Jones v. Prudential Insurance Co. of America

173 Mo. App. 1 | Mo. Ct. App. | 1913

NORTONI, J.

—This is a suit by the assignee, a creditor of the insured, on a policy of life insurance. Plaintiff recovered and defendant prosecutes the appeal.

The policy contains a provision to the effect that it should be void if assigned, and the questions for ultimate consideration relate to the competency of finding a waiver of that clause on the part of the company, or an estoppel through the acts of its soliciting agent engaged in negotiating industrial insurance, when it appears that such agent wrote the application for the policy, delivered the policy to the creditor at the instance of the insured, and afterwards, with full knowledge of its assignment, continued, • without objection, to collect premiums thereon from the creditor who is plaintiff here.

' Defendant is engaged in the business of industrial life insurance and maintains a general office in the city of St. Louis in connection therewith. It appears that plaintiff is a barber and the insured, Lang, was his debtor to the amount of $53.50. James, defendant’s soliciting agent, had charge of what is known as a “debit” for it in the city and solicited life insurance among what is commonly known as the “plain people;” took applications therefor; collected the first premium; delivered the policies to his patrons and thereafter collected weekly premiums thereon. In prosecuting this business, as before said, the soliciting agent has charge of what is known in industrial insurance nomenclature as a “debit”—that is, a certain identified. territory in which he operates by soliciting new business and taking care, as through collection of the debit accounts of the company’s patrons for insurance theretofore written ,and outstanding. Such insurance is usually written in small amounts and on the weekly .payment plan, and the agent in charge of the “debit” calls and collects the premium —that is, usually but a few cents, as in this case twenty-five cents per week. Because of this, the soliciting agent in charge of a “debit” becomes well known in the neighborhood and is in frequent contact with the patrons of the company.

It appears that James, defendant’s soliciting agent, was in plaintiff’s barber shop and solicited insurance on the life of Lang, who resided in the neighborhood. Plaintiff, the barber, remarked that Lang was his debtor and said he would pay the premiums if Lang would take out a policy. James thereupon urged Lang to do so and he consented on the terms suggested by the plaintiff. With this understanding between Lang, the insured, plaintiff and the agent,- the latter prepared an application for the policy and Lang executed it. A few days thereafter, the policy in suit was issued at the general office of the company in the city and delivered by James to the plaintiff at his barber shop. But plaintiff was not named therein as the beneficiary. About two weeks later, Lang, the insured, executed a written assignment of the policy to the plaintiff, William H. Jones, “subject to the approval of said Prudential Insurance Company.” This assignment was annexed to the policy. The insured did not present the policy to the general office of the company for its consent, but informed James, the soliciting agent, of the assignment when he called to collect the next premium. James said it was all right and collected the weekly premiums of twenty-five cents thereafter as before. Each week James, the soliciting agent, called at plaintiff’s barber shop and collected premiums on the policy and receipted therefor in Lang’s book, which the plaintiff held also in connection with the policy. The policy vouchsafes the payment of $120 on Lang’s death as the amount insured on his life. It was issued in November and Lang died in the following March.

After Lang’s death, defendant refused to pay plaintiff any part of the insurance money, for the reason the policy contains a provision inhibiting its assignment, to the effect that it should become void if it be assigned or otherwise parted with. Besides this provision, the policy contains what is known an industrial insurance as a “facility of payment” provision as well. The “facility of payment” provision goes to the effect that the company may make any payment provided for in the policy to any relative by blood or connection by marriage of the insured, or to any other person appearing to the company to be equitably entitle to the same by reason of having incurred expense on behalf of the insured for his or her burial, etc., or if the insured be more than fifteen years of age at the date of the policy, for any other purpose; and the production by the company of a receipt signed by any or either of said persons or of other sufficient proof of such payment to any or either of them shall be conclusive evidence that such payments have been made to the person or persons entitled thereto and that all claims under this policy have' been fully satisfied.

On the death of Lang, plaintiff asserted his claim, but defendant did not recognize it. A few days thereafter, Mr. Dubard, defendant’s assistant superintendent in St. Louis, called at plaintiff’s barber shop to investigate the claim. While there, this officer induced plaintiff to deliver the policy to him “for examination by the company,” as is recited in a written receipt given by Dubard therefor to plaintiff on March 22nd. Defendant,'having thus obtained possession of the policy from plaintiff,- retained it and refused to surrender it to him thereafter. A few months later, on September 23d, defendant, proceeding on the theory that the assignment to plaintiff was void because of the condition in the policy to that effect in case of assignment, paid Mrs. Evelyn Lang, the widow of the insured, as it insists by way of compromise and under the facility of payment provision, sixty dollars as in full settlement of all claims under the policy. In consideration of the payment, Mrs. Lang executed a receipt to defendant as in full release of every claim under the policy, etc.

The policy is in the amount of $120, sixty dollars of which has been paid to Mrs. Lang, as above stated, and plaintiff prosecutes this suit for the amount of the indebtedness of the insured to him, that is $53.50, and his right of recovery to that extent is entirely clear (see Warnock v. Davis, 104 U. S. 775), unless the provision in the policy declaring it void in case of an assignment should prevail.

There can be no doubt that it is competent and proper for defendant to pay the insurance money under the “facility of payment” clause to the widow, either in full or in part as on a valid compromise, and that it is entitled to a full acquittance on so doing from further obligation to respond under the policy in those cases where it does not appear that the rights of others have attached thereto. But if a valid assignment appears, then, of course, the assignee is to be compensated to the extent of his rights. [See Wilkinson v. Met. L. Ins. Co., 63 Mo. App. 404; Wilkinson v. Met. L. Ins. Co., 64 Mo. App. 172; Renfro v. Met. L. Ins. Co., 148 Mo. App. 258, 129 S. W. 444.] It is clear that the policy was assigned to plaintiff in the instant case by the insured, and that such assignment is valid to the extent sought to be enforced—that is, $53.50—unless it is rendered void by the provision in the policy to that effect. No express consent to the assignment was indorsed by the company or its general officers on the policy, and the assignment itself contemplates that the company’s assent should be had.

But it is obvious the provision of the policy rendering it void in case of an assignment is incorporated for the benefit and convenience of the defendant and may therefore be waived by it. [See Saetelle v. Met. L. Ins. Co., 81 Mo. App. 509, 19 Am. & Eng. Ency. Law (2 Ed.), 96.] It does not appear that the general officers in charge of defendant’s office in St. Louis had knowledge of the assignment until after the death of the insured and the question is, may a waiver touching this matter be predicated on tbe knowledge and acquiescence of James, the soliciting agent, wbo negotiated tbe insurance, delivered tbe policy to plaintiff and collected tbe premiums tbereon week after week witb full knowledge concerning tbe entire transaction? When tbe application was entered into by tbe insured, it was with an express understanding on tbe part of the insured, Lang, tbe agent, James, and plaintiff that tbe insurance was taken out to tbe use of plaintiff as tbe creditor of Lang, and that plaintiff should pay tbe premiums tbereon. Plaintiff then paid tbe first and thereafter all subsequent premiums' to tbe agent, James, wbo not only possessed full knowledge touching tbe matter but expressly agreed thereto. In keeping witb this arrangement, tbe policy was delivered by James, tbe .agent, to plaintiff at bis barber shop, but no beneficiary was named therein as is usual in such policies containing tbe “facility of payment” clause, for they appear to authorize tbe insurer to exercise considerable discretion as to wbo shall receive tbe insurance money. About two weeks thereafter, tbe assignment was executed by tbe insured on tbe policy, and James was fully informed by plaintiff concerning it. It appears that James consented by saying, “All right,” and continued to collect tbe premiums from plaintiff week after week. All of tbe premiums were paid until tbe death of tbe insured occurred.

In tbe circumstances of tbe case, such knowledge and conduct on tbe part of James, tbe soliciting agent, should be regarded as revealing a waiver on tbe part of tbe company of tbe condition of tbe policy against assignments, for though such agent is but a mere solicitor, it is obvious that be possessed authority to take applications, deliver policies tbereon and collect tbe premiums-. In this case, tbe insurance was induced in tbe first instance by James witb a full understanding that it was to be for plaintiff’s benefit and on that be paid all of tbe premiums to James and received credit in the hook of the insured therefor. The premiums thus obtained by the agent were paid to defendant and retained by it, it is true, without knowledge on its part concerning all of the facts, but in so far as-those premiums were solicited and collected, no one can doubt the authority of James in that behalf. If it were competent for James to induce the insurance and collect the premiums and deliver the policy therefor, it was certainly competent for him to waive the condition of the policy, which waiver alone rendered the insurance valid to the use' contemplated and which he utilized to the end of negotiating it. [Shotliff v. Mod. Woodmen, 100 Mo. App. 138, 73 S. W. 326; Mod. Woodmen v. Angle, 127 Mo. App. 94, 104 S. W. 297; Wagaman v. Security, etc., L. Ins. Co., 110 Mo. App. 616, 85 S. W. 117.]

Moreover, in answer to' the suggestion that it is not competent as a rule for a mere soliciting agent to either waive such a condition of the policy or estop the company thereabout, the nature and character of the business and the authorized duties of such agents are to be considered. As before stated, the business of industrial insurance is conducted principally among people of the poorer classes, many of whom are illiterate and but slightly informed concerning intricate business matters. Soliciting agents are given separate portions of territory with a view of soliciting insurance •among these people, delivéring policies to them, and ,by dividing the’payments into weekly stipends, founding a sort of credit system therein known as a “debit.” ■These agents call upon the patrons of the company weekly, make collections and enter credit therefor in the book of the insured and seem to have general supervision pertaining to such matters within the immediate “debit.” To the people with whom they ■deal, such agents are justly regarded as representatives of the company, with complete power touching the performance of the duties which they daily exercise in their presence.

In these circumstances, it would seem, furthermore, that, besides the waiver referred to, the precepts of natural justice should preclude the company, through the intervention of the principle of estoppel, from disputing the validity of the acts and conduct of such a soliciting agent, by which its patrons are induced to part with the premium which eventually finds its way into the home office till of the company. It is the high aim and purpose of the common law to afford adequate relief, to the end of effectuating a just result in the circumstances of every case. It should be ad-' ministered, too, in every instance with reference to the peculiar facts of each case, in connection with a degree of common sense from which the law itself is evolved.. In this view, the acts and conduct of such"agents in so far as they are put forward and performed in the fullfilment of their office in negotiating insurance and collecting the premium thereon should be regarded as those of the company. It is certain that the company itself will be estopped to insist upon a forfeiture if, impliedly by the course of its conduct, it leads the insured or his assignee honestly to believe that the premiums being paid are received as compensation on a valid insurance contract. [19 Am. & Eng. Ency. Law (2 Ed.), 55.] There is an abundance in the case to sustain the finding of both a waiver and an estoppel against the company.

Over the objection of defendant that the other party to the contract of assignment, Lang, the insured, was dead, the plaintiff was permitted to testify fully concerning the assignment to him. However, it was admitted by counsel representing defendant that, though the defendant was represented and present in court before the justice of the peace, plaintiff had testified without objection, concerning the same matter in this identical case before the justice of the peace, and that defendant cross-examined him fully with respect to it. Upon this admission being made, the circuit court permitted plaintiff to testify concerning the assignment. Obviously no error appears in this, for though plaintiff may have been an incompetent witness under the statute, his incompetency was waived by the conduct of defendant before the justice. By the general rule the right to object to. any witness as incompetent is waived unless the objection is taken at the first opportunity. It is conceded that no such objection was made before the justice and furthermore that defendant’s counsel participated in examining the witness there fully. This being true, the right to object on the ground of his incompetency under the statute was waived so as to enable plaintiff to testify concerning the same matter at another trial in any court and such waiver could not be recalled. [See Imboden v. St. Louis Union Trust Co., 111 Mo. App. 220, 232, 233, 86 S. W. 263; Norvell v. Cooper, 155 Mo. App. 415, 134 S. W. 1095.] Moreover, the fact that the statute contemplates a trial de novo in the circuit court on appeal, without regard to any error, defect or imperfection in the proceedings before the justice is without influence on the question whatever. [See Tierney v. Hannon’s Executor, 81 Mo. App. 488, 492, 493.]

Besides $53.50, the amount of his debt, plaintiff prayed a recovery for interest thereon, and also for ten per cent on the amount sued for and a reasonable attorney’s fee. By its verdict the jury awarded a general recovery in the amount of $107.62, without specifying the amount plaintiff was entitled to on the policy, as the assignee thereof, on account of his debt nor an amount as ten per cent thereon nor a specific amount as a reasonable attorney’s fee. It is argued that the court erred in receiving this verdict, for the reason the statute requires a specific finding touching each of the several matters mentioned.

The statutes on which the argument proceeds are as follows: “In all actions where exemplary or punitive damages are recoverable, the petition shall state separately the amount of such damages sought to be recovered.” [Sec. 1796, R. S. 1909.]

The succeeding section (Sec: 1797, E. S. 1909) is as-follows: “In all actions wherein such damages are ' recoverable and are allowed by the jury, the amount ■thereof shall be separately stated in the verdict. ’ ’

It is to be noted that these statutes cohtemplate the subject of “exemplary or punitive damages” and 'therefore apply only to such cases. But we believe a ■portion of the damages recovered here to be exemplary •or punitive in character. There is a distinction between “penalty” and “damages” in the strict sense of the terms, in that a penalty goes in the nature of a fine or forfeiture, and when it is levied by the statute in a specific amount, it should be pursued as such by pointed! and direct pleading to that effect, as was pointed out in Casey v. St. Louis Transit Co., 116 Mo. App. 235, 91 S. W. 419; s. c., 186 Mo. 229, 85 S. W. 357; whereas generally damages are based and recoverable on the idea of a loss to be compensated, a damage to be made good. [See Nicholas v. Kelley, 159 Mo. App. 20, 139 S. W. 248.]

Our statute touching the matter involved here is as follows:

“In any action against any insurance company t,o recover the amount of any loss under a policy of fire, ■life, marine or other insurance, if it appear from the .•evidence that such company has vexatiously refused to ■pay such loss, the court or jury may, in addition to the amount thereof and interest, allow the plaintiff damages not exceeding ten per cent on the amount of the loss and a reasonable attorney’s fee; and the court shall enter judgment for the aggregate sum found in the verdict.’-’ [Sec. 7068, R. S. 1909.]

From this it appears that in those cases where the company has vexationsly refused to pay the loss the jury may award, in addition to its amount and interest, damages not to exceed ten per cent thereon, and a reasonable attorney’s fee. The statute by employing the word ‘ ‘ damages ’ ’ rather than penalty identifies the amount of this award as damages and the courts have heretofore declared it such, but of a punitive character as for willful conduct in vexationsly refusing to pay the loss. The idea seems to be that the award of ten per cent on the amount of the loss and the reasonable attorney’s fee contemplated by the statute are to be regarded in a sense as damages, for the statute so names it, and because a recovery on that score tends to compensate for the loss entailed by the act of the company in forcing the litigation upon the insured, but as penalty, too, by way of punishment for the wrongv ful act of the company as through its willful, vexatious refusal. [See Blackwell v. Am. Central Ins. Co., 80 Mo. App. 75; Thompson v. Traders’ Ins. Co., 169 Mo. 12, 68 S. W. 889.] Obviously such a recovery must be regarded as for damages, exemplary or punitive in character, and thus falls within the very terms of the statute quoted, requiring a special award in the verdict. ' Moreover, the statute (Sec. 7068, R. S. 1909) authorizing the recovery of such damages seems to imply that the jury should state the amounts separately in the verdict, in that the concluding words of that statute direct that “the court shall enter judgment for the aggregate sum found in the verdict.” The word “aggregate” means, according to Webster, formed by a collection of particulars into a whole mass or sum. Of it, the Supreme Court of California says, in Chapin v. Wilcox, 114 Calif. 498, aggregate is “a sum, mass, or assemblage of particulars; a total or gross amount. ... It implies a plurality of units whose total amount it represents.” It would seem that the statute thus directing the court to enter a judgment for the aggregate sum found in the verdict presupposes an award by the jury in parts, as so much on the policy and so much on account of the other grounds therein mentioned. Obviously such course should be pursued in the interests of the administration of complete justice, for it is essential, in reviewing the verdict, to ascertain whether it conforms to the case as made in pleading and proof. Here it is impossible to interpret the verdict with a degree of precision, for the aggregate sum allowed is $107.62 and no items are given. No doubt $53.50 and $4.12 of this is intended to-cover the amount of plaintiff’s debt and interest, and it may be a portion of it is intended as an allowance of ten per cent on the principal amount as for vexatious delay, and it may be that another portion is to be regarded as for reasonable attorney’s fees, but we are unadvised as to that.

But it is clear enough that plaintiff was entitled to a recovery, and the jury so found the fact to be. If he is entitled to a recovery at all, he is entitled to $53.50 and no doubt this amount is included in the verdict. The amount of $53.50 together with interest thereon at six per cent it seems would be $57.62; add to this fifty dollars and the entire amount totals $107.-62. The record is replete with evidence tending to prove a vexatious refusal to pay and to the effect that fifty dollars is a reasonable attorney’s fee in the case and it is obvious that no injustice would appear had the jury expressly found such to be the fact, instead of doing so sub silentio. We are commanded by the statute (Sec. 2082, R. S. 1909) not to reverse judgments unless we believe that error has interposed which materially affects the merits of the controversy to the injury of the appellant. We do not believe the error in the form of the verdict entails substantial harm and in that view it should be regarded on the facts of the case as purely formal. See Courtney v. Blackwell, 150 Mo. 245, 277, 51 S. W. 668, where it appears the Supreme Court took a like view on a similar verdict. The judgment should he affirmed. It is so ordered.

Reynolds, P. J., and Allen, J., concur.