Andrus v. Fidelity Mut. Life Ins. Ass'n.

• Decision Date: 19 March 1902
• Citation: 67 S.W. 582,168 Mo. 151
• Parties: ANDRUS et al. v. FIDELITY MUT. LIFE INS. ASS'N.
• Court: Missouri Supreme Court

67 S.W. 582

168 Mo. 151

ANDRUS et al. v. FIDELITY MUT. LIFE INS. ASS'N.

Supreme Court of Missouri.

March 19, 1902.

LIFE INSURANCE — LAPSE FOR NONPAYMENT — WAIVER — PROOF — PLEADINGS — PRACTICE — CONSTITUTIONAL LAW — CLASS LEGISLATION — PERFORMANCE OF CONTRACT — NONJOINDER OF PLAINTIFFS — WAIVER OF OBJECTION — ESTOPPEL — BENEFICIARIES — SEPARABLE INTERESTS.

1. The practice in the state courts, of allowing plaintiff in an action on an insurance policy to prove a waiver of the terms thereof without alleging such waiver in his petition, is not repugnant to the fourteenth amendment of the federal constitution, as a discrimination against insurance companies; such companies being a proper subject for classification in this regard, and the practice applying equally to all such companies.

2. A life insurance policy provided that it should lapse upon nonpayment of any premium, but that by payment in a certain time after such lapse, and furnishing a health certificate, the policy might be reinstated. Fourteen premiums were paid, — four at maturity, five before, and five after, — a health certificate being required in only one case. The premiums were collected by drafts through a bank, the company notifying insured when the drafts were drawn, but no notice of the draft for the last premium was given, and it was not paid until 20 days after maturity. The company notified insured that a health certificate would be required, but retained the payment, giving a receipt reciting that the policy would not be reinstated until the health certificate was furnished. It was the custom of the company to give such receipts for payments after maturity, but the policies were not in fact marked "lapsed" in such cases, and the policy sued on was never so marked. Insured died a few days after the last payment, and upon notice of the loss the company gave instructions as to how to make proof thereof, but a month thereafter offered to return the last premium, claiming the policy forfeited. Held, that the evidence was sufficient to sustain a verdict based upon a waiver of the forfeiture.

3. A petition in an action on a life insurance policy, alleging that immediately after death of insured plaintiffs gave defendant due notice and proof of the death, and performed all the other requirements of the contract, was not subject to the objection that it did not sufficiently allege performance, where no such objection was taken below, either before verdict or by motion in arrest of judgment.

4. Where an insurance company, on receiving notice of a loss under a life policy payable to two persons if they survived the insured, but one of whom died before the loss, instructed the living beneficiary and insured's administrator that the interest of the dead beneficiary reverted to the estate of the insured, and proof of loss should be made by the living beneficiary and the administrator of the insured, it could not object, in a suit on the policy, that the administrator of the deceased beneficiary was not a party plaintiff.

5. Where a life insurance policy payable to two beneficiaries provided that if they died before the insured the benefits should go to the legal representatives of the insured, and one of the beneficiaries died before insured, on death of insured the interest of the dead beneficiary passed to the legal representatives of the insured, and that of the surviving beneficiary remained in him.

In banc. Appeal from circuit court, Jackson county; John W. Beebe, Special Judge.

Action by V. R. Andrus and others against the Fidelity Mutual Life Insurance Association. From a judgment in favor of plaintiffs, defendant appeals. Affirmed.

This is an action upon a policy of insurance for $2,000 issued by the defendant on November 22, 1892, upon the life of Laura E. Andrus, payable to her mother and her son, with a proviso that if she survived the beneficiaries the policy should be payable to her legal representatives. The assured died on December 20, 1898, and her son survived her, but her mother had died previously. The suit is by the executor of her estate and her minor son by his guardian and curator. The plaintiffs obtained judgment in the circuit court, and the defendant appealed. This court has jurisdiction because the defendant invoked in the lower court the protection of the fourteenth amendment to the constitution of the United States, and that court held that the defendant was not denied the protection of the federal constitution by its proceedings and judgment in this case. The case made is this: On November 22, 1892, the defendant issued its said policy. By its terms the insured was required to pay semiannual premiums of $19 on May 22d and November 22d of each year, and it was stipulated that a failure to pay the same at such times should cause a forfeiture of the policy, and that no agent had a right to extend the time of payment of the premiums, but that if they were paid after the required times the policy could only be reinstated with the approval of one of the medical directors and of the president of the company, and then only upon application of the assured, containing a statement that the assured is in good health, and of any medical treatment or advice and of any sickness or complaint the assured may have had since the issuing of the policy, and that the acceptance of any premium on a defaulted policy from one who had not been reinstated as aforesaid should not be a recognition of the policy, but it should remain null and void until the assured was reinstated in the manner above set forth. The petition, after setting out the character of the parties and the issuance and terms of the policy, the death of the assured and her mother, avers "that immediately after the death of the said Laura E. Andrus, as aforesaid, the plaintiffs herein gave the defendant due notice and proof of the said death, and duly and faithfully performed all the other terms, stipulations, and requirements imposed upon them by the terms of said contract of insurance," etc. The answer pleads a forfeiture of the policy by reason of a failure to pay the premium that fell due on November 22, 1898, and further pleads that the premium was paid on December 12, 1898, to its agent in Kansas City, who remitted it to defendant at its home office in Philadelphia, where it was received on December 15, 1898, and that the president and treasurer immediately mailed a receipt therefor, containing a conditional revival, that is, that the policy was not to be understood as revived by the receipt of the premium unless the assured was in good health and free from all diseases, ailments, or injuries, and that the acceptance of that receipt by the assured was a warranty that such was the case, and if it was not true the policy should be null and void; that a certificate of health and application for a revival of the policy was mailed to the assured at the same time for her to execute, but which she never did; and that when the defendant learned, on January 24, 1899, from the proofs of loss, that the assured was not in good health and free from disease when the premium was paid on December 12, 1898, it immediately tendered the premium to the plaintiffs, which was refused. The answer then pleads that the policy had become forfeited and void, and the defendant is not liable. It also pleads that there is a defect of parties plaintiff, in that the administrator of the assured's mother is not a party, and then concludes with a general denial of everything not expressly admitted. The reply is a general denial. The constitutional question arose, and was brought into the case, in this way: During the trial the plaintiffs offered in evidence the receipts for all the premiums paid upon the policy. The defendant objected thereto, on the ground that it was incompetent and immaterial. Thereupon the plaintiffs' counsel stated that he desired by such evidence to show a waiver of the conditions of the policy as to the payment of premiums, and as to the forfeiture of the policy because of the failure to pay the premiums promptly when due. Counsel for defendant then said: "Defendant objects to any proof of waiver, for the reason that the rule which allows waiver to be shown without being pleaded is confined to insurance contracts in Missouri, and for that reason the rule is a violation of the fourteenth amendment to the constitution of the United States, and is an unjust discrimination against them, and a denial of the equal protection of the law." The court overruled the objection, and the defendant saved an exception. Thereupon the plaintiff introduced the receipts of premiums, which showed that the payments were made as follows: The first premium, due on November 22, 1892, was paid on December 3, 1892; the second premium, due May 22, 1893, was paid on that day; the third premium, due November 22, 1893, was paid on that day; the fourth premium, due May 22, 1894, was paid on that day; the fifth premium, due November 22, 1894, was paid November 20th, two days before it was due; the sixth premium, due May 22, 1895, was paid on May 21, 1895, one day before it was due; the seventh premium, due November 22, 1895, was paid on December 11, 1895, nineteen days after it was due, and the assured was required to sign a health certificate and application for reinstatement of the policy; the eighth premium, due May 22, 1896, was paid on May 25, 1896, three days after it was due; the ninth premium, due November 22, 1896, was paid on November 20, 1896, two days before it was due; the tenth premium, due May 22, 1897, was paid on May 17, 1897, five days before it was due; the eleventh premium, due November 22, 1897, was paid on November 19, 1897, three days before it was due; the twelfth premium, due May 22, 1898, was paid on May 24, 1898, two days after it was due; the thirteenth premium, due November 22, 1898, was paid on December 12, 1898, twenty days after it was due. The testimony further shows that...