160 Mo. App. 407 | Mo. Ct. App. | 1911
(after stating, the facts). — I. Plaintiff’s case concedes that there was a default in the payment of assessments or premiums, and the policy, by its terms, was void on that account unless the non-forfeiture law of Missouri (Sec. 5856, R. S. 1889) was applicable thereto and operated to extend the insurance from the time of default to the death of the insured. The non-forfeiture law is not applicable if the contract in suit is one of insurance upon the assessment plan. [McCoy v. Bankers’ Life Assn., 134 Mo.
Sec. 5860 of the Revised Statutes 1889 (now Sec. 6950, R. S. 1909) provides that “every contract whereby a benefit is to accrue to a person or persons named therein, upon the death or physical disability of a person also named therein, the payment of which said benefit is in any maimer or degree dependent' upon the collection of an assessment upon persons holding similar contracts shall be deemed a contract of insurance upon the assessment plan.” There are other provisions in the article of which said section is a part, but we need not set them forth. It is sufficient to say that in all respects the policy in suit conforms to the requirements of said article and section so as to be “a contract of insurance upon the assessment plan” if the payment of the benefit,to accrue under it “is in any
There has been considerable discussion in the decisions as to the applicability of this language to particular policies. We need not set it forth. It is sufficient for the purposes of this suit that we may deduce from such decisions the conclusion that even though a policy contains provision for fixed and defined sums to be paid at certain intervals, still if such payments do not form the only resource for the payment of the benefit and are not necessarily sufficient for that purpose, but by the terms of the contract shall be supplemented, if necessary, by an assessment which shall be levied by some designated person or body, and be directed against and binding upon persons holding similar contracts, then such policy meets the requirement of the statute under consideration. [Hanford v. Assn., 122 Mo. 50, 26 S. W. 680; Jacobs v. Assn., 146 Mo. 523, 48 S. W. 462; Elliott v. Assn., 163 Mo. 132, 63 S. W. 400; Hayden v. Franklin Life Ins. Co., 136 Fed. 285.] It is not necessary for us to decide that a policy may not be an assessment contract unless it meets every requirement above mentioned; but we do hold that if it does meet all such requirements it is certainly an assessment contract. In determining the character in that respect of the contract before us, we may consider not only the policy but the constitution and bylaws as well, for though the policy does not in terms make the constitution and by-laws part of the contract it does, as we shall see, provide for the making of an assessment. ‘ ‘ This of itself was sufficient to advise the policy holder that he was amenable to an assessment in addition to the regular mortuary call, which characterized its policy as being on the ‘assessment plan.’ As the manner of making such assessments was not pointed out on the face of the policy, and such assessments in their very nature being mutual among the associated members, the law refers the policy
Now in the light of the foregoing, how does the contract in suit meet the necessary requirements? While it is true that it contemplates the payment at certain intervals of a fixed and defined sum and to that extent might be held an old-line policy (Hanford v. Mass. Ben. Assn., 122 Mo. 50, 26 S. W. 680), still such payments do not form the only resource for the payment of the benefit and are not necessarily, and were not in fact, sufficient for that purpose. They were to be applied in certain parts toward the accumulation of a mortuary fund and an emergency fund, and death losses were primarily payable out of the mortuary fund and if that proved insufficient, then out of the emergency fund. The policy expressly provided that “should the emergency reserve fund be used, in excess of statutory requirement, for the payment of death claims, its impairment shall be made good by additional premium calls sufficient to pay the maximum amount of insurance stated in the policy.” The bylaws provide that such additional premium calls shall be “against all members of the association according to the ratio of the mortuary call,” and empower the “executive committee” to levy the same and prescribe the extent and manner of serving notice thereof.
It seems to us that the contract meets all the requirements of the statute under the decisions. The plaintiff suggests however, that it is necessary that the assessment shall be upon “persons” holding similar contracts, and they must become personally liable to pay the assessment when levied. Granting that that is a correct statement of the law, the provision for assessment under this policy is sufficient under it. The provision is that impairment of the emergency fund “shall be made good by assessment in addition to the regular premium call. ’ ’ The by-laws provide that such
II. Nor are we impressed by plaintiff’s insistence that the contract of assumption transformed the asesssment contract into a simple life policy on the level premium plan. For the contract of assumption to effect such a change, amounting to a complete novation, it must express clear intent to that effect. [Hayden v. Franklin Life Ins. Co., 136 Fed. Rep. 285.] The one before us does not do that. On the contrary it is plain therefrom that all the parties, the Merchants’ Life Association, the policy holder, and the defendant, intended that the policy should be assumed as it was, viz.: as an assessment contract. In the contract between the Merchants’ Life Association and the defendant, the latter was bound to assume merely the “outstanding policy contracts” and “all obligations to policy holders and beneficiaries thereunder.” ' As part of the consideration therefor the Merchants’ Life Association was to transfer to the defendant all its outstanding policies, with all premiums due or to become due thereon, and to completely substitute the defend-, ant in place and stead of the Merchants ’ Life Associa
But plaintiff insists that the defendant had no power to levy assessments and therefore the assessment feature would be eliminated from the contract by operation of law. If it be true that defendant lacked the power mentioned it would not affect the contract in the manner indicated. It would not deprive policy holders of their right originally given to them by solemn contract and never surrendered to have others holding similar contracts contribute by paying assessments toward paying death benefits as they accrue ; nor should it deprive defendant of the consideration solemnly promised to it in consideration of its entering into the very contract of assumption which plaintiff seeks to enforce. The executive committee of the Merchants’ Life Association might make them in order to fulfill its contractual obligations to the policy holders and the defendant, or if that committee would not or could not levy such assessments, a court of equity would have power to levy them, or cause them to be levied. Nor can it avail plaintiff to contend, as it does contend, that defendant had no power to assume an assessment contract, being an old-line com
III.' The letter of October 3, 1905, was written nearly four years after the time the petition conceded that the policy lapsed for the non-payment of premiums, and some eighteen months after the death' of the insured. Therein defendant’s secretary informed the plaintiff’s attorney that the policy “remained in force until December 20, 1901, when it lapsed and became-null and void by reason of Mr. Moran’s failure to pay an assessment due on that date.” Plaintiff asserts that defendant had no right to levy said assessment, it being a special assessment, and therefore the policy could not have been avoided because of it. She contends that having in said letter given the non-payment of said assessment as a reason for the policy having become void, it could not rely in the trial court upon
The judgment of the trial court is affirmed.