211 Mo. 158 | Mo. | 1908
— Defendant is a life insurance company incorporated in the State of New York. At the times in hand John II. Reifsnyder was a resident and citizen of Missouri and so was his wife, Frances A. On February 20, 1894, defendant, as insurer, issued to John H. Reifsnyder, as the insured, a policy for five thousand dollars, naming his said wife as beneficiary. Her right was absolute, i. e., the policy itself contained no provision permitting the insured to change the beneficiary. The application for it was made to défendant’s St. Louis agent. The policy was delivered by him in St. Louis and the case proceeds on the theory that defendant was transacting a life insurance business in the State of Missouri under its laws in that behalf made and provided, that the policy is a Missouri contract, and, hence, the lex loci contractus governs. Reifsnyder died November 3, 1901. It stands admitted that payment of the policy was demanded, was refused, that defendant denied liability and that
At the close of a trial before the Hon. Moses N. Sale, presiding judge of Division Two of the St. Louis Circuit Court, and a jury, a peremptory instruction was given for defendant. Thereat plaintiff excepted and asked a nonsuit with leave. One going, he presented in due season his motion to set it aside. This motion was allowed. Thereat defendant in turn excepted and appeals from the order granting a, new trial.
The suit was for the policy face less a certain policy loan made the insured. The recovery sought was thereby put below our jurisdiction. Jurisdiction, however, is conceded here because by answer there are lodged in the case constitutional questions.
No question is made on the pleadings and it will do to say on that behalf that they were sufficient to raise all questions made by learned counsel.
The controversy turns on a policy loan, a default in a premium payment, a default in paying the interest on the loan and an alleged surrender and cancellation of the policy under the terms of an alleged policy pledge made as collateral security for said loan. In a nutshell defendant’s contention is that the policy with all its accumulations was pledged to it by the insured and the beneficiary to secure a policy loan; that under the terms of that pledge a default was made and the policy was cancelled to pay the loan, and surrendered. On the other hand, plaintiff (conceding the loan and default) contends that under, the non-forfeiting clauses of the statutes of Missouri, them in force, the policy was alive at Reifsnyder’s death and that defendant must pay the face of the policy less the loan.
Sec. 5856 (R. S. 1889): “No policies of insurance on life hereafter issued by any life-insurance company authorized to do business in this State, on and after the first day of August, A. D. 1879, shall, after the payment upon it of two full annual premiums, be forfeited or become void by reason of the nonpayment of premium thereon, but it shall be subject to the following rules of commutation, to-wit: The net value of the policy, when , the premium becomes due and is not paid, shall be computed upon the American experience table of mortality, with four and one-half per cent interest per annum, and after deducting from three-fourths of such net value any notes or other indebtedness to the company, given on account of past premium payments on said policy issued to the insured, which indebtedness shall then be canceled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy, and the term for which such temporary insurance shall be in force shall be determined by the age of the person whose life is insured at the time of default of premium and the assumption of mortality and interest aforesaid.”
This statute in the Revision of 1899 is, so far as this controversy is concerned, substantially the same. It reads:
Sec. 7897 (R. S. 1899): “No policies of insurance on life hereafter issued by any life insurance company authorized to do business in this State, on and after the first day of August, A. D. 1879', shall, after payment upon it of three annual' payments, be forfeited or become void, by reason of non-payment of premiums thereof, but it shall be subject to the following rules of commutation, to-wit: The net value of
During the Forty-second General Assembly (Laws 1903, p. 208), section 7897, supra, was amended as follows :
.“Section 1. That section 7897, article 2, chapter 119, of the Revised Statutes of Missouri of 1899, be and the same is hereby amended by striking out the words ‘any notes or other evidence of indebtedness to the company, given on account of past premium payments on said policies, issued to the insured, which indebtedness shall be then canceled,’ in the tenth, eleventh and twelfth lines, and inserting in lieu thereof the words ‘any notes given on account of past premium payments on said policy issued to the insured, and any other evidence of indebtedness to the company, which notes and indebtedness shall be then canceled,’ so that said section, when amended, will read as follows:” [Here follows section 7897 as amended, q. v.]
Section 7899 (R. S. 1899), provides that: “If the death of the insured occur within the term of temporary insurance covered by the value of the policy as determined in section 7897, and if no condition of
Section 7900 (R. S. 1899), points out certain eases to which the foregoing statutes shall not be applicable. The mateiial one here is this: “If the policy shall he surrendered to the company for a consideration adequate in the judgment of the legal holder thereof, then, . . . this article shall not be applicable.”
So much for the statutes.
The policy contained the following loan provision :
“The company will make advances as loans upon this policy at the fifth or any subsequent anniversary of the insurance, within the Accumulation Period, under the following conditions:
“First. That premiums are paid in full to the time when the loan is made, including the premium for the entire insurance year then beginning.
“Second. That the aggregate amount of loans outstanding from the sixth to the tenth years, inclusive, shall not exceed $1,400'; from the eleventh to the fifteenth years, inclusive, shall not exceed $3,180; and from the sixteenth to the twentieth years, inclusive, shall not exceed $3,475.
“Third. That the policy shall be duly assigned to the company as collateral security for the loans, and deposited at the Home Office.
‘ Fourth. That interest at the rate of five per cent per annum shall be paid upon all such loans at the anniversary of the insurance next succeeding, and annually thereafter until the loans are paid off.
“Fifth. That the loans shall be for such time as consider it, but he was not to be controlled by it, nor
“(Any indebtedness to the Company, including any balance of the current year’s premium remaining unpaid, will be deducted in any settlement of this policy or of any benefit thereunder.)”
After the policy had been in force for five years and six annual premiums had been paid by the insured there were borrowed from the company, in pursuance of the aforesaid policy provision, fourteen hundred dollars, evidenced by the following “policy loan agreement” (omitting signatures):
“An agreement made this 27th day of February, 1899, between the New York-Life Insurance Company, party of the first part, and Frances A. Reifsnyder and John H. Reifsnyder, party of the second part,'
“Whereas, said party of the first part has this day loaned to said party of the second part the sum of fourteen hundred dollars the receipt of which is hereby acknowledged, upon the pledge of Policy No. 591,221, and its accumulations, issued by said party of the first part on the life of John H. Reifsnyder.
“And whereas said party of the second part hereby pledges to and has deposited with said party of the first part, as collateral security for the repayment of said loan with interest, said policy and its accumulations ;
“Now this agreement witnesseth that said parties, in consideration of the premises and of the mutual covenants hereinafter mentioned, hereby mutually covenant and agree as follows:
“1. That interest in advance at the rate of five per cent per annum shall be paid upon said loan from the date of said loan to the next anniversary of said policy, to-wit, the 14th day of February, 1900, and annually in advance thereafter, at the Home Office of said party of the first part.
“2. That said party of the second part shall be at liberty to repay said loan with accrued interest, at any time.
“3. That the repayment of said loan, with accrued interest, shall, without further action, cancel and annul this agreement, and that thereupon the company will return said policy, duly released, to said party of the second part.
“4. That in the event of default in payment of said interest or of any premium on said policy, for one month after they shall respectively become due, said party of the first part, which is hereby irrevocably appointed attorney for that purpose, is hereby authorized at its option to cancel said policy and its accumulations, for the customary cash surrender value then allowed by said party of the first part for the surrender of policies of this class, said party of the first part in that case being liable to said party of the second part for the return of the balance only of said cash surrender value, after deducting said loan and accrued interest.
“5.' That in the settlement of any claim or any benefit under said policy before said loan with accrued interest shall have been fully paid, said party of the first part shall be liable to said party of the second part for the return of the balance only of the proceeds of said policy after deducting said loan and accrued interest and any-other indebtedness.
“7. That all the conditions, limitations and requirements of said policy, except as herein expressly modified, remain in full force.
‘•‘In witness whereof, the parties hereto have hereunto set their hands and seals the day and year first above written, in duplicate.”
The policy premium-payment date was fixed at February 14th, in each year. The insured also paid his premium and interest for 1900 (making seven annual premium payments) but defaulted in paying both interest and premium on February 14, 1901, and this default continued until his death.
There is evidence that for a year prior to his death the insured was non-compos, was watched as one who had lost his mental reckoning and attended to no business. It seems that within the time allowed by the policy, to-wit, on the 4th day of June, 1901, he made (or was caused to make) an application to the company for the reinstatement of his policy, his brother living in the East furnishing the 'money. But a medical examination determined he was not an insurable risk at that time and thereupon the application was refused. On the heels of this refusal, defendant company undertook, by its check, to return the money advanced for the reinstatement, to-wit, $512.75 —said money having apparently laid in defendant’s St. Louis office pending the result of the application. There are certain facts relating to the alleged return of this money and certain contentions made with reference to the same that do not affect the legal proposi
After the fact was ascertained that Reifsnyder was not an insurable risk at the time of his application for reinstatement, to-wit, on June 18, 1901, defendant company foreclosed its lien as pledgee of the policy which it then held and indorsed on the policy a memorandum of its surrender and cancellation for non-payment of the February, 1901, premium and interest. By its actuaries and other experts it undertook to determine the customary cash surrender value of the policy at that time, and did determine it at $1,649.42. It then deducted its loan and accrued interest from the aforesaid cash surrender value and found a balance of $243.59 in its hands due on the policy after cancellation as aforesaid. Thereupon on the 21st day of June, 1901, it drew its check for said sum, payable to the order of the insured and the beneficiary, and put the same in the mails accompanied by a letter addressed to John H. Reifsnyder, Room 406 Security Building, St. Louis, Missouri. At that time John H. Reifsnyder was at Pottstown, Pennsylvania, with his brother where he remained to within a month of his death. The letter containing that check apparently never reached him as addressee. The check itself apparently never came into his hands nor into the hands of the beneficiary, and was never cashed. Mr. Reifsnyder had been secretary of an annuity company having its office in Room 406, Security Building, St. Louis, Missouri, and usually got his mail there. For a year he had not been performing the duties of secretary on account of his mental affliction. At a certain time one Seeor, his brother-in-law, was appointed' his administrator. One year after the check was dated and six months after Reifsnyder’s death it came into the possession of Mr. Secor from one Mesmer who, it
It is stipulated that the reserve or net value of the policy in suit, on the 14th day of February, 1901, according to the American Experience Tables of Mortality, was such a sum that if three-fourths of it be applied as a net single premium to the purchase of extended insurance it would, at the then age of the insured, extend the policy for the full amount written in it for a period far beyond Reif snyder’s death.
Any other facts necessary to the determination of material contentions in the case will appear in the opinion.
On this record did the court err in setting aside the nonsuit?
I. In this court, on March 20, 1903, there was. handed down a decision in Smith v. Mutual Benefit Life Insurance Co., 173 Mo. 329. That case was considered first in Division and then in Bane. What was decided by it was decided after mature deliberation in the light of able briefs and argument. It hinged on the interpretation to be given to that clause of section 7897, supra, pointing out the rule for getting at the net value sum to be applied to the purchase of temporary or extended insurance on default in the fourth or any subsequent annual premium payment. Attending to that section as it read when the policy issued and when the insured died, it will be observed that the net value of the policy is to be' computed. Then from three-fourths of such net value there is to be
Seven days after the decision in the Smith case, • and presumably on account of it, the Forty-second General Assembly, then in session, amended section 7897, supra (Laws 1903, p. 208, supra). The significance of the amendment can be seen at a glance in section 1 of that act hereinbefore set forth. It struck from the body of the law the statutory restriction upon the character of the notes and other evidence of indebtedness to be deducted from the net value before applying it to the purchase of temporary insurance and in it wrote in lieu thereof a broader provision, to-wit, a clause providing that there should be deducted from this net value not only “any notes given on account of past premium payments on said policy issued to the insured,” but, also, “miy other evidence of indebtedness to the company.”
It becomes plain, then, that if the policy in suit had been issued and the loan made under the provisions of the amendment of 1903, the case would present a boneless contention. But the Act of 1903 was not retrospective under settled rules of law. It did not hark back to cover outstanding policies and policy loans — the general rule being that legislative acts must be construed as prospective in intention and application and not retrospective unless their language calls for retroactive operation. [Haarstick v. Gabriel, 200 Mo. l. c. 244, et seq.; Manwaring v. Missouri Lumber & Mining Co., Ibid, l. c. 731, et seq., and cases cited. See, also, sec. 15 of art. 2, Constitution.]
In fairness to appellant’s learned counsel it should be said they do not contend the Act of 1903 was re
II. Plaintiff stands upon the Smith case. Defendant concedes, arguendo, that the case at bar is not without similarity to the Smith ease, but counsel say there are differences distinguishing it, in that: (1) “There is here an independent contract of commercial pledge distinct from the policy. (2) The entire loan was made for the purpose of payment of premiums. (3) There was .an actual settlement and payment to the insured constituting a surrender of the policy.”
Is there substance in' these contentions? We think not; because:
(a) The loan and pledge contract in the case at bar is in no fair sense a contract distinct and independent from the policy. To the contrary, such loan and pledge was contemplated by the policy itself. It involved the policy, it may be likened unto an egg laid in the policy and subsequently hatched — i. e., was made in pursuance of its terms. But were it conceded by way of argument that either the loan or the policy pledge were an independent contract distinct from the policy, yet neither the one nor the other were more “independent” in principle than in the Smith case. The case in hand, therefore, in the particulars now up for consideration should be controlled by that case, if it is to be followed.
(b) But it is asserted that the entire loan in the case at bar was made for the purpose of payment of premiums and that this ear-marks the case and dis
This contention seeks the uncovering of further facts. It will be observed that by the policy loan provision it is made a condition precedent to the granting of any loan whatever that the fifth, or some subsequent, anniversary of the insurance should happen before a loan can be made, and that premiums are to be paid in full to the time of the loan, including the premium for the entire insurance year then beginning. It will be observed that the whole policy plan contemplates the payment of premiums in cash when due. In this condition of things (given a policy loan, as here) a violent presumption at once arises, in the absence of evidence to the contrary, that as each annual premium fell due the insured paid it in cash and the insurer received it up to and inclusive of the fifth ánniversary premium. If, now, this presumption is to be rebutted and overcome defendant has the laboring oar — the burden of proof is on its shoulders. How did it carry this burden? Well or ill? Manifestly, not well. And this is so because, as said by Lord Mansfield in Blatch v. Archer (Cowper 63, 65): “All evidence is to be weighed according to the proof which it was in the power of one side to have produced and in the power of the other side to have' contradicted. ” Applying that rule here, it becomes -plain that if there were any notes or evidences of indebtedness to the company given by the insured or the insured and the beneficiary “on account of past premium payments,” the evidence of such fact was peculiarly within the
“Q. Did you get any papers connected with the New York Life Insurance Company? A. No, sir.
“Q. Or with the policy? A. No, sir.
“Q. Did you ever find a copy of the loan agreement made with the company? A. No, sir.-
“Q. You knew that there-was one? A. No, sir.
“Q. You knew there was a loan made on the policy? A. I knew he made a loan and that the money went to pay premiums. All that money that he got went to pay premiums.
“Q. Did he tell you he defaulted on the premium of February 14, 1901? A. No, sir.”
Again on re-examination he testified in relation to his knowledge of that matter, as follows:
“Q. Now, with respect to the making of this' $1,400 loan, you were not a party to that, and knew nothing about the facts yourself at all, do you? A. No, sir, I didn’t know it was made until afterwards.
“Q. You don’t know how that $1,400 was paid to Doctor Reif snyder, or where, do. you? A. Only what' was talked of afterwards. He said it all went for premiums is all I know.
“Q. Whatever you know about that is what some one else has told you? A.- That’s right.”
Such is the evidence on which defendant relies.
It is apparent from the foregoing that not a shred
(c) Finally it is urged by counsel that “there was an actual settlement and payment to the insured constituting a surrender of the policy.” This contention is said to arise from the fact that at a certain time in June, 1901, the defendant company foreclosed its lien as pledgee of the policy and applied the bulk of its surrender value to the payment of the debt for which the policy and its accumulations stood as security, and sent the residue of such surrender value to
'If our statute is unconstitutional, if the Smith case is illy-considered law, then the first branch of defendant’s contention is sound, otherwise not. But we remain satisfied with the reasoning and conclusion in the Smith case. We hold now, as we held then, that neither at the policy date nor by any supplemental subsequent contract, in legal effect an amendment to the policy, was it permissible to whittle away the mandate of the non-forfeiting statute requiring the net value of the defaulted policy to- be applied to extended insurance. If the deductions made from that net value are notes coming within the statutory description, it is well enough, but if they fall within the interdiction of the statute it is bad. It matters not whether the mischief be done when the policy was executed and springs from its own loins by use of a policy term forbidden by law, or whether it sprang up afterwards by indirection; because it ought not to be held that “one can do in a circle what he cannot do on a straight line.”
The remaining question is whether what defendant did in sending a check to the beneficiary and the insured for the remainder of the surrender value of the policy, after subtracting the loan and interest, amounts to a compliance with section 7900. That sec
Other points are discussed by counsel, but are not deemed material to the issues of the case in its present form.
The premises considered, we conclude the court, nisi, did right in setting aside the nonsuit and reinstating the case for another trial.
. The judgment is, accordingly, affirmed.