New York Life Ins. Co. v. Cravens, 178 U.S. 389 (1900)
New York Life Insurance Company v. Cravens
No. 262
Argued April 25, 1900
Decided May 28, 1900
178 U.S. 389
ERROR TO THE SUPREME COURT
OF THE STATE OF MISSOURI
Syllabus
The contract for life insurance in this case, made by a New York insurance company in the State of Missouri with a citizen of that state, is subject to the laws of that state regulating life insurance policies, although the policy declares
that the entire contract contained in the said policy and in this application, taken together, shall be construed and interpreted as a whole and in each of its parts and obligations, according to the laws of the New York, the place of the contract being expressly agreed to be the principal office of the said company in the City of New York.
The power of a state over foreign corporations is not less than the power of a state over domestic corporations.
The business of insurance is not commerce, and the making of a contract of insurance is a mere incident of commercial intercourse in which there is no difference whatever between insurance against fire, insurance against the perils of the sea, or insurance of life.
The controversy in this case is as to the amount due upon a policy of insurance issued by the plaintiff in error upon the life of John K. Cravens, husband of the defendant in error.
The contention of the plaintiff in error is that there is only due on the policy, if anything, the sum of $2,670; that of defendant in error is that she is entitled to the full amount of the policy, to-wit, $10,000, less unpaid premiums.
These contentions depend chiefly for solution on the statute of Missouri, inserted in the margin,
The case was submitted upon an agreed statement of facts substantially as follows:
That the defendant is a corporation organized and existing under the laws of the State of New York as a mutual life insurance company, without capital stock, having its chief office in the City of New York, and was at the date of issuing the policy in question, and since has been, engaged in the business of insuring lives through branch offices in the different states and territories of this country and certain foreign countries, and that it maintains agents and examiners in the State of Missouri.
On May 2, 1887, the local agent of the company solicited John K. Cravens, at his residence in Missouri, to insure his life in the company, and thereupon Cravens signed and delivered to the local agent a written application for the policy in suit. The application was made a part of the policy, and contained the following provisions:
That inasmuch as only the officers of the home office of the said company in the City of New York have authority to determine whether or not a policy shall issue on any application, and as they act on the written statements and representations referred to, no statements, representations, promises, or information made or given by or to the person soliciting or taking this application for a policy, or by or to any other person, shall be binding on said company, or in any manner affect its rights, unless such statements, representations, or information be reduced to writing and presented to the officers of said company at the home office, in the application. . . .
That the entire contract contained in said policy and in this application shall be construed according to the laws of the State of New York, the place of said contract being agreed to be the home office of said company in the City of New York.
The application was signed by the agent of the company and forwarded to the latter’s home office in New York, and thereupon the policy in suit was issued and transmitted to Kansas City by the company to its agent, who there received the same, and there delivered it to Cravens on the 20th or May, 1887, and collected the first premium provided to be paid.
Four annual premiums of $589.50 each were paid in Missouri. The fifth and sixth premiums were not paid. Cravens died November 2, 1892, in Missouri, and proof thereof was duly made.
The company had different forms of policies, and Cravens selected a nonforfeiting limited tontine policy, fifteen years endowment, with the limited premium return plan of insurance. This plan is described in the policy as follows:
This policy is issued on the nonforfeiting limited tontine policy plan, the particulars of which are as follows:
That the tontine dividend period for this policy shall be completed on the 11th day of May in the year nineteen hundred and two.
That no dividend shall be allowed or paid upon this policy unless the person whose life is hereby insured shall survive until completion of its tontine dividend period, and unless this policy shall then be in force.
That surplus or profits derived from such policies on the nonforfeiting limited tontine policy plan as shall not be in force at the date of the completion of their respective tontine dividend periods, shall be apportioned among such policies as shall complete their tontine dividend periods.
At the end of the tontine period, certain benefits were to be allowed which are stated in the policy but which need not be repeated.
The policy also contained the following provision:
That if the premiums are not paid, as hereafter provided, on or before the days when due, then this policy shall become void, and all payments previously made shall be forfeited to the company, except that if this policy, after being in force three full years, shall lapse or become forfeited for the nonpayment of any premium, paid-up policy will be issued on demand within six months after such lapse, with the surrender of this policy, under the same conditions as this policy except as to payments of premiums, but without participation in profits, for an amount equal to as many fifteenth parts of the sum above insured as there shall have been complete annual premiums paid hereon when said default in the payment of premium shall be made, and all right, claim, or interest arising, under statute or otherwise, to or in any other paid-up policy or surrender value, and to or in any temporary insurance, whether required or provided for by the statutes of any state, or not, is hereby expressly waived and relinquished.
The total number of policies, of the plan of the policy in suit, issued in the year 1887 to the residents of all states and countries where the company was doing business was 5,172, covering an aggregate of insurance of $20,154,981.
The amount of paid-up insurance to which the policy was entitled at the date of lapsing was $2,670. No demand was made for it within six months after default, or at any time. Upon the death of Cravens, the company offered to waive the failure to make such demand, and tendered defendant in error, and still tenders her, the amount of such paid-up policy, which she declined, and still declines.
On the 11th of May, 1891, Cravens was fifty-three years old,
and the term of temporary insurance procured at that date by three-fourths of the net value of the policy, taken as a single premium for the amount written in the policy, was six years and forty-six days from the 11th day of May, 1891, making said policy, if subject to said extended insurance, in force at the death of the said Cravens.
The defendant in error claims under the policy $10,000, less the amount of unpaid premiums, with interest thereon, which left a balance of $8,749.21, with interest at six percent from November 30, 1892. The plaintiff in error admitted and offered to pay the sum of $2,670, which plaintiff in error declined to receive.
The trial court rendered a judgment for the plaintiff (defendant in error) for the sum of $2,670.
On appeal to the supreme court of the state, the case was remanded with directions to enter judgment for plaintiff (defendant in error) for the sum of $8,749.21, with interest at six percent from November 30, 1892.
The case was then brought here.
It is urged as error against the judgment of the supreme court of the state that it makes the law of Missouri, and not the law of New York, the law of the contract, as provided in the application for the policy, thereby denying to the plaintiff in error a contractual liberty without due process of law, in violation of the Fourteenth Amendment of the Constitution of the United States, and that the statute of Missouri is an attempted regulation of interstate commerce.