Rose v. Franklin Life Ins. Co.

• Decision Date: 29 November 1910
• Citation: 132 S.W. 613,153 Mo. App. 90
• Parties: ROSE v. FRANKLIN LIFE INS. CO.
• Court: Missouri Court of Appeals

132 S.W. 613

153 Mo. App. 90

ROSE v. FRANKLIN LIFE INS. CO.

St. Louis Court of Appeals. Missouri.

November 29, 1910.

Rehearing Denied December 9, 1910.

1. APPEAL AND ERROR (§ 273)—REVIEW—EXCEPTIONS —SUFFICIENCY.

In an action against an insurance company, the defendant demurred to the evidence at the close of plaintiff's case and at the close of the entire case. It also attempted to raise the question that the policy in issue had not sufficient net value to support the judgment in its motion for new trial. Held that, though defendant did not except to specific findings of fact, this practice was sufficient to entitle it to a review of the action of the trial court in overruling the demurrer to the evidence, to which action an exception was duly taken.

2. INSURANCE (§ 350)—FORFEITURE—NON-PAYMENT OF DUES—STATUTES—CONSTRUCTION —TECHNICAL TERMS.

In construing Rev. St. 1899, § 7897 (Ann. St. 1906, p. 3752), which provides that policies shall not be forfeited by reason of non-payment of premiums where three-fourths of the net value of the policy is sufficient to secure temporary insurance, etc., "net value" is a technical term, and is to be taken in its technical sense.

3. STATUTES (§ 176)—CONSTRUCTION—QUESTION FOR COURT—TECHNICAL TERMS.

In construing a statute, the meaning of technical terms is a question for the court, and it may determine their meaning by consulting books of reference, or referring to persons who have knowledge on the subject.

4. STATUTES (§ 192)—CONSTRUCTION—TECHNICAL TERMS—PRIOR MEANING.

In construing a statute containing technical terms, where such terms had a settled meaning before the statute was enacted, the Legislature will be presumed to have used such terms to express the settled meaning.

5. STATUTES (§ 236)—CONSTRUCTION—HISTORY —ABUSE TO BE CORRECTED.

In construing a remedial statute, the abuse to be corrected may be considered.

6. INSURANCE (§ 350)—PREMIUMS—"NET VALUE"—STATUTES.

The "net value" of an insurance policy, as computed under Rev. St. 1899, § 7897 (Ann. St. 1906, p. 3752), is the excess of the total premiums paid, plus 4 per cent. compound interest, over the actuarial cost of insurance.

7. INSURANCE (§ 350)—PREMIUMS—NET VALUE —"GROSS PREMIUMS."

"Gross premiums" include the net premium and the loading, usually imposed on a policy, to pay expenses of the company and yield a profit to the insurer.

8. INSURANCE (§ 350)—PREMIUMS—NET VALUE —COMPUTATION—STATUTE.

Under Rev. St. 1899, § 7897 (Ann. St. 1906, p. 3752), the computation of the net value is to be made upon the premiums as paid, and according to the actuarial cost of insurance, and not upon an artificial standard, independent of the kind of policy or rate of premium.

9. INSURANCE (§ 370)—ACTIONS UPON POLICIES —EVIDENCE— EXPERT EVIDENCE— EFFECT.

In an action on an insurance policy, under Rev. St. 1899, § 7897 (Ann. St. 1906, p. 3752), providing for nonforfeiture because of lapse, etc., the evidence of an actuary as to the net value of a policy, based upon computations, founded on an erroneous construction of the statute's requirements as to the elements of the computation, was wholly worthless.

10. INSURANCE (§ 350)—PREMIUMS—NET VALUE—AMOUNT OF PREMIUM.

In computing the net value of a policy, such net value being based upon the excess of premiums actually paid over the cost of insurance, the net value is not greater in proportion to the smallness of the premium because the insured receives a greater benefit for his money, this reason being supported by the construction of Rev. St. 1909, § 6925, intended to secure the solvency of insurance companies which charges them as a liability with a reserve sufficient to meet all policy obligations.

Appeal from Circuit Court, Lincoln County; James D. Barnett, Judge.

Action by Susie S. Rose against the Franklin Life Insurance Company. From a judgment for plaintiff, defendant appeals. Reversed.

This is an action on a policy of life insurance for $2,000, issued to Thomas M. Rose on the 2d day of July, 1900. The plaintiff is his widow and the beneficiary in the policy. The said policy contained provisions in substance as follows:

"The Franklin Life Insurance Company hereby promises to pay $2,000 on receipt of satisfactory proofs of death of Thomas M. Rose, provided this policy is then in force, to Susie S. Rose, if living. This insurance is granted in consideration * * * of the payment in advance of $36.54 and of the payment of a like amount on or before the second day of July in every year following until premiums for the term of five years have been duly paid; and of the further payment of the life rate premium of $70.80, on or before the date above mentioned in every year thereafter during the continuance of this policy. In case of default of any premium after one full year's life rate premium has been paid in cash, the company will: (a) Without action of the insured continue the full amount of insurance during the time specified in the following table. * * * (b) Upon due surrender of this policy within sixty days after such default, issue a nonparticipating paid-up life policy, as specified in said table; and after this policy has been in force one year under life rate, the company will loan the value stated in the following table. (And the policy contained the table of loan, temporary or continued insurance and paid-up insurance values referred to in the foregoing provisions.) Failure to pay any renewal premium of this contract will render it null and void. A grace of one month will be allowed in the payment of premiums."

At the date of said policy, Thomas M. Rose was 43 years of age, and his age was so stated in the policy. He paid to the defendant the five annual premiums of $36.54 falling due on the 2d day of July of the years 1900 to 1904, inclusive, and no more. He made default of premium, and the policy by its terms lapsed on July 2, 1905. After such default and lapse he lived 2 years, 10 months, and six days, dying May 8, 1908. Proof of death was waived. The trial was to the court. No declarations of law were asked or given. There was a written finding of facts made pursuant to request under the statute. On the same day judgment was rendered for plaintiff for $1,818.68, being the amount of the policy, $2,000, with 6 per cent. interest from date of suit, less three unpaid annual premiums of $70.80 each with 6 per cent. interest compounded annually from the dates when they respectively became due. After unsuccessful motions for new trial and in arrest, the defendant appealed. Other facts deemed necessary to be understood will appear in the opinion proper.

Jones, Jones, Hocker & Davis and O. H. Avery, for appellant. William A. Dudley, for respondent.

CAULFIELD, J. (after stating the facts as above).

The suit was brought and prosecuted by plaintiff upon the theory that the policy, notwithstanding the lapse, had, at the time of lapse, a net value, three-fourths of which was sufficient when used as a net single premium (as contemplated by section 7897, Rev. St. 1899 [Ann. St. 1906, p. 3752]) to provide temporary insurance for the time that intervened between lapse and death, and the question which we deem decisive of this appeal is whether the policy had such net value. The defendant raised the question by demurring to the evidence at the close of the plaintiff's case and again at the close of all the evidence, and this was overruled, defendant duly excepting to such action of the court. Defendant also attempted to raise this question by suggesting for the first time in its motion for a new trial that the court erred in certain of its findings of facts. Plaintiff disposes of this suggestion by pointing out that defendant did not except to said findings, and therefore cannot complain of them as such. However this may be, we can find no authority, and plaintiff cites us to none, holding that a failure to except to special findings of fact closes the door of investigation as to whether the trial court erred in its rulings during the trial. The failure to except to the findings will not prevent us reviewing the action of the trial court in overruling the demurrer to the evidence, which action was excepted to.

We are satisfied upon reading the record that there is really no controversy as to the facts. The case upon said demurrer turns upon the meaning of the term "net value" as used in the statute (section 7897, Rev. St 1899), which is admittedly applicable, and which, omitting parts not important to this controversy, is in substance as follows: "Policies Nonforfeitable, When.—No policies of insurance on life * * * shall, after payment upon it of three annual payments, be forfeited or become void, by reason of nonpayment of premiums thereof, but it shall be subject to the following rules of commutation: 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 * * * three-fourths of such net value * * * 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 interest aforesaid." The words "net value" being technical words are to be taken in their technical sense. Sutherland, Statutory Construction, § 393; section 8057, Rev. St. 1909. Their meaning is for the court who may ascertain their meaning by referring to persons who have knowledge on the subject or by consulting books of reference containing information thereon. Sutherland, Statutory Construction, § 391. It is important to ascertain whether the words had a settled technical meaning before the statute was enacted, as in that case we must assume that the Legislature used them in that sense. Ruckmaboye v....