Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1901-11-21
United States Supreme Court De-
cides Against Underwriters.
WILL REVOLUTlONlzE The BUSINESS
SO Claim Many Agents Throughout
Country - Case That of McMaster
VS.. New York Life company-Lone
Time in the Courts.

CaS0 Is that Ol +. Il. NlCNdSLGr VS.. Tie
New York Life Insurance company.
McMaster had taken out a policy in
the company on one date. and when
the policy was delivered it was given
another date. His death soon follow
ed, and when the company refused to
pay the claim, it was taken into court.
1t went from one court to another, de-
cisions in the meantime having been
made both ways, until finally it reach
ed the United States supreme court.
That body now holds it an unanimous
opinion that an insurance company
cannot date premium one day for
the purpose of taking persons mon
ey, and then dating it some other time
if he happens to die, and finds for the
plaintiff. The case originally came
from Sioux City, where the plaintiff
was well known citizen.
RevoIutionize Insurance Business.
AS result of this decision, one of
the leading agents in this city said to-
day, that it was probable that the in
surance companies would be compelled
to change their method of issuing poll
cies. If this is done it will cause big
eruption in the insurance world, and
before the matter is finally straight
ened out. The counsel for the New
York Life company is quoted as having
said that the decision will revolution
ize the entire insurance world" and
his opinion is backed up by every local
agent in Ottumwa. B. T. Wilcox, the
manager of the policy issues division
of the New York Life also backs up
this statement with an affidavit in
which he said:
1T is the custom and usage of the
New York Life Insurance company to
commence the insurance year on the
date of application, and to require pay
ment of the premium on each recurring
anniversary of such date
What You Get, What You Pay.
This means that it has been the al
most universal custom of life insurance
on the date of the application, as far
but not beginning the year in which
the applicant is insured. until the pol
icy is delivered and paid for.
A striking conversation is reported
to have taken place between Justice
Harlan and the attorney for the insur-
ance company while he was making
his argument in the McMaster case.
Justice Harlan interrupted the coun-
sci by asking:
when do you hold ire policy be-
came indemnity"
For certain purposes answered
the attorney, Frederick d. Mckinney,
Washington attorney for the New York
Life, ''it began on the date of the ap-
gplication.'
( "But when," persisted Justice Har-
Ian, was McMaster actually insured,
so that if he died there would have
been no doubt about his right to in
demnity?"
"On the day he paid the premium
and received the policy"
Then you and Mr.. Taylor agree on
that point?"
"Not in all respects" persisted the
'attorney.
At this point Justice Peckham spoke
UP and said: ''The distinction your
company makes, then,is that the policy
began for the purpose of taking the
mans money, when he applied for it,
but that it did not begin to give him
what he paid for until the policy was
delivered and the premium paid?"
That's it. admitted the lawyer.
Justice Harlan interrupted again,
siDid you keep full years premium?"
EYES,"
Claim 1t Is No Fraud.
Justice Harlan-"Did you give a
years insurance for it,"
Counsel-"No, but there was no
fraud in drawing the policy according
to the universal CUSTOM"
Here Justice Brown took a hand,
asking: Don't you think it Is fraud
to collect full annual premium and in
return therefore deliver a policy that
does not allow years insurance."
For answer the counsel urged that
under the universal custom of the in
surance world, the form of the policy
did not involve any intent to defraud
the policy holder and without wrong
intent, no relief should be granted.
History of Case.
The case is one of very interesting
origin. Former City Attorney Frank
E. Gill, of Sioux City, brought the
case up and fought it through all the
courts. He was assisted in the mat
ter by Taylor and Burgess, also of
Sioux City.
Frank e. McMaster, who was Sioux
City attorney, signed an application
for insurance from the New York Life
Insurance company, of New York, on
December 10, 1898. When the policy
was made out it was dated December
+ is, 1898. The policy was delivered to
Mr.. McMaster on December 26, 1898
when the first payment was made. A
grace of thirty days was to be al
lowed for the payment of the second
premium. The face of the policy stat
ed the second payment was due thirty
days after December -, 1894, which
would bring the date up to January
IL, 1895. McMasters death occurred
January IS, 1895, he in the meantime
having paid no second premium. Thus
his death occurred just one year ant
thirty days after the date of issuance
of the policy. When the insurance
company refused to pay the face o
the policy on the ground that the pol
icy had lapseds January 10, 1895, til,
heirs began suit on the ground tina
the figuring should be done from tn,
time of the delivery of the policy, De
oop,har on1 ,,n5o,. M nj,