269 Mo. 21 | Mo. | 1916
This is an action at law on policy number 174,416 issued by the defendant September 4, 1893, insuring the life of Frank Barber for $2000 for the benefit of the plaintiff, who was then his wife and is now Ms widow, and for damages for vexatious refusal to pay the loss under the provisions of section 7068, Revised Statutes 1909. Mr. Barber died June 5, 1910. There was a judgment in the circuit court for $2976, including $200 damages and $500 attorney’s fee awarded by the jury for vexatious refusal to pay, from wMch this appeal is taken. The defendant is a life insurance company of Connecticut. It had a business department called the “Safety Fund Department,” which was again divided into the “Men’s Division” and “Women’s Division,” which issued policies payable on the assessment plan, and tMs policy was of course in the ‘Men’s Division,” and was called a “Certificate of Membership Safety Fund Department.”
The answer pleads that this certificate was conditioned upon the payment of periodical assessments; that on January 29, 1910, an assessment designated as “Call 126” was levied on it against Barber for $13, with dues amounting to $1.50, which became due by the terms of the certificate on March 1, 1910; that Mr. Barber failed to pay it on or before March 20th, to which time it had been extended; and in consequence thereof the insurance was, by the terms of the certificate, forfeited. The issues in the case grow out of this circumstance. It also pleads, in effect, that an action had been brought in the New Haven .County Superior Court of Connecticut, by one Dresser, holding a similar certificate of membership in the safety fund department of defendant, on his own behalf, as well as on behalf of all others similarly situated, including the plaintiff, wherein the rights of plaintiff were fully adjudicated; that the mortuary fund of said department and the trust thereby created is being
The defendant on the trial offered in evidence the record in the Dresser case duly certified under the act of Congress in such cases made and provided, which was, on plaintiff’s objection, excluded, to which defendant duly excepted.
The policy sued on, so far as applicable to the questions in this case, is as follows:
“In consideration of the representations, agreements, and warranties made in the application herefor, and of the admission fee paid; and of $3 per annum on each $1000 of the indemnity herein provided for, for expense dues, to be paid as hereinafter conditioned, and of the further payment of all mortality calls proportioned to the said indemnity, levied against the herein-named member to form a mortuary fund for the payment of all indemnity matured by deaths of members, and to create a safety fund as hereinafter described, which mortality calls, to be levied upon all the members in the department wherein this certificate is issued whose certificates are in force at the date of such deaths, shall be made according to the table of graduated mortality ratios given hereon, and as further determined by their respective ages*29 and the aggregate indemnity of the dates of.such deaths, with due allowance for discontinuance of membership (one-third of the proceeds of such mortality calls to be applied toward said safety fund until the sum of $10 on each $1000 indemnity aforesaid shall have been thus applied, when the basis of all subsequent mortality calls shall be two-thirds only of the table given hereon) does hereby issue this certificate of membership in its safety fund department to Frank Barber (herein called the member) of St. Louis County, of city of St. Louis, State of Missouri, with the following agreements:
“That ninety days from the receipt by the president or secretary of said company of satisfactory proofs, in accordance with forms furnished upon notice of death and with full information as to the manner and cause of the death of the herein-named member while this certificate is in force, all the conditions hereof having been conformed to by the member, upon presentation and surrender of this certificate properly receipted, there shall be due and payable, out of the aforesaid mortuary fund and not otherwise, the indemnity of $2000 (less the balance unpaid, if any, of the stipulated contribution to said safety fund, with fifty per cent added, together with the unpaid installments of annual expense dues and any mortality or other charge against the member payment of which is not matured), to his wife, Bosa Barber, if living, otherwise to his legal representatives. All such payments to be made at the home office of said company in lawful money of the United States.
“That said company will deposit said sum of $10, when received, with the trustee, named in a contract with it (of which a copy is printed hereon), as a safety fund in trust for the uses and purposes expressed in said contract; and shall make a semiannual division of the net interest received therefrom by it pro rata among all the holders of certificates in force in said department at such times, who shall have contributed five years prior to the date of any such division their stipulated proportion of said fund, by applying the same to the payment of their future dues and assessments; and that, whenever said fund shall amount to $1,000,000, all subsequent receipts therefor shall be divided by the said company in like manner as the interest.”
The department in which this certificate was issued was organized about 1879, on the following plan: Each person applying for insurance under the plan was to pay an admission fee of $8 for $1000; $12 for $2000; $15 for. $3000; $18 for $4000; $20 for $5000; $40 for $10000, and the medical examination fee estimated at $3 to he paid to the physician; also to pay annually for the sole purpose of paying all expenses of said insurance $3 for each $1000 of insurance; and also to pay, as mortuary payments assessed to pay death losses, an amount graduated according to the policy holder’s age
After reciting these facts the judgment proceeded:
“Whereupon It is adjudged and decreed that said mortuary fund of the men’s division arising from the excess of the amount received for quarterly assessments over the amount necessary for the payment of losses for said quarter, as above described, or from any other sources, together with all income or interest thereon, belongs to the certificate-holders in the men’s division of the safety fund department, and the Insurance Company is reasonably entitled to hold the same as a necessary and proper fund for the settlement of death claims on the certificates of insurance in said department.”
It then ordered that “any excess in said fund above the average of the four preceding quarterly assessments in said men’s division shall be distributed to the certificate-holders in diminution of assessments.”
Tbe call in question is as follows:
Hartford Life Insurance Company.
Hartford, Conn., January 29, 1910.
Special Notice of Quarterly Call No. 126.
Your next quarterly call will fall due and be payable June 1, 1910. Frank Barber, 4201 Pleasant St., St. Louis, Mo.
2-174416 15
*32 This call which will be due March 1, 1910, is made to meet 119 deaths (as shown by accompanying list), benefits, $322,378.48, and expenses on your policy, as follows:
For mortality call ............................................$13.09
For quarterly dues to June next................................ 1.50
Credit........................................................$14.59
Dividend to be applied if payment be made...................... 1.40
Amount due .........................................'.........$13.19
Payment will not be accepted later than Mar. 5, 1910, unless residence is on or west of the meridian of Salt Lake, Utah, in which case payment will be accepted up to and including Mar. 15, 1910.
Unless the payment called for by this notice shall be paid to the company at its home office by or before the day it falls due the policy and all payments thereon will become forfeited and void.
Return this notice with remittance payable to Hartford Life Insurance Company.
Make all remittances by draft, check, P. O. or express money order when possible. Letters containing currency must be registered.
See over for special notice.
Special Notice.
If the payment of the above quarterly call is not received at this office on or before Mar. 5. 1910, the last day allowed for payment in the above notice, a second notice will be mailed to the policy holder by registered letter, giving until Mar. 20, 1910, to remit, and the same charge will be made for this second notice as is fixed by the law of Massachusetts, namely, fifty cents.
Every member whose payment does not reach this office on or before Mar. 5, 1910, will be obliged to pay fifty cents fee in order to have the policy unconditionally reinstated.
After Mar. 20, 1910, the limit allowed for payment under the registered notice, the company reserves the right to require a medical examination as a condition of reinstatement.”
The credit of $1.40 is Barber’s share of the excessive compensation taken by the Security Company for the care of the safety fund. The amount of this fund, for which charges were being made up to and at the time of the Dresser trial, was more than $1,000,000.
The assessment in question was made as of December 31, 1909. At that time all of the one hundred and nineteen death losses enumerated in the notice had been paid except fifteen, aggregating $41,000, and there was remaining in the mortuary fund $74,938.92; and the interest on the safety fund was paid into it on the same date, making an aggregate of $94,386.31 then in the fund. The
The appellant asked upon the trial and the court refused. an instruction to the effect that there was no evidence that the refusal of the defendant to pay the sum sued for was vexatious, and for that reason they should not allow any sum for damages or attorney’s fees should they find for the plaintiff. It also, both upon the trial and in its motion for a new trial, contended that the action of the court in excluding the record in the Dresser case violated section 1, article 4, of the Constitution of the United States, providing that “full faith and credit shall be given in each State to the public acts, records, and judicial proceedings of every other State.” Such further reference will be made to the record as seems to be necessary.
The defendant company seems to have had a checkered career. It was organized under an act of the Connecticut Legislature, in 1866, as the “Hartford Accident Insurance Company.” The next year its name was changed to the “Hartford Life & Accident Insurance Company,” and the next year (1868) it was again changed to the “Hartford Life & Annuity Insurance Company” and authorized to “make contracts, upon any and all conditions appertaining to or connected with life risks, annuities and reversionary interests of whatever kind and nature.” It then became a full-fledged life insurance company. Its business kept pace with these changes, and in 1879 it reduced its capital stock and organized the safety fund department in which these policies were issued, and continued to write that kind of insurance until 1899 when it ceased to issue such policies, but has continued to administer the funds created under their terms. The plan was the same as that expressed in the policy sued on. Each certificate-holder contributed $10 per $1000 of insurance to form the “safety fund,” which was to be held and administered by a corporation formed by themselves, called the “Security Company.” When the fund reached $300,000 its income was to be distributed among the policy-holders according to the amount of insurance held by each, by applying it in reduction of their future assessments. It was to be invested in United States bonds and when it reached the sum of $.1,000,000 “in United States bonds” no further accumulation was to be made, but all future payments by policy-holders of the $10 per $1,000 required for that fund were to be divided among policy-holders of five years ’ standing and applied to reduce assessments the same as the interest. Although the fund reached the magnitude of $1,000,000, it never reached that amount in United States bonds, but was invested in other securities, including railway and bank stocks and irrigation bonds. At the time of the assessment here in question
There is one more fund which is material in this controversy. It will be seen from the terms of this certificate that upon payment of a death loss “any mortality or other charge against the member payment of which is not matured” is to be deducted. In other words, if he died after the close of the assessment quarter and before payment of the assessment was due, the entire assessment was to be deducted; if before the end of the quarter only, the pro rata amount up to the time of his death was to be deducted from the amount of the indemnity paid. In this way each assessment was excessive to that extent, and the excess, amounting to “many thousands of dollars,” together with the surplus resulting from the overestimate of probable lapses, all of which was applicable to the payment of mortality assessments, had, at the time of the Dresser judgment, been kept in the mortuary fund for the payment of death losses in advance of the assessments, and this constituted the fund for the prompt payment of losses which the Connecticut court had in view when it entered the judgment. It was a fund being continually replenished at the occurrence and payment of each death loss, and the same fund about which it said in its judgment:
“The plaintiffs claim it was improper and wrongful to accumulate these margins and to carry this balance in said mortuary fund, and claimed that said balance of margins should be distributed amongst the outstanding certificate holders, but it held that it is proper and reasonable that the company should hold some such fund for the purpose of enabling it to pay losses promptly, but that it was not necessary for that purpose that the company should hold more than the amount of one average quarterly assessment for the previous year.”
In the light of these three funds, that is to say (1) the fund proceeding directly from the regular quarterly assessments to pay the losses for which they are made, (2) the interest on the safety fund, and (3) the “margins” referred to in the Dresser judgment, we will examine the assessment for the last quarter of 1909 embodied in call 126. The average amount of the quarterly assessments for the preceding year had been $300,-000, to which amount the defendant was limited by the judgment in maintaining this emergency fund. The assessment was levied by its express terms to pay one hundred and nineteen death losses therein enumerated, amounting, in benefits, to $322,378.48. On December 31, 1909, the last day of the quarter for which it was levied, all these losses except fifteen, amounting to $41,-000, had been paid out of the fund on hand and there remained $74,938.92. On the same day there had been paid into the fund from the income account of the safety fund $19,447.39, making the amount left on hand $94,-386.31. Deducting from this $41,000, the amount of the fifteen unpaid losses, left $53,386.31. In other words, the payment of all .losses for which this was to be made left the last-mentioned amount on hand in the fund, to
When this appeared in its evidence, the defendant attempted to explain by the statement that there were other death losses which had accrued up to and including that day, bringing the total amount unpaid up to $128,000 in round numbers. Were this true, and the proofs in the hands of the company, they should have been included in that assessment, but no claim is made that they belonged there. If the death had occurred before that date and no proof had been furnished the company, the fund would be “replenished” to that amount in the next assessment so that, they would have no influence whatever in determining the amount of call 126, but could be promptly paid out of the surplus that call would leave on hand. It is intimated, however, that the $87,000 of these losses not included in call 126 had been included in previous assessments, the payment upon which had been extended out of kindness to the certificate-holders; and this suggestion is given color by the report of defendant filed in the insurance department of Missouri as of that day, in which the following item appears: “Net premiums in course of collection safety fund department $185,000. ’ ’ And as this included both the men’s and, women’s division of that fund it would probably account for the proportion of such pending collections in the men’s department. For this an assessment had already been made which should be added to the amount of call 126 as a means of replenishing the fund. Its inclusion in this transaction in any other form would be in plain violation of the terms of both the policy and judgment.
It follows that the appellant, instead of sustaining the burden of proving á valid assessment as a foundation for the forfeiture of this policy, has shown a grossly excessive one made without authority either in
“In consideration of ... $3 per annum on each $1000 of the indemnity herein provided for, expense dues, to be paid as hereinafter conditioned.”
The policy is dated September 4* 1893. On the next page are the “conditions” which, with respect to this payment, are as follows:
“The member agrees to pay to said company, for expenses, dues of $3 per annum on each $1000 indemnity on the first day of the month after date of issue hereof, and at every anniversary thereafter, so long as this certificate shall remain in force; or by pro rata installments of the same, in advance, for periods of less than a year.”
We have searched this voluminous record carefully for any evidence of any.other arrangement. This was
We have examined the cases referred to by appellant, and note that the Fee case (Fee v. Accident Assn., 110 Iowa, 271), is necessarily overruled by the Mill Owners case, supra, 127 Iowa, 314; and Miles v. Life Assn., 108 Wis. 421, construed a charter so different from the one we are considering as to make it entirely inapplicable to this case. The same may be said of Insurance Co. v. Birnbaum, 116 Pa. St. 565. There is nothing in either of these cases tending to disapprove the position we have taken.
VT. The submission of the question of damages and attorney’s fees to the jury was proper under the rule stated by this court in Keller v. Home Insurance Co., 198 Mo. 440, and Brown v. Assurance Co., 45 Mo. l. c. 227, where it is said that:
vexatious Delay. “The whole question of vexatious refusal or delay is a matter of fact to be determined by the jury. They must make up their verdict on this issue by a general survey of all the facts and circumstances in the case; and if, upon full consideration, they conclude that the refusal was .unjustifiable and vexatious, the law authorizes them to assess the damages. The statute will not admit of the construction contended for by the counsel for the plaintiff in error, that before damages are allowed it must be explicitly proved by the plaintiff that the delay or refusal was vexatious.”
We think that under this rule the evidence was ample to justify the submission of that question, and that the instruction of the court properly defined the duty of the jury. There having been no error in this and the appel
The foregoing opinion of Brown, C., is adopted as the opinion of the court.