*1 TEEM, 1921. Insurance Co. v. Life opinion Sturgis, peals; White, G., thinks dissents adopted. should J., he opinion foregoing PER CURIAM:—The Mozlby, adopted opinion hereby Wood- court. of the as the
0., Higbee concur; James Walker, J.J., son, Graves, dissent. Elder, JJ., E. Blair and Blair, J., David T. G. LIFE INTERNATIONAL F. ADRIAN SHERMAN Appellant. LOUIS, OF ST. INSURANCE COMPANY Banc, 30, 1921. In December of Certificates: Re- Assignment AND RECEIVED: MONEY 1. HAD Assignment Operate of Causes Action. Contract: as scission of where- company issued Where an insurance during owners annuities their the agreed apportion to it to per of all thousand dollars twenty-five cents one equal lives to aggregate annuities fifty years, such written for insurance purchase receiving the full annually, and after to ascertained original thereby, hold- 'price repudiated evidenced the contracts payable for the sums option to sue had the ers of such as certificates, contracts rescinded treat under their repudiation if sueh an money paid them; and after sue for the for n original assigned his electing rescind, had cer- holder, without money paid therefor, tificate, right purchase as recover rescission, passed assignee on a have an incident would to the ownership original certificate; holders, if be- exercising right assigned certificates, rescind, fore their having assignee, having rescinded contract rescission, right purchase consented has to sue money paid thereby for the intended certificates, assign did effect action. their causes of Only --: -: Transferable on An order, Books. writing or act which shows the intention owner of a chose action transfer so that it will become the transferee equitable assignment, supported by will amount to an if a valuable although consideration; the terms of only the books of transferable the insurance com- pany, assignments by delivery transfer in blank indorsed , OF SUPREME COURT Sherman v. Life Insurance Oo.
thereon, reciting upon had been made a valuable con- sideration, part shows intention on holders to trans- respective fer action, causes to recover the amount of *2 money paid repudiated person on the contract, to whom to the the by estops certificates were them delivered, and them from here- asserting after contrary. to the Paid, Money -:3. Limitations: for Vires Ultra Certificates: Re- scission. Even if the by issuance of insur- an company vires, ance was ultra it does not follow that a cause of action for money paid the for them in pur- favor of arose the chaser at the instant the sale was consummated. The insurance company, being private corporation, repudiate a could not the cer- ground vires, perform- tificates on the were ultra full after purchaser, ance the without refunding purchase money; the repudiate until purchaser did them the treat them could binding; as valid and company and where never refused the to payments make the provided for in the ground certificates on the that it power them, simply no to pay had issue but failed the annuities, five-year the begin of Statute Limitations did not against run purchaser the until he elected to rescind the contract purchase money. sue for the Adjudication: Receivership: -:4. Former of Cancellation An- nuity Certificates: Judicial Contracts: Parties Not Before Court. receivership against decree proceeding Federal court' in a provided an company any insurance that if holder certificate issued it failed to avail himself of privilege there- by extended surrendering buying his certificate stock in the company for par thirty days cash at twice its value, within there- after, he making any against would be barred claim of kind company or assets, and his "certificate would be cancelled. Held, grave court, any it is a matter whether doubt in that proceeding, parties compelled with all the before it, could have holders, against will, certificate enter into new con- penalty forfeiting rights tractual relations under vested under existing not annul contracts; is certain the could but it court any rights contract and the incident thereto of holder proceeding given who had not been not been notice and had right to afforded a be heard. Appearafice. receivership -: --—: 5. in Where the decree appeared attorneys "annuity proceeding recited that certain for plain appeared therefrom certificate holders" and it that only joined "praying for those stockholders in leave who re-'organize company, these and rehabilitate" the insurance plaintiffs against not did in suit embrace the TERM, Yol. 291J Life Insurance Oo.
Sherman v. certificates, recover the for their and the out- evidence conclusively plaintiffs side the court records shows herein that parties appear proceeding, did not that the decree was judgment sense no a h'ar to in their a favor. Representation. -:6. -: -: Class: Virtual doc- representation, trine virtual under one more which or members specified instances a class in are allowed to sue or defend all, theory behalf of all members that of the class will beneficially thereby, 'application affected no where has the elass of holders 'of consisted issued an insurance original company, parties'to proceeding none of whom were appointment complainants receiver, either or defend- ants, whom therein proper none of sense, intervened' appear none of asked, others, those who did for themselves or against any against any party relief suit assets of all was done who appear but those did was to postpone ask court confirmation of the sale of com- *3 pany’s money assets until raise pay cbhld sufficient to its having its rehabilitation, postponement debts and such and effect granted they paid enough money been returned and into court to n pay thereupon relinquished and the jurisdic- the debts court company, tion over the returned num- it to the the reorganization appeared ber of said certificate holders who so being plaintiffs being number, one-half the whole about not among them. Knowledge: Assign- Estoppel: Aequiescences: 7. -—: Inducement: Estoppel apply ment. a of an does not holder by company like holders issued fact other insurance reorganization rehabilitation money for the up put had acquiescence, so his do either silence not induced to were but re-organization had been notified that such although has since he he not court, when the decree of the effected been his cer- cancel attempted bind him and to court, before estopped to he thereto; is not if he did aeeede tificate assignee. his neither is paid certificate, money for such sue for the Pur- of Contract: Modification Annuities: of Action: --—: Cause 8. Money. eon- had, with annuity certificates Where chase pay- make the annuities so as to holders, been modified sent holders cannot company” said earnings “out of able earnings out they show were there for unless annuities recover to recover paid; but suit a have been the annuities could which a rescission money paid based purchase for the rescis- consented company has contracts, where sion, maintained. can be 142 SUPREME COURT . OF v. Life Insurance Co. -: money Interest: Demand. In a suit purchase recover for issued an insurance where has holder- rescinded the contract and the has con- only sented to the rescission, the holder can interest from recover demand, must pleaded proved; date and demand both filing but petition, interest, prayer a in which there is a demand, plaintiff, a recover, if otherwise entitled is en- titled interest from prior the date suit was commenced, but not
thereto. Jackson Circuit Court. Appeal Hon. ThomasJ.
Seehorn, Judge., (on condition). Af:fikm:ed Cooper, Neel J. & Wright, Lyons Leslie and Charles Rev,elle for appellant.
G..
(1) This suit one had and receded cannot be maintained by the erred plaintiff, court in not Dennin sustaining defendant’s demurrer. T. Woodbury, 160 M Supp. Schhiffer v. 83 N. 650; Seitz, y. 300; Y. 130 N. Y. Pryor Poster, 171; Love v. Yan Every, 203; 18 App. Frazier, Mo. Steele v. 139 Mo. App. 338; Lowry, Mullinax v. 140 App. 45; Engine Mo. Co. v. Co., 68; Gras Fed. Engine Bernays v. Wurmb, Mo. App. 231. (2) including certificate holders, plaintiff and his court and bound assignors, Wagstaff decree the cáse of v. Grreat Company, (a) repre as matter actual *4 sentation; because of (b) class community fund; (c) by the court in not representation, holding. erred so Cloyes Middlebury Cochran v. 131 Mo. Thomas, 279; v.
Elec, Adams, 66 Atl. 140 Co., ; Cyc. 1039 30 ; Wallace v. Schultz, 204 U. 51 Ed. 547; S. Law Phoenix Ins. Co. v. 425, n 726; Fed. 104 N. 337; 464, 80 v. Wis. 80 Hodges Nalty, W. v. 15 Cyc. Bennie, 160, 167; 30 Ins. Co. 88 Fed. 132; 500; v. 1025, 499, Lilly Case secs. Ruling Law, pp. 1024, 132; 103 v. Mo. B'eaty, Mo. Accord 244 Tobbien, 488; S. Sparks Clay, 408; Buckner, v. 185 Mo. Buckner v. 210! 9 to 11. 672, 20 R. L. 6-69to secs. 887; pp. W. (Mo.) C. n 1921. 143 TEEM, ' Life Insurance Co. Sherman v.
(3)
petition
demurrer to
The demurrer
plaintiff’s
have been sustained
evidence should
any
petition
not state
cause
the reason that
does
not disclose
cause
action and the evidence does
against
in not
and the court erred
action
the defendant,
ruling.
Plaintiff is hound "Wagstaff case, in the decree of the United States Court holding. Cochran v. erred so the court v. N. 279; 131 145 Thomas, 258, Earner, Mo. Sheets W. 1019; Gillett, 164 v. 788; Woolf, Cronan v. N. W. Johnson Shannon, 200 Am. ; 99 96 1029; 168 Pac. Burlen v. Mass. 705; N.. Dec. Jackson E. Board, v. Industrial 117 733; App. Mo. v. Grand- Crenshaw, 193; v. Scoffins Watkins 59 (5) original annuity certificate Kan. 365. staff, 12 having assignors plaintiff, had notice of holders, Wagstaff proceedings in the Federal court thereby, right no action bound or cause of are case, assignment, in not so to transfer court erred Mining holding. N. 156; v. Y. Quicksilver Co., Kent 78 Presumptive Co., Hill 109 Fed. v. Forrest 820. Halstead ly them. notices them at addresses reached mailed 80 Watson v. 343; Phoenix v. Fed. Ins. Co. Schultz. Shaw, 80 N. Natl. Bank v. W. Casco Richardson, 409; v. Acc. Assn. N. Burr, Natl. Masonic W. 67; Atl. 77 10 1099 Co.,v. 318; 142 Fed. Hender S.,U. S. S. ; Davidson L. 332; 140 S. Ed. Mc 25, & Coke U. 35 Co., son v. Coal (6) alleged 24 213. Assn., Mo. v. Accident Farland case is barred action sued cause of in not so the court erred Limitations, Statute holding. Mo. Parker- Smith, 593; v. 27 Johnson Washington 209; Mo. Merrill v. Town Dennison, 267 v. Ely, 606; 20 v. N. E. 66 Fed. Roberts 165; Monticelli, City City 31 N. E. Rochester, 255; Sioux v. Trimmer County County, N. v. Ry. 857; W. Scott 92 Go. v. O’Brien Burlington Co., v.Co. 820; 3N. Jefferson Chickasaw, W. Mfg. 129; Natl. Bank Burt, Hunt v. Ga. 899; N. 23 W. 343; L. Ed. Parks v. Salterth- 128 U. S. Bank, v, (7) 29 N. Ballow, E. Brunson W. 82; 32 N. waite, *5 144 SUPREME COURT OE v. Insurance Co. The in favor judgment plaintiff cannot be stand cause no proper assignment plain tiff shown. Mechanics Bank v. Mo. 516. Bank, 45 In no (8) event was entitled to plaintiff judgment any in this case on 8, 9, 10', Counts 11 and and the 12, court in erred not so in holding, entering erred judgment on said counts. The in court erred event (9) any entering judgment on the counts: following 35, 70, 41, 71, 72, 45', 63, 12, 10 for the reason 46, 60, 8, that the original thereof consented to the certificates amended writing provide any payment thereunder should out of only earnings of company. court event (10) erred in judgment on entering 200, 212, 205, 2101, counts 214, because from testimony and evidence appeared the holders thereof had actual notice of the pro ceedings court and reorganization of the company and were bound decree of the court in the Wag- staff Case.
Thad B. Atwood, London, Hill Wichersham, Pop- & ham and William Thomson for i~espondent.
(1) The plaintiff
authorized to maintain the
Avas
suit,
the pleadings and evidence sustained plaintiff’s
right
judgment,
(a)
plaintiff
assignee
annuity certificates,
rights
became vested with all the
remedies
possessed by
assignors,
remedies that
accrued after
assignment.
Carroll v.
131
Wright,
R,
728;
Gh.
Sec. 8057,
S. 1909 6 R. C. L.
;
p.
310;
sec.
925,
R.
L.
2
C.
sec..
633, 634,
2 Am.
43;
Eng.
Ency.
&
Eaw,
1079-1084; Schlieman v.
30
Bolen,
879;
N.-'W.
Oneida
Bank v. Ontario
21 Y.
Bank,
N.
490;
Prylin-
v.
Shoe Co.
Co.,
60
Cyc.
N.
4
ski,
969;W.
20, 69; Woodland
v. Menden-
hall, 82
483,
Minn.
85 N.
164; Henson
W.
Smith, 138
v.
Cal. 216,
Sherman v. Life Insurance Co.
(b)
‘appellant
In
Sherman, v. Life Insurance Co.
y.
Washington.
L.
35
Ed. 464;
Packet Co.
Sickles, 65 U.
Ry.
S.
16 L. Ed.
<&
v.
24,
650';
Johnson,
Texas Pacific
Co.
S,
Hovey
151 U. S.
38 L.
81,
Ed.
v.
81;
167 U.
Elliott,
407,
Corporations (6 Ed.),
42 Ed. 215;
U.
3
p.
Cook on
3180;
Jaclrson
v.
Co.,
Co. Gardner Inv.
Sherman v. (9) appellant’s Assuming con 494. tlie correctness of ultra, vires, Statute tention that the certificates were to run the action did commence Limitations money suggests appellant (which had and received would remedy), appellant, proper have been a until after repudiated predecessor, contract because or its ha9l Merrill Town character. v. of Monti vires ultra 682; District, 111 Fed. 462; 72 Fed. v. School cello, G-eer Ed., Douglas Chapman 378; L. 348, U. S. 27 Co., v. 107 assignee Thayer, (10) The of a v. Ill. 74 Collins obligation maintain an contract authorized action the contract has been for repudiated had and received where corporation vires, ultra because certainly assignee would contract true, moneys right back the recover have the rescind and Dtainage 282; Mo. Dist., 257 thereon. v. Wilson Ed., Parkers- 153; v. S. L. Wood, 294, Louisiana 202U. burg L. Chelsea Bank 238; 106 S. Ed. v. IT. Brown, City Count}1' 130 Fed. Board of Ironwood, 140; v. Ill Irvine, 689; Dist., 126 Fed. Geer v. School Commrs. Fed, 682. money had and -This isa suit for RAGLAND, C. growing sale out the issuance and received what it Great Western annuity certificates. denominated *8 controversy to the facts. no sxibstantial as
There is organized year under the laws there In the corporation the Great known as a the State of Colorado capital Agency Company, an authorized company acquired of, an ad- This two dollars. million company vantageous' Ind- with an insurance contract Thereupon long period extending of time. over iana, a many Company great Agency to a was sold stock n persons, and)through accumulated funds were such sales something treasury $80,000. like its amount effect- the same individuals who had Thereafter, Company incorporation Agency who were ed the of the company organized under insurance it, control" ' SUPREME COURT OF liafe Insurance Co. Síterman v.
the laws of State, called the Great Western Life Company, capital with a $100,000'. stock of Through manipulation Agency Company bor- $21,000, rowed and with in its $80,000 treasury paid up capital it the entire stock the In- Company. surance
Eight one thousand shares stock the such incorporators in their own names held as individuals, remaining ninety-two and the nine hundred and shares Agency Company. held as trustees for It be- merely holding company. came a During year following incorporation the first the Great Western Life Insurance thir- wrote premiums teen million dollars insurance. re- therefor ceived were absorbed commissions over- expenses. Desiring head to raise more funds for prosecution of its it business, conceived the idea o£ is- suing what later termed certificates--such represent pro- one or more shams in the arising annually ceeds pre- part from certain company. miums received The certificates issued following’ contained the recitals: “Whereas,.has
for. of its shares, said the sum of $. premises,
“Now, therefore, in consideration of the company hereby, agrees apportion pay annuity during owner thereof an his life and thereafter personal representatives,*1 heirs his of-shares proceeds twenty per five cents one thousand except dollars of all insurance, reinsurance, written years fifty in-the United States incorporation, premiums the date of its on which com puted on the annual basis have been in cash, received long premiums also so thereafter re are ceived on insurance; said to be determined as follows: aggregate twenty-five per
“1. The of said cents one' thousand dollars of insurance shall be ascertained at the *9 end year, of each calender such sum and divided 1921. Vol. OCTOBER TERM, Life Insurance Co. Sherman v. appor- quotient be the
fivelmndred; the shall obtained total tionment to each of of- and shares, said payable hereunder, thereof shall shares be the thirty days within thereafter. guarantees
“2 company The that the first payable eight per than cent hereunder shall be less upon company stated amount as therefor, above. assignable writing in and
“3. This certificate is only per- in on the of the books transferable, by attorney, upon presentation son or of this certificate company.” at the home of office per The basis sold on the of $150 They in share. were issued February annuity or due first dividend them became duly paid. 1, was 1908, and May Great
On stockholders 1908, certain of equity Agency Company Western filed bill for the of Western Circuit Court States United against the of Division the Western District Missouri Agency Company, Western the Great Great Western Company, individuals, Life Insurance and certain mismanagement alleging bill Great Agency Company Life Insurance Great Western complaining Company, the Great the issuance Company invest- these Western Insurance charged being been ment certificates, something large being like in a the amount number, sold attempt was macle that an $330,000, and further capital stock the Great Western increase appoint- Company prayer was made charge control the assets ment a receiver to take Agency of the Great Western Company. A Life Insurance Great Western ap- prayed. appointed court also receiver chancery, pursuance pointed who a master gave appointing that all claims notice him, order corporation any person, company or held demands against companies re- in the either hands *10 SUPREME COURT OF Sherman v. Life Insurance Co. presented
ceiver a should he him master as such hearing on or before Octorber 1, 1908, the would same he forever barred. July directing
On 6, 1908, the court made an order its receiver to advertise and sell the sets of the Great Western Life Insurance as-
Company. In response published calling- notice therefor, three bids filed with the receiver. That of the were Kansas City Company Life Insurance deemed the was best July reported him, and on 28, he 1908, sale a and asked its confirmation the court. Under proposed City the terms of the sale the Kansas Life In- Company obligations surance would have the assumed of the Great Life Western Insurance under the insurance, latter’s contracts but of not its under- takings under the the, certificates; from paid, cash that was to be receiver have real- would only payment ized about $125,000 for the of debts ambng distribution stockholders of Great West- Agency Company (hereinafter ern calle*dthe stockhold- ers).- excluding alone, As the indebtedness entirely exceeded consideration, quite apparent amount, was that, if the sale were con- would,certainly get nothing, firmed, stockholders predica- probably certificate holders would be like report pending ment. While the sale was some of meeting stockholders and certificate holders held a To- peka, purpose pro- devising Kansas, for the means to meeting largely tect their interests. The was as attended, subsequent City. At one ones Kansas held “ informally meetings Chappelle these Mr. James was designated by certain stockholders and certif- icate as a sort trustee to collect steps might necessary (cid:127)take pay as the debts ‘company generally insurance and to handle situation.” application of the receiver for confirmation coming hearing, postponement
the sale on for asked some of the stockholders hold- and certificate TERM, Co.
Sherman v. Insurance . appearances made court ers. order of in that follows: are as connection, shown record, August, cla}'- on 1908, “Now fifteenth regular days April, one of said term of the. upon the heard court, the above canse came to be application for the confirmation receiver properties sale of the The Great assets, business Company, accordance Company; City bid of The Life Insurance Kansas *11 person Esquire, appearing and receiver, by Jobes, C. S. Esquire; the Kansas his E. L. solicitor, Scarritt, Company, appearing City bidder, Philadelphia Life Insurance a Ingraham, R. Life In solicitor; J. its Company, appearing Guthrie, F. surance W. a bidder, creditor, its solicitor; Commerce, National a Bank of appearing Pearl F. H. and M. solicitor, C. Ward, Agency and other stockholders of Great Western Company annuity the Great certificate holders of and similarly Western Life Insurance are who appearing by Waggoner W. situated, B. and James P. praying postponement said stockholders Orr, said a hearing, representing said court that annuity endeavoring to holders were stockholders and a holders raise from the stockholders and pay said the debts sufficient fund off all of Company, Insurance The Great Western Life obligations re rehabilitate and meet all and to of its appearing organize company, the court said accomplishment prospects there are reasonable thereby reorganization plan, secure on such payment of full the creditors said com- all of said life insurance of the debts or liabilities n (\\ > panj. by1the court “It therefore considered and ordered is application hearing; re of said that the further assets of said ceiver to confirm the sale Company be and Life Insurance of the Great Western hereby postponed Tues- and continued until the same nine o’clock a. m.” dav. Auaust 25. 1908. SUPREME COURT OF Life Insurance Oo. just
The order set out stockhold- indicates that the appeared pre- ers and certificate holders who did not plan sent rescuing definite the insurance com- pany receivership. from the connection with their In application postponement report for a of action Ohappelle of sale, an affidavit of Mr. filed in which appears: “He, affiant, with other stockholders and plan certificate of said holders undertook a of rehabilitation of the said Great Western Life Insur- Company, ance and to that with end con- has, others, large ferred an- number the stockholdérs and nuity companies certificate holders of the defend- said policy ant, also with a number of Company. the Great Western Affiant says, further as a result of such conference and investi- gation, voluntary there has been contributed assess- ments from such stockholders and purpose rehabilitating reorgan- holders, for the izing defendant, The Great Life Insurance Company, aggregating a sum about he $120,000'; that large has assurance from a number other stock- *12 annuity policy-holders holders, certificate holders and of willingness co-operate their to and add additional funds purpose thereupon for said and affiant believes and annuity policy- states fact the to be that stock, and position pay discharge holders are now in .a to off and outstanding obligations all pressing of the of the said Company, given Great Western Life Insurance if and impairment capital reasonable time to all do, so of the company repaid stock of said will be and business said by reorganized re-established and an- stockholders, nuity policy-holders placed of said and and upon position a substantial basis, and and to condition carry perform obligation every outstanding out and of Company.” the Great Western Life Insurance finally adopted plan Chappell© and those who co-operating him was that each stockholder holder certificate should into a to be pay fund, used TERM, v. Life Insurance Co. capital repairing liquidating stock the debts and equivalent Company, one- of the amount to Insurance fourth of the of stock or certificate face value upon of held receive in return the surrender him, and might his stock or as the certificate, be, case cash much of stock of insurance as his buy, contribution ón the basis to the fund would Practically par latter stock worth twice its value. fifty seventy-five per all of the stockholders and from to plan cent participated the certificate holders acceded by wholly surrendering therein their several holdings privilege buying In- for the mere stock par Company per value; surance share—twice its $200 enough “recoganization” fund into pay on worth the stock $130,000 hearing the further before the date basis, which application of the sale receiver’s confirmation presented August been continued. 27, 1908, On was'approved; plan to and after di- the court; recting payment into other funds $130,000 applied pay- be him the hands of a custodian to ments therein set schedule of which was debts, a of. receivership and the court decree lifted the out, its to the insurance the receiver to re-deliver com- ordered (cid:127) pany and assets. provisions of the decree dis- recitals receivership, having bearing questions charging on presently are as follows: considered, day being one August, 1908, 27th
“Now regular April, days of said court, of the term objections exceptions to be came on further of F. heard The Great M. other Pearl and stockholders Agency Company Life The Great Western holders of properties the assets, confirmation sale Life Insurance Com- said and business of Great Western *13 complain- by pany hereof, made the receiver heretofore by E'sq., appearing and H. Tim- H. C. Atwood, John ants person Esq., appearing E. and receiver monds, said SUPREME COURT OP Life Co. Insurance Esq., Esq, E. Ms Scarritt, Frank P. solici- Sebree, Company, tors ; tlie City Kansas Life Insurance bidder appearing Esq., said sale, Charles M. Plowell, Esq., Frank Smith, solicitors; Adams, Q. its Franklin J. appearing by Cooper, Cowes and other interveners A. L. Esq., objectors appearing their said E. A. solicitor; W, Berry, Esq., Esq., solicitors;—Hess Orr, James appearing by E'sq., Hunt his Moore, solicitor, C. and A. Eisq., F. appearing for himself and certain Sherman, other certificate holders. objections exceptions pre- being
“And said objectors praying sented to the court, and leave to said reorganize and rehabilitate the Great Life said Company pay outstanding Insurance and to its'debts, obligations properties, moneys, and take over credits good any impairment and effects and restore and make capital of its stock and thereafter conduct the business Company; of the said Insurance Great Western Life parties being all before the court and heard being fully and the court informed and advised, considered, ordered and decreed: plan reorganization
“1. That the and re- habilitation Great Western Life said Insurance Company presented be, court and the same is, hereby approved by upon following court, terms . viz:. . . conditions, plan it has further been the
“Whereas of the said reorganization of the said Life Insurance permit certificates hereto- so-called upon Company, fore said issued upon payment each sum share of such $37.50 upon the surrender and certificates such certificates cancellation of capital
£breceive stock said Company stock of the Life Insurance said par equal one-half of amount of such value payment. already agreed to holders have
“Certain certificate aggregating all than one-half thereof, more this, holders who so done have not *14 1921. TEEM, OCTGBEE Insurance Co. v. Life
Sherman twenty doing privilege given hereby so for are of privi- days himself such hereof, from date to avail failing lege, any annuity certificate holder such twenty period time of so avail himself such within privilege longer days no have such this date shall from right, there- holders shall or certificate and such making any estopped claim of after be barred and against any Com- Life Insurance said whatsoever kind against any pany thereof, or as- or officers stockholders company, certificates will' sets said equity, thereby fully in and in then be canceled law no fur- holders will have and such certificate rights, against said ther claims or demands property account assets or on officers, stockholders, its ’’ thereof. rendering in- the court At the time decree length expressed formally re- its somewhat views at position gard the anomalous to what considered Among things, holders. other the court certificate that, were neither effect said such holders creditors they their entitled to have sense that were liquidated by payment, present their cash worth a nor ascertainable, stockholders; ultra, possibly of the certificates was vires issuance Company; legal rights, that in Insurance event any, these if tangible of the holders of certificates were so in- impossible af-
that it would be court to through modes; and ford relief the usual such holders things the stockholders that, considered, all the offer of permit plan rehabilitating in the them share privilege glad of which was a should embodying* A to avail letter themselves. circular these expressions together copy of the court, immediately mailed to each hold- decree, them er. Thereafter a few more of surrendered provided bought stock basis certificates and decree. The remainder the stock was later pro- parties per share and the $200 sold to outside treasury sales were into the ceeds of such company. insurance SUPREME COURT OF MISSOURI, Life Insurance Co.
Upon receivership lifting the return to it of its assets, Great Western Insurance at once resumed business writing life insurance. It continued so to do until its merger with International Life defendant, Company, By December con- the articles of *15 agreed pay solidation the all defendant assumed and obligations of the debts, and of liabilities the Great Company. Western Life Insurance the The-claims of annuity sepecifically re- latter’s holders were agreed ferred to therein, and the the pay defendant provided annuities for in such certificates or refund paid by amounts for if them, were held this court obligations to be valid of In- the Great Western Life merger. Company surance time at the The holders of the certificates did not surrender who accept provisions them and stock in accordance with steps receivership discharging of decree took no looking any whatever enforcement of claims .under merger their certificates of until about time of Company During the Great Western with defendant. receivership merger interim between the and any made no demands of kind on the former part anything nor did it on its do to indicate that carry provided undertakings would not out the for certificates—except pay any that it failed to of February plain- However, annuities. on 22, 1913,' the n following tiff wrote the defendant letter: Company, “International Life Insurance Louis, St. Mo. ‘ ‘ Gentlemen: attorney persons, a
“As list whose for these of. part names are hereto and made attached a each hereof, every and of whom are owners holders and of certain annuity so-called or investment issued the Great Life Insurance of Kansas City, hereby performance I Missouri, demand the of said contracts International Life Com- said Insurance payment pany, of due under such each certificates. TEEM, Insurance Life Co. snob,persons, attorney every 'I
“As for each and of hereby yon that so-called advise unless the terns said complete- fully or investment are complied ly according thereof, said terms with to.the Company, or on before International you day seventh are to consider March, 1913, every each owners notice that or certifi- said investment so-called every said and cancel certifi- cates, each rescind moneys paid each cates, return of all demand every Life Insurance of them to the Great Western Company, may have sum or sums thereon, less whatever upon been or certificates. to them said them, attorney persons, every
“As each and of said you hereby I also that unless the demand advise complied the return before said day suit instituted the eleventh will be March, rights my to enforce clients. very truly,
“Yours ’} *16 “AdeaiN F. ShermaN. replied: “Your letter will To this letter defendant next the its meet- Board of submitted Directors you nothing ing’, Hearing further and will be advised.” April plaintiff 1, suit from instituted this defendant, annuity assigp.ee certificates. as of 112 of the 1913, petition alleged The in 112 causes counts, on based arising many different of action out of the issuance of as alleges annuity the certificates. Each count substance annuity and issuance of the therein described certificate price paid payment of -dividend it; the the thereon per eight February and 1908.; the failure cent and 1, refusal of the Great Life Insurance perform and the to further defendant as its successor assign- by The the evidenced certificate. contract the rights grow- claims ment and and the certificate of all ing prayer is for the out of further the averred; it is recovery original the therefor amount paid, costs. and holder, less with interest dividend xq SUPREME COURT OF Oo. subsequent up. (1) The answer sets that defenses: to the were annuity issuance of the certificates payable amended mutual consent so that sums payable only earnings of thereunder, became out of (2) company, earnings; and there were such no' alleged that the barred the five- causes of action are year (3) rights of Limitations; Statute that based all adjudicated by on the de- were lifting- thereby receivership cree and were canceled discharged; (4) plaintiff and as- and his signors, by standing acquiescing’ in said decree permitting, protest part, without stock- on remaining holders and re- effect a holders to organization company, by paying treasury into capital purchase price thereof, as sums assets, money aggregating capital more than stock market, equal to or in excess of the actual and value all the from free assets any against claim on account of said certifi- estopped asserting cates, are now claims. puts reply in issue the affirmative matters specifically assignors plaintiff’s answer. It denies that appeared parties proceeding* or were made to the which attempted dispose culminated which decree rights of all certificate holders. stipulated: “prior At the trial it was institution of suit cer- assigned tificates shown the attached list the same thereupon plaintiff, who became and has continued stipulation be the owner holder thereof.” question, except covered all certificates those now petition. described in 8,. 10, counts and 12 of the The five referred those counts *17 originally George Kumpf issued and four' of members family respectively. produced his The certificates were plaintiff at the trial each had on indorsed an assignment signature persons in blank over the the of Kumpf, stand, whom it had been issued. on the witness signatures assigments. identified the of these He family four members of his named in were the list cer- of 1921. TERM, OCTOBER. v. Life Co. acting- professed plaintiff to he tificate holders for whom attorney as defendant Feb- his communication to of ruary 1913. 22, jury. of number
The cause tried without A was a voluntarily petition dismissed the counts of were progress during the court found trial; plaintiff remaining re- his on all counts assessed covery for the under each the amount that eight per therein cent described, less n amount, per per thereon, cent annum interest six February aggregate from amount of appeals. judgment was Defendant $47,463.90. opin- facts will be stated in the course of the
Other necessary understanding of the if deemed ion, questions considered. questions passed appeal raised on
upon by refusing the trial declarations law court by defendant—appellant principal Its con asked here. assignments (1) tentions are: that operate assignments certificates did not of causes (2) received; action for that such had and action, causes if ever barred are existed, five-year plaintiff’s (3) Limitation; that claims Statute adjudicaba are res under decree of the United States lifting receivership (4) that ; Circuit Court having acquiesced during in the decree time reorganization company.and for-four of the insurance years plaintiff’s assignors plaintiff thereafter estopped through asserting are now them provisions upon binding are not them. prior
I. It is admitted that the institution of plaintiff all suit the “owner and holder” of became the recovery he seeks
the certificates for which purchase money, except Assignment 0f ele- five. It is x ^ ' Cause mentary that if insurance which of Action. receiving the issued had, the certificates after purchase price, repudiated full the contracts evidenced thereby ground vires, were ultra *18 SUPREME COURT OP
Sherman v. Life Insurance Co. n any other reason or for no reason at all refused to perform sucli contracts without the consent of the other parties original thereto, an holder of one of such option certificates would have to sue for the payable sums under his or certificate, to treat the con tract as money rescinded recovery sue for of the paid [6 for it. R. L.C. sec. 310.] repudi If after such ation original the insurance an holder, with having out assigned elected to rescind, had his certifi right purchase cate, the to recover the therefor, as on passed assignee rescission, have would as an ownership incident to the of the certificate. [Parkersburgv. Brown, 487.] S.U. The technical diffi presented culty proof, on the facts in however, is right to rescind seems have been to exercised original assigned they .before to certificates plaintiff. February attorney through On 22, 1913, their they they notified defendant that rescinded and canceled every each and said certificate and demanded the return moneys paid every of all each' them—unless complied fully the terms of the certificates with on were acknowledged before March 1913. The defendant receipt nothing of the notice, but said and did more. Its implied. assent to the rescission was, therefore, thereupon. contracts embodied the ceased exist, and lieu of contracts there arose obligation part on the of the insurance re money turn the several sums of for them. While assign respective their certificates at the times represented yet longer ments contracts no in existence, they support retained an evidential of the value causes of action which arose out of cancellation they wholly worth contracts. But otherwise were supposed, less. It that the holders therefore, cannot assignments plain them to papers tiff mere intended invest him with title to the ly, retaining of action of which while the causes apart proof sustaining part afforded en wholly seems It value. without which 291 Mo.—11 TERM, T—1 1—! Insurance Oo.
tirely assignments clear that the of the certificates were assignments intended to effect, and did effect, plaintiff asserting canses action which title this suit. *19 Kumpf
toAs the five certificates issued to family, stipulation, which were not included within the appellant points by out that the terms of the certificates only were transferable on the books of the com- (cid:127) pany, whereas the transfers of these certificates were attempted through delivery to be effected their with as- signments passing in blank on them. If the indorsed legal subsisting of the title to the certificates as con- question position appellant’s tracts was the at issue, plaintiff would no well doubt be taken. But con- on the trary claiming is title causes action that arose upon the rescission In of those this connec- contracts.- tion writing the rule is that order,' act which shows the intention of the owner of chose in to action transfer so that it will the become equitable assignment will transferee, amount to if an sustained a valuable consideration. it is said And that, equitable assignment the test of an is whether the justified paying per- debtor would be in the debt to the assignee. p. claiming son L. sec. [2 R. C. the Drainage 21; 283.] Wilson 266, 282, Dist. Mo. possession question certificates plaintiff the rescission the contracts after evi signa them; each it over denced had indorsed on original assignment ture of the in blank which owner assignment upon that the been made a valu recited had original able knew that consideration; and the owners money plaintiff suing own name to recover was his paid bjT company severally them to insurance for Kumpf certificates—George their witness testified as a think, plaintiff. we sufficient, These facts are part original show an intention respective the five certificates to transfer estop plaintiff them causes action contrary. asserting hereafter
291 Mo.—11 COURT SUPREME OF Co.
SRsrman v. Appellant’s plaintiff’s II. suit contention that five-year barred is based of Limitations Statute on the view issuance of certificates b3r company that causes vires, insurance was ultra money had accrued of action for and received purchased in fasror of those who the certifi- Limitations. respectively of cates, if at times all, payments issuance of the .and purchase money. appellant’s premises not are But sound. ultra Even if issuance of the certificates vires, it that a of action does follow cause purchaser one received arose favor of the them at the consummated. instant the sale was corpora- public, private, insurance tion; not a awas it was the issuance prohibitum; neither it could malum in nor se, malum perform not, by the contracts evidenced therefore, refuse *20 ground they after vires, them on the were ultra performance refunding purchasers, full without purchase money. Guardian [First National Bank v. App. Trust 187Mo. v. 77 Mo. Co., 494; Richardson, Smith Corp., 422; 1603.] 3 of secs. 1602 and Fletcher’s Enc. purchasers repudiate And until it did them the binding’. valid and them as could treat [Chapman County Douglas, 348; Geer U. v. 107 S. 682.] v. matter of fact School 111 Fed. As a Dist., any Company Great never payments provided time refused to make power ground to issue no certificates on that it had any question in them, nor did the ever raise defendant respect case-doubt- until it filed its brief lessly without so, because it that it do knew could money. offering repay West- purchase The Great simply ern its successor and the defendant as pay failed the certificates. annuities called for represented con- The contracts the certificates b3^ companies tinuing had contracts the insurance and after perform the period time to a considerable failed for contracts holders of to treat the certificates elected TEEM, Sherman v. Life Insurance Oo. right
as abandoned, as liad until do. And made such election no canse of action accrued for [Chapman Douglas, County had received. supra.] plaintiff’s It follows that several causes action were not barred the Statute Limitations invoked defendant.
III. The decree of Circuit Court the United receivership preceeding provided any States that if annuity certificate bolder failed avail himself privilege thereby surrendering extended of his certifi- buying cate and stock in the insurance coni~ Adjudicata. Res pany par value, cash at twice within days twenty he barred be thereafter, would (cid:127) making any against claim of kind thereupon assets, his certificate would can- be provision, according-to appellant’s celed. This insist- ence, canceled the not sur- that were extinguished according rendered to its terms and all rights ownership long prior incidental to their to their assignment plaintiff. grave It is doubt a matter of proceedings, as to any whether court in with all parties compelled it, before have the certifi- could against cate holders their will to enter into new contract- penalty forfeiting rights ual relations under vested existing under then contracts. there can But of this rights no doubt; it could not annul the contracts and the (if given incident thereto who not been notice had op- proceeding or not been afforded portunity McVeigh, to be heard. S. [Windsor v. U. plaintiff’s assignors 277.] And whether were in court *21 and were heard in connection the rendition of the controversy point. decree is the essence of the. at this Appellant they that iii insists court because anpearance. is' recites recital it record From this argued appeared by actually counsel, that either representation. or were there the rule of class under again language, setting Without it is sufficient out its reading say that a to the decree a whole makes OF MISSOURI, SUPREME COURT 16.4 v. Life Oo. plain Berry appeared the solicitors who Orr, receivership- “annuity in certificates holders” joined proceedings appeared only for those who had reorganize “praying- re- stockholders in leave habilitate” that these con- the insurance number. stituted but 'little more than half of the whole Pearl, names other than F. M. individuals, of the appeared who so There there- is, nowhere are disclosed. nothing precludes plaintiff in fore, the record that pro- asserting assignors appear not to the that Ms did ceeding by of the re- evidence outside counsel, just conclusively did cord shows that referred in-person appear counsel. either or representation Under doctrine one or of virtual specified more in instances are members of a class theory in of all on the allowed sue or defend behalf beneficially that all the members of will af- the class proof thei’eby. how- case, fected ever, can ceivership On facts theory doctrine it is on what not' conceiveable discharging the re- make the be invoked to decree against effectual as the certificate n actually of the the court. None who were not before proceed- original parties certificate holders were ing -appointment either as com- for the of a receiver, any plainants inter- them or defendants. Nor did proper any term. Those of that vene therein sense pro- appear during progress of them who-did ceeding others, less the themselves, did not ask for much against parties against any relief suit company. situtation assets the insurance having jurisdiction simply been thereto this: The court’s proper- custody properly ty into its it had taken invoked, jur- company; it then the further of the insurance had property, entitled who were isdiction to sell determine priorities and make proceeds thereof, settle to share power in accordingly. no other It distribution had purely to these. premises except incidental such as was proceeded of this After in the exercise court report of point jurisdiction the receiver’s where *22 TERM., v. Life Insurance Co. Sherman pending before some it, assets was sale for want a better term holders, who designated reorganization holders, will certificate be conjunction appeared the stockholders, with some of according to Mr. before the court and substance said, Chappelle’s conferring been We have with affidavit: confident we stockholders and certificate holders are and postpone that if confirmation the sale the court will can, give sufficient time, and us we raise funds to further company put pay debts of the insurance and on going ourselves have volunta- concern; its feet as a rily we to for that $120,000 to a fund used contributed be purpose, that other holders and we believe certificate yet opportunity with whom we have to con- agree cooperate postponement fer will to with us. A thereupon granted. days for At the of that ten end reorganization again ap- time certificate holders peared court effect said: consti- before the and We per fifty tute than cent of the certificate holders more may yet join whether or not, others but do us, amoung ourselves we and the stockholders have raised bring that now court, and, which we into $130,000, com- amount rehabilitate the insurance is sufficient you relinquish your pany pay that debts, we ask its jurisdiction company. return it over the It there- obvious, the court did. that what And seemed reorganization certificate holders in fore, that ask- rehabilitating ing approve plan their court to purport company not assume or act did except holders one and such other certificate themselves voluntarily them, as only chose to come with they sought court was at the
relief hands permitted pay the other volunteers company thereby release of secure the debts Assuredly they represent property. or as- did not represent many who sume certificate holders refusing then and there to surrender pay stock in the insurance cash for par toor value, one of of two dollars for basis SUPREME COURT MISSOURI, OP Life Insurance Co. anything reorganization liave to do the so called plan. nonconsenting These were never *23 represented by anyone, they ever nor were afforded they opportunity proposition to he heard, that give up buy company' must their certificates and insurance anyway. stock, or else their certificates would canceled Certainly, question they day on this never had in their personally through representation. court either or virtual attempted in decree, therefore, so far itas to cancel destroy rights their certificates and thereto, incident nullity. was a Appellant’s original
IV. next contention is that the plaintiff’s assignors, having no- holders, had proceedings Wag- tice of the in the Federal court in the thereby right staff Case are bound and had no Estoppel. by assignment. or transfer cause action to respect position fully Its in this in fol- is more stated lowing language of its brief: “These certifi- taking position cate that holders the court was knew they that were in court and that their certifi- being They cates were affected this decree. knew therefrom that other larily certificates holders simi- putting money situated new to rehabili- were in reorganize yet they tate made no motion aside the or reconsider to set decree the same objection appeal any or thereto, or hav- therefrom, and proceedings ing notice of these as and all the details (the copy disclosed from this mail matter of the decree embodying ex- and the letter court’s circular views pressed they decree), rendering at the time of if any right, plaintiff undertook to assert is here, would ap- difficulty estopped have been to do so.” The pellant here is that the certificate who encounters holders reorganize put money in to rehábiliate new the com- plain- pany not induced to the silence were do so apparent acquiescence assignors their 'tiff’s or They put court’s views or decree. had was made were before the decree views TEEM, Life Insurance Oo. expressed; when did they not all the cer- know whether tificate come or not and regardless would they whether not. thou- did or One hundred and thirty sand been dollars worth of the stock them bought had as- (subject course to the release company’s of the before the decree or its sets) was entered provisions known; worth for the $70,000 was sold remaining they most part were, to outside when parties; who they whether bought, knowledge provisions of the decree is shown. thing One took certain and that is that the defendant the time it over the business and G-reat outstanding these claims were knew it. In truth against vigorously so of Insurance com- pressed Superintendent that the State merger. that fact in the articles of pelled recognition *24 con- as is estoppel of an The essential elements plain- Of course entirely lacking. for are tended assignors as to claims in the shoes of his tiff stands from assert- estopped and he is no more him, assigned have them than would been. ing assigned that of the certificates Thirteen V. been amended assignment prior had to plaintiff with Great Western by the holders so the respective consent Cause ‘1 out of Action. under them were payable annuities ’’ attempt no made Plaintiff company. earnings of ‘‘ ’’ the an out of which earnings there were show paid. been have could these under nuities in that respect failure that plaintiff’s insists Appellant based the counts under by him recovery fatal to a is certificates. of such out of action growing on causes re suit if this were a impregnable be would position the pur recover suit to it is a But annuities. cover the re based on a for the chase as by them, represented contracts scission rescis consented appellant out already pointed disallowed. and is merit without is The contention sion. -1—Í [00] SUPREME COURT OF Sherman v. Life Insurance Co. Appellant finally impro
VI. claims court that the perly allowed interest on several which sums for plaintiff recovery. it awarded Under a the statute (Sec. 1909) plaintiff 7179, R. S. was interest entitled to payment, af ter demand but order for Interest: necessary to recover it it, for him to Demand. prove allege assignors that he his [Compton made such demand. a Mo. v. Johnson, App. 88, 94.] However, mere institution of the suit was itself a [Trimble demand. Railroad, Mo. prayer recovery 587.] each count is ‘‘together of the sum therein named interest there allegation on,” but petition there nowhere in the is previous payment. of a demand of Under such circum prayer should stances, be we construed, think, asking for interest from the time of the demand then through made the institution of the suit. It fol plaintiff greater lows that as the court could not award (Wright sum as interest than he asked v. Jacobs, 19), allowing 61 Mo. it was in error in interest from February April 22, 1913, 1, 1913, date on which the suit was commenced. The interest should have been computed By from the latter date. reason im proper judgment allowance of interest as a whole plaintiff excessive to the extent of If the $229.77. will enter a remittitur of that sum as of the date of judgment, days, judgment within ten will bo affirmed; will otherwise, reversed the cause CC., remanded. concur. Brown, Small and *25 opinion foregoing PER CURIUM:—The Rag- adopted opinion as the' C. court. All laND, .except judges concur, JJ., Elder Graves who dissent.