Eggleston v. Centennial Mut. L. Ass'n of Iowa

19 F. 201, 1883 U.S. App. LEXIS 2496

• Court: U.S. Circuit Court for the District of Eastern Missouri
• Decided: December 3, 1883
• Status: Published

Opinion

Treat, J.

A motion has been filed to strike out parts of the answer to this amended petition, which motion raises the same question heretofore decided, varied, it is contended, by new averments. It is stated in the amended petition that defendant “guarantied” payment of the maximum stated in the policy; but there is nothing to sustain such an allegation; indeed, the whole tenor and scope of the policy is to the contrary. It is further averred that the defendant refused, as agreed, to make the stipulated assessments on policy-holders, whereby it became liable for the maximum amount, despite the positive terms of the contract; and liable also, in an action at law, regardless of the express agreement that resort should be had only to proceedings in equity to enforce assessments. In deciding the demurrer to the original petition, leave was given to the plaintiff to file a bill to compel an assessment; but, instead of filing a bill for that purpose, he has filed an amended petition at law, which leaves the case just as it was before, so far as legal propositions are involved. The contract of insurance was peculiar, as under its terms the respective persons insured were bound to contribute to death losses according to the shifting provisions mentioned; and the defendant bound itself merely to pay over what should be assessed and collected—nothing more; and to make it certain and definite that its obligation was not to extend further, it was expressly agreed that it should be liable only to the stipulated proceedings in equity.

It is contended that tlie restrictive clause as to the remedy is void, and many cases are eited in suppor't thereof, supposed to be analogous. That question was previously before this court and involved in its decision on the demurrer, wherein an adverse conclusion was reached; from which there in no reason to depart. Indeed, if the subject were driven to a full analysis it would appear that a different conclusion would involve many strange absurdities. The parties agreed, one with the other, to many rules for determining their respective obligations and liabilities, dependent on the number of persons assured, the amounts for which they were respectively assured, euc., and to make sure as to the obligations of the defendant, and the means of enforcing the same in the only just, feasible, and equitable manner, stipulated that only a suit in equity should be resorted to. How else could it be ascertained what was done to the plaintiffs ? An assessment must be made, dependent on the shifting conditions mentioned in the policy, collections enforced, etc.; defendant being liable only for the amount of assessments collected. It did not agree to pay any fixed sum, but merely to pay the amount collected from assessments, not exceeding tho sum limited; and therefore provided for appropriate proceedings in equity to adjust the dispute, if any, between the parties. It is not for the court to comment on the wisdom or folly of such contracts. If parties choose to enter into them, they are bound by their terms, in the absence of fraud, unless they are contra bonos mores. There is nothing shown to void the agreement the parties voluntarily entered into, and hence this court adheres to the decision heretofore made in this ease, viz., that redress must be sought in equity alone.

The views of this court in a case somewhat like that under consideration were limited, and suggestively, in the published opinion then given. Lueders’ Ex’r v. Hartford L. & A. Ins. Co. 12 Fed. Rep. 465. It is not held that there may not be cases where resort can bo had to a common-law remedy under contracts like that in question, but it is held, as expressed on demurrer- in this case, that the clause in the contract as to the mode of ascertaining the rights of the parties is obligatory, (18 Fed. Rep. 14,) with the possible exceptions suggested.

Suppose there was not a valid defense, as in the Lueders Case, and it was ascertained that a mortuary loss had occurred, how could the amount to be recovered be ascertained ? It was hinted that under the facts and circumstances of that case certain rules might obtain; but there was no question there raised as to a contract limitation with respect to the mode of ascertaining the amount of the liability. The mode prescribed in this case by the contract between the parties, considering their relations to each other, was the most practicable and equitable that could be adopted, and does not fall within any of the prohibitory rules stated in the many cases cited, as to ousting courts of jurisdiction, and enforcing or refusing to enforce agreements for arbitration. The answer sets up as a defense the clause in the contract commented upon, which this court has heretofore held, and still holds, to be a valid defense to- this action at law.

The motion to strike out is overruled, and the plaintiff left, as heretofore held, to the remedy in equity to which he agreed sole resort should b.e had. #

McCrary, J., concurs.