Court Opinion

ID: 3731600
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:58:58.218005+00
Date Added: 2024-06-11T14:11:05.632407
License: Public Domain

This is an appeal on questions of law from the judgment of the Common Pleas Court of Franklin county, wherein the plaintiff, appellant herein, instituted an action for a declaratory judgment which had for its purpose the determination of his rights and status as a policyholder in The Mutual Life Insurance Company of New York, defendant, appellee herein.
For the purpose of brevity, the plaintiff, Charles J. Chastang, will be referred to as "plaintiff" or "Chastang," and the defendant, The Mutual Life Insurance Company of New York, will be referred to as "defendant company."
The plaintiff brought the action on his own behalf and on behalf of all others similarly situated.
The record shows that, by agreement of the parties, the cause was submitted to the trial court as a class action, upon the pleadings, interrogatories, answers thereto, stipulations and exhibits. The trial court rendered two separate opinions and also a separate findings of fact and conclusions of law.
It was stipulated and agreed that Chastang, who at *Page 436 
all times was a resident of the state of Ohio, on January 19, 1929, in Cincinnati, Ohio, had issued to him by the defendant company a $5,000 policy of insurance on his life, such policy being designated as a "Limited Payment Life Policy with Double Indemnity for Death by Accident and Increasing Total and Permanent Disability Benefits" and being policy No. 4,097,734; that Chastang kept the policy in full force and effect; and that the defendant company is a corporation organized and existing under and by virtue of the laws of the state of New York, and licensed to do business as a foreign insurance company in the state of Ohio. It was further stipulated and agreed that the policy was issued pursuant to an application made in writing by Chastang upon a form presented to him by the agent of the defendant company for the above described insurance, and that at the time the application was made Chastang paid such agent in cash the first semiannual premium in the amount of $66, of which $2.80 was the premium for the double indemnity benefit, and $7.95 the premium for the disability benefits.
The record discloses, and the trial court so found, that for seven years after the policy was issued to Chastang the defendant company paid to him the same dividend (in dollars and cents) per $1,000 face amount of life insurance specified in Chastang's policy as it paid to other policyholders of the same age, same expectation of life, and who held exactly similar policies to that held by Chastang but which did not contain any provision for disability benefits; that beginning in 1937 and continuously through 1942, the defendant company annually paid to Chastang a smaller dividend (in dollars and cents) on his policy than it paid to other policyholders of the same age, same expectation of life, and who held exactly similar policies to that held by Chastang but which did not contain any provision for *Page 437 
disability benefits. The record shows that the dividends (per $1,000 face amount of insurance) which the defendant company paid during the calendar years 1930 to 1942, both inclusive, (1) on Chastang's policy No. 4,097,734 with disability benefits, and (2) on a corresponding policy without disability benefits, were as follows:
               Dividends paid on         Dividends which would Policy No. 4,097,734      have been paid on cor- with            responding policy issued Disability               without Disability Benefits                    Benefits Year             (per $1,000)                (per $1,000)
    1930                $6.74                       $6.74 1931                 6.82                        6.82 1932                 6.60                        6.60 1933                 5.47                        5.47 1934                 5.37                        5.37 1935                 5.42                        5.42 1936                 5.14                        5.14 1937                 3.34                        5.98 1938                 3.01                        5.65 1939                 1.61                        4.25 1940                 2.57                        5.21 1941                  .45                        4.54 1942                  .45                        4.63
The defendant company changed its dividend payment policy in 1937, due to the fact that the defendant company and all other insurance companies for a number of years prior to 1937 found that losses suffered for disability benefits were far in excess of the anticipated losses. The insurance companies set about to rectify the situation by reducing the dividend payment on life insurance policies which contained disability benefits. The defendant company made this change in 1937 so that thereafter the dividends paid on a life *Page 438 
insurance policy which contained disability benefits were less than the dividends paid on a life insurance policy which contained no disability benefits provision.
In 1942, the plaintiff instituted this action to have the court determine, declare, adjudge and decree the rights, duties, obligations, status, and legal relations of the plaintiff and defendant company under the terms and provisions of the insurance contract, and under the provisions of Section 9403, General Code; and further to have the court determine, declare, adjudge and decree that under the provisions of Section 9403, General Code, and under the terms of the life insurance contract issued to the plaintiff, and in accordance with the intent of the parties thereto, it is the legal and contractual duty and obligation of the defendant company to pay to the plaintiff and to others similarly situated for the years 1937, 1938, 1939, 1940, 1941 and 1942 the same dividend per each $1,000 face amount of life insurance in force as the defendant company paid during such years to individuals of plaintiff's same life insurance class, who had not purchased disability benefits insurance. While the plaintiff in his petition prayed for other relief, in substance, the gist of the plaintiff's action is as herein stated.
At once we are met with the contention that the court was without jurisdiction. The question as to whether the court has jurisdiction of the subject matter can be raised at any stage of the case. It is contended that the plaintiff seeks relief which would require the court to exercise visitorial powers over the defendant company, it being a foreign corporation. The principle of law involved is very well established and stated in the second paragraph of the syllabus of the case of Relief Assn. v.Assurance Society, 140 Ohio St. 68, 42 N.E.2d 653, as follows:
"Courts of Ohio are without jurisdiction to entertain *Page 439 
an action against a foreign corporation where the result of granting the relief asked would be to interfere with the management of such corporation or the exercise by the board of directors of such corporation of a discretion vested in them by the laws of the state of creation or domicile of the corporation."
  See, also, Ellis v. Mutual Life Ins. Co. of New York, 237 Ala. 492,  187 So. 434; 11 Ohio Jurisprudence, 718.
Does the relief sought in the instant case require this court to exercise visitorial powers over the defendant company? We do not think so. The gist of plaintiff's action is to "determine, declare, adjudge and decree the rights, duties, obligations, status and legal relations of plaintiff and all others similarly situated and defendant company under the terms and provisions of the insurance contracts * * * and under the provisions of Section 9403 of the General Code of Ohio." The relief sought will not interfere with the internal management of the defendant company or in any manner disturb the board of directors in the exercise of a discretion vested in them by the laws of the state of New York. This court is asked to determine the rights of the plaintiff and all others similarly situated in light of the action of the defendant company, which can be done without interfering with the internal management of, or the exercise of visitorial powers over, the defendant company.
Plaintiff in his first, second, fourth, sixth and seventh assignments of errors, contends in substance that the trial court committed prejudicial error in determining that Section 9403, General Code, did not apply, but that Section 9404, General Code, did apply, in determining the plaintiff's rights, and that the trial court committed prejudicial error in not requiring the defendant company to continue paying dividends according to its established custom and practice and in failing to hold *Page 440 
that the agreement of life insurance and the agreement of disability benefits insurance are two separate and distinct agreements of insurance.
The one vital question for the court to determine, around which all other matters revolve, is whether the policy of insurance issued to Chastang consisted of two separate contracts, to wit, (1) for life insurance, and (2) for disability benefits, each of which must be considered as an entire separate contract; or whether the disability benefits feature of the policy was an integral part of one life insurance policy, and the policy regarded as one entire contract. There are no reported cases in Ohio, consequently this case becomes one of first impression. In cases where this issue has been raised, the courts have uniformly held that the policy constituted one entire contract. Rhine v.New York Life Ins. Co., 248 A.D. 120, 273 N.Y. 1, (1936),6 N.E.2d 74, 108 A.L.R., 1197; Rubin v. Metropolitan LifeIns. Co., 251 A.D. 382, 278 N.Y. 625 (1938),16 N.E.2d 293; Barnett v. Metropolitan Life Ins. Co., 258 A.D. 241,285 N.Y. 627, (1941), 33 N.E.2d 554; Sullivan v. Penn MutualLife Ins. Co., 100 F.2d 560 (C.C.A. 7) (1938); Blackburn v.Home Life Ins. Co. of New York, 19 Cal. (2d), 226,120 P.2d 31 (1942); and Pratt v. Mutual Life Ins. Co. of N.Y.,157 Kan. 710 (1944), 145 P.2d 113; Maynard v. Mutual Life Ins. Co.,179 Tenn. 267, 165 S.W.2d 385.
The gist of the plaintiff's case is that if the insurance contract is separable he would possess a life insurance contract separate and apart from the disability benefits provision and that on the life insurance contract he would be entitled to receive the same dividend as is received by holders of life insurance policies which did not contain the disability benefit provision. If the plaintiff's contract of insurance is regarded as one entire contract, he cannot prevail. *Page 441 
In the instant case, the disability benefits provision of the life insurance contract was issued in connection with and as a part of a policy of ordinary life insurance. The disability benefits provision of the policy could not be continued in force independently of the death benefit, consequently the disability benefits provision cannot stand alone as an independent contract. The disability benefits provision was written into and was interwoven with and dependent upon the life insurance provision and was an integral part of the policy. Even, where the disability benefits insurance provision was printed upon a separate rider page which was attached to the policy of life insurance, it has been held that the rider was a part of the life insurance contract and both documents constituted one entire contract. Rubin v. Metropolitan Life Ins. Co., supra; Blackburn
v. Home Ins. Co. of New York, supra.
The plaintiff contends that, inasmuch as the semi-annual premium in the amount of $66 was broken down to show that $2.80 was the premium for the double indemnity benefit and $7.95 was the premium for disability benefit, the court would be justified in concluding that the policy of insurance was separable and that by mathematical calculation the premium for life insurance amounted to $55.25 and was in payment of a contract of life insurance, and that $7.95 was the premium in payment of a disability benefits contract. The stipulation in the policy of the amount of the premium for the double indemnity benefit and for disability benefits was made under instructions of the Superintendent of Insurance, so that if the policyholder wished to terminate the disability benefits feature he would be advised as to the amount of the premium which would be due on the life insurance policy alone. We hold that the policy of insurance held by the plaintiff constituted one entire contract.
The plaintiff contends that he should receive the *Page 442 
same dividends on the life insurance feature of his policy as are received by other holders of life insurance policies of the same age, same expectation of life, and who held exactly similar policies to that held by the plaintiff, but which did not contain any provision for disability benefits, and that any losses which the defendant company has suffered greater than were anticipated on the disability benefits provision of the insurance contract should not operate to reduce the dividends which the plaintiff claims are due him on the death benefit provision of the insurance contract. The plaintiff cites Section 9403, General Code, enacted in 1910, which provides as follows:
"No life insurance company doing business in this state shall make or permit any distinction or discrimination in favor of individuals between the insured of the same class and equal expectation of life in the amount of payment of premiums, or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contracts it makes; nor shall any such company, or any agent thereof, make any contract of insurance or agreement as to such contract, other than is plainly expressed in the policy issued thereon." (Italics ours.)
Plaintiff contends that the defendant company since 1937, in paying to him and to others similarly situated a smaller dividend than was paid to those holding life insurance contracts which did not provide for disability benefits, made a distinction and discrimination between policyholders in the same class and with equal expectation of life, in violation of the provisions of Section 9403, General Code. However, it is contended by the defendant company that Section 9403, General Code, does not apply but that Section 9404, General Code, does apply, which latter section in its *Page 443 
present form was amended in 1933 and in part provides as follows:
"No life insurance company, doing business in this state, whether on the group insurance plan or any other plan, shall make or permit any distinction or discrimination in favor of individuals between insurants of the same class and equal expectation of life in the amount or payment of premiums or rates charged for policies of insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contracts it makes; nor, except as otherwise expressly provided by law, shall any such company, or any agent thereof, make any contract of insurance or agreement as to such contract, other than as plainly expressed in the policy issued thereon." (Italics ours.)
The trial court in its first opinion found that Section 9403, General Code, applied and had not been violated by the defendant company. In a subsequent opinion the trial court held that Section 9403, General Code, was not applicable inasmuch as that section sought to control "policies of life or endowment insurance," and that Section 9404, General Code, did apply since it was broader in scope and applied to "policies of insurance," which aptly described the policy in question. We approve of the judgment of the trial court. However, this court holds that whether Section 9403 or 9404 is applied to the facts in this case, no distinction or discrimination has been made by the defendant company, and that such statutes have not been violated in the manner in which it has declared and paid dividends on the policy of insurance held by the plaintiff. Both sections of the statute provide that no distinction or discrimination shall be made between "insured of the same class and equal expectation of life." Clearly, the risk assumed by the defendant company under the *Page 444 
plaintiff's policy was greater than it would have been if the contract of insurance had not contained a provision for disability benefit insurance.
This court holds that the plaintiff, being insured by the defendant company in a life insurance contract with a disability benefit provision as an integral part of the contract of insurance, is not in the same class as the holder of a similar life insurance policy which does not contain a disability benefit provision. We find that the defendant company equitably apportioned its divisible surplus to the plaintiff and other policyholders in the same class.
The plaintiff contends that the trial court committed prejudicial error in refusing to admit in evidence exhibit B. The record shows that exhibit B was a certain book published by the defendant company in 1926 and described as "The Mutual Life Insurance Company of New York — Premium Rates, Guarantees and Rules, Regulations and Instructions for Local Agents and Solicitors." In the stipulation, the parties agreed that "said book shall be received in evidence." However, in such stipulation the parties agreed also that they should have the right to except "to any and all statements in the stipulation, upon the ground of incompetency, irrelevancy, or immateriality." In view of the latter stipulation, we are of the opinion that the defendant company reserved the right to object to the introduction of exhibit B into the evidence. Exhibit B contained a printed statement as follows: "The guaranteed cash, loan, and other values are the same as those in policies without disability benefits, and such values will increase each year in the same manner, and the amount of dividends will be the same as if each premium had been paid when due instead of being waived." Nowhere does the record disclose that the plaintiff had any knowledge of, or in any way relied *Page 445 
on, any statement in "Exhibit B" at the time he purchased the insurance. The trial court found and this court holds, that exhibit B did not constitute any part of the plaintiff's contract of insurance, that the entire contract between plaintiff and defendant company was contained in the application for insurance and the policy which was subsequently issued. Pratt v. MutualLife Ins. Co. of New York, supra. We hold that prejudicial error was not committed in refusing to admit exhibit B into the evidence.
Plaintiff contends that the trial court committed prejudicial error in its separate findings of fact No. 5 by going outside the record. We do not find that the record in this case supports the contention of the plaintiff.
Furthermore, the plaintiff contends that the judgment of the trial court is against the manifest weight of the evidence. We are of the opinion that there is ample evidence in this case to support the judgment of the trial court. The judgment of the trial court is affirmed.
Judgment affirmed.
HORNBECK, P.J., and MILLER, J., concur.
ON MOTION to dismiss assignment of error and brief.