#### Merrick, Appellant, vs. Northwestern National Life Insurance Company, Respondent.

*December 15, 1904*

February *21, 1905.*

*Life insurance: Wrongfully declared forfeiture: Bight of action of. wife as beneficiary: Joinder of parties: Measure of damages.*

1. Where, under sec. 2347, Stats, 1898, and the terms of the policy, insurance on a husband’s life was to go to his wife as her separate property if she survived him, otherwise to his heirs,, neither the husband nor his heirs are necessary parties to an action by the wife against the insurance company for damages, based on the wrongful act of the company in declaring the-policy forfeited.

2. The wife has a cause of action in such a case against the insurance company, although the husband is still living; and the-measure of her damages is the value of the policy at the time it was so declared forfeited. •

Appeal from a judgment of tbe circuit court for Dane-county: E. Ray SteveNS, Circuit Judge.

*Reversed.*

Tbis is an appeal from an order sustaining a demurrer to a complaint alleging, in effect, that tbe Madison Company therein mentioned [tbe Northwestern National Life Insurance Company of Madison, Dane County, Wisconsin] was-incorporated under tbe laws of this state in 1882; that February 22, 1883, tbe plaintiff’s husband, Noel N. Merrick,, became a member of that company and procured from that *222'company insurance on bis life, for $4,000, -which was subsequently reduced to $1,000, payable as hereinafter mentioned; that the Madison Company was reincorporated in January, 1892, under the laws of this state then in force; .that the Madison Company was again reorganized and re-iincorporated in 1899 under the laws of this state then in force; that October J, 1899, the Madison Company changed •its name so as to be the same as the defendant’s name; that after the defendant was duly incorporated under the laws of Minnesota, and after it was duly licensed and authorized to do business in this state, and after it was fully and duly empowered and authorized to consolidate with and reinsure the risks and the members of the Madison Company, it did so • consolidate and reinsure the risks and members of the Madison. Company under the laws of this state then in force, and the Madison Company, on August 29, 1901, transferred all its members and risks and all its insurance contracts and obligations and duties, including its duties and obligations to the plaintiff and her husband, and all its duties and .obligations to its members, including the plaintiff and her husband, to the defendant company, and at the same time and place the defendant assumed and reinsured all the risks and members •of the Madison Company, including the membership and risk and certificate of membership of the plaintiff’s husband, and at the same time and place the Madison Company assigned, transferred, and set over and delivered- to the defendant all of its property of every nature and kind, and the defendant accepted and carried the same away, and the Madison Company thereupon went out of business; that from and after August 29, 1901, the defendant undertook to and did carry out and perform the duties and obligations due to the plaintiff and her husband according to the terms and conditions of his certificate of membership; that in 1898 the Madison Company issued and delivered to the plaintiff’s husband a new •certificate of membership and contract of insurance, dated *223January 4, 1898, in and by tbe terms of which the plaintiff’s husband was obliged to pay, within thirty days after due notice by mail at his postoffice address at Meadow Valley, Wisconsin, $1.30 on the maturity of the certificate of any other member of the Madison Company; that said certificate also contained the following: That the Madison Company, upon due proof of the death of Noel N. Merrick, within sixty days after due proof and allowance thereof and of the plaintiff’s claim or right, would pay to the plaintiff, if living, but in case •of her death would pay *Ms heirs,*the amount of eighty per cent, of an assessment levied upon and collected from all the members of the Madison Company, not to exceed $1,000.

The complaint also alleges, in effect, that the plaintiff is the wife of Noel N. Merrick, and sole beneficiary named in the certificate, and, if living at the time of his death, she alone will have and receive the benefit, not exceeding $1,000; that she is the owner and holder and possessor of the certificate, and the annual assessments do not exceed $150; that an assessment levied upon and collected from all the present members 'of the Madison Company would far exceed the "$1,000; that Noel N. Merrick has paid all assessments ever noticed to or required of him by either of the respective companies mentioned, and has kept and performed all the conditions and agreements contained in his contract; that June 3, 1902, he paid $3.55, which would have become due June 10, 1902, on assessment No. 104; that July 29, 1902, he remitted to the defendant $3.55, which would have become due August 10, 1902, on assessment No. 105, but which the defendant refused to accept, and declared that Noel N. Merrick had lapsed and forfeited his certificate and membership; that Noel N. Merrick protested, and insisted that he was still a member in good standing, but the defendant persisted that he was a lapsed and forfeited member by reason of the nonpayment of assessment No. 104, mentioned, and that his only right was an application for reinstatement after he should *224submit to a medical examination showing that be was insurable; that he was then in poor health, suffering from rheumatism and from disease of the heaif, and was not insurable,, and could not pass such examination successfully — of all of which he informed the defendant; that he is sixty-six years of age, and by the American Experience Tables his life expectancy is ten years; that in case of his death the members of the Madison Company would be liable thereon to an amount exceeding $3,000; that by the wrongful acts of the-defendant aforesaid the plaintiff had been injured and damaged in the sum of $1,000, for Avhich amount she demands judgment.

*Frank H. ParJcinson,*for the appellant,

argued, among, other things, that whenever an insurance company wrongfully refuses to accept payments and to cany out the contract of insurance — wrongfully puts an end to it, — the real party in interest may sue at once and recover full damages. 1 Phillips, Ins. § 505; *U. 8. v. Belian,*110 U. S. 338; *Lovell v. St. Louis Mvi. L. Ins. Co.*Ill U. S. 264; *People v. Security L. Ins. & A. Co.*78 N. Y. 114, 125; *Martine v. International L. Ins. Soc.*53 N. Y. 339; *Thompson v. New York L. Ins. Co.*21 Oreg. 466; *New York L. Ins. Go. v. Statham,*93 U. S. 30; *Hedden v.*Griffin, 136 Mass. 229; *Clemmitt v. New York L. Ins. Go.*76 Ya. 355; *Union Cent. L. Ins. Go. v. Poettker,*5 Big. L. &. A. Ins. Rep. 449; May, Ins. § 568; Bliss, Life Ins. § 425; Kerr, Ins. 751, 753. Putting an end' to any contract gives an immediate right of action for full damages. Plaintiff need not wait for expiration of contract or death. *Hildebrand v. Am. F. A. Go.*109 Wis. 171; *Howard v.*Daly, 61 N. Y. 362; *Burlis v. Thompson,*42 N. *Y.*246; *Van Werden v. Equitable L. A. Soc.*99 Iowa, 621; *Dugan v. Anderson,*36 Md. 567; *Cohen v. New York Mut. L. Ins. Go.*50 N. Y. 610; *Hochsler v. De La Tour,*2 El. &• Bl. 678, 20 Eng. L. & Eq. 157; *Day v. Conn. Gen. L. Ins.*Oo_ 45 Conn. 480.

*225Eor the respondent there was a brief by *Burr W. Jones,*attorney, and *Brown & Kerr,*of counsel, and oral argument by *Mr. Jones.*

Cassoday, C. J.

1. It is claimed that the demurrer was properly sustained on the ground of defect of parties plaintiff. It appears from the complaint that the plaintiff’s husband, who procured the insurance on his own life, is still living, and hence it is claimed that he should have been made a party plaintiff. The contract required the defendant to pay the insurance to the plaintiff in case she should be living at the time of his death. It is alleged that he is in poor health, but, of course, it is possible for him to survive his wife. Her rights in the insurance are to be determined by the contract and sec. 2347, Stats. 1898. Under that section and the contract the plaintiff was to have the whole of such insurance or none of it. - If she died before her husband, then the whole of the insurance was to go to “his heirsand if she survived her husband, then .the whole of it was to go to her. Subject to such contingency, the insurance was the sole and separate property of the plaintiff, free from the control or disposition of her husband. *Canterbury v. N. W. Mut. L. Ins. Co., ante,.*p. 169, 102 N. W. 593. If, therefore, the plaintiff has a-cause of action, then neither her husband nor his heirs have-any interest in such cause of action, and hence are not necessary parties to this action. The husband and wife are not; so united in interest as to require that they should be joined! as plaintiffs in this action. Sec. 2604, Stats. 1898; *Barnes v. Beloit,*19 Wis. 93; *Linden L. Co. v. Milwaulcee E. R. & L. Co.*107 Wis. 508, 83 N. W. 851.

2. It is claimed that the demurrer was properly sustained because the plaintiff’s husband is still living, and hence that the plaintiff’s alleged cause of action had not yet accrued. It is well established that:

> *226“When one party to an executory contract prevents the performance of it, or puts it out of bis own power to perform it, the other party may regard it as terminated, and demand whatever damages he has sustained thereby.” *Lovell v. St. Louis M. L. Ins. Co.*111 U. S. 264, 4 Sup. Ct. 390; *Kelley, M. & Co. v. La Crosse C. Co.*120 Wis. 84, 89, 90, 97 N. W. 674.

The principal controversies have been as to the proper form of action and the measure of damages. In the case at bar the demurrer concedes that the defendant had wrongfully refused to accept further payments of assessments, and had declared that the insurance had lapsed and the certificate of membership become forfeited. It is claimed that, if this is true, still it only gave to the plaintiff a right of action on the policy after the death of her husband. But there are adjudications to the effect that the policy-holder is not limited to such a remedy. Thus it has been held in Connecticut that, where

> “a life insurance company refused to receive the premium on one of its policies from a holder on the ground that it had become forfeited by a breach of one of its conditions by the person whose life was insured, . . . there were three courses open to the holder of the policy in the circumstances: (1) He might elect to consider the policy at an end, in which case he could, in a proper action, recover its just value. (2) He might institute an equitable proceeding to have the policy adjudged in force, in which case the question of forfeiture could be determined. (3) He might tender the premium, and wait till the policy became payable by its terms, and then try the question of forfeiture in a proper action on the policy.” *Day v. Connecticut G. L. Ins. Co.*45 Conn. 480.

In the case at bar the beneficiary has elected to consider the policy at an end, and is here seeking to recover its value, as damages for the breach of the contract.

In a Virginia case a husband took out a policy of insurance on his own life for the benefit of his wife, and, in case she died before he did, then for her children, and paid the pre*227miums thereon up to the time of the war. After the war the company repudiated the policy. Then the wife died without bringing any suit, leaving only one child her surviving, and that child brought the action during the life of the assured, for damages for the breach of the contract. Pending that suit the insured died, and it was held, in effect, that after the company repudiated the policy the wife might have sued in her own name for damages for the breach of the contract, or she might have waited, and, if she survived her husband, she might have brought an action on the policy; that as she did not survive, but died prior to her husband, such right of action on her death at once became vested in the child; that the war did not abrogate the policy, but only suspended the same; and that the company’s repudiation of the policy after the war excused the insured from making any tender of premiums thereafter. *Clemmitt v. New York L. Ins. Co.*76 Va. 355; *S. G.*77 Va. 366. It was there further held that:

> “"Where breach occurred and suit is brought during insured’s life, and he dies before judgment, the value of the policy is the present value, as at the date of the insurance company’s repudiation, of the sum assured and payable at the death of the assured, to be diminished, however, at the same date, by the present value of the premiums subsequently accrued, and also by the amount of the premiums previously accrued (which are unpaid), and interest thereon.”

It was there strongly intimated that, even if the assured had been “alive at the date of the judgment, with no decrease of health except from efflux of time,” still she might have recovered such damages as she had actually sustained. It was there said that “the 'rule to ascertain the value of a life policy is laid down in *Universal L. Ins. Co. v.*Binford, 76 Va. 103.” In that case the company was insolvent, and it was held that the policy-holder was entitled to a sum of money which “would purchase from a solvent company a policy of the same kind, for the same amount, and for the same rate of premium,” and that such amount was ascertainable “by treating *228tbe difference between tbe premiums paid tbe defendant company and tbe premiums to be paid to tbe new insuring company as an annuity for tbe assured’s expectation of life, and calculating its casb value.” In tbe case at bar tbe company is solvent, and tbe assured is in poor bealtb and is not insurable.

In Georgia it’ bas been beld that, where tbe company bad breached tbe contract, tbe bolder of tbe policy was entitled to “recover any damages be may bave sustained in consequence thereof.” *Alabama G. L. Ins. Co. v.*Garmany, 74 Ga. 51. It bas been beld in New York that, where tbe policy-holder is entitled to recover damages for tbe breach of tbe contract, tbe measure of bis 'damages “is tbe value of tbe policy destroyed ; and in ascertaining this resort may properly be bad to tables used in tbe business of’life insurance, showing tbe average expectancy of life.” *People v. Security L. Ins. & A. Co.*78 N. Y. 114, 125, 126. In a later case in New York it was beld:

> “That if, at tbe time of tbe refusal of tbe defendant to accept tbe premiums, tbe life of tbe plaintiff’s father was still insurable, tbe measure of bis damages was tbe difference between tbe then present value of the premiums be would bave been compelled to pay during tbe life of bis father under tbe policy issued by the defendant and tbe present value of tbe premiums which be would be compelled to pay under a policy which could then be obtained from another responsible company; that if at that time tbe life of bis father was not insurable, bis damages would be tbe actual value of tbe policy at tbe time of tbe breach, as being a valid and obligatory claim against an entirely responsible company.” *Speer v. Phœnix M. L. Ins. Co.*36 Hun, 322.

In that state it is beld that in case of such breach of tbe company tbe policy-holder is entitled to recover as damages tire value of tbe policy at tbe time of tbe breach. *Farley v. Union M. L. Ins. Co.*41 Hun, 304; *People v. Empire M. L. Ins. Co.*92 N. Y. 105. The latest case in that state which bas come to our attention, and applicable here, is *Toplitz v.**229Bauer, 161 N. Y. 325, 336, 55 N. E. 1059, 1062, where it was said by the court and held that:

“Tbe insurance company, having thus canceled its obligation, refused to reinstate it. The plaintiffs are entitled to complete indemnity for the loss thus sustained, and the inquiry was, What was the loss in contemplation of law ? . . . The reasonable and just rule of damages in such cases would seem to be the cost of replacing the policy on the same terms in a perfectly sound company at the time of the surrender, but the pledgor had then ceased to be an insurable risk under any circumstances existing in the business of insurance; so that the real loss was the face of the policy less what it would cost to carry it by payment of another premium which fell due before the death of the insured.” See 2 May, Ins. (4th ed.) § 569.

These New York adjudications seem to indicate the true rule of damages in such cases. Under the allegations of the complaint, which are admitted by the demurrer, the plaintiff is entitled to recover unless she should die before the assured. So, as the case now stands, the complaint states a cause of action.

*By the Gourt.*— The order of the circuit court is reversed, and the cause is remanded with direction to overrule the demurrer, and for further proceedings according to law.

Siebeckee and KebwiN, JJ., took no part.