Court Opinion

ID: 4490113
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:02:12.072712+00
Date Added: 2024-06-11T08:49:21.306671
License: Public Domain

Love,
dissenting: I do not believe that the decision reached in this case is authorized by law. For the purposes of this dissent I accept the findings of the evidentiary facts as stated in the prevailing opinion. From those findings of fact the following conclusions of fact are inevitable, and as briefly as possible may be thus stated:
1. Petitioner is, and was during the years in question, a .duly organized and chartered corporation.
2. It was chartered as an insurance agency and not as an insurance company, or a life insurance company.
3. Under its contract with the Inter-Ocean Casualty Co. it had authority to bind the Inter-Ocean Casualty Co. to the terms and conditions set out in the insurance policies issued by it, and hence to that extent and not otherwise, it was the agent of that company.
4. By bringing into the concept of the whole situation its contract with the Inter-Ocean Casualty Co., petitioner made itself liable and was primarily liable under those insurance contracts. It was not an indemnitor, because it was primarily liable and was bound to pay in the first instance.
5. It issued policies contracting to pay indemnity in the event of death, accident or sickness of the insured.
6. It issued such policies on its own responsibility, after making its own investigation, passing on the risk for itself, determining for itself the character of policy to be issued without any supervision or control whatever by the Inter-Ocean Casualty Co.
7. In the event a liability arose or was claimed by an insured, petitioner made its own investigation, determined the liability, vel *726non, and adjusted and settled the claim without consulting the Inter-Ocean Casualty Co.; in the event a suit in court were instituted, regardless of who was made defendant in such suit, it responded to such suit, paid all costs and expenses thereof, and responded to the judgment of the court.
In other words, to use a homely expression, it was its own boss, and took orders from no one.
8. It received and retained for its own use and benefit practically the whole of every payment of premium on the policies issued by it.
9. It kept reserves in very substantial amounts to meet its liabilities under its insurance contracts, and not only 50 per cent, but the whole of that reserve, was dedicated to that purpose.
The statute involved in the issue in this case is section 242 of the Revenue Acts of 1921, 1924, and 1926, which provides:
That when used in this title the term “ life insurance company ” means an insurance company engaged in the business of issuing life insurance and annuity contracts (including contracts of combined life, health, and accident insurance), the reserve funds of which held for the fulfillment of such contracts comprise more than 50 per centum of its total reserve funds.
The statute has thus defined “ life insurance company.” The Board is called upon to decide whether or not the petitioner, in view of the facts disclosed by the record before us, has brought itself within the ambit of that definition.
It will be observed that in the statutory definition an insurance company is presupposed. “ Insurance company ” is not defined; only “ life insurance company ” is defined. It follows therefore that any insurance company, a corporation, joint stock company, or a partnership, that is “ engaged in the business of issuing life insurance and annuity contracts (including contracts of combined life, health, and accident insurance), the reserve funds of which held for the fulfillment of such contracts comprise more than 50 per centum of its total reserve funds,” is within the ambit of that definition. Petitioner seems to have qualified in every particular specified in the definition as a “ life insurance company,” provided it has first qualified as an insurance company.
As heretofore pointed out, the statute does not define “insurance company.”
The petitioner is a corporation, and being a corporation, and not chartered as an insurance company, the query arises, Is it, or can it be, an insurance company? It certainly was in fact an insurer, and being a corporation engaged in issuing insurance policies, it must be in fact an insurance company. It may be that it was guilty of ultra vires acts, yet, nevertheless, under the facts in this case, it was liable on those contracts, and was in fact an insurance company. No one other than the sovereign that authorized *727its existence and endowed it with all its rights and powers will be heard to complain of its ultra vires acts, if any.
It has been urged that it did not conform to the laws of West Virginia in the way of making reports to the insurance department. It may be that failure to do those things rendered it liable to the penalties prescribed (in the way of fines) but compliance with those regulations was not a prerequisite, a sine gui non to its existence as an insurance company.
Congress could have prescribed that no company other than a corporation chartered as an insurance corporation, or that no company other than a corporation chartered as a life insurance company could qualify under section 242 hereinbefore quoted, but Congress has not done so, and seems deliberately to have refrained from doing so.
Petitioner being an insurance company in fact, and having met every requirement contained in said section 242 defining life insurance company, I am not willing to undertake to write into that statute an additional requirement which Congress seems deliberately to have omitted.
It is urged that Congress did not have in mind such an organization as we are here dealing with, and legislative history is invoked to show that no such organization was contemplated. I see nothing-in that legislative history that tends to exclude such an organization. It may be true, and likely is true, that no Congressman, or for that matter any one else, other than those who conceived the idea and organized the petitioner corporation, ever had such an idea in mind, but that situation does not preclude petitioner from the benefits granted in sections 243 and 244, if in fact it can qualify under section 242.
It is true that petitioner did not write big policies, did not engage in big business. It was designed to serve wage earners who were unable to pay large premiums and get large indemnity policies. It sought and obtained business so very modest in amount that one feels safe in saying that standard life insurance companies would have spurned such business as not worth while. Yet petitioner served a clientele that sadly needed such protection, and, while not claiming any altruistic motives, it did perform a welfare mission that should not be tabooed.
One who thinks out this problem finds himself asking the question, If the attention of Congress had been called to such an organization, would Congress have deliberately barred such an organization from the benefits granted to the big life insurance corporations? I do not' believe it would have done so.
Seawell aerees with this dissent,