Maclay v. Equitable Life Assurance Society

This was an action, brought February 12, 1889, in the civil district court for the parish of Orleans, in the state of Louisiana, by Robert P. Maclay, a citizen of Louisiana, and tutor of Mason Snowden, a minor child and sole issue of Samuel H. Snowden and Mary Louisa his wife, against the Equitable Life Assurance Society of the United States,-a corporation of New York, and removed by the defendant into the circuit court of the United States for the eastern district of Louisiana, to recover the sum of $10,000, with accrued dividends, less any amounts due for premiums, upon a policy dated July 6, 1870, by which the defendant, in consideration of the sum of $67.70 paid by Mrs, Snowden, and of quarterly premiums of a like sum to be paid on the 5th days of October, January, April, and July in every year during the continuance of the policy, insured 'the life of the said Samuel H. Snowden, of New Orleans, in the parish of Orleans, state of Louisiana, for the sole use of the said wife, in the amount of $10,000, for the term of his natural life,' and promised to pay that amount at its office in the city of New York, to her, if living, and, if not living, to his children, 'or their guardian, for their use,' or, if there should be no such children surviving, then to his executors, administrators, or assigns, in 60 days after due notice and satisfactory proof of his death during the continuance of the policy; the balance of the year's premium, if any, being first deducted therefrom.

The policy declared that it was 'issued and accepted by the assured upon the following special agreements and conditions relative to tontine dividend policies:

'First. That this policy is issued under the tontine dividend plan, class A.

'Second. That the tontine dividend period for this policy shall be completed on the first day of June in the year eighteen hundred and eighty-six.

'Third. That no dividend shall be allowed or paid upon this policy unless the person whose life is hereby assured shall survive until the completion of its tontine dividend peiod, and unless this policy shall be then in force.

'Fourth. That all surplus of profits derived from such policies, in any class on the tontine dividend plan, as shall cease to be in force before the completion of their respective tontine dividend periods, shall be apportioned equitably among such policies of the same class as shall complete their tontine dividend periods.

'Fifth. That the tontine dividend, when made, shall be applied only to the purchase of an annuity to reduce premiums during the whole subsequent continuance of this policy, and that the first payment of such annuity shall be due at the commencement of the assurance year of the policy immediately succeeding the year in which the tontine dividend period of this policy shall be completed: provided, that if, in any year, the amount derived from dividends on this policy shall exceed the amount of premiums due thereon, the excess shall be paid in cash to said Samuel H. Snowden or assigns.

'Sixth. That previous to the completion of its tontine dividend period this policy shall have no surrender value in cash, or in a paidup policy.'

Mrs. Snowden died August 3, 1883, in the state of Mississippi. Under the laws of Mississippi, Samuel H. Snowden was appointed by the chancery court of Wilkinson county, in that state, on December 4, 1883, administrator of her personal estate, and gave bond as such, describing himself as of that county and state, and on March 4, 1884, was appointed by the same court guardian of the person and of the estate, real and personal, of their child.

On July 19, 1886, the tontine period on the policy having been reached, and the policy having a surrender value, which was proved to have been $3,170.40, Samuel H. Snowden, as such guardian, without any application to said chancery court for an order specially authorizing him to do so, requested of the defendant payment of this surrender value, and received the full amount thereof, and gave the defendant a receipt therefor, attaching to his receipt his letters of guardianship.

On March 9, 1888, Samuel H. Snowden died. On April 5, 1888, the plaintiff was appointed and qualified, in Louisiana, tutor of the minor, and afterwards brought this action.

The question in controversy was whether the receipt of the surrender value of the policy by Samuel H. Snowden, as guardian of the minor, was a discharge of the policy.

Upon proof of the foregoing facts the plaintiff requested the court to instruct the jury 'that the receipt of the said amount and discharge of the policy was invalid, and did not bind the ward, and the said guardian, S. H. Snowden, in receiving it, and in attempting to discharge the insurance policy, had no authority of the court, or of a family meeting, or any other authority, excepting that which was vested in him, as guardian of the minor, under the laws of Mississippi; that the transaction was either a compromise or a sale of a debt, and therefore was contrary to sections 2065, 2106, and 2110 of the Revised Code of Mississippi of 1880,' which are copied in the margin.

The court refused to give each of the instructions requested, and instructed the jury 'that the transaction on the part of the former guardian, by which he received the surrender value of the policy, was neither a compromise nor a sale of a debt, but, on the other hand, was the collection of a debt which was due in the alternative at the option of the guardian, and that the guardian had authority, as a common-law guardian, under the laws of Mississippi, to make such collection.'

The plaintiff excepted to the refusal to give each of the instructions requested, as well as to the instructions given, and, after verdict and judgment for the defendant, tendered a bill of exceptions, and sued out this writ of error.

F. L. Richardson, for plaintiff in error.

Chas. B. Alexander, for defendant in error.

Mr. Justice GRAY, after stating the case, delivered the opinion of the court.