269 Mo. 509 | Mo. | 1917
This is an appeal from an order overruling a motion to set aside an involuntary nonsuit taken by appellant in the circuit court of the city of St. Louis in an action she instituted on an insurance policy issued by respondent, September 29, 1901, on the life of
Respondent, in its answer, admitted its corporate capacity and that it was engaged in the life insurance business; that it issued the policy sued on; that the annual premiums (each amounting to $4291.50) were paid in September 1901, 1902, 1903 and 1904, but denies any premium was thereafter paid; that in March, 1904, the policy was, with its consent, duly assigned by the insured to his wife, this appellant; and that Frederick W. Y. Blees, the insured, died September 8, 1906. The answer contained several affirmative defenses; (1) that insured and his wife, in October, 1904, secured from respondent a loan equal to the full surrender value of the policy September 29, 1905, to-wit, $9550, the proceeds “divided as follows: $4291.50 to pay premium due September 29, 1904; $468 for interest; and $4790.50 paid Blees by company’s check; that the borrowers signed a loan agreement authorizing respondent, at its option, in case of default in payment of the loan September 29, 1905, without demand and without notice, to apply cash surrender “consideration of $9550 to the payment of loan and interest” and cancel the policy; that the loan was not paid and respondent exercised its option and so applied the cash surrender value to the payment of the loan and canceled the policy, and that it was thereby rendered void; -(2) that the repayment of the loan mentioned under “(1)” supra, was a condition of the insurance provided for in the policy; that the failure of Blees to repay violated this condition; that this was a violation of the “condition of the insurance other than the non-payment of premiums” within the meaning of section 6948, Revised Statutes 1909 (Sec. 7899, R. S. 1899) and for this reason the policy had lapsed and been canceled and there was no liability thereon; (3) that while the policy was issued in 1901, but two premiums had been paid prior to the Act of 1903, whereby section 7897, Revised Statutes 1899, was amended to permit indebtedness other than that for past due premiums and interest to be deducted from three-fourths of the net value of the
In the reply waiver of proof of death was pleaded, in addition to a general denial.
The policy consisted of a promise to deliver to the assured, his executors, administrators or assigns, fifty $1,000 bonds, payable in gold coin twenty years after issuance, with five per cent, interest. The delivery of the bonds was conditioned upon the maintenance of the policy in force and effect, and proof of the death of the insured. It concluded thus: “This contract is subject to the mutual agreements endorsed hereon and is issued on condition that on its delivery” and each year thereafter during the first ten years of the continuance of the contract, insured pay the respondent company ‘$4291.50. The “mutual agreements” endorsed on the policy provided for (1) place of payment of premiums; (2) thirty days grace in payment of premiums; (3) for automatic paid-up insurance after three payments in case of failure “to make any subsequent deposit,” i. e. pay premiums, provided no loan had been made on the policy; (4) for extended insurance, after three years, on failure to make any subsequent deposit, on conditions and for periods stated; (5) for cash surrender value on conditions and for amounts set out; (6) for loans on the policy on given
“Cash Option in Lieu oe Bonds. — It is hereby mutually understood and agreed between all the parties hereto, that the beneficiary under this contract shall have the option of accepting in settlement of this contract, when it matures under its terms, the sum of sixty-five thousand two hundred and fifty gold dollars in lieu of the insurance of fifty thousand dollars of bonds as stipulated in said contract, provided all deposits previously due thereon shall have been made and the contract maintained in full force and effect from date of issue. ’ ’
These were followed by (9) restrictions as to service in army and navy; (10) provision that understatement of age in application should result in an “equitable adjustment of the amount of the insurance or other benefit,” and then by this paragraph:
“Incontestability. — After two years from date of issue this contract shall be incontestable if the deposits shall have been made.”
Space, may be saved by stating other necessary facts in connection with the discussion of questions to which they are relevant.
III. There was evidence that formal proofs of death were made to respondent by the insured’s administrators on another policy. In fact, the proofs were offered in evidence, but rejected because the witness had testified to their substance. We shall deal with them as a part of appellant’s evidence. These were furnished respondent in October, 1906, thirty days after the death of the insured. Subsequently, attorneys for appellant, within the ninety-day period, prescribed by the statute, wrote respondent concerning the policy in suit, claiming respondent was liable thereon. Respondent’s general solicitor replied, denying liability on the policy and declaring *it had been cancelel in September, 1905, one year before the insured died. That these facts constituted evidence of waiver of formal proofs of death is
In Jarman v. Knights Templars’ & Masons’ Life Indemnity Co., 95 Fed. l. c. 73, Judge Philips, dealing with a like question, quoted, with approval, from McCracken v. Hayward, 2 How. l. c. 612, as follows:
“The obligation of a contract consists in its binding force on the party who makes it. This depends on the laws in existence when it is made. These are necessarily referred to in all contracts, and forming a part of them, as the measure of the obligation to perform, them by the one party and the right acqmred by the other . .
. If any subsequent law affect to dimmish the duty, or to impair the right, it necessarily bears on the obligation of the contract, in favor of one party to the injury of the other; hence any law which in its operation amounts to a denial or obstruction of the rights accruing by the contract, though professing to act only on the remedy, is directly obnoxious to the prohibition0 of the Constitution. ’ ’
The argument advanced assumes the correctness of the contention counsel had previously made that this action is based upon the statute, and is on a liability arising upon the non-forfeiture statute, which contention was overruled in a preceding paragraph. The statute being a part of the agreement and, by its force, extending the policy and binding the company “to .pay the amount of the policy, the same as if there had been no default in the payment of premium, anything in the policy to the contrary notwithstanding” (Sec. 7899, R. S. 1899; Sec. 6948, R. S. 1909), the death of the insured during the period of extended insurance, matured the policy “according to its terms” and fulfilled the first condition in the cash option paragraph. To hold otherwise. would be to permit provisions in the policy to nullify the express words of the statute. The same considerations lead to a like conclusion with respect to the second condition. If the fact that a premium payment has not been made avoids appellant’s right to avail herself of the cash-option feature, the very thing the statute declares shall not affect her rights is allowed to destroy one of them.
VII. In Haas v. Insurance Co., 84 Neb. 682, the cases are collected which announce the doctrine that forfeitures are not favored and will not be aided by construction,'nnd that an insurance policy containing no provision that non-payment of premiums shall work a forfeiture will not be held to be forfeited by reason of such non-payment. It is argued by appellant’s counsel that this rule applies to tMs case. The argument ignores the fact that the non-forfeiture law (Sec. 7897, R. S. 1899, et seq.) constitutes a part of this policy and that it makes full and explicit provision as to what effect the failure to pay premiums shall have in cases falling within its purview. It is as applicable to policies which do not contain forfeiture clauses as those which do. It is mandatory. It disposes of the whole matter fixing with mathematical certainty the period of extension for policies to which it applies. It leaves no room or opportunity for applying, in the manner desired, the doctrine of the Haas case.
The incontestability clause, upon which counsel also relies, contending it excludes a failure to pay premiums as a ground of defense, also is to be read in the light of the whole policy, including the statute, and when that is done counsel’s construction cannot be regarded as sound.