MYRTLE E. JOHNSON ET AL. V. CENTRAL MUTUAL INSURANCE ASSOCIATION, Appellant.
Division One
September 18, 1940
143 S. W. (2d) 257
*NOTE: Opinion filed at May Term, 1940, July 18, 1940; motion for rehearing filed; motion overruled at September Term, 1940, September 18, 1940.
After careful consideration of appellant‘s motion, we see no reason to depart from the conclusions reached in our original opinion herein.
All concur.
HYDE, C.—This is an action in two counts on life insurance certificates, of $1000 each, issued by an association organized under Article 3, Chapter 37, R. S. 1929, and operating on the assessment plan. Plaintiffs, beneficiaries, had verdict and judgment on each count. Defendant appealed to the Kansas City Court of Appeals, which affirmed the judgment. [Johnson v. Central Mutual Ins. Assn., 132 S. W. (2d) 674.] However, “deeming this opinion in confliсt with the question of St. Louis Court of Appeals,” in two cases named,
Defendant defended on the ground that these certificates were “void from the beginning,” because purported insured was disqualified to be a member of or insured by the Association when thеse certificates were issued to her in 1931 upon applications stating her age to be fifty years. Defendant tendered into court all fees and assessments paid by or on behalf of Mrs. Parrish to whom these certificates were issued. [See Klaber v. O‘Malley (Mo.), 90 S. W. (2d) 396.] Defendant assigns error in refusing its requests for peremptory instructions. However, the Court of Appeals found, and defendant seems now to concede, that “there was evidence, both oral and documentary, showing that insured was 55 years of age when the certificates were issued, and there was evidence the statements in the applications, that she was born January 13, 1881, was correct.” Therefore, this assignment is overruled.
Defendant‘s other and principal assignment is against plaintiffs’ instruction No. 1, which was as follows:
“The Court instructs the jury that under the law, if the age of the insured was misrepresented in the application for insurance, that fact does not constitute any defense to this action, and said misrepresentation, if so made, would not be a valid reason for refusing to pay the full amount of the insurance issued by defendant upon the life of Norah Isabelle Parrish, unless the jury believe and find from the evidence that the matter misrepresented actually contributed to or caused the death of said insured, Norah Isabelle Parrish.”
Defendant‘s complaint is that it was error to direct the jury that the age of the insured did not constitute any defense if such age did not contribute to cause her death. Defendant‘s pоint is that the certificates never became valid contracts, if insured was over the Association‘s age limit when issued. For the validity of the policies and the propriety of this instruction, plaintiffs rely upon the applicability of the misrepresentation statute. [
The misrepresentation statute,
In Carter v. Metropоlitan Life Ins. Co., 275 Mo. 84, 204 S. W. 399, this Court en Banc said that what is meant by this section (misrepresentation statute) “is that no false statement made in the application for the policy shall avoid the same, unless such statement concealed a condition which contributed to the death of the insured.” This court held, under the facts of the Carter case, wherein the required physical examination was not taken by the insured but by one impersonating him, “no real agreement had ever been entered into by the parties,” because the party contracting for insurance did not submit to examination. Therefore, the misrepresentation statute was held not applicable. Likewise, in Reed v. Travelers Ins. Co., 227 Mo. App. 1155, 60 S. W. (2d) 59, wherein the insured was in a сlass which the policy by its express terms did not insure, the Kansas City
In the case of insurance on the assessment plan, when the application, by-laws or articles of association are made a part of the certificate by proper reference, they form a part of the сontract of insurance. [Nastav v. Missouri Mutual Assn. (Mo. App.), 47 S. W. (2d) 166; Propst v. Capital Mutual Assn. (Mo. App.), 124 S. W. (2d) 515; see also Beazell v. Farmers’ Mutual Ins. Co., 214 Mo. App. 430, 253 S. W. 125; 14 R. C. L. 935, sec. 109; 32 C. J. 1121, sec. 221.] Insurance on the assessment plan is carried only on members of the association or company, and the payment of benefits is “dependent upon the collection of an assessment upon persons holding similаr contracts.” [
Plaintiffs point to the authority givеn to defendant‘s board of directors to change the age limit for membership. While the directors may have this power (within the statutory limits) if not in conflict with the articles of association, still there is no evidence in this case to show that they ever did increase the age limit above the age of fifty. Plaintiffs also say that they interpret defendant‘s plea “to be in the nature of a plea of ultra vires;” and that “such a plea cannot be made when the contract is fully and completely executed on behalf of one of the parties.” The trouble with this argument is, that if the insured was over the age of fifty, she did not either have or perform any insurance contract, because the contract was both that she was of this аge and that only a person within the age specified was insured. [See DeLoach v. Ozark Mutual Life Assn. (Ark.), 230 S. W. 268, 14 A. L. R. 921, and note l. c. 926-927; note 1 A. L. R. 459, l. c. 463.] Clearly plaintiffs’ Instruction No. 1 was wrong, squarely in conflict with defendant‘s instruction stating that plaintiffs could not recover if Mrs. Parrish was over the age of fifty when the certificates were issued, and prejudicial error.
The judgment is reversed and the cause remanded. Bradley and Dalton, CC., concur.
PER CURIAM:—The foregoing opinion by HYDE, C., is adopted as the opinion of the court. All the judges concur.
HYDE, C.—As a ground for rehearing plaintiffs say that they inadvertently overlooked citing Burgess v. Pan-American Ins. Co. (Mo. Div. I.), 230 S. W. 315, “which is controlling in this instant case.” However, we did consider the Burgess case, because it was discussed in Langan v. United States Life Ins. Co. (Div. I), 344 Mo. 989, 130 S. W. (2d) 479, cited and quoted in our opinion. In the Langan case, we pointed out that the Burgess case reached the correct result because “the vital point related to the condition of the insured‘s health at the date the policy was delivered.” As was also pointed out, there was a discussion of misrepresentation of age. We think the ruling on that point (in the Burgess case) was right because that opinion states (as to the defense that the compаny “had a rule by which it would not insure the life of anyone over the age of sixty years, and therefore the policy was void ab initio“): “One thing is certain, the rule was not a part of the contract. No such provision appears in the policy or application which together constitutes the contract.” Of course no rule of the company (the Burgess contract “was an old-line life insurance policy“), which was not a part of the contract, could have any effect on the contract that actually was made. Therefore, what the Burgess opinion goes on and says, about the effect of the misrepresentation statute (
What we hоld in this case is this: In assessment insurance, where all persons insured must be members of the association, where all members regardless of age pay the same amounts for their insurance, where each policy is to some extent a contract with every other member, and where our statutes fix maximum age limitations beyond which insurance under this plan is prohibited, that аn assessment company may by its contract fix age limitations within and less than the statutory maximum age limits; that such a contract does not insure persons over the age limit specified because it plainly says it does not; and that such persons, over the age which the contract agrees to insure, cannot use the misrepresentation statute to change suсh a contract so as to bind the company to do what the contract expressly provides it would not do. This must be true because age is a definite and certain matter, like an excepted risk or prohibited hazardous occupation. [See Wendorff v. Missouri State Life Ins. Co., 318 Mo. 363, 1 S. W. (2d) 99; State ex rel. Mutual Ins. Co. v. Shain, 344 Mo. 276, 126 S. W. (2d) 181.] Moreover, the assessment plan statutes (
Unquestionably, as to a policy in which there was no contract about age limit, or as to persons within the limit where there was one, no misrepresentation as to age (as no misrepresentation about anything else that did not contribute to death) could bе a ground for avoidance of the policy. But how can we say, when the contract is an agreement to insure only persons within a certain age limit, that nevertheless such contract can be held to insure a person over the age limit? To say that it does, is not merely to say that misrepresentation as to age prevents avoidance of the сontract, but, instead, it is to say that the court will make and enforce a contract to insure a person as to whom there was none agreed upon by the parties. [See Carter v. Metropolitan Life Ins. Co., supra.] Moreover, not only was a contract, to insure only persons under fifty, the only one offered to or agreed upon with plaintiffs’ insured, but, in such assessment insurance, defendant (by making this by-law a part of all its contracts) had contracted with every other member that it would not take members over fifty or require them to pay assessments to insure persons over such age. Defendant is not seeking to avoid the contract it offered to and agreed to make with plaintiffs’ insured. It stands on the express terms of that contract. We hold that it had the right to make such limitations in its contract, and can be bound only by the contract it agreed to make. We cannot decree the reformation of it (for which no grounds of reformation are stated, such as mistake, etc.), which plaintiffs in effect seek, to hold that defendant was bound to do what its contract expressly provided it was not bound to do.
The motion for rehearing is overruled. Bradley and Dalton, CC., concur.
PER CURIAM:—The foregoing opinion by HYDE, C., is adopted as the opinion of the court. All the judges concur.