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The Judicial System and the Law of Life Insurance, 1888-1910*

Published online by Cambridge University Press:  24 July 2012

Morton Keller
Morton Keller
Affiliation:
Assistant Professor of History atUniversity of Pennsylvania
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Abstract

Despite a widely prevailing judicial insensitivity to corporate reform and regulation, the large insurance companies found themselves under careful, constant, and not always sympathetic legal scrutiny. This scrutiny tended to emphasize the equity rather than the letter of the law, and kept the insurance contract the flexible servant of a dynamic society and industry.

Type
Research Article
Information
Business History Review , Volume 35 , Issue 3 , Autumn 1961 , pp. 317 - 335
Copyright
Copyright © The President and Fellows of Harvard College 1961

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References

1 By 1883 one half of circuit court and one third of Supreme Court cases involved corporations. Frankfurter, Felix and Landis, James W., The Business of the Supreme Court (New York, 1927), p. 89nGoogle Scholar. See also Aumann, Francis R., “Some Problems of American Legal Development During the Period of Industrial Growth, 1865-1900,” University of Cincinnati Law Review, vol. XII (1938), pp. 520, 523Google Scholar.

2 Westin, Alan F., “The Supreme Court, the Populist Movement and the Campaign of 1896,” The Journal of Politics, vol. XV (1953), pp. 3–41CrossRefGoogle Scholar; Mowry, George E., Theodore Roosevelt and the Progressive Movement (Madison, 1946), pp. 214–217Google Scholar.

3 Root, Elihu, Addresses on Government and Citizenship (Cambridge, 1916), pp. 445–462CrossRefGoogle Scholar; Lodge, Henry C., The Democracy of the Constitution and Other Addresses and Essays (New York, 1915), pp. 69-87, 105Google Scholar.

4 References to judicial conservatism may be found in Goldman, Eric F., Rendezvous with Destiny (New York, 1952Google Scholar); Hofstadter, Richard, The Age of Reform (New York, 1955), p. 250Google Scholar; and Mowry, George, Theodore Roosevelt and the Progressive Movement (Madison, 1946), pp. 214–215Google Scholar, and The Era of Theodore Roosevelt (New York, 1958), pp. 264–265Google Scholar. See also Westin, “The Supreme Court,” passim; Paul, Arnold M., “Legal Progressivism, the Courts, and the Crisis of the 1890's,” Business History Review, vol. XXXIII (Winter, 1959), pp. 495–509CrossRefGoogle Scholar; Paul, Arnold M., Conservative Crisis and The Rule of Law: Attitudes of Bar and Bench, 1887-1895 (Ithaca, 1960Google Scholar), passim; Jacobs, Clyde E., Law Writers and the Courts (Berkeley and Los Angeles, 1954Google Scholar), chap. 5.

5 Most substantial histories of the Supreme Court or of constitutional law accept these views: Myers, Gustavus, History of the Supreme Court of the United States (Chicago, 1912), pp. 578–786Google Scholar; Haines, Charles G., The Revival of Natural Law Concepts (Cambridge, 1930), pp. 138-139, 323–336Google Scholar; Boudin, Louis B., Government by Judiciary (New York, 1932), vol. IIGoogle Scholar, passim; Carr, Robert K., The Supreme Court and Judicial Review (New York, 1942), p. 146Google Scholar; Swisher, Carl B., American Constitutional Development (Cambridge, 1943), p. 527Google Scholar. Cf. also Twiss, Benjamin R., Lawyers and the Constitution (Princeton, 1942Google Scholar), chaps. IV-X, and Fine, Sidney, Laissez Faire and the General-Welfare State (Ann Arbor, 1956Google Scholar), chap. V. Some contemporaries — Roscoe Pound, Richard T. Ely, Frank J. Goodnow, Frederic R. Coudert — saw a developing liberalism in the turn-of-the-century Supreme Court, but often emphasized the greater conservatism of the state tribunals. See references and quotations in Warren, Charles, The Supreme Court in United States History (Boston, 1923), vol. III, pp. 468-469n., and 399, 466–469Google Scholar. The most sophisticated analysis of nineteenth-century and early twentieth-century judicial tendencies, one to which I am heavily indebted, is Hurst, Willard, Law and the Conditions of Freedom in the Nineteenth Century United States (Madison, 1956Google Scholar), passim.

6 The author recognizes that this judicial disposition appeared in other areas of litigation, such as mortgage foreclosures and small loans, where there was a recognized disparity in the parties' bargaining power. But none of these areas directly involved corporations as puissant as the great life insurance companies. Carnahan, Charles W., Conflict of Laws and Life Insurance Contracts (Chicago, 1942Google Scholar), denies that the courts choose the precedential rules which will benefit the insured (p. 680), but much of his own work suggests otherwise; cf. pp. 8-9, 286-287, 443, 678-679, 683. For conclusions similar to mine, see Kimball, Spencer L., Insurance and Public Policy (Madison, 1960), pp. 209ffGoogle Scholar.

7 Stalson, J. Owen, Marketing Life Insurance (Cambridge, 1942), p. 799Google Scholar.

8 These themes will be developed in a forthcoming work by the author. The best printed sources are the records of the 1905 New York investigation (Testimony and Report of the Legislative Insurance Investigating Committee, 10 vols. [New York, 1905]Google Scholar), and the better company histories: Buley, R. Carlyle, The Equitable Life Assurance Society of the United States, 1859-1959 (New York, 1959Google Scholar); Clough, Shepard B., A Century of American Life Insurance [Mutual] (New York, 1946Google Scholar); James, Marquis, The Metropolitan Life (New York, 1947Google Scholar). See also Stalson, Marketing Life Insurance, pp. 428-543; Buley, R. Carlyle, The American Life Convention (New York, 1953), vol. I, pp. 86–193Google Scholar; North, Douglass C., “Life Insurance and Investment Banking at the Time of the Armstrong Investigation of 1905-1906,” Journal of Economic History, vol. XIV (1954), pp. 209–228CrossRefGoogle Scholar.

9 Clough, A Century of American Life, pp. 120, 198; “Atkinson's History of the Prudential,” chap. 4 (typescript, Prudential Archives).

10 Ibid.; Prudential, Board of Directors' Minutes, Jan. 14, 1897; Mutual, Board of Trustees' Minutes, Dec. 27, 1893; New York Life, Docket Books, 1893; Dublin, Louis J., A Family of Thirty Million (New York, 1943), p. 365Google Scholar; Hurst, Willard J., The Growth of American Law (Boston, 1950), p. 351Google Scholar.

11 The American Lawyer (New York, 1907), p. 22Google Scholar.

12 Swaine, Robert T., The Cravath Firm (New York, 1946), vol. I, pp. 750–765Google Scholar; Legislative Insurance Investigating Committee, Testimony, vol. I, pp. 9–10Google Scholar; May, Earl C. and Oursler, Will, The Prudential (Garden City, 1950), pp. 142–155Google Scholar.

13 These, and ensuing, tabular data are derived from a study of the five companies' litigation based on Deitch, Guilford A., ed., Insurance Digest, vols. I–XXIII (1889-1911Google Scholar), a reasonably complete analysis of insurance cases in all appellate courts. The ratio of reported to recorded cases is, of course, a very small one. An analysis of the New York Life's Docket Books (in the office of the company's General Counsel) for the years 1895, 1900, 1905, and 1910 suggests the proportion.

There were approximately 2,000 cases reported in the New York Life's Docket Books from Oct., 1893, to Jan., 1910. The company's appellate litigation in the Insurance Digest from 1894 to 1910 totaled 133 actions. See also Jaffin, George H., “Prologue to Nomostatistics,” Columbia Law Review, vol. XXXV (1935), p. 7Google Scholar; Hurst, Growth of American Law, pp. 160, 171-172.

14 Knight, Charles F., The History of Life Insurance in the United States to 1870 (Philadelphia, 1920), p. 158Google Scholar; cf. Weekly Underwriter, vol. XXXVII (1887), pp. 85–86Google Scholar.

15 See Table above, note 13. The Mutual, traditionally more litigious than its peers, led in the withdrawal from courtroom battle. Its out-of-court settlements went from 35% of all litigation in 1895 to 70% in 1897. Mutual, Minutes of the Board of Trustees, Feb. 19, 1896, Dec. 28, 1898. The companies always were defendants far more often than they were plaintiffs. The straight life firms, dealing in more substantial policies, were readier to seek legal action:

16 Dublin, Louis, A Family of Thirty Million (New York, 1943), pp. 367–368Google Scholar; Dunham, Howard P., comp., The Business of Insurance (New York, 1912), vol. III, p. 123Google Scholar. The rate of decisions in later years — 56 in 1915, 38 in 1920, 41 in 1925 — reveals that litigation remained stabilized while the volume of insurance rose enormously.

17 In numerous instances, a single case touched on more than one of these subjects, and was included in each appropriate category.

The author of this article is indebted to Mr. Walter Poulshock for assistance in gathering this material, and to the Social Science Research Council for the financial aid which made this study possible.

18 Richards, George, A Treatise on the Law of Insurance (3d ed., New York, 1912Google Scholar), Appendix, chap. I, passim; Patterson, Edwin W., The Insurance Commissioner in the United States (Cambridge, 1926), pp. 519–537Google Scholar. The scope of life insurance legislation during the period is suggested by: New York State Library, Legislative Bulletins 1-39, Yearbooks of Legislation (Albany, 1890-1908Google Scholar); and “Notes on Current Legislation,” American Political Science Review, vol. I (1907), pp. 258-261, 608–619Google Scholar; vol. III (1909), pp. 401-404; vol. IV (1910), pp. 393-395; vol. VI (1912), pp. 415-425.

19 “Such companies and such contracts naturally and properly belong to a class by themselves, and must be governed by laws that would be wholly inappropriate to any other company or any other contracts.” Andrus v. Fidelity Mut. Life Ins. Ass'n., 67 S.W. 582 (Mo. 1902Google Scholar). “There is such a difference between the insurance business and other kinds … as to justify and not make repugnant to the equality clause of the … Constitution … state laws penalizing companies for bad faith in refusing to pay claims promptly.” Continental Fire Ins. Co. v. Whitaker & Dillard, 195 Am. St. Rep. 916 (Tenn. 1904). See also People v. Formosa, 30 N.E. 492 (N.Y. Ct. Supp., 1892); Orient Ins. Co. v. Diggs, 172 U.S. 557 (1899); Cravens v. N.Y. Life Ins. Co., 178 U.S. 389 (1900); German Alliance Ins. Co. v. Lewis, 233 U.S. 389 (1914).

20 The estimate of total insurance legislation is based on the yearly Index to Legislation of the New York State Library Bulletin (see note 18); decisions of unconstitutionality were compiled from the Index to Legislation and the Insurance Law Journal, vols. XVIIXXXIX (1888-1910Google Scholar), passim. Of 19 findings of unconstitutionality of statutes with regard to the contract clause, 7 may be considered antithetical to the insurance companies' interests. See also Wright, Benjamin F., The Contract Clause of the Constitution (Cambridge, 1938), p. 129Google Scholar.

21 Dryden, John F., Addresses and Papers on Life Insurance and Other Subjects (Newark, 1909), pp. 175–215Google Scholar; Beck, James M., “The Federal Regulation of Life-insurance,” North American Review, vol. CLXXXI (1905), pp. 191–201Google Scholar; Perkins, George W., “Corporations in Modern Business,” North American Review, vol. CLXXXVII (1908), p. 396Google Scholar; American Bar Association, Reports, vol. XXVIII (1905), pp. 92-123, 492–516Google Scholar; Keller, Morton, In Defense of Yesterday (New York, 1958), pp. 75–78Google Scholar.

22 Hillmon v. Mutual Life Ins. Co., 79 Fed. 749 (C. C. Kan. 1897); Hillmon v. N.Y. Life Ins. Co., 79 Fed. 749 (C.C. Kan. 1897); Metropolitan Life Ins. Co. v. McNall, 81 Fed. 888 (C.C. Kan. 1897); Mut. v. Boyle, 82 Fed. 705 (C.C. Kan. 1897).

23 Met. v. City of New Orleans, 205 U.S. 395 (1907); Bd. of Assessors v. N.Y.L., 216 U.S. 517 (1910).

24 N.Y.L. v. Hardison, 85 N.E. 410 (Mass. 1908).

25 233 U.S. 389 (1914); 178 U.S. 389 (1900); 231 U.S. 495 (1913). Cf. German Alliance Ins. Co. v Lewis, 233 U.S. 389 (1914). There were numerous instances of judicial regulation of the large companies' business structure. In 1902 John F. Dryden, the Prudential's president, proposed to solidify control of the company by his associates and himself through an elaborate exchange-of-stock arrangement with the Fidelity Trust Company. Dissatisfied stockholders challenged the plan. The New Jersey Court of Chancery granted an injunction blocking the Prudential's purchase of Fidelity stock, declaring that the company's managers “were not elected to revise the laws of New Jersey, or to devise schemes for evading those laws….” (Robotham v. Pru., 53 Atl. 842, 853 [N.J. 1903]; May and Oursler, The Prudential, pp. 126-129.) When, in later years, the Prudential and the Equitable changed from stock to mutual companies, judicial decisions generally assisted an organizational change considered desirable for a large life insurance company. (May and Oursler, The Prudential, pp. 149-150, 157-169; Lord v. Equitable Life Assurance Soc., 108 N.Y. Supp. 67 [1908], 87 N.E. 443 [1909]; People v. Equitable, 101 N.Y. Supp. 354 [Trial Ct., 1906].)

26 Henderson, Gerard C., The Position of Foreign Corporations in American Constitutional Law (Cambridge, 1918), pp. 55, 64-66, 84, 101–108Google Scholar; “W.B.R.,” “The Adoption of the Liberal Theory of Foreign Corporations,” The University of Pennsylvania Law Review, vol. CXXIX (1931), p. 964Google Scholar; Beale, Joseph H., The Law of Foreign Corporations (Boston, 1904), para. 116-117, 132Google Scholar; Vance, William R., “Federal Control of Insurance Corporations,” The Green Bag, vol. XVII (1905), pp. 84–85Google Scholar; Freund, Ernst, The Police Power (Chicago, 1904), p. 737Google Scholar.

26a Banholzer v. N.Y.L., 178 U.S. 402 (1900); Doll v. Equit., 138 Fed. 705 (3d Circ. 1905); Johnson v. N.Y.L., 78 N.W. 905 (Iowa 1899); Met. v. Commonwealth, 84 N.E. 863 (Mass. 1908); Haskell v. Equit., 63 N.E. 899 (Mass. 1902); Johnson v. Mut., 62 N.E. 733 (Mass. 1902); Bottomley v. Met., 49 N.E. 438 (Mass. 1898); Epperson v. N.Y.L., 90 Mo. App. 432 (1903); McElroy v. Met., 122 N.W. 27 (Neb. 1909); Met. v. Bradley, 79 S.W. 367 (Tex. Cir. Ct. App. 1904).

26b Montgomery Ex'rs v. Equit., 34 Pa. County Ct. 671 (Phila. County Ct. 1908); Dillon v. Met., 33 Pa. County Ct. 176 (Phila. County Ct. 1907); Cowan v. Met., 33 Pa. County Ct. 175 (Phila. County Ct. 1907); Hall v. Met., 15 Pa. Dist. 144 (Phila. County Ct. 1906); Rohrer, Adm'r. v. Met., 22 Lancaster L. Rev. 67 (Lancaster County Ct. [Pa.] 1905); Ford v. Met., 7 Pa. Dist. 397 (Phila. County Ct. 1898); Connors v. Pru., 49 Legal Intelligencer 75 (Luzerne County Ct. [Pa.] 1892).

26c Board of Assessors v. N.Y.L., 216 U.S. 517 (1910); Mut. v. Boyle, 82 Fed. 705 (C.C. Kans. 1897); Met. v. McNall, 81 Fed. 888 (C.C. Kans. 1897); N.Y.L. v. Bradley, Treas., 65 S.E. 433 (S.C. 1909); N.Y.L. v. Smith, 41 S.W. 680 (Tex. 1897).

27 Bohlen, Francis H., “Contributory Negligence,” Harvard Law Review, vol. XXI (1908), p. 254Google Scholar. Cf. Patterson, Christopher S., Railway Accident Law (Philadelphia, 1886), p. 4Google Scholar; Hay, G. Jr., The Law of Railway Accidents in Massachusetts (Boston, 1897), p. 3Google Scholar; Hunt, Robert S., Law and Locomotives (Madison, 1958), p. 75Google Scholar.

28 People v. Formosa, 16 N.Y. Supp. 783 (1891). “The subject [of insurance contracts] … is sui generis and the rules of a legal system devised to govern the formation of ordinary contracts between man and man cannot be mechanically applied to it.” Pfiester v. Mo. State Life Ins. Co., 116 Pac. 245 (Kan. 1911). “Courts have always set their faces against an insurance company, which, having received its premiums, has sought by a technical defense to avoid payment.” Mut. v. Hill, 193 U.S. 551 (1904).

29 Finch, John A., “The Law of Insurance in the Law School,” American Bar Association Reports, vol. XX (1897), p. 496Google Scholar; Reports, vol. XIX (1896), p. 32Google Scholar; Gross, Charles E., “Insurance Law,” Yale Insurance Lectures, vol. II (New Haven, 1904), pp. 335-336, 350Google Scholar. An insurance text writer in 1892 felt called upon to supplement a collection of leading cases with a discussion of principles because of the “large number of independent tribunals in the different States, and the enormous multiplication of reported cases, involving decisions more or less inharmonious with each other.” By 1912 he dropped the case collection, explaining: “It has become obvious at a glance that a few isolated instances, a few reported cases, no matter how carefully selected, fail hopelessly to stand for the great body of insurance law as developed in recent times. Each decision is but a pin point on a vast surface.” George Richards, The Law of Insurance (1st ed., 1892), vols. iii-ix; Ibid. (3d ed., 1912), vols. vi-vii. See Hurst, Growth of American Law, pp. 265-266, for a similarly motivated critique of the case method of legal education.

30 Patterson, Edwin W., “Warranties in Insurance Law,” Columbia Law Review, vol. XXXIV (1934), pp. 595–597CrossRefGoogle Scholar; Vance, William R., “The History of the Development of the Warranty in Insurance Law,” Yale Law Journal, vol. XX (1911), p. 533Google Scholar; Amrhein, George L., The Liberalization of the Life Insurance Contract (Philadelphia, 1933), pp. 139–143Google Scholar; Parkinson, , “Are the Law Schools Adequately Training for the Public Service?” American Law School Review, vol. VIII (1935), p. 294Google Scholar.

31 Cooke, Frederick H., The Law of Life Insurance (New York, 1891), pp. 21, 26Google Scholar; Vance, “Development of the Warranty,” p. 523; Patterson, “Warranties,” p. 620.

32 Kessler, Friedrich, “Contracts of Adhesion — Some Thoughts About Freedom of Contract,” Columbia Law Review, vol. XLIII (1943), p. 633Google Scholar; Morris, Clarence, “Waiver and Estoppel in Insurance Policy Litigation,” The University of Pennsylvania Law Review, vol. CV (1957), pp. 925, 943-945, 951Google Scholar; Vance, William R., “Waiver and Estoppel in Insurance Law,” Yale Law Journal, vol. XXXIV (1925), p. 834CrossRefGoogle Scholar; Richards, , Insurance (1912), vol. vii n., pp. 162–165Google Scholar. Legislation which restricted the impact of the warranty and the companies' policy liberalization also played important roles in this development. Amrhein, Liberalization, pp. 145—147; Richards, Insurance (1912), pp. 683-685.

32a La Marche v. N.Y.L., 58 Pac. 1053 (Cal. 1899); McGurk v. Met., 16 Atl. 263 (Conn. 1888); Fair v. Met., 63 S.E. 812 (Ga. 1909); Met. v. Larson, 85 Ill. App. 143 (1900); Met. v. Quandt, 69 Ill. App. 649 (Sup. Ct. 1898); N.Y.L. v. Easton, 69 Ill. App. 479 (1898); Met. v. Willis, 76 N.E. 560 (Ind. Ct. App. 1906); Halle v. N.Y.L., 58 S.W. 822 (Ky. 1900); Hewey v. Met., 62 Atl. 600 (Me. 1906); Mailhoit v. Met., 32 Atl. 989 (Me. 1895); Van Houten v. Met., 68 N.W. 982 (Mich. 1896); Hilt v. Met., 68 N.W. 300 (Mich. 1896); Temmink v. Met., 40 N.W. 469 (Mich. 1888); Williams v. Met., 96 N.Y. Supp. 823 (Sup. Ct. 1906); O'Farrell v. Met., 48 N.Y. Supp. 199 (Sup. Ct. 1898); Pickett v. Met., 46 N.Y. Supp. 693 (Sup. Ct. 1897); Wells v. Met., 46 N.Y. Supp. 80 (Sup. Ct. 1897); Boylan v. Pru., 42 N.Y. Supp. 52 (Sup. Ct. 1897); Quinn v. Met., 41 N.Y. Supp. 1060 (Sup. Ct. 1896); Robinson v. Met., 37 N.Y. Supp. 146 (Sup. Ct. 1896); Corbitt v. Met., 30 N.Y. Supp. 1069 (Sup. Ct. 1894); Pru. v. Kilbane, 15 Ohio C.C.R. 62 (1898); Fludd v. Equit., 55 So. 762 (S.C. 1907); Mut. v. Nichols, 26 S.W. 998 (Tex. Ct. App. 1894).

32b Flannigan v. Pru., 46 N.Y. Supp. 687 (Albany County Ct. 1897); Singleton v. Pru., 42 N.Y. Supp. (Sup. Ct. 1897). Other decisions argued that the burden of proof was on the company (Cobb v. Met., 19 Pa. Super. 228 [1902]); that intent to deceive had to be shown (Hogan v. Met., 41 N.E. 663 [Mass. 1895]); that the company might not necessarily have rejected the applicant if he had answered correctly (Diamond v. Met., 116 N.Y. Supp. 617 [Sup. Ct. 1909]); that the warranty must be subject to strict construction (Owen v. Met., 67 Atl. 25 [N.J. Ct. Eq. App. 1907]); that the breach of warranty had occurred, but the number of premium payments warranted an exception (Monahan v. Mut., 63 Atl. 211 [Md. 1906]).

32c N.Y.L. v. Hurd, 77 S.W. 380 (Ky. 1903); Summers v. Met., 90 Mo. App. 691 (1903); Scott v. Met., 107 N.Y. Supp. 124 (Sup. Ct. 1908); Berry v. Met., 88 N.Y. Supp. 140 (Sup. Ct. 1904); Lauer v. Equit., 10 Ohio S. & C.P. 397 (Super. Ct. 1901); Ellis v. Met., 77 Atl. 460 (Pa. 1910); Arnold v. Met., 20 Pa. Super. 61 (1903); Guiltman v. Met., 38 Atl. 315 (Vt. 1897).

33 Holly v. Met., 11 N.E. 507.

33a McMaster's Adm'r. v. N.Y.L., 183 U.S. 25 (1901); Mut. v. Abbey, 88 S.W. 950 (Ark. 1905); Griffith v. N.Y.L., 36 Pac. 113 (Cal. 1894); Hogben v. Met., 38 Atl. 214 (Conn. Sup. Ct. Eq. 1897); Mut. v. Keach, 22 Chi. Legal News 373 (Ill. Ct. App. 1890); Pru. v. Sullivan, 59 N.E. 873 (Ind. Ct. App. 1901); Kimbro v. N.Y.L., 108 N.W. 1025 (Iowa 1906); Getz v. Equit., 64 N.W. 799 (Iowa 1895); Met. v. Mulleady's Adm'x., 53 S.W. 282 (Ky. Sup. Ct. 1899); McNicholas v. Pru., 82 N.E. 692 (Mass. Sup. Ct. 1907); Mut. v. Herron, 30 So. 691 (Miss. 1901); Eames v. N.Y.L., 114 S.W. 85 (St. Louis [Mo.] Ct. App. 1909); Wichman v. Met., 96 S.W. 695 (St. Louis [Mo.] Ct. App. 1906); N.Y.L. v. Smucker, 80 S.W. 278 (St. Louis [Mo.] Ct. App. 1904); Lally v. Pru., 72 Atl. 208 (N.H. 1909); Singleton v. Pru., 42 N.Y. Supp. 446 (Sup. Ct. 1897); Carr v. Pru., 101 N.Y. Supp. 158 (Sup. Ct. 1906); East v. Pru., 42 N.Y. Supp. 584 (Sup. Ct. 1897); Matthews v. Met., 61 S.E. 192 (N.C. 1908); Equit. v. Cole, 35 S.W. 720 (Tex. Ct. App. 1896); Griesemer v. Mut., 38 Pac. 7031 (Wash. 1895); Leonard v. Pru., 107 N.W. 646 (Wisc. 1906); Rasmusen v. N.Y.L., 64 N.W. 301 (Wisc. 1895).

33b Equit. v. Golson, 48 So. 1034 (Ala. 1909); Mut. v. Allen, 72 N.E. 200 (Ill. 1904); Ingersoll v. Mut., 40 Nat.'l Corp. Rep. 825 (Ill. Ct. App. 1910); Haas v. Mut., 121 N.W. 996 (Neb. 1909); O'Brien v. Pru., 33 N.Y. Supp. 67 (N.Y.C.C.P. 1895); Brady v. Pru., 29 N.Y. Supp. 44 (Ct. App. 1894).

33c Lenon v. Mut., 98 S.W. 117 (Ark. 1907); Barrett v. Mut., 85 S.W. 745 (Ky. 1905); Mut. v. Jarboe, 42 S.W. 1097 (Ky. 1898); Seidel v. Equit., 119 N.W. 818 (Wisc. 1909).

Numerous decisions upheld or applied state laws protecting the premium payer: N.Y.L. v. Cravens, 178 U.S. 389 (1900); Equit. v. Pettus, 140 U.S. 226 (1891); Mut. v. Dingley, 100 Fed. 408 (9th Circ. 1900); Hathaway v. Mut., 99 Fed. 534 (C.C. Wash. 1900); Mut. v. Allen, 97 Fed. 985 (9th Circ. 1900); N.Y.L. v. Dingley, 93 Fed. 153 (9th Circ. 1899); Equit. v. Nixon, 81 Fed. 796 (9th Circ., 1897); Equit. v. Winning, 58 Fed. 541 (8th Circ. 1894); Burridge v. N.Y.L., 109 S.W. 560 (Mo. 1908); Nichols v. Mut., 75 S.W. 664 (Mo. 1903); Wall v. Equit., 32 Fed. 273 (8th Circ. 1887); Burns v. Met., 124 S.W. 539 (Kan. City [Mo.] Ct. App. 1910); Whittaker v. Mut., 114 S.W. 53 (Kan. City [Mo.] Ct. App. 1909); Auspitz v. Equit., 115 N.Y. Supp. 109 (Sup. Ct. 1909); McCall v. Pru., 90 N.Y. Supp. 644 (Sup. Ct. 1904); Fischer v. Met., 56 N.Y. Supp. 260 (Sup. Ct. 1899); N.Y.L. v. English, 67 S.W. 884 (Tex. 1902). Cf. Cooley, Insurance, pp. 1051, 2286-2299.

33d In 1891 an authority complained that while the essential nature of the premium payment should have placed the burden of proof in relevant litigation upon the insured, the active rule seemed to be that the insurer had to prove his case in court. Cooke, Insurance, p. 172. The judicial tradition in Kentucky held that time was not the essence of the contract so far as premium payment was concerned. Richards, Insurance (1912), pp. 502-503. Yet another indication of the courts' concern for the policyholder's equity was their disinclination to allow premium loan or policy note defaults to mar the insurance contract proper (N.Y.L. v. McPherson, 33 So. 825 [Ala. 1903]); Boseman's Adm'r. v. Pru., 113 S.W. 836 (Ky. Sup. Ct. 1908); N.Y.L. v. Curry, 72 S.W. 736 (Ky. 1903); Mut. v. Gorman, 40 S.W. 571 (Ky. 1897); Crook v. N.Y.L., 75 Atl. 388 (Md. 1910); Krause v. Equit., 58 N.W. 496 (Mich. 1894); Raymond v. Met., 86 Mo. App. 391 (1902).

34 Amrhein, Liberalization, pp. 196-237; Fouse, L. G., “Policy Contracts in Life Insurance,” American Academy of Political and Social Science Annals, vol. XXVI (1905), pp. 219–221Google Scholar.

35 Ritter v. Mut., 169 U.S. 139 (1898).

36 Vance, William R., “Suicide as a Defense in Life Insurance,” Yale Law Journal, vol. XXX (1921), p. 401Google Scholar; Maguire, Philip J., “The Suicide Clause in Life Insurance Policies,” Albany Law Journal, vol. LXIV (1902), pp. 279–285Google Scholar; Sawyer, George, “The Suicide Clause in Life Insurance Contracts,” Central Law Journal, vol. LII (1901), pp. 107–111Google Scholar.

37 Robbins, Alexander H., “The Vested Interest of a Beneficiary Under a Policy of Life Insurance,” Central Law Journal, vol. LIII (1901), pp. 184—189Google Scholar; “Life Insurance Policies,” National Corporation Reporter, vol. XIII (1896), p. 133Google Scholar; Richards, Insurance (1912), pp. 79-80. In 1922 one authority discussed the role of a beneficiary's vested rights as an American invention which, he implied, had gone too far. He discerned a retrogression to the view that, except for statutory protection of women and children, the beneficiary would have no rights until the policy matured. Vance, William R., “The Beneficiary's Interest in a Life Insurance Policy,” Yale Law Journal, vol. XXXI (1922), pp. 344-345, 360Google Scholar. Cooke, Life Insurance, pp. 137-146, “Note on Statutory Protection of Rights of Beneficiary,” emphasized New York's protection of the rights of an insured's wife and children. Compare Richards, Insurance (1892), p. 577, and Ibid. (1912), pp. 711-713, on the growth of legislative protection of beneficiaries.

38 Harris, George D., “Insurable Interest in the Life of a Person,” Central Law Journal, vol. LII (1901), pp. 381–386Google Scholar; Patterson, Edwin W., “Insurable Interest in Life,” Columbia Law Review, vol. XVIII (1918), p. 421Google Scholar; Cooke, Life Insurance, pp. 90-106; Cooley, Roger W., Briefs on the Law of Insurance (St. Paul, 1905), pp. 244–329Google Scholar.

39 Cooke, Life Insurance, p. 90; Cooley, Insurance, pp. 85-97; Collins, Eric, “The Doctrine of Insurable Interest in Illinois as Applied to Life Insurance,” Chicago-Kent Review, vol. IX (1931), pp. 163–164Google Scholar.

40 Cooley, Insurance, p. 1080; Hudnut, James M., History of the New-York Life Insurance Company 1895-1905 (New York, 1906), p. 30Google Scholar.

41 Ford, James T., “Validity of Assignments of Life Insurance Policies to Persons Having No Insurable Interest in the Life of the Insured,” Central Law Journal, vol. LVIII (1904), p. 185Google Scholar; Richards, Insurance (1912), pp. 50-54; Cooley, Insurance, pp. 262-278.

42 Ibid., pp. 3740-3741. This device was upheld in Kelly v. Pru., 127 S.W. 649 (St. Louis [Mo.] Ct. App. 1910); Brooks v. Met., 56 Atl. 168 (NJ. 1903); Brennan v. Pru., 32 Atl. 1042 (Pa. 1895); and Thomas v. Pru., 24 Atl. 82 (Pa. 1892). The New York Life's use of pleas of avoidance in representative years was as follows:

43 For rejections of company attempts at avoidance, see N.Y.L. v. Freund, 35 Chi. Legal News 267 (Cook County [Ill.] Ct. 1903); Pru. v. Godfrey, 72 Atl. 456 (N.J. Ch. 1909); Nixon v. N.Y.L., 98 S.W. 380 (Tex. 1907); Lateer v. Pru., 72 N.Y. Supp. 235 (Sup. Ct. 1901); Golden v. Met., 55 N.Y. Supp. 143 (Sup. Ct. 1899); Stevenson v. N.Y.L., 41 N.Y. Supp. 964 (Sup. Ct. 1896); Lennon v. Met., 45 N.Y. Supp. 1033 (N.Y. City Ct. 1897); Sampson v. Met., 36 Pa. County Ct. R. 481 (Phila. 1909).

“Courts have always set their faces against an insurance company, which, having received its premiums, has sought by a technical defense to avoid payment.” Mut. v. Hill, 193 U.S. 551 (1904); cf. Davies, Law of Life Insurance, pp. 10-11.

Besides the preponderance of anti-company decisions, no patterns of judicial policy-making are discernible in beneficiary decisions. An almost case-by-case equity, weighted toward the beneficiary, seems to be the working rule.

44 Carter, Ellerbe W., “Suits for Accounting on Tontine Life Insurance Policies,” Virginia Law Review, vol. II (1914), pp. 23–25Google Scholar; Reed, Herbert H., “Distribution of Surplus by Insurance Companies,” American Law Review, vol. XLII (1908), pp. 12–24Google Scholar.

45 Stalson, Marketing Life Insurance, pp. 508-537.

46 Vance, William R., Handbook of the Law of Insurance (St. Paul, 1904), pp. 298–305Google Scholar; Elliott, Charles B., A Treatise on the Law of Insurance (Indianapolis, 1907), pp. 128-129, 138Google Scholar; Richards, Insurance (1892), p. 93.

47 Richards, Insurance (1892), p. 86; Elliott, Insurance, pp. 138, 145; May, John W., Insurance, 3d ed. (Parsons, Boston, 1891), vol. I, p. 210Google Scholar. Again, legislative enactments supplemented the courts' work by making the solicitor always the agent of the insurer, forbidding rebates, and making notice to the agent notice to the company. Richards, Insurance (1912), pp. 686-687; Vance, Insurance, pp. 299-301; Patterson, Insurance Commissioner, pp. 157-183. The courts supported this work: “It would be quite preposterous to say that, while the legislature could in the exercise of its legitimate authority regulate these corporations and prescribe the terms under which they may exist and do business, yet it could not by similar laws regulate and control the conduct of their agents.” People v. Formosa, 30 N.E. 492 (N.Y. 1892).

48 “There is too much tendency on the part of judges to construe away valid provisions in contracts of insurance and indemnity, and thus reach some more equitable conclusion. The result is much ‘hard case’ law, which is mostly bad law, and always variable law.” J. Pardee in Jackson v. Fid. & Cos. Co., 75 Fed. 359 (5th Circ. 1896) — appropriately, in dissent.