Burridge v. New York Life Ins. Co.
| Decision Date | 26 February 1908 |
| Citation | 109 S.W. 560,211 Mo. 158 |
| Parties | LEE S. BURRIDGE v. NEW YORK LIFE INSURANCE COMPANY, Appellant |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. Moses N. Sale Judge.
Affirmed.
Judson & Green for appellant; James H. McIntosh of counsel.
(1) The assignment and delivery of the policy to the company was a pledge of the reserve value of the policy for payment of the loan, under a distinct and separate contract of pledge, valid and enforcible both under the laws of New York and Missouri and the non-forfeiture provisions of the Missouri statutes are inapplicable. Secs. 7880-7882, R. S. 1899, recognizing and authorizing loans by insurance companies upon securities of policies; sec. 16, ch. 690, Laws of New York, 1892. (2) The case of Smith v. Mutual Benefit Life Ins. Co., 172 Mo. 329, which was the sole basis of the order for new trial, does not control this case, as that case must be limited to its special facts, and is clearly distinguished from the case at bar. Laws 1903, p. 208; Mutual Reserve Life Ins. Co. v. Roth. 122 F. 853. The Smith case is distinguished from the case at bar by the following facts: 1. There is here an independent contract of commercial pledge distinct from the policy. 2. The entire loan was made for the purpose of payment of premiums. 3. There was an actual settlement and payment to the insured constituting a surrender of the policy. (3) This case falls within the express exception to the non-forfeiture statute, as the policy was surrendered to the company for a consideration adequate in the judgment of the holder. R. S. 1899, sec 7900. (4) The plaintiff is estopped from maintaining this action. The retention of the check with knowledge of the fact that it was for the balance of the surrender value of the policy, was a waiver of any other payment, and an acceptance of the account. Story on Contracts, sec. 1004; 29 Am. and Eng. Ency. Law (2 Ed.), 1108; Williams v. Railroad, 153 Mo. 519. (5) The physical or mental condition of the insured is immaterial. Wheeler v. Ins. Co., 882 N.Y. 545; Klein v. Ins. Co., 104 U.S. 89; Ins. Co. v. Daily, 33 Kan. 606; Hawkshaw v. Supreme Lodge, 29 F. 223; Gaterman v. Ins. Co., 1 Mo.App. 300; 25 Cyc., 844. (6) The non-forfeiture provisions of the Missouri statutes do not prohibit loans of insurance companies to their policy holders secured by the reserve value of their policies, and no such prohibition can be implied therefrom. Statham v. Ins. Co., 93 U.S. 24; Smith v. Ins. Co., 64 Mo. 330; Relfe v. Ins. Co., 78 Mo. 594; Rumbold v. Penn. Mut. Life, 70 Mo.App. 715; Boettgen v. Iron Co., 136 Mo. 531; R. S. 1899, sec. 7880. (7) The non-forfeiture statutes must be read not only in connection with the other sections of the non-forfeiture act, but with the entire chapter on life insurance, and the legislative intent must be derived from the entire act. A fortiori, must this be done to avoid a construction which involves unjust and absurd consequences, making the statute so construed unconstitutional. Kane v. Railroad, 112 Mo. 34; Bingham v. Birmingham, 103 Mo. 345; Chouteau v. Railroad, 122 Mo. 375; Lamar Water & Elec. Light Co. v. Lamar, 128 Mo. 188, 140 Mo. 145. (8) If the statute relied on could be construed as making the policy loan agreement in this case void and unenforcible, the statute so construed would be unconstitutional both under the State and Federal Constitutions. Art. 2, sec. 4, Const. of Mo.; Const. of U.S. amd. 14; Const. of U.S. art. 1, sec. 10; State v. Loomis, 115 Mo. 307.
Jones, Jones, Hocker & Davis for respondent; Wellman, Gooch & Smyth of counsel.
(1) Under the undisputed facts the plaintiff was entitled to judgment. It was error to grant a nonsuit, and the error was properly corrected by setting aside the nonsuit. R. S. 1899, sec. 7897; Smith v. Insurance Co., 173 Mo. 333. (2) The company could not rightfully deduct the amount of the loan to the insured from three-fourths of the net value of the policy because the loan was not made "on account of past premium payments on the policy." No such showing was pleaded or proven by defendant, upon whom the burden of proof rested, and the physical facts preclude the possibility of any such showing. Smith v. Insurance Co., 173 Mo. 333. (3) The loan agreement was part of the contract of insurance. Lewis v. Ins. Co., 187 U.S. 335.
Defendant is a life insurance company incorporated in the State of New York. At the times in hand John H. Reifsnyder was a resident and citizen of Missouri and so was his wife, Frances A. On February 20, 1894, defendant, as insurer, issued to John H. Reifsnyder, as the insured, a policy for five thousand dollars, naming his said wife as beneficiary. Her right was absolute, i. e., the policy itself contained no provision permitting the insured to change the beneficiary. The application for it was made to defendant's St. Louis agent. The policy was delivered by him in St. Louis and the case proceeds on the theory that defendant was transacting a life insurance business in the State of Missouri under its laws in that behalf made and provided, that the policy is a Missouri contract, and, hence, the lex loci contractus governs. Reifsnyder died November 3, 1901. It stands admitted that payment of the policy was demanded, was refused, that defendant denied liability and that by so doing it waived notice of proofs of death. Frances A. Reifsnyder on the 5th day of May, 1903, made a formal written assignment of her right, title and interest in the policy and of her right, claim, action and demands thereon to the plaintiff, who sues.
At the close of a trial before the Hon. Moses N. Sale, presiding judge of Division Two of the St. Louis Circuit Court, and a jury, a peremptory instruction was given for defendant. Thereat plaintiff excepted and asked a nonsuit with leave. One going, he presented in due season his motion to set it aside. This motion was allowed. Thereat defendant in turn excepted and appeals from the order granting a new trial.
The suit was for the policy face less a certain policy loan made the insured. The recovery sought was thereby put below our jurisdiction. Jurisdiction, however, is conceded here because by answer there are lodged in the case constitutional questions.
No question is made on the pleadings and it will do to say on that behalf that they were sufficient to raise all questions made by learned counsel.
The controversy turns on a policy loan, a default in a premium payment, a default in paying the interest on the loan and an alleged surrender and cancellation of the policy under the terms of an alleged policy pledge made as collateral security for said loan. In a nutshell defendant's contention is that the policy with all its accumulations was pledged to it by the insured and the beneficiary to secure a policy loan; that under the terms of that pledge a default was made and the policy was cancelled to pay the loan, and surrendered. On the other hand, plaintiff (conceding the loan and default) contends that under the non-forfeiting clauses of the statutes of Missouri, then in force, the policy was alive at Reifsnyder's death and that defendant must pay the face of the policy less the loan.
In the determination of the case, the following record facts, agreements and statutes are involved, viz.:
Sec. 5856 (R. S. 1889): "No policies of insurance on life hereafter issued by any life insurance company authorized to do business in this State, on and after the first day of August, A. D. 1879, shall, after the payment upon it of two full annual premiums, be forfeited or become void by reason of the nonpayment of premium thereon, but it shall be subject to the following rules of commutation, to-wit: The net value of the policy, when the premium becomes due and is not paid, shall be computed upon the American experience table of mortality, with four and one-half per cent interest per annum, and after deducting from three-fourths of such net value any notes or other indebtedness to the company, given on account of past premium payments on said policy issued to the insured, which indebtedness shall then be canceled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy, and the term for which such temporary insurance shall be in force shall be determined by the age of the person whose life is insured at the time of default of premium and the assumption of mortality and interest aforesaid."
This statute in the Revision of 1899 is, so far as this controversy is concerned, substantially the same. It reads:
Sec 7897 (R. S. 1899): "No policies of insurance on life hereafter issued by any life insurance company authorized to do business in this State, on and after the first day of August, A. D. 1879, shall, after payment upon it of three annual payments, be forfeited or become void, by reason of non-payment of premiums thereof, but it shall be subject to the following rules of commutation, to-wit: The net value of the policy, when the premium becomes due, and is not paid, shall be computed upon the actuaries' or combined experience table of mortality, with four per cent interest per annum, and after deducting from three-fourths of such net value any notes or other evidence of indebtedness to the company, given on account of past premium payments on said policies, issued to the insured, which indebtedness shall be then canceled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy; and the term for which said temporary insurance shall be in force shall be determined by the age of the person whose life is insured at the time of default of premium, and the assumption of mortality and...
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