Schuermann v. Union Central Life Ins. Company
| Decision Date | 17 December 1901 |
| Parties | SCHUERMANN v. UNION CENTRAL LIFE INSURANCE COMPANY, Appellant |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. Leroy B. Valliant Judge.
Affirmed.
Geo. P B. Jackson for appellant.
(1) A contract procured through fraud is voidable at the election of the party defrauded. If the other party asserts a right or attempts a recovery on such contract, and the injured party desires to defeat such right or such recovery by reason of the fraud, he must resort to a suit in equity to set aside the contract, and where such resort to equity is made in a pending case, it should be separately and finally disposed of before any other issues are tried. Och v. Railroad, 130 Mo. 27; Hancock v. Blackwell, 139 Mo. 454. (2) The answer admitted the plaintiff's cause of action, and sought affirmative relief from the same, on equitable grounds. The entire case was thus converted into one in equity, to be governed by the rules of equity practice. The equity jurisdiction having once attached, it should be retained until complete justice is done. The court therefore erred in denying the defendant's request for a trial in equity, and in trying the case as an action at law, before a jury, over the objection of defendant. Hodges v Black, 8 Mo.App. 389; s. c., 76 Mo. 537; Schuster v. Schuster, 93 Mo. 443; Allen v. Logan, 96 Mo. 591; Woodward v. Martin, 106 Mo. 362; Wendover v. Baker, 121 Mo. 289; O'Day v. Conn, 131 Mo. 325; McCollum v. Boughton, 132 Mo. 620. (3) The court erred in holding that section 5849, Revised Statutes 1889, prevented defendant having the relief sought by its answer, on account of the policy sued on having been secured by fraudulent representations and suppression of the truth. That statute only modifies the doctrine of "warranties" in insurance law, and does not destroy the right to invoke the power of courts of equity to annul contracts of insurance procured by fraud. White v. Ins. Co., 4 Dill. 177; Hermany v. Ins. Co., 151 Pa. St. 17; Ins. Co. v. Bank, 72 F. 418; Mengel v. Ins. Co., 35 A. 197; Zepp v. Grand Lodge, 69 Mo.App. 494; Ashford v. Ins. Co., 80 Mo.App. 638; Van Cleave v. Ins. Co., 82 Mo.App. 682. (4) As construed and applied by the court, section 5849, Revised Statutes 1889, is violative of section 30, article 2 of the Constitution of Missouri, and of section 1, article 14 of the amendments to the Constitution of the United States, because, as so construed and applied it deprives the defendant of its property without due process of law, and denies the defendant the equal protection of the laws. Cooley's Const. Lim. (4 Ed.), 490, s. p. 391; Barbier v. Connolly, 113 U.S. 27; Yick Wo v. Hopkins, 118 U.S. 356; Dent v. West Va., 129 U.S. 114; Railroad v. Ellis, 165 U.S. 150; State v. Loomis, 115 Mo. 314. The stipulation that policy shall be incontestible, does not preclude defense on ground of fraud in procuring the policy. Welch v. Union Cent. Life Ins. Co., 78 N.W. 853.
Seneca N. Taylor, Charles Erd and Seneca C. Taylor for respondent.
(1) Sections 5849 and 5850, Revised Statutes 1889, entered into and became a part of this insurance contract. This statute is constitutional and conclusively binding on the appellant. Thassler v. Life Ass'n, 67 Mo.App. 505; Ampleman v. Ins. Co., 35 Mo.App. 314; Daggs v. Ins. Co., 136 Mo. 382; Havens v. Ins. Co., 123 Mo. 403; Hanford v. Mass. Ben. Ass'n, 122 Mo. 59; Oshkosh Co. v. Ins. Co., 71 Wis. 454; Thompson v. Ins. Co., 45 Wis. 388; Reily v. Ins. Co., 43 Wis. 388; Ins. Co. v. Leslie, 24 N.E. (Ohio), 1072; Emry v. Ins. Co., 52 Me. 322. (2) It is for the State to determine what class of cases shall be tried by jury. What is due process of law in the State is regulated by the law of the State. Walker v. Sauvinet, 92 U.S. 90; Murrey v. Hoboken L. & I. Co., 59 U.S. 376; Dent v. West Virginia, 129 U.S. 114; Ellenbecker v. Plymouth County District Court, 134 U.S. 31. Where rights are created or limitations prescribed by statute, and a procedure pointed out for the enforcement of these, that procedure is exclusive, unless waived by both parties. Sauter v. Leveridge, 103 Mo. 622; Earl v. Hart, 89 Mo. 270; Kitchen v. Railroad, 59 Mo. 515. Aside from the statute giving the respondent a right to trial by jury, it could not be said the court erred in the simple fact of calling a jury, as was done in the case at bar. Estes v. Fry, 94 Mo. 271; Cox v. Cox, 91 Mo. 78; Reed v. Bott, 100 Mo. 67. The law which applies alike to all persons in the same business, answers all constitutional requirements of uniformity. Express Co. v. St. Joseph, 66 Mo. 675; St. Louis v. Sternberg, 69 Mo. 301; St. Louis v. Spiegel, 75 Mo. 147; St. Louis v. Bowler, 94 Mo. 630; State v. Julow, 129 Mo. 176. (3) Insurance companies make their own conditions, and these should be construed most strongly against them. Burnett v. Insurance Co., 68 Mo.App. 345; Hoffman v. Accident Indemnity Co., 56 Mo.App. 301; Renshaw v. Ins. Co., 103 Mo. 611. (4) Where the construction of a life policy is doubtful, it should be resolved in favor of the assured. Ethington v. Ins. Co., 55 Mo.App. 134; Hale v. Ins. Co., 46 Mo.App. 509; La Force v. City Ins. Co., 43 Mo.App. 519; Ins. Co. v. Wiler, 100 Ind. 92; Reynolds v. Ins. Co., 47 N.Y. 597; Hoffman v. Ins. Co., 32 N.Y. 405; 1 Wood on Fire Ins. (2 Ed.), sec. 60; May on Ins. (2 Ed.), sec. 175. (5) The court should not only affirm the judgment in this case, but it should also assess ten per cent damages on the amount of the judgment, for this is just. Secs. 2303, 2305, R. S. 1889; Linnenkohl v. Winkelmeyer, 54 Mo.App. 574; DeBule v. Labadie, 7 Mo.App. 578; Smith v. White, 17 Mo.App. 443; Utz v. Hore, 20 Mo.App. 37; Reber v. Railroad, 38 Mo.App. 346; Milling Co. v. Coquard, 40 Mo.App. 41. In the last case it was held, a demand for an affirmance with damages held warranted on the ground that every proposition urged by the appellant had been determined adversely to him by prior decisions of the Supreme Court and this court. Osborn v. Oliver, 23 Mo.App. 667. It is a common practice in the Federal courts, where a writ of error is sued out for delay, to award the defendant in error ten per cent damages. Halmer v. Arthur, 131 U.S. 60; Railroad v. Volk, 151 U.S. 73; Mining Co. v. Star, 141 U.S. 222; Wilson v. Everett, 139 U.S. 616. And the same rule obtains in the highest courts of the State of New York. Warner v. Tessner, 33 N.Y. 296; Mayor v. Carmen, 38 N.Y. 25; Winfield v. Potter, 38 N.Y. 67; Sentems v. LaDeau, 140 N.Y. 463; Deginer v. Underwood, 30 N.Y.S. 399.
ROBINSON, J. Brace, P. J., and Marshall, J., concur. Valliant, J., not sitting, having tried the case below.
This is an action against the appellant, the Union Central Life Insurance Company, to recover on a policy of insurance issued on the life of respondent's husband, Henry Schuermann. The petition is in the usual form, containing all essential averments.
The amended answer, upon which the case was tried, among other things avers that the plaintiff's husband in his application for insurance, made certain false representations and statements, as to the past and present condition of his health, and his habits of sobriety, etc., fully detailed and set out. It then avers that plaintiff's husband at the time knew said representations and statements as made were false, but that the defendant relied upon and believed them to be true, and that but for its belief and reliance therein and thereon, it would not have issued the policy in suit. The answer then sets out the amount of premiums received, and avers the deposit of same in court to the use of plaintiff as soon as it learned of the falsity of the insured's statements contained in his application for insurance, and prayed that the court, in the exercise of its powers as a court of equity, decree the policy to be null and void, and for naught held, and for such other relief as the court might think it entitled to under the facts of the case.
To defendant's answer plaintiff replied denying each and every allegation thereof, and as a further affirmative reply alleged that her deceased husband stated and represented in his application for insurance that he was a moderate drinker, and that the defendant company knew that fact, and knowing it induced deceased to take out the policy in suit, and further averred that said insured died of dropsy, a malady in no way provoked, caused or influenced by any of the conditions about which the insured is alleged to have made false and untrue statements and representations. Other averments were made in the reply, unnecessary to recite in the present consideration of the case. Upon the case being called for hearing both parties announced ready for trial and the plaintiff demanded a jury. Thereupon the counsel for defendant objected to a jury being impaneled, or to the trial of the case before a jury, for the reason as stated that "under the pleadings the defendant was entitled to have the issues, presented in its answer, tried before the judge as a chancellor sitting as a court of equity; that it was entitled to a trial in equity and without a jury to determine the issues raised as to whether or not the policy of insurance relied upon in the petition was obtained by fraud, and because it was improper to submit such issues to a jury, and proceed in the case as upon an action at law," all of which objections made by defendant, were overruled by the court, and a jury was duly impaneled and the cause was proceeded with before them, resulting in a verdict upon which a final judgment was entered. From that judgment this appeal has been prosecuted by defendant.
Several minor objections have been made to the action of the trial court, that arose during the progress of the...
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