Court Opinion

ID: 6141260
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:39:08.622135+00
Date Added: 2024-06-11T08:54:39.343838
License: Public Domain

Beach, J.
[After stating the facts as above.]—The relation created between the parties to this action by the insurance policy is not fiduciary, but rests in contract. The reasons for this conclusion have heretofore been given by me in Hencken v. United States Life Ins. Co., Jones v. New York Life Ins. Co., and, if memory is not faulty, in Bogardus v. New York Life Ins. Co., and, at Special Term, in Taylor v. Charter Oak Life Ins. Co. (9 Daly 489). I am not advised of this conclusion having been disturbed on appeal, and my opinion is unchanged. It is needful, then, to examine the contract to ascertain what are the rights of the plaintiff. In brief these are :
First. An equitable apportionment of all surplus or profits derived by the company from such policies, in the plaintiff’s class, as shall have lapsed during the ten-year period.
Second. That the ten-year dividend may be applied by the plaintiff to the purchase of an annuity, for which the defendant will issue a bond, or, in a certain event, pay its value in cash.
The contract obligation of defendant is to equitably apportion the surplus or profits so derived, give the bond or pay the cash.
The reasonable and fair intendment of this instrument is that the company shall make apportionment, which is practically identical with declaring the ten-year dividend. The amount which became dué the plaintiff is a dividend, and neither more nor less. The fund to be divided was surplus profits derived from lapsed policies. Neither by analogy to other corporations declaring dividends, or under any provision in the contract, is the plaintiff to have aught to do with determining the gross surplus or its apportionment. The defendant’s obligation under the contract respecting the declaration of a dividend at the appointed time makes the case dissimilar to those adjudications where corporations were parties not bound by like contract. But the *56principle applies to the amount of the dividend. Determination of amount is a duty confided to the company, and can only be questioned by plaintiff in an action alleging non-performance of contract obligation. There are no such allegations in this bill, but the plaintiff seems to suppose that ownership of the policy confers the right to investigate the company’s business so far as needful to discover whether or not the sum for division has been correctly determined and the proper dividend declared.
With great deference, I am unable to adopt the view of the learned court below, that the defendant owes any debt to the plaintiff except until after the dividend has been declared. Until then, the relation of debtor and creditor does not exist. The plaintiff, therefore, can have no right as creditor to an account, because the settling of the account and the declaration of a dividend must precede and constitute Mm a creditor.
The other position of the learned court seems to me not tenable. It is, that because a complicated account is necessary to ascertain and apportion the surplus, the plaintiff is entitled to invoke the exercise of equitable jurisdiction. TMs could only be sound in principle if the plaintiff had any right to interfere in the account. The contract gives Mm none by its terms or intendment, and there are neither mutual accounts, complicated dealings or fiduciary relationsMp.
A court of law is open to the plaintiff for the' recovery of any damages he may be entitled to from the defendant for breach of contract. A court of equity should not gram; him an accounting, because he does not possess any right, character or equity entitling him to the relief.
The judgment should be reversed and a new trial ordered, with costs to abide the event.
Charles P. Daly, Ch. J., concurred.
Larremore, J., dissented.
Judgment reversed and new trial ordered, with costs to abide event..