State National Bank v. United States Life Insurance

Mr. Justice Scott delivered the opinion of the court: The contract of insurance was originally assigned to the appellee as collateral security for a debt owed to it by George M. Brinkerhoff. It does not appear that such interest as then remained in Brinkerhoff and wife has ever been extinguished. Though not raising this question in the circuit court, appellant vigorously contends here that there is a fatal defect of parties because Brinkerhoff and wife were not made parties to the suit. Whatever may have been the situation earlier, after the issuance of the policies in 1900 the only parties to the contract of insurance were appellee and appellant, and' the bill as originally filed was purely a bill for specific performance of a contract. Conceding that the Brinkerhoffs have an equity in the contract of insurance, it does not necessarily follow that they should have been made parties to the bill for specific performance. (Gibbs v. Blackwell, 37 Ill. 191; Deniston v. Hoagland, 67 id. 265; Washburn & Moen Manf. Co. v. Wire Fence Co. 109 id. 71; Burton v. Perry, 146 id. 71.) The general doctrine that all parties having an interest in the subject matter of the litigation must be made parties does not have full application to suits for specific performance of contracts, the general rule being, that to such a bill no persons are necessary parties except the parties to the contract itself. In this case the objection to the non-joinder was first taken in the Appellate Court, and an objection so taken is not favorably received. To be of avail in such case it must appear that the failure to make the omitted person a party will result in depriving that person of some material right. (Washburn & Moen Manf. Co. v. Wire Fence Co. supra.) It does not appear here but that the equities, if any, which the Brinkerhoffs have in the contract of insurance may hereafter be fully protected and enforced by suit without respect to the event of this cause. As appellant did not raise the question in the circuit court we will not consider whether any necessity existed for making the Brinlcerhoffs parties for the purpose, alone, of protecting the appellant’s rights. The only change made in the character of the litigation by the supplemental- bill was to require the appellant to account for the value of the endowment policies on the date at which they would have matured had they issued as prayed by the original bill. The date of such maturity arrived after filing the original and before filing the supplemental bill. The suit still remained, in effect, a suit for specific performance. The principal question in the case is whether, on December 22, 1904, appellee had the right to exchange the two policies which it then held for two fifteen-year participating endowment policies of $10,000 each, bearing date December 22, 1890, with a premium rate fixed by the age of Brinkerhoff at the last mentioned date, which age was fifty-one years, upon the payment by appellee to appellant of the differences in premiums between the two forms of insurance, with four per cent interest per annum, compounded, from the respective dates when premiums fell due. Appellant contends that it could not be required to issue such policies, but that the endowment policies which it could be required to issue were policies of the date of the policies of 1900, to-wit, December 22, 1900, based upon a premium rate fixed by the age of Brinkerhoff at the last mentioned date, which age was sixty-one years. It is not questioned that the owners of the policies issued in 1890 would have had the right, prior to the maturity of those policies,, to exchange them for precisely such endowment policies as the appellee sought by the original bill upon making payment according to the basis upon which appellee offered to make payment in 1904, but it is contended that by taking the two policies of 1900 the right to obtain the endowment policies of date December 22, 1890, etc., ended. Upon the margin of each of the policies of 1900 appears an endorsement in writing made by appellant, reciting that the policy was issued pursuant to the contract of insurance made in 1890. Each of the policies of 1900 provided, by the recitals of certain “conditions” annexed thereto and made part thereof, that it might be changed upon any anniversary of its date, the policy then being in force, “to a participating policy bearing original date and at the premium rate of the original age, upon pa)mient of the difference in premiums, with four per cent interest per annum, compounded.” Each policy also had attached a table of rates, to which the language last quoted had reference. That table of rates was printed, the first column in the table being figures representing age, in years, from twenty-five to sixty-five, inclusive, and opposite each year of age so shown were figures showing the premium per thousand dollars for various kinds of insurance written by appellant, including fifteen-year endowment. Across this table, immediately below the age fifty-one and the figures set opposite thereto, was a line drawn by pen in red ink. The amount of the annual premium per thousand dollars of insurance at age fifty-one for a fifteen-year endowment policy was so shown to be $77.77, The evidence shows that this line was drawn on each policy before the policies left the general offices of appellant in New York City and that each policy was mailed by the appellant with this red line thereon. In each of the policies dated December 22, 1900, the age of the insured is stated as sixty-one years, and the question is whether, in construing the contract of insurance, the words “original date” and “original age,” in the language above in this opinion quoted from the “conditions,” mean the date of the policy of December 22, 1900, and Brinkerhoff’s age on that date, which was sixty-one years, or mean the date of the first policies, which was December 22, 1890, and his age as set out in the first policies, which was fifty-one years. In determining this question we must apply the rule that in case of doubt or uncertainty in the terms of a life insurance policy the language used is to be interpreted most strongly against the company. Each of the policies secondly issued recites that it is issued pursuant to the contract of insurance made December 22, 1890, and upon each, as above recited, the age fifty-one and the figures opposite thereto are underlined in red ink by pen. We think these facts warrant the conclusion that the words in question, “original date” and “original age,” had reference to the date of the first policies and Brinkerhoff’s age at the time they issued. The red ink line was evidently drawn for the purpose of indicating the “original age” and the rates at which the new policy could be exchanged'for another. No other purpose for which it could have been drawn appears. It is true that Mr. Stan-den, who was actuary of appellant in 1900, testified that the red lines were not placed on the policies in the company’s offices, but that if they were drawn upon the policies in those offices they were so drawn surreptitiously after the policies had been signed by the officers. It is clear from this man’s entire testimony that he did not have personal knowledge which would enable him to make either of these statements. He was not one of the officers who signed these policies. He did not know whether he ever saw these policies before they left appellant’s offices. Several officers of the company other than the actuary had authority to make and alter contracts. His testimony in this regard proves nothing, and leaves undisputed the evidence which does show that the lines were drawn upon the policies before they left the appellant’s New York offices. At the time of the maturity of the policies issued in 1890, and for many years prior thereto, Joseph H. Strong had been a general agent for appellant, with offices in the city of Chicago. Appellee was permitted to prove, over objection, that prior to the maturity of those policies it conferred with Strong, and was advised by him that if it surrendered the first policies upon their maturity and took in lieu thereof new ten-year policies of the same character, it would have the right, on December 22, 1904, to make the exchange which it afterward, at that time, sought to make. Testimony was also admitted, over objection, tending to show that the appellant had on several occasions permitted exchanges to be made, or had been willing to permit exchanges to be made, identical in character with the exchange which it refused to make at the request of appellee. Whether the testimony objected to was properly admitted we deem immaterial, as the obligation of appellant to issue the policies demanded on December 22, 1904, appears from an examination of the applications, the policies, their endorsements, and the “conditions” and tables accompanying the policies. The decree must have been the same had the evidence objected to been excluded. It is also urged that the proof for appellee was fatally defective because it did not show that the Brinkerhoffs acquiesced in appellee’s election to take the endowment policies which it demanded on December 22, 1904. The policies of 1 goo were by appellant rightfully made payable to appellee, and the options to exchange for other policies were properly vested in the appellee, alone, by those policies, in accordance with rights transferred to appellee by the Brinkerhoffs. Under these circumstances failure to show acquiescence of the Brinkerhoffs in the exercise of the options would not defeat the bill. It is also contended that the amount decreed to be paid appellee was excessive. We think the evidence showed that the fifteen-year policies at their maturity would have been of the value of $23,400, and that the amount chargeable against appellee, on account of the difference in premiums, at the time the endowment policies would have matured, was $16,377.49. The difference between these two amounts is $7022.51. That balance, with interest thereon at the proper rate to the date of the decree, makes an amount somewhat in excess of the amount awarded. The judgment of the Appellate Court will be affirmed. Judgment affirmed.