Andrus v. Business Men's Acc. Ass'n

• Decision Date: 04 June 1920
• Docket Number: No. 20218.,20218.
• Parties: ANDRUS v. BUSINESS MEN'S ACC. ASS'N OF AMERICA.
• Court: Missouri Supreme Court

223 S.W. 70

283 Mo. 442

ANDRUS v. BUSINESS MEN'S ACC. ASS'N OF AMERICA.

No. 20218.

Supreme Court of Missouri, Division No. 2.

June 4, 1920.

Rehearing Denied June 25, 1920.

Appeal from Circuit Court, Jackson County; E. E. Porterfield, Judge.

Action by Cora I. Andrus against the Business Men's Accident Association of America. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

Solon T. Gilmore, and Gilmore & Brown, all of Kansas City, for appellant.

James G. Smith, of Kansas City, for respondent.

WHITE, C.

The plaintiff sued as the widow of Vincent R. Andrus, deceased, upon a policy of life insurance issued to him by the defendant. The contract is what is termed an "accident policy" and insured against —

"loss resulting from bodily injuries, effected directly, independently, and exclusively of all other causes, contributing or proximate, through external, violent, and accidental means (excluding suicide, sane or insane)."

It is alleged in the petition that the insured met his death —

"from bodily injuries, effected directly, independently, and exclusively of all other causes, contributing or proximate, through external, violent, and accidental means, to wit, by the drinking of carbolic acid on said 20th day of May, 1915."

Plaintiff prayed judgment for $3,000, the amount named in the policy for loss of life.

Defendant filed an answer containing, first, a general denial; second, an allegation that Vincent R. Andrus, at the time of the acceptance of the application and issuance of the policy, was 61 years of age at his nearest birthday, that the defendant was a corporation organized under article 3, chapter 61, R. S. 1909, pertaining to insurance on the assessment plan, and was licensed to do business on that plan, and the policy issued was therefore prohibited by the statute of Missouri and was ultra vires; third, averments that the policy contained a provision excluding liability for suicide, voluntary or involuntary, sane or insane, and Andrus voluntarily committed suicide by drinking carbolic acid with suicidal intent, and section 6945, R. S. 1909 of Missouri, the suicide section, is unconstitutional in violation of section 1 of article 2, section 4 of article 2, section 30 of article 2, and section 5 of article 12, of the Constitution of the state of Missouri.

Plaintiff introduced the policy and proofs of death. She swore that she did not know how old her husband was at the time of his death. The defendant offered its articles of association framed under the provisions of article 3, chapter 119, Revised Statutes of Missouri for 1899, now article 3, chapter 61, Revised Statutes of 1909. There was a second count in the petition, but it is stated that it was dismissed, and the trial proceeded upon the first count. The terms of the policy and the statements in the application, the character of the company shown by its articles of association and the business transacted, and other facts, will be considered in treating of the several *questions arising in the case. There was a judgment for plaintiff for the amount sued for, and defendant appealed.

I. Appellant attacks the constitutionality of section 6945, R. S. 1909, which declares suicide shall not be a defense in suits upon policies of life insurance, and asks this court to examine that statute and the reasons advanced for its alleged conflict with certain provisions of the Constitution of the state of Missouri, as mentioned in the answer. The argument is that it is unconstitutional, because it abridges the right of contract; the constitutional guaranty of the right to liberty includes the right to make such contracts as the individual sees fit. If the argument of appellant was sound as applied to individuals, it would not necessarily apply to corporations, which are creatures of the statute. This court has said in the case of Julian v. Kansas City Star, 209 Mo. loc. cit. 66, 107 S. W. 499:

"The Legislature, in dealing with artificial creatures of the law, may, in certain particulars, make them a class to themselves, and impose conditions upon them not imposed on individuals."

And further (209 Mo. on page 67, 107 S. W. 499):

"The state, in issuing the charter, may impose its own terms, and, when accepted, the corporation is bound by the terms."

The state, in prescribing terms and conditions upon which a corporation may be organized and may be empowered to transact business, merely exercises the ordinary power vested in the sovereign state. It could forbid accident insurance companies from doing business in Missouri altogether, which it would be powerless to do in regard to natural persons. It can limit the activities of a corporation, and prescribe the manner and conditions under which it may transact business, in a way that could not be applied to individuals. This has been determined so often that argument in support of the distinction between artificial and natural persons is unnecessary. N. W. Life Ins. Co. v. Riggs, 203 U. S. 243, loc. cit. 354, 27 Sup. Ct. 126, 51 L. Ed. 168, 7 Ann. Cas. 1104; Applegate v. Travelers' Ins. Co., 153 Mo. App. loc. cit. 82, 83, 132 S. W. 2; Houston v. Pulitzer Pub. Co., 249 Mo. loc. cit. 338, 155 S. W. 1068.

Appellant argues at length that the statute, by declaring suicide to be no defense to an action on an insurance policy, places a premium on suicide and is inimical to public welfare and to public morals. In that argument the appellant merely attacks the propriety and the policy of the statute, a consideration which does not concern this court. It is within the discretion of the Legislature to determine the propriety of an enactment and decide whether it may have a beneficial effect upon the subject to which it applies, and that determination it not to be questioned by this court in determining the validity of the statute.

II. The appellant describes itself as a company formed upon the assessment plan, within the provisions of article 3, chapter 61, of the Revised Statutes of 1909. That raises the question as to whether the suicide statute, section 6945, would apply to policies issued by it, and whether section 6956, R. S. 1909, limiting the issuance of a policy to one under 60 years of age, is applicable to policies of this company. Section 6950, R. S. 1909, defines a contract of insurance upon the assessment plan as one where the payment of the benefit is in "any manner or degree dependent upon the collection of an assessment upon persons holding similar contracts."

It has been held by this court that a fraternal benefit association, if it issues contracts of insurance which do not depend upon the collection of assessments, but provide for the payment of fixed sums-in other words, old-line policies-is bound by such contracts. Toomey v. Supreme Lodge, K. of P., 147 Mo. 130, loc. cit. 138, 139, 48 S. W. 936; Aloe v. Fidelity Mut. Life Ins. Co., 164 Mo. loc. cit. 687, 55 S. W. 993; McDonald v. Life Ass'n, 154 Mo. 618, loc. cit. 627, 55 S. W. 999 (citing cases). In the case last cited it is said that the amount to be paid in case of death —

"does not depend in any manner upon the collection of an assessment upon persons holding similar contracts, and that is the test under our statutes whether or not a company is an assessment company."

And further (154 Mo. on page 628, 55 S. W. 1001):

"For it devolves upon the defendant to show, not only that it is an assessment company, but that the policy as issued is such a policy as an assessment company is authorized to issue; otherwise, it is bound by its contract, and is estopped to plead that the contract is ultra vires."

If a company organized under article 3 of the insurance chapter issues a policy not authorized by that article, it cannot avail itself, in a suit upon such policy, of the exemptions from liability provided for such companies. Ordelheide, Adm'r, v. M. B. A., 268 Mo. 346, 347, 187 S. W. 1193.

In this case the policy issued to the deceased provides for the payment of a fixed assessment of $6 on the 15th days of March, June, September, and December of each year. The benefit to be paid is a definite fixed sum of $3,000 upon the loss of life and the performance of the conditions relating to proofs of loss. There is nothing in the policy to indicate that the payment of the benefit is in any manner Or degree dependent upon the collection of assessments upon persons holding similar contracts. It is therefore not a contract upon the assessment plan as defined by the statute. Williams v. Insurance Co., 189 Mo. 70, loc. cit. 81, 87 S. W. 499.

The suicide statute (section 6945) provides that it shall be no defense that the insured committed suicide, unless he contemplated suicide at the time he made the application for insurance. That section is in article 2 of chapter 61, entitled "Life and Accident Insurance." Section 6959, R. S. 1909, found in article 3, relating to "Fraternal Benefit Insurance," after providing for annual reports, has this proviso:

"And all such foreign companies are hereby declared to be subject to, and required to conform to the provisions of sections 8945, 7042, 6937 and 6940 of the Revised Statutes of Missouri of 1909, and governed and controlled by all the provisions in said sections contained: Provided, always, that nothing herein contained shall subject any corporation doing business under this article to any other provisions or requirements of the general insurance laws of this state, except as distinctly herein set forth and provided."

It may be noted that at the time of the issuance of the policy which this court had under consideration in the Ordelheide Case, 268 Mo. 346, 187 S. W. 1193, supra, section 1408, R. S. 1899, then in force, contained this clause:

"Such associations shall be governed by this act and shall be exempt from the provisions of the insurance laws of this state, and shall not pay a corporation or other tax, and no law hereafter passed shall apply to them unless they be...