term, nor any oral opinion except as set out in case on appeal.
Raphael J. Moses. Sworn to before me this 12th ) day of March, 1907.
Charles G. Hensley, 3,i0 Notary Public.
Kings Co. Cert, filed in N. Y. Co.
The plaintiff, Bertha D. Thompson, as administratrix of the goods, chattels and credits of William H. Thompson, deceased, having appealed to the Appellate Division of the Supreme Court, First Department, from the judgment entered in the above entitled action in the office of the Clerk of New York County, on the 20th day of October, 1906, dismissing the complaint herein, with $110.33 costs, and the said appeal having duly come on to be heard, and the said Appellate Division having by an order entered in the office of the Clerk of said Appellate Division on the 19th day of April, 1907, directed that the said judgment so appealed from be affirmed, with costs to the respondent, and a certified copy of said order of the Appellate Division having been filed in the office of the Clerk of the Connty of New York on the 20th day of April, 1907, and the costs of the respondent having been duly adjusted at the sum of 97.20 dollars; now, on motion of Alexander & Green, attorneys for the defendant herein, it is
Ordered And Adjudged, that the said judgment so appealed from be, and the same hereby is, in all things affirmed; and it is
Further Ordered And Adjudged, that the defendant, The Equitable Life Assurance Society of the United States, do recover from the plaintiff, Bertha D. Thompson, as Administratrix of the goods, chattels and credits of William H. Thompson, deceased, the sum of 97.20 dollars, the costs of said appeal, and have execution hereon therefor.
36S Dated New York, April 20, 1907.
(Signed) Peter J. Dooling,
Clerk.
At a Term of the Appellate Division of 370 the Supreme Court, held in and for the First Judicial Department, in the County of New York, on the 19th day of April, 1907.
Present—Hon. Edward Patterson,
Presiding Justice.
Hon. George L. Ingraham, ) Hon. John Proctor Clarke, ! T .. Hon. James W. Houghton, >Jusuces- Hon. John S. Lambert, Jr.
Bertha D. Thompson, as Administratrix, &c., J 371 Appellant,
AGAINST
The Equitable Life AssurAnce Society Of The United States,
Respondent.
An appeal having been taken to this Court by the plaintiff from a judgment of the Surpreme Court entered on the 20th day of October, 1906, and the said appeal duly coming on to be heard, having been argued by Mr. Raphael J. Moses, of counsel for the 372 appellant, and by Mr. Charles W. Pierson, of counsel for the respondent, and due deliberation having been had thereon,
It Is Hereby Unanimously Ordered And Adjudged that the judgment so appealed from be and the same is hereby, in all things affirmed; and that the respondent recover of the appellant the costs of this appeal.
Enter.
E. P., J. S, C.
373 Notice of Appeal to Court of Appeals.
NEW YORK SUPREME COURT, New York County.
Appellant's Brief.
against
The Equitable Life Assurance! Society Of The United States,
Defendant-Respondent
Statement.
The appeal in this case (fols. 373-5) was taken February 27, 1908, fron the judgment entered herein April 20, 1007 (fols. 264-6(3) in the County Clerk's office (said judgment was entered pursuant to an order of the Appellate Division of the First Department, dated April 19, 1907 (fol. 366). The judgment of April 20, 1907, affirmed a judgment entered Oct. 20, 1906 (Cols. 355-358) whereby (fol. 358) it was "ordered and adjudged that the complaint herein be and the same hereby is dismissed, and that the defendant, The Equitable Life Assurance Society of the United States, recover from the plaintiff, Bertha I). Thompson, as administratrix of the goods and chattels and credits of William II. Thompson, deceased, the sum of One hundred and ten and 83/100 dollars cash, and have execution therefor."
The action is brought to recover damages caused the plaintiff intestate by the defendant's alleged unlawful appropriation in January 1901 (fol. 171), the policy then being in full force, when Mr. Pierson (counsel for defendant trying the action) said: "His loan for which these policies were pledged expired in December, before this extension ran out, and therefore while the policies were in force, so far as the payment of premiums is concerned. His loan fell due in December and he did not pay it, and thereupon the Society surrendered the policy and applied its cash surrender value to the loan in pursuance of the terms of the loan agreement.'"
The terms of the loan agreement referred to by Mr. Pierson are found at folios 240 and '248. Both are identical in terms, but the contract found at folio 240 relates to policy No. 555,915, and the contract at folio 248 is as to No. 555,916, and both provide (fols. 242-254): "In the event of default in the payment of said loan upon the date hereinabove mentioned, the party of the first part (Equitable) is hereby fully authorized and empowered, without notice to and without demand for payment by the parties of the second part, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest."
The appellant contends that this contract is illegal.
Before cpioting the statutes that it contravenes, let me call attention to the words "Cash surrender value.
These words have no relation to the actual value.
The policy (fol. 43) makes the application a part of the contract, and endorsed on the policy is a list of privileges, the details of which will be found in the application.
If after having been in force for three years it should lapse in consequence of non-payment of any premium it will have a surrender value in paid up insurance, provided the policy be surrendered within six months after the date of such lapse. It gives to William II. Thompson a choice of six months of settlement upon the completion of the tontine period on the 9th of October, 1906. One of these is, the surrender of the policy for the full value, consisting of the entire reserve, amounting to $3,647 (thirty-six hundred and forty-seven dollars), together with the surplus then apportioned by the Society in cash (fol. 47).
In the application referred to above as giving the details of paid-up assurance we find (fol. 28).
"Non forfeiture.—If premiums upon the policies for not less than three complete years of assurance shall have been duly received by the Society and default shall be made in payment of a subsequent premium, the policy may be surrendered for a nonparticipating paid-up policy for the entire amount which the full reserve on the policy according to the present legal standing of the State of New York, will then purchase as a single premium calculated by the regular table for single premium policies now published by the society: Provided, that tl e policy be returned to the society, duly receipted, within six months after the date upon which the last premium in default has fallen due."
This policy was returned to the company at the time the loan was made, nearly a year before the actual forfeiture by the company.
Then we have the Statute of 5879, Ch. 347, §1
& 2 amended by 5588, Ch. 690, Laws 1882, and Ch. 326, Laws 1906.
The policies in suit were issued 1891, and reissued 1900, without new consideration.
At the end of §88, Laws 1892, Ch. 690, are found these words:
"This section shall not apply to any case where the provisions of the section are specifically waived in the application and notice of such waiver is written or printed in red ink on the margin of the face of the policy when issued."
The legal value (treating Mr. Thompson as a normal life), on the expiration of the ninth year, was $2,147, The cash surrender value by Mr. VanCise calculates only $1,048, so that the Si,099 required by the contract to be given had been taken by the company (fols. 182, 199).
My first point will be the illegality of this loan contract.
The company violated its own contract, and the statutes of this State.
But before dealing with the strictly legal branch of the case, I must beg the Court's pardon for time enough to show the moral turpitude of the company, and the extent of the wrong it has done and is doing millions of its policyholders. The fact seems incredible, but I think a little examination of official documents, sworn reports of our great companies will show that prior to 1879 the unjust actions of these companies had aroused public sentiment to such an extent that the will of the people formulated and enacted in Laws of 1879, forbade such practice. Then the great actuaries devised this scheme of not forfeiting for failure to pay premiums, but for failure to pay note, so that while the schedule and contract when construed, promised full legal reserve, $2,147.23, the company could get it for $1,048.22, even on normal life. But in this case, where the assured was gradually dying of paresis, who had not made a dollar for four years since his attack, and the value of his policy was really the difference in January, 1901, between the face value of the policy and the actual premium that would become due thereon before his death, February, 1904.
Spear v. Phoenix Life.
At the time this company attempted to forfeit this policy by reason of non-payment of loan, it had in its hands ample funds to pay the loan. At folio 227, the Court will see the plaintiff's counsel asked "to go to the jury on the question of whether or not the company didn't have in its hands sufficient money belonging to Capt. Thompson derived from the renewal contracts at the time of the alleged forfeiture to have paid said indebtedness." The fact that contract relations existed between Capt. Thompson and the defendant at this time January 25, 1900, and December 29, 1901, is proved by the contract, Exhibit 21, printed in full at pages 90 to 102. This was admitted in evidence (fol. 129), and is dated December 11, 1899. Under this contract, the Equitable Life during the year 1900 received large sums of money on which Capt. Thompson was entitled to commission. The plaintiff put in evidence a statement between the Equitable and Capt. Thompson commencing with the year 1899 and ending December 31, 1902. It is printed on pages 103 and 104. If we draw a line just below the figures 621.76 on page 103, folio 302, and add the figures above, we rind we have the sum of $15,125.17 on the debtor side of the account. During the year 1899 (fol. 304) he is credited with five items aggregating §3,499.31, leaving balance due $11,625.85. The company from that date to July 1st, 1901, credits Capt. Thompson with six items (fols. 304-5), aggregating $5,135.60. Dnring the same period it advanced in moneys 82,426.2(5, leaving $2,079.35 to be applied on indebtedness due of Capt.'Thompson on advances and on the loan contract. On the $2,426.26 advanced in this period, the tirst item, $('21.76 is a part of the loan on these policies (see check, fol. 328). The contract entered into December 18, 1899, provides (Paragraph , fol. 280):
"It is further understood and agreed that "said society may offset against any claim or "other compensation under this contract any "debt or debts due or to become due at any "time from said party of the second part to "the said society, whether arising under this "agreement or otherwise; which debt or debts "shall be a tirst lien thereon."
Under this contract the Ecpiitable Life had ample security for both its advances and for this debt of $2,080, and it received during the same period $5,135.60. It regarded the security as so ample that during this period, January 1, 1900 to July 1, 1901, it made further advances to the amount of $2,456.26 specifically on the contract and still had $2,679.35. My contention is that this raised an obligation on the part of the pledgee to pay the loan of $2,080 due on the policies and saved a loss to the pledgor of over $14,000. I think the Court may almost take judicial notice of what these advances to agents mean. The company starts by depositing $100,000 in the Insurance Department, and then it has to incur expenses to get its business started. If it paid these out of the moneys on hand, and charged it up to expense account, say $50,000, the account at the end of the year would show $100,000 on deposit and $50,000 spent for expenses—balance $50,000. But, instead of doing this directly, the statute is evaded by appointing an agent, who has a mere trilling interest in the commissions to be received, and charging the amount to the agent. Then the agent's indebtedness for the $50,000 is pledged with a Trust Company to pay five or six per cent, interest, and the Trust Company issues its certificate of indebtedness upon the understanding that the money is to remain on deposit and bear only a charge of two per cent., making a clear three per cent, without risk for division among the insurance manipulators. In reality, none of these expenses were due by Capt. Thompson. It was a mere incident of the business in which the company received from seventy-five to ninety-five per cent, and Capt. Thompson's commission was only from five to twenty-five per cent, (see pp. 92-93), and the company so recognized it by continuously advancing him money on account of these commissions, and the whole amount has long since been paid off before the trial of this action. But can there be any doubt that where a pledgor has moneys in his hands which he can appropriate to one of two debts that it is his business to appropriate it to that debt which would prevent a forfeiture of valuable collateral held? In this case, for example, by withholding the appropriation from the outstanding loans the company claims to have secured a forfeiture in its own behalf of two Ten thousand dollar policies, the legal value of which at that time was $10,987.32 (Spear v. Phumix, supra) from aman who had been stricken by paresis after twenty years of faithful service rendered it, while by applying it to the expense account, the only damage to the pledgor was the interest of live per cent, on $2,080, equal to $104,especially when we see that during the same year the company did actually advance him monthly cash advances of $100 and a special cash advance of March HI, $500, 1901; December 28, 1902, $250, and April 25, 1902, $500 (see p. 103).
I am going to rest this case upon these two propositions, that the loan contract was illegal and it was the pledgee's duty to have paid off this loan rather than reimburse itself for its own advances made nominally to Thompson to secure business for itself. The character of these advances is best seen by a careful examination of the contract printed in full (p. 90, et seq.).
In the Appellate Division, the respondents claim a right to make such application upon two grounds: (a) that such indebtedness was the oldest and (b) that it was the least secured. This is not true as matter of fact. The contract entered into on the 15th day of December, 1899 (p. 90), did not take effect until January 1st, 1900 (see Paragraph 35, p. 102). The loan agreement, although dated 8th of March, 1900, was concededly a mere renewal without new consideration of a previous loan agreement of the 29th of December, 1899 (see Paragraph 9, Defendant's Answer, fol. 57), and there was no inequality in the security because the contract of December 29 covered not only these expense items but expressly provides, as cpioted above, that the Society had a right to offset against commissions any debt or debts due or to become due at any time from said party of the second part arising under this agreement or otherwise.
POINT I.
The attempted evasion of Section 88 by the loan contracts is illegal and void.
Two decisions only will I quote, as both seem to me irrefutable, and the latter controlling on this Court. I refer to the case of the Equitable Life Ins. Co. v. Clements, 140 U. S., 226 (decided in May, 1891), and the case of Straus v. Union Life Ins. Co. (decided in April, 1902), 170 N. Y., 343.
From the heading of the first case, I quote:
"The revised Statutes of Missouri of 187$) establish a rule of commutation upon default in payment of premium after two premiums have been paid on a policy of life insurance, which can not be varied or waived by express provision in the contract, except in the cases specified in those statutes."
At page 33 (mid.) the Court say:
"The statute is not directory only, or subject to be set aside by the Company with the consent of the assured; but it is mandatory and controls the nature and terms of the contract into which the company may induce the assured to enter."
The Statute in Missouri, Sec. 5986, authorizes: "A surrender of the policy to the company for a consideration adequate in the. judgment of the holder thereof."
But the Court holds that this question of adequacy must be determined at the time of the surrender in view of all the facts then existing and cannot be contracted for in advance on a basis different from the rule prescribed in the statute.
In the case of Straus v. Union Central Life Ins. Co. (supra), the company failed to give the notice required by Section 92 of the Insurance Law, Chap. 690, Laws of 1892—the assignee paid part of the premium on the day when due and gave his note for the balance; the note reciting the default in payment would render the policy void. This Court held that it was out of the power of the companv to insert a condition in the note which they were not authorized to insert in the policy, and as they could not forfeit under the policy for failure to pay when due a premium stipulated, unless the statutory notice was given, so it was out of their power to forfeit for the non-payment of any obligation given as part payment of a premium, as towhich the statutory notice had not been given. The policy is in reality an endowment policy; a sum certain is agreed to be paid at a specific date if the insured be alive. In this respect it is radically different from an insurance policy where the company pays in case of death. The provisions of the statute in reference to paid up insurance cannot possibly apply to endowment policies or policies with a sum certain to be paid at a definite date as to radically change the nature of the contract. So, Section 88 is divided into two parts, the first relating to insurance policies and the second provides that if the reserve upon any endowment policy applied according to the provisions of this section as a single premium of temporary insurance be more than sufficient to continue the insurance to the end of the endowment term named in the policy, but if the insured survive that term the excess should be paid in cash at the end of such term on the conditions upon which the original policy was issued, in December, 1900, Mr. Thompson had paid nine full years of insurance. His contract provided that if he paid six more premiums of $508, he should be entitled to receiveat the end of that period $8,647. The legal reserve on each of these policies at that date was $2,147. The amount of obligation $1,040 on these loan contracts, so that there was $1,107 reserve in the company's hands, which the statute provided should be applied as a single premium of temporary insurance to the end of the endowment term named in the policy; and if the insured survived that term the access should be paid in cash at the end of the term on the conditions upon which the original policy was issued. The contention of the other side is that he had a right to waive this provision, and we refer to Clause 7 of the application [tol. 816, p. 108), which reads:
"It is agreed in consideration of the privileges as to paid-up insurance stated on the reverse side of this application that all right or claim to temporary assurance or any other surrender value than that provided in the said privileges are hereby specifically waived and relinquished, whether required by the statute in this state or not."
It is conceded that this is not found in red ink on the face of the policy and the statute provides that this section shall not apply to any case where the provisions of the section are specifically waived in the application, and notice of such waiver is written or printed in red ink on the margin or face of the policy when issued. The Legislature, fully aware of the wrongs perpetrated upon policyholders by these companies through secret conditions stated in the application, endeavored to uproot this evil by declaring that the section should not be waived, unless the fact of such waiver was endorsed either in writing or printing in red ink on the face of the policy. I appeal to the Court to carry out this fair and beneficent provision of the statute.
POINT II.
It was the duty of the pledgee to apply the cash received on the commissions first to prevent the forfeiture of these valuable collaterals.
"Sic utere tuo ut alienvm non Lindas."
POINT III.
The judgment should be reversed and as the facts are undisputed judgment absolute awarded the plaintiff.
Respectfully submitted,
RAPHAEL J. MOSES, Attorney for Appellant.
Dated, November 17, 1908. [4650]
Appeal By Plaintiff From Judgment Of Appellate Division, First Department, Dated April 19th, 1907, Affirming Judgment Entered In The Office Of The Clerk Of New York County, October 20, 1906, DisMissing THE COMPLAINT AFTER A TRIAL AT TRIAL TERM,Part X., Before Amend, J., And A Jury.
Statement Under Rule VIII.
In 1891 defendant issued two policies of life insurance, for the sum of $10,000 each, on the life of plaintiff's intestate, William H. Thompson, who was an agent of defendant (Forms of application and policy will be found at fols. 27-47). Under date of December 29, 1899, said William H. Thompson pledged these policies, under two similar agreements in writing, with defendant as security for a loan of $2,080 ($1,040 on each. policy). The policies and loan agreements were re-written in March, 1900, without substantial change so far as this action is concerned. The loan agreements were in the following form (see fols. 240, et. seq.):
"$1040.00/100.
This Agreement, made this eighth day of March 1900, between The Equitable Life Assurance Society Of The United States, party of the first part, and William H. Thompson, party of the second part,
Witnespeth: The party of the first part agrees to loan and does hereby loan to the party of the second part, the sum of Ten hundred and forty & 00/100 dollars, the receipt of which by the party of the second part is hereby acknowledged; and the said party of the second part agrees to repay the same to the said party of the first part, at its office, 120 BroadWay, New York City, on the twenty-ninth day of December, 1900.
In Consideration Of said loan the party of the second part hereby assigns, transfers and sets over all his right, title and interest in policy No. 555,915 on the life of William H. Thompson issued by said party of the first part, together with all money which may be payable under the same to said party of the first part as collateral security for the repayment of said loan.
In The Event Of Default in the repayment of said loan upon the date hereinabove mentioned, the party of the first part is hereby fully authorized and empowered, without notice to and without demand for payment by the party of the second part, to cancel said policy and to apply the cash surrender value of such cancellation to the payment of said loan and any unpaid interest. Should the surrender value of said policy exceed the amount of above loan with interest at five per cent, thereon, then and in that case the excess value above the loan and interest shall be due and payable to the legal owner or owners of the policy on demand."
At the maturity of the loan, viz., December 29,1900, it was not paid or renewed and thereafter in pursuance of the terms of the loan agreements defendant canceled the policies and applied the cash surrender values of such cancellation to the payment of said loan and unpaid interest (fols. 191-193).
The policies contained no provision for a cash surrender value before the fifteenth year, nor was there any statute requiring the allowance of such a cash surrender value (see form of policy, fols. 43-47; testimony of Van Cise, defendant's Actuary, fol. 189).
(note: The statement on page 7 of appellant's brief, that the "legal value" of the two policies was $10,937.32 has no foundation in fact.)
.For a long period of years, however, the defendant had been in the habit of allowing cash surrender values upon policies of this kind, the amount so allowed being based on methods and tables established long before these policies were taken out; and by the words "cash surrender value" in the loan agreements was meant the value determined by these methods and tables (fols. 189, 191). In the case of the Thompson policies it amounted on December 29, 1900, to $1,044.48 for each policy. When the policies were canceled this amount was actually applied in the case of each policy to the payment of the loan and unpaid interest pursuant to the terms of such agreements (fols. 189-193).
William H. Thompson, the assured, never raised any question as to the defendant's right to do this (fols. 194, 195), although he lived about three years thereafter, during which time he had various other dealings with defendant and obtained sundry further loans (see e. g., Plaintiff's Exhibit 26, fol. 325 ;. Defendant's Exhibits C, E, E, G, H, fols. 334 et seq.).
After his death this suit was begun by his administratrix.
The Issues.
The complaint sets forth the policies, the making of the loan and the loan agreements, and the cancellation of the policies, along with many other allegations that are either conclusions of law or immaterial. The complaint is somewhat indefinite as to the precise theory on which a recovery is sought. A claim appears, however, to be asserted on the following grounds, viz.:
(1) That the defeudant expressly agreed with William H. Thompson, the assured, to keep the policies in force and not cancel them (Complaint, fols. 15, 16). No evidence was given of any such agreement and this claim, therefore, requires no further discussion.
(2) That the loan agreement under which the policies were canceled was void for usury. (See Complaint, fols. 20-21). This claim was urged in appellant's brief below but is not mentioned in the brief for this Court.
(3) That the cancellation of the policies was unlawful because defendant had in its hands other moneys belonging to William H. Thompson which it was legally bound to apply in extinguishment of the loan.
See Complaint, fols. 21, 22; Appellant's Brief, Point II.
(4) That the loan agreement was unlawful and the cancellation of the policies thereunder was invalid because in conflict with Sections 88 and 92 of the New York Insurance Law.
See Complaint, fols. 16-18; Appellant's Brief, Point I.
At the opening of the trial defendant moved that plaintiff be compelled to elect upon which theory she proposed to stand, and plaintiff voluntarily elected to stand upon the claim of usury (fols. 93-96).
The trial Court dismissed the complaint at the close of plaintiff's case (fol. 221).
The Appellate Division affirmed without opinion (See 119 App. Div., 868).
Plaintiff having elected at the trial to stand upon the theory of usury, is bound by such election and cannot now be heard in support of a different theory of recovery.
At the opening of the trial plaintiff's counsel moved (fol. 93) that plaintiff be compelled to elect upon which of the various theories advanced in the complaint he proposed to rely. Thereupon the following colloquy took place between counsel and the Court (see fols. 93-96):
"Mr. Moses (plaintiff's counsel) : We claim that it was usurious.
"The Court : Do you claim that this contract was in any way usurious?
"Mr. Moses : Yes, that is exactly my claim.
* * * * * * *
"The Court: Do you stand on that?
"Mr. Moses : I stand on that.
******
"The Court : Is that satisfactory to you, Mr. Pierson?
"Mr. Pierson (defendant's counsel) : What I ask is that the plaintiff be compelled to elect. If that is to be interpreted as an election to stand on the ground of usury here and try this case on that theory, that is all I want.
"Mr. Moses: There is no other election but usury. If your Honor will take the original complaint you will see I struck all the rest out. I did not feel satisfied with it.
"Mr. Pierson: Then I understand your Honor does direct the plaintiff to elect to proceed on the question of usury?
"The Court: I understand that the plaintiff elects, without any direction.
"Mr. Moses : There is not any alternative in the complaint whatever. The complaint is an election to proceed on usury."
In other words, plaintiff voluntarily and without any order or direction of the Court elected to stand upon the theory that the contract relied upon 03' defendant was void for usury. Having made this election, plaintiff must stand by it. As stated in 2 Abbott's Trial Brief on the Pleadings, 2nd Edition, page 1275, "After the plaintiff has voluntarily elected between two theories of recovery and formal proof has been introduced, he must stand by his position." The rule here laid down has been repeatedly enforced by this Court, see e. cj.:
Salisbury vs. Howe, 87 N. Y., 128.
Snider vs. Snider, 160 N. Y., 151.
Stephens vs. Meiiden Britannia Co., Id., 178.
Greene vs. Smith, Id., 533.
Hicks vs. British America Assurance Co., 162 N. Y., 5S84.
In the case first cited this Court said (87 N. Y., at p. 134): "We must rule again, as we have often held, that a question not presented on the trial cannot be heard here, least of all when to do so would violate every principle of fairness and justice, and reverse the whole current and theory of the trial. We must regard the pleading and the issue as the parties and the Court united in regarding it, and not substitute in its room something not tried or considered. We think the appellant is bound by his acquiescence on the trial."
And in the case last above cited (162 N. Y., pp. 289290) the Court refers to " the many decisions of this Court holding that on an appeal a case must be disposed of upon the theory upon which it was tried."
The point we are urging is not a mere technicality. Plaintiff is asking this Court to declare defendant's loan agreement illegal on theories other than the 'one elected at the trial, viz., that it was usurious. Any decision against the validity of the loan agreement would be far reaching and affect similar contracts covering business running into many millions of dollars. Before defendant can properly be confronted with such a possibility in an Appellate Court it is entitled to be put on notice in the trial Court that the point will be raised, so that it may conduct its defense accordingly.
We submit in all confidence, therefore, that the only question properly before this Court is the question of usury. Without intending to waive this contention, we will, however, also discuss briefly the other points raised in appellant's brief.
POINT II.
The loan agreements were not usurious.
On their face there is nothing usurious about the loan agreements, because the interest reserved is only five per cent.
See Plaintiff's Exhibits 12 and 15 at fols.
24.0-248.
Plaintiff's point appears to be, however, that the vice of usury lurks in the right reserved to defeudant to cancel the policies ou non-payment of the loan and apply the cash surrender value to the payment of loan and interest, plaintiff's contention being that such " cash surrender value " was " an arbitrary sum, less than one-half the reserve value and less than onesixth the actual value of said policy, and so used with the intent and for the purpose of concealing the said usurious agreement."
See Complaint, fols. 20,21.
To this we reply:
(a) Plaintiff is in error as to the facts. On December 29, 1900, the policies being then in force had no "actual value " in cash, either by their terms or by operation of law, other than the cash surrender value which the defendant was willing to allow, computed in accordance with the methods and tables in use by the defendant.
(h) Even if plaintiff were right as to the facts and the policies had an "actual value " six times greater than the arbitrar}- "cash surrender value " bargained for in the loan agreements, still there would be no usury because the borrower had the absolute right to pay off the loan at maturity with interest at 5 per cent. To render a transaction usurious there must be an agreement which imposes upon the borrower the obligation of paying more than the legal rate of interest, and without this there is no usurious contract, whatever may be the hopes, wishes or expectations of either party.
Home Ins. Co. vs. Dunham, 33 Hun, 415. Morgan vs. Mechanics' Banking Ass'n, 19
Barb., 584. Pomeroy vs. Ainsworth, 22 Barb., 118. Ramsey vs. Morrison, 39 N. J. L., 591.
As said in Home Ins. Co. vs. Dunham, supra, at page 416:
"An agreement to be void for usury under the statute must be one which will enable the party making the loan to demand and enforce the payment of the excessive interest, but for the operation of the statute. There must be no option on the part of the borrower to pay or not, as he chooses, the excess beyond the legal rate of interest."
POINT III.
There is no merit in plaintiff's claim that at the time of the cancellation of the policies defendant had in its hands moneys which it was in duty bound to apply in extinguishment of the loan (see Appellant's Brief, pp. 8, 11).
The fact was otherwise. William H. Thompson had an agency contract with defendant (Plaintiff's Exhibit 21, fols. 262 el seq.), under which he became entitled from time to time to certain commissions on renewal premiums on the policies taken out through his agency, and some of these commissions accrued during the period of the loans on his policies. But under the terms of his contract these commissions were pledged as security for, and were to be applied as they accrued to the payment of, his general indebtedness to defendant (see fols. 280, 297, 298). During all the period of the policy loans that indebtedness exceeded by many thousands of dollars the amount of the commissions accruing to him (see Plaintiff's Exhibit 22, fols. 301-305). It is not the fact, as seems to be claimed on page 8 of appellant's brief, that this general indebtedness was junior in point of time to the policy loans in question. The latter date from December 29, 1899 (fol. 57), whereas it appears from Plaintiff's Exhibit 22 (fol. 301) that a large general indebtedness existed prior to that time.
Even in the absence of any special agreement defendant would have had the right, under general principles of law, to apply his commissions as they accrued to the payment of other indebtedness on the grounds:
(a) That such indebtedness was the oldest.
(b) That it was the least secured. See
Jones vs. Benedict, 83 N. Y., 79. Jones on Pledges, &c., Sees. 548, 548a.
In any event, even if there were such a principle of law as plaintiff urges, it could have no application to a case like the present, where there was a special agreement in writing specifically pledging the policies as security for the loans made thereon and authorizing defendant, in case of default, to do precisely what was in fact done.
POINT IV.
There was nothing in the loan agreements or in the transactions had thereunder 'which was in conflict with Sections 88 or 92 of the New York Insurance Law
(see Appellant's Brief, Point I., pp. 8-11).
At the time the policies were canceled Section 88 provided as follows:
"Surrender Value Of Lapsed on Forfeited Policies.—Whenever any policy of life insurance issued after January first, eighteen hundred and eighty, by any domestic life insurance corporation after being in force three full years, shall, by its terms, lapse or become forfeited for the nonpayment of anjr premium, or any note given for a premium or loan made in cash on such policy as security, or of any interest on such note or loan, the reserve on such policy computed according to the American experience table of mortality at the rate of four and one-half per cent, per annum shall, on demand made, with surrender of the policy within six months after such lapse or forfeiture, be taken ais a single premium of life insurance at the published rates of the corporation at the time the pohcy was issued, and shall be applied, as shall have been agreed in the application or policy, either to continue the insurance of the policy in force at its full amount so long as such single premium will purchase temporary insurance for that amount, at the age of the insured at the time of lapse or forfeiture, or to purchase upon the same life at the same age paid up insurance payable at the same time and under the same conditions, except as to payments of premiums, as the original policy. If no such agreement be expressed in the application or policy, such single premium may be applied in either of the modes above specified at the option of the owner of the policy, notice of such option to be contained in the demand hereinbefore required to be made to prevent the forfeiture of the policy.
"The reserve hereinbefore specified shall inolude dividend additions, calculated at the date of the failure to make any of the payments above -described according to the American experience table of mortality with interest at the rate of four and one-half per cent, per annum after deducting any indebtedness of the insured on account of any annual or semi-annual or quarterly premium then due, and any loan made in cash on such policy, •evidence of which is acknowledged by the insured in writing.
"The net value of the insurance given for such single premium under this section, computed by the standard of this State, shall in no case be less than two-thirds of the entire reserve computed according to the rule prescribed in this section after deducting the indebtedness as specified; but such insurance shall not participate in the profits of the corporation.
"If the reserve upon any endowment policy applied according to the provisions of this section as a single premium of temporary insurance be more than sufficient to continue the insurance to the end of the endowment term named in the policy, and if the insured survive that term, the excess shall be paid in cash at the end of such term, on the conditions on which the original policy was issued.
"This section shall not apply to any case where the provisions of the section are specifically waived in the application and notice of such waiver is written or printed in red ink on the margin of the face of the policy when issued."
Section 92 provides as follows:
"No Forfeiture Of Policy Without Notice.— No life insurance corporation doing business in this State shall within one year after the default in payment of any premium, installment or interest declare forfeited or lapsed, any policy hereafter issued or renewed * * * nor shall any such policy be forfeited or lapsed, by reason of non-payment when due, of any premium, interest or installment or any portion thereof required by the terms of the policy to be paid, within one year from the failure to pay such premium, interest or installment unless a written or printed notice * * * shall have been duly addressed and mailed to the person whose life is insured * * *. No action shall be maintained to recover under a forfeited policy unless the same i' instituted within one year from the day upon which default was made in paying the premium, installment, interest, or portion thereof, for which it is claimed that forfeiture ensued."
Both of these sections apply only to lapsed or forfeited policies. Neither has any application to a case like the present. Here no lapse or forfeiture of the policies was 'hown ; on the contrary it affirmatively appeared that on December 29, 1900, when the loans matured and defendant's right under the loan agreements to cancel the policies and apply the cash surrender value accrued, the policies were still in force, the time to pay the overdue premiums having been duly extended to January 9, 1901 (see Defendant's Exhibit " B," fols. 331-333).
It cannot be said that the policies lapsed or were forfeited by reason of the provision of the loan agreements (fol. 242) authorizing defendant on non-payment of the loans to retire and cancel the policies for their cash surrender value. That provision is not, properly speaking, a provision for a forfeiture at all ; it is rather in the nature of a provision for the purchase or taking over of the collateral at an agreed price.
Even if this provision of the loan agreements were to be treated as creating a lapse or forfeiture, it would not be such a lapse or forfeiture as was contemplated, or intended to be relieved against, by Section 88 of the Insurance Law. That statute is expressly confined in its operation to a policy which "shall hj its terms lapse or become forfeited." It was designed to protect policyholders against oppressive or obscure provisions for forfeiture contained in the policy itself. Obviously it was not intended to hamper the right of the policyholder after the policy was once issued to sell, pledge, surrender or otherwise deal with it or contract concerning it, like any other species of property.
But assuming for purposes of argument that the policies had lapsed or been forfeited within the meaning of Section 88 of the Insurance Law, nevertheless plaintiff would be in no better position, because
(a) Neither Section 88 nor Section 92 gives any right to a cash surrender value. The only right secured by the statute is a right to temporary or paid up insurance; there is nothing to prevent a policyholder from making a valid contract, independent of his policy, for the sale or surrender of his policy for cash, nor is it to be presumed that the statute was intended to deprive the policyholder of his right so to do. Section 88 nowhere specifies how much a policy shall be worth in present cash. The words " net value " in the clause " the net value of the insurance given for such single premium under this section * * * shall in no case be less than twothirds of the entire reserve," are words of technical meaning and have no reference to a present cash value, any more than has the other technical term "reserve."
(b) In order to take advantage of the benefits conferred by Section 88 on the holder of a lapsed policy a demand must be made, with surrender of the policy, within six months after lapse or forfeiture. No such demand was alleged or proved in this case.
(c) The period of one year during which a forfeiture is postponed and an action is required by Section 92 to be begun under a forfeited policy had long since elapsed when this action was brought.
POINT V.
None of the cases cited in appellant's brief has any application to the case at bar.
Appellant's brief cites only three cases, viz:
Spear vs. Phcenix Life (reference not given). Equitable Life Ins. Co. vs. Clements, 140
U. S., 226. Strau's vs. Union Central Life Ins. Co., 170 N. Y., 349.
In the citation first mentioned we presume appellant refers to the case of Speer vs. The Phoenix Mutual Life Insurance Company (36 Hun, 322). That was a decision on the measure of damages to be applied upon the refusal by an insurance company to receive further premiums on a valid policy. It has no application to the case at bar.
Equitable vs. Clements (supra) was a case involving the construction of a Missouri statute and has no application to the case at bar.
Strauss vs. Union Life (supra), involved a question arising under the Premium Notice Law (Section 92 of the Insurance Law) and denied the right of a foreign life insurance company to forfeit a policy for nonpayment of premiums unless notice had been given pursuant to the said statute. It has no application to the case at bar, which does not involve any question of forfeiture for non-payment of premium, but is concerned rather with the right of the policyholder to sell and surrender his policy before forfeiture for a cash consideration.
To Point I.—The issues on -which the case was tried were four, as set out in respondent's points, page 4. Then follows the incorrect statement that at the trial the defendant moved that plaintiff be compelled to elect upon which theory she proposed to stand, and plaintiff elected to stand upon the claim of usury.
What the plaintiff actually did is shown at folio 93:
"The defendant moves that the plaintiff be compelled to elect upon what theory she proposes to recover. Whether on the theory that the loan agreement was usurious, or on the theory that Captain, Thompson was incompetent to make any agreement by reason of paresis, or whether upon the theory that the defendant agreed to carry Captain Thompson's policies and charge them against renewal."
What the Court understood the election required is shown at folio 94:
"The Court: The point pressed by the other side is that they want you to state whether you are going to hold that this contract was usurious orwhether it was voidable, because the party, Mr. Thompson, who made it, was not mentally in a position (condition) to make it."
All the quotations made by the respondents in their brief on Point I relate solely to that question. Did I claim the defendant was incapable of making the loan contract, or did I concede his capacity to make the contract and attack its validity upon the point of usury? I conceded the capacityof the deceased to make a contract, and on the particular phase then before the Court showed that the amended complaint had withdrawn the question of paresis or incapacity and proceeded on the theory of usury.
Not a word was said about the other two theories of the complaint, to wit, the pledgee's duty to nse the money received from the commissions to protect the policy, and the illegality of the contract by reason of its violation of Sections 88 and 92 of the Insurance Law, etc.
The case was tried on the issues presented by the amended complaint, and the greater part of the trial was devoted to the issue of the illegality of the contract, by reason of its violation of Sections 88 and 92 of the Insurance Act. Mr. Van Cise, the defendant's actuary, was called on this question alone. This testimony (fols. KM) to 190) is devoted solely to this point. I quote here only the last question (fol. 199):
"Q. I will change the question so as to save any trouble about it. Did you give any value for that policy over and above the indebtedness, over the reserve and above the indebtedness? A. No."
And among the requests to go to the jury (fols. 222-223):
"Also in connection therewith that the jury shall decide what additional value the $1,011 would be the equivalent of two-thirds $2,117, the amount of the reserve less the indebtedness of $1,040."
There is no conflict between an allegation that the contract is void because contrary to the Statute of Usurj-, and an allegation that it is also void because contrary to the Statute of Insurance, nor between either or both of these allegations, and the allegations that the Company agreed to keep the policy in force by charging it to renewals, and another allegation that having received more than sufficient to pay this loan, it was the duty of the Company to so apply it and save a forfeiture.
If I entrust a bag of gold to a skipper weighing 1000 pounds, and at the same time ship one-half a ton of coal, and a storm arises so that 1000 pounds weight must be thrown over, it is the duty of the captain to throw over the coal, not the gold, the more especially when the gold bag contains the captain's own obligation to pav $10,937.22 (fols. 209-220)
II.
Reply to Point II.—This is as to usury. I have not pressed this point in my original brief, believing* that the two questions presented are absolutely irrefutable.
The condition of Captain Thompson at the time this contract was made was thattff a man stricken with paresis over a year before and never afterwards able to earn a dollar until his death, in 1904. He was so dependent that this company advanced him regularly $100 a month, and occasionally $500, to help his wife support him and their child by giving riding lessons. To take his agreement under such circumstances, to lend him $1,040, payable in a year under forfeiture of policies worth actually $5,468.01 each (Sheer v. Phenix, 36 Hun, 322). Or $2,147 according to Mr. Van Cite if the life had been normal.
What a mockery looking at the actual facts of this case it is to say. He had the legal power to pay the $1,040 and save the forfeiture. This company controlled every source of revenue Captain Thompson had except the miserable pittance his wife could earn as a riding mistress, and even this they knew to be insufficient and were contributing to his support.
In moral hideousness this contract could only be equalled by a similar one made by the committee of a lunatic with his ward, whereby, by withholding the $1,040 necessary to save forfeiture he released himself from $5,468.21.
If this be legal, the law justifies total depravity and sanctions an act that revolts any honest man.
The Japanese Yen is worth about 50 cents on the dollar, about the same relation that the "Cash Surrender Value" bears to the actual value. Suppose the ward of a lunatic in consideration of a loan of 1,040 Yen exacted from his ward an agreement to pay $2,090 and interest at a rate of f 10. If the ward failed to pay the 1040 Yen on a date certain and then withheld from the ward, his income and applied it to unsecured debts so as to prevent the ward having means to pay. Is not this illegal and does it not strictly violate the Statute of Usury in its obligation to pay 10% interest on any time after the due date.
There is no obligation on the company to cancel if not paid, they have the legal right to keep the debt open indefinitely and receive 10% interest on all times elapsed since maturity of note. It does not make any difference in the eye of the law whether the rate charged for forbearance commenced to run at the making of the loan or at a future date. Here the 10% interest (5% in cash surrender value—10%) commences one year afterdate and runs indefinitely during the will of the company (in this case really the committee of the lunatic). Mr. Van Cise's testimony (fol. 161) shows the company did not actually cancel until July 12, 1901.
III.
Point III of the respondent's brief denies its obligation as pledgee to apply the money received from commissions to prevent forfeiture of the contracts.
Assume that these policies pledged with the Equitable Life had been policies of Captain Thompson in the New York or Mutual Life, and that the amounts charged up to Captain Thompson for expenses in getting business for the fJqitit(tb1e had been more than the value of the renewal commissions.
We can imagine the haste with which the company to protect itself and save these collaterals worth $10,937.22 above loans would have paid off these loans.
Is a different rule to be applied where the Equitable Life is the debtor? If it be legal, the law allows a pledgee to do with the pledged property what if he did with his own would justify his committal to an insane asylum. Suppose I place with a liveryman llfhorses; 2 blooded ones worth $10,937.22. and a dozen others worth only $104 (interest $1,040), and send insufficient grain to feed all the stock. Can the stable keeper honestly give all the feed to the $104 horses and let the two valued ones starve?
An actual case occurred in my experience. The late Henry C. Knox bought a very fine bull for $5,000 and sent it to his farm in Virginia and his agent then thought it looked so nice, was so fat, he killed it for Christmas and let the common stock, worth $20 each, live. This act cost that agent his ptace and in strict justice the conduct of this company to Captain Thompson ought to cost it its charter. lint the defendant says in its brief, page 3: "William J. Thompson never raised any question as to the defendant's right to do this" (fols. 194-195). When the original case was prepared, I had not conceived it possible such a prity would be made. /v^^JT
Folio 195, the Court will see that attached to Exhibit 18, letter of January 15, 1900, was a memorandom in Captain Thompson's handwriting. The contents were excluded against my objection and exception (fol. 207). I have not pressed the exception on appeal, as while a contemporaneous writing in a party's favor is admissible in Connecticut and Massachusetts, the decisions in New York exclude. This memorandum shown to defendant's counsel and now ready to be exhibited to this Court, showed conclusively that he understood the policies were to be kept in force at all times. Respondent's counsel refer to folios 194-195, which is merely Mr. Van Cite's statement that he had heard of no complaint as to the amount of the cash value. There is no evidence that Captain Thompson ever had any notice or suspicion that this company had violated what he understood the contract to be on January 15, 1900, and endorsed at the foot of Brophy letter: "The policies to be kept in force at all times."
IV.
Point IV of respondent claims the loan agreement does not violate Sections 88 and 92 of the New York Insurance Law.
The question is fully considered in my original brief.
The foundation of all law, most assuredly of republics, is Vox Populi Suprema lex est. The members of the Court will doubtless remember the terrible failure of insurance companies in the seventies. Atlas, Continental, Empire, Guardian, Hercules, Knickerbocker, North America Reserve, State Life, Universal. These disclosed every conceivable device to get policyholders to give up their reserves, and the community, outraged and furious, tried to stop this wholesale plunder of policyholders by the enactment of the Act of 1879, forbidding forfeitures after three years' premiums have been paid.
The first section relates to policies of life insurance, to wit, a sum of money to be paid at death.
The second part of this section relates to endowment insurance, to wit, a sum of money to be paid at a stated time, if the insured be still alive. The first the company pay if dead; the second if alive. These are usually combined and one sum is to be paid if death occurs in the interval and another sum if the assured is alive at the period. Usually the same sum is stated, but this is immaterial. In the policies in suit the sum of $10,000 was to be paid if Captain Thompson died before (9th October, 1906) (fol. 46) (fol. 44) and if he survived that period $3,647, together with the surplus then apportioned by the society.
This being an endowment policy the statute (and the nature of the contract) gave no choice but it was obligatory to apply the reserve as a single premium of temporary insurance to continue the policy in force to the end of the endowment term, and if the assured survived that term the excess shall be paid in cash. According to Mr. Van Cise this policy was cancelled July 12, 1901 (fol. 162). Mr. Thompson was then 61 years old (born May 13, 1840, fol. 315). The rate of temporary insurance at the interest and mortality prescribed by statute was $31.66 (fol. 212) and for three years, 1902, 1903, 1904, would be $94.98=$944.98 for $10,000. Therefore had the statute been complied with the policy would have been in force at the death of Captain Thompson in 1904 (Feby.).
(6) The respondents insist that the policy ought to have been surrendered in six months. This does not apply to endowment policies; if it did the fact is the policy was turned over a year before at time of loan. It has no application to the case when the defendant concedes and insists that the company cancelled the policy while still in force.
(c) The defendant objects that the one year and over has elapsed before action brought. No plea of the Statute of Limitations is made, and if there were it would be sufficient answer to say: You agreed to keep this policy in force at all times and you had Thompson's money to do it with and until you notified him to the contrary he had no right to suspect your intended trap for his widow. The people have spoken: it is writ large in the statute and this Court must enforce the law. Mrs. Thompson asks only that common honesty shall govern the actions of this insurance company and this Court will compel such obedience.
Respectfully submitted,
Raphael J. Moses.
Dec. 4, 1908.
Documents of the Assembly of the State of New York,
ONE HUNDRED AND THIRTY-SECOND SESSION.
Vol. XVI.-No. 28.-Part 5. 1909.
50th ANNUAL REPORT OF THE Superintendent of Insurance OF THE State Of New York, 1909,
PART V. Laws of 1909—Court of Appeals Decisions—Opinions of Attorney-General—Superintendent's Rulings—Examinations — Special Reports —Fees and Taxes
Bertha D. Thompson, as Administratrix of the Estate of WilLiam II. Thompson, Deceased, Appellant, v. The Equitable Life Assurance Society OfThe United States, Respondent.
Thompson v. Equitable Life Assur. Society, 119 App. Div.
868, affirmed.
(Argued December 8, 1908; decided January 5, 1909.)
Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered April 20, 1907, affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term in an action to recover upon certain policies of lifeinsurance.
Judgment affirmed, with costs; no opinion.
Concur: Cullen, Ch. J., Gray, Willard Bartlett and BTisCock, J J. Dissenting: Edward T. Bartlett and. Vann, J J. Absent: Werner, J.
Catherine Bannisteb, Appellant, v. Michigan Mutual Life Insurance Company, Respondent.
Bannister v. Michigan Mut. L. Ins. Co., 122 App. Div. 898, affirmed.
(Argued January 29, 1909; decided February 9, 1909.)
Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered December 3, 1907, affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term without a jury in an action to recover upon a policy of life insurance.
Judgment affirmed, with costs; no opinion. Concur: Cullen, Ch. J., Gray, Haight, Werner, Willard Bartlett and Chase, J J. Absent: Hiscock, J.
Belinda Meehan, Appellant, v. Supreme Council, Catholic Benevolent Legion, Respondent.
Meehan v. Supreme Council, C. B. L., 95 App. Div. 142. affirmed.
(Argued January 26, 1909; decided February 9, 1909.)
Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered June 15, 1904, affirming a judgment in favor of defendant entered upon a verdict directed by the court in an action to recover upon a policy of life insurance.
Judgment affirmed, with costs; no opinion.
Concur: Cullen, Ch. J., Gray, Haight, Werner, Hiscock and Chase, J J. Not sitting: Willard Baetlett, J.
Theresa Rossenbach, Respondent, v. The Supreme Coubt Ob The Independent Order Of Foresters, Appellant.
Rossenbach v. Supreme Court, Ind. Order of Foresters, 122 App. Div. 897, affirmed.
(Argued January 26, 1909; decided February 9, 1909.)
Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered November 21, 1907, affirming a judgment in favor of plaintiff entered upon a verdict and an order denying a motion for a new trial in an action to recover upon a policy of lifeinsurance.
Judgment affirmed, with costs; no opinion.
Concur: Cullen, Ch. J., Gray, Haight, Werner, Willard Bartlett, Hiscock and Chase, JJ.
Franklin B. Lord, Jr., et al., as Executors of Franklin B. Lord, Deceased, Appellants, v. The Equitable Life AssurAnce Society Of The UnitedStates, Respondent, Impleaded with Others.
Constitutional Law — Eight Of Legislature To Amend Charter Of Corporations — Life Insurance Corporations — Constitutionality AndEffect Of Statute (L. 1906, Ch. 326, § 13) Permitting Life Insurance Corporations To Amend Charter So That Policyholders, As Well As StockHolders, May Vote For Directors. The provision in the Revised Statutes that "the charter of every corporation, that shall hereafter be granted bythe legislature, shall be subject to alteration, suspension and repeal in the discretion of the legislature" (1 R. S. 600, § 8), was the result of public alarm and protest caused by the decision of the Supreme Court of the United Stated in the Dartmouth College case. This statute became thepermanent policy of the State when the Constitution of 1846 was adopted and in the revision of 1894.
It is provided by section 11 of chapter 463 of the Laws of 1853 that all companies formed under that act "shall be subject to all the provisions of the Revised Statutes in relation to corporations, so far as the same are applicable, except in regard to annual statements and other matters herein otherwise provided for." This exception does not refer to the provisions of section 20 of that act, that " every charter created by or under the laws ofthis State for the purposes aforesaid shall continue until repealed," and the Revised Statutes were not so modified as to prevent the Legislature from touching the charter of a company organized under the Laws of 1853, except by repeal.
The limitation in the act of 1853 was not intended to repeal the reserved power to alter charters. The provision for a permanent charter until repealed was to enable life insurance companies to make and perforin their peculiar contracts which differ from any others in the length of time they may last.
There is a distinction between the repeal of a charter and the repeal of a franchise. The charter of a corporation is the law which gives it existence as such; that is, its general franchise, which can be repealed at the will of the Legislature. A special franchise is the right granted by the public to use public property for a public use, but with profit, such as the right to build and operate a railroad in the streets of a city. Such a franchise, when acted upon, becomes property and cannot be repealed, unless power to do so is reserved in the grant, although it may be condemned upon making compensation. (People v. O'Brien, 111 N. Y. 1, distinguished.)
The power to amend a general law of incorporation involves power to amend charters taken out under that law. Both by the Constitution and theRevised Statutes the Legislature has the reserved power to so amend the law under which a charter has been taken out as to carry with it a corresponding amendment of the charter itself either directly or by authorizing the corporation to make the change. The right to amend a charter, however, does not include the right to take away money invested in reliance thereon or property acquired thereunder. When the Legislature has created a corporation and has given it the power to acquire property, it cannot take away the property so acquired without providing for compensation, since such property is protected by the Federal Constitution.
The right of a stockholder to vote for directors is the right to protect property from loss and make it effective in earning dividends. To absolutely deprive him of the right to vote is to deprive him of an essential attribute of his property. To so undermine that right as to essentially affect its powerof protection would, under ordinary circumstances, undermine the right to property involved in the ownership of stock.
The variations between the statute of 1S53 and section 52 of the Insurance Law (L. 1906, ch. 32G, § 13) as to the right to enfranchise policyholders are differences of detail not of substance, and were within the control of the Legislature under the reserved powers which it possesses. The object of the reservation in the charter was to permit the enfranchisement of policyholders, and that is all that the Legislature has authorized. The Legislature may, under its reserve power, amend anv ch^i^Cjitf^"^ re~ spect, not fundamental, when the object* of iRJ^ftrpSminn and pioperty acquired by it are considered. The statute" "b¥EH)Q6 authorizes no change in principle since the oldTfeEsflW^e^itteiL
social* U*uaw mutualization, but it simply allowed the object contemplated by the charter to be effected by a method varying in unessential details from that provided by the charter itself. So far as the act applies to this case it is sanctioned by the Constitution of this State and is not in conflict with the Constitution of the United States.
The contention that the Legislature did not amend the charter of defendant, by authorizing the directors to amend it, is overruled. When theLegislature authorizes a course of procedure whereby a charter may be acquired or amended, action in conformity thereto does not create the charter nor make the amendment, but both come into existence through an operation of the statute. The amendment is the act of the Legislature, the same asthe charter itself, and neither has existence except as conferred by statute.
The objection that enough of the directors, who were not directors de jure, to affect the result voted for the amendment, whereby the charter was mutualized, is not well founded. Passing by the fact that all were directors de facto, section 20 of the Stock Corporation Law (L. 1892, ch. 088, amd. L. 1906, ch. 238) provides that "policyholders of an insurance corporation shall be eligible to election as directors whether or not they be stockholders."
The Legislature authorized the directors of defendant to enfranchise policyholders with the consent of stockholders holding a majority of the stock. Stockholders and directors voted for an amendment which conferred upon policyholders the right to vote for twenty-eight out of fifty-two directors, and limited stockholders to the right to vote for but twenty-four. Held, this action deprived the stockholders of the right to vote for all the directors. While the directors had the right to limit the power of the policyholders to vote for only a part of the directors, they had no right to thus limit thepower of the stockholders. Lord v. Equitable Life Assur. Society, 126 App. Div. 937, reversed.
(Argued January 7, 1909; decided February 9, 1909.)
Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the second judicial department, entered May 12, 1908, which affirmed an interlocutory judgment of Special Term sustaining a demurrer to the complaint.
The following question was certified: "Docs the complaint in this action, consisting.of the amended complaint and the supplemental complaint, set forth a cause of action against the defendant, The Equitable Life Assurance Society of the United States?"
The order and interlocutory judgment appealed from is reversed, with costs in all courts, and the question certified is answered in the affirmative, with leave to the defendant to withdraw its demurrer and plead over within twenty days upon payment of costs.
Cullen, Ch. J., Werner, Willard Bartlett, Hiscock and Chase, J J., concur; Edward T. Bartlett, J., reads dissenting opinion.
Order and judgment reversed, etc.
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