Court Opinion

ID: 6429948
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:07:18.371887+00
Date Added: 2024-06-11T15:52:08.873284
License: Public Domain

Loring, J.
So far as the question of jurisdiction is concerned the defendant has sought in vain to distinguish this case from Pierce v. Equitable Assurance Society, 145 Mass. 56.
In one respect the case at bar is not so strong a case for the defendant company as was Pierce v. Equitable Assurance Society. The plaintiff in that case was a non-resident, and a non-resident has no standing in the courts of Massachusetts as matter of right. That was decided in the subsequent case of National Telephone Manuf. Co. v. Du Bois, 165 Mass. 117. It was apparently the non-residence of the plaintiff which the court had in mind as the objection to the jurisdiction in the.case of Pierce v. Equitable Assurance Society, 145 Mass. 56, 62.
There appears to be one difference between the provisions of the policy here in question and the policy on which Pierce v. Equitable Assurance Society was founded. With the exception of the words “ all surplus of profits ” in the policy here in question in place of “ all surplus or profits” in the policy in Pierce v. Equitable Assurance Society, the two policies are in substance identical in respect to the clause describing what profits the *148policy holder is entitled to. Whether there is a misprint and the word “ of” should be “ or,” or vice versa, is not material, for in either case the meaning is not substantially different.
There is however a difference between the two policies in the clause which states what the company is to pay over on the dividend or tontine period being completed. In Pierce v. Equitable Assurance Society, the promise speaks of “.this policy’s entire share of the assets, whether in the reserve fund proper or in the accumulated surplus.” The policy here in question speaks of “ this policy’s entire share of the assets, i. e. the accumulated reserve, and in addition thereto the surplus apportioned by this Society, to this policy.”
Although the plaintiff has not addressed his argument in terms to this point, the contention made by him involves the position that the measure of the obligation due to him does not depend upon the decision, or at any rate upon the uncontrolled decision of the directors or trustees of the defendant company. If the second of these two provisions does not control the first, the rights of the holder of a policy like that now before us are the same as the rights of the holder of the policy before this court in Pierce v. Equitable Assurance Society. One of the questions to be determined in this suit is whether the second provision does, or does not control the first. The fact that it may, does not go to the jurisdiction of this court in a suit in which the question whether it does or does not is to be determined.
The rest of the defendant’s argument is in effect a request for a reconsideration of the decision of the court in Pierce v. Equitable Assurance Society. After careful reconsideration of that decision, in view of the elaborate argument of the defendant’s counsel, we are abundantly satisfied with the conclusion there reached and with the reasons there stated.
However inconsiderable the amount of the capital stock of the defendant corporation may be in comparison with its other assets, the fact that it is a corporation having a capital stock and that its directors or trustees are elected by its stockholders and not by the policy holders is decisive of the relation between the plaintiff and defendant. The relation between the two is that of debtor and creditor and not that of a member of a mutual *149insurance company and the mutual insurance company itself. There is no allegation in the plea that the directors or trustees of the defendant corporation are not elected by the stockholders, and on this record it must be taken to be the fact that they are.
It is idle for the defendant to argue, as it has done at great length, that an agreement by a stock corporation to pay to a policy holder his share of the profits after expenses and a dividend to the stockholders, are provided for, is the same thing as the agreement between a mutual corporation and its members.
For the purposes now under consideration, not only are the two not essentially the same but they are entirely different.
When the plaintiff who brings the suit is a resident who has of right a standing in the courts of the Commonwealth, and who under our statutes has a right to implead a foreign insurance company, the only objection to the court’s taking jurisdiction in suits like that now before us is that the relation between the foreign corporation and its own members is of necessity involved. That question must of necessity be decided finally, at any rate, by the courts of the State which created the artificial being made up of its several members; and the courts of this State will not entertain jurisdiction of suits involving that question. That was the ground on which jurisdiction was refused-in Smith v. Mutual Ins. Co. 14 Allen, 336; Kansas Construction Co. v. Topeka Railroad, 135 Mass. 34; New Haven Horse Nail Co. v. Linden Spring Co. 142 Mass. 349 ; Kimball v. St. Louis & San Francisco Railway, 157 Mass. 7; Wason v. Buzzell, 181 Mass. 338. That ground was held, and rightly held, not to exist in a suit brought against a stock corporation by the holder of a policy issued by it although the policy as matter of contract gave the holder a right to a share of the surplus profits. In some respects there may be no substantial difference between the contract right to surplus profits which such a policy holder has in case of a stock corporation and the right to the same profits which enures to the member of a mutual company by reason of his being a member of such a company. But for the purpose of jurisdiction of a suit to enforce those rights in the court of a foreign State the difference between the two cases, to wit, the case of a policy issued by a stock company and that of a policy *150issued by a mutual company, might make the difference between the court’s taking or not taking jurisdiction.
The inconveniences to which the defendant will be subjected by reason of the multiplicity of books and the complexity of the accounts involved are matters to be considered in cases like Pierce v. Equitable Assurance Society and National Telephone Manuf. Co. v. Du Bois, where the plaintiff is a non-resident. But they are not matters which can be taken into account by the court when the plaintiff is a resident and as such has a standing in the court as matter of right, and the suit is brought to enforce a contract made between him and a foreign insurance company over which the court is given jurisdiction by statute.
The defendant has reargued with great earnestness that there can be but one division between all policy holders and in consequence what is given to the plaintiff is taken away from others. The defendant has overlooked in this connection the capital stock of the defendant corporation. If by any chance this court should hold that the apportionment made by the defendant society was wrong and another court should hold that it was right, the defendant’s capital stock would be answerable for the breach of contract. The amount of the capital stock is $100,000, and although that may be small in comparison with the assets of the corporation derived from its reserve fund and its undivided profits, yet it is likely to be sufficient to make good any breach of contract between this plaintiff and the defendant.
In view of what was said by the defendant’s counsel in argument, it is proper to add that although Pierce v. Equitable Assurance Society came before this court on a report, it came on a report after a hearing on the merits where all the evidence was taken by a commissioner and made part of that report. There is nothing in the facts now before the court which was not presented to the court in' Pierce v. Equitable Assurance Society, at least in substance.
We do not find it necessary to consider the propriety of basing a motion to dismiss on facts not apparent on the record.
The entry must be

Order denying motion to dismiss affirmed ; order overruling plea to jurisdiction affirmed.