Barber v. Hartford Life Insurance Co.

• Decision Date: 03 July 1916
• Parties: ROSA BARBER v. HARTFORD LIFE INSURANCE COMPANY, Appellant
• Court: Missouri Supreme Court

187 S.W. 867

269 Mo. 21

ROSA BARBER v. HARTFORD LIFE INSURANCE COMPANY, Appellant

Supreme Court of Missouri, First Division

July 3, 1916 ^[*]

Appeal from Johnson Circuit Court. -- Hon. C. A. Calvird, Judge.

Affirmed.

Jones Hocker, Hawes & Angert, J. W. Suddath & Son, and James C Jones, Jr., for appellant.

(1) The Connecticut court was a court of competent jurisdiction to determine the question of the right of the company to maintain the mortuary fund and its decree was binding upon the company and all its members. Ins. Co. v. Ibs, 237 U.S. 662; Royal Arcanum v. Green, 237 U.S. 531; Condon v. Mutual Reserve, 89 Md. 99; Clark v Mutual Reserve, 14 App. D. C. 154; Taylor v. Mutual Reserve, 97 Va. 60; State ex rel. v. Shain, 254 Mo. 78. (2) The issue as to the right and propriety of maintaining the mortuary fund was involved in the Connecticut case and in the case at bar. Ins. Co. v. Ibs, 237 U.S. 662; Southern Pacific Co. v. U.S. 168 U.S. 1; Klein v. Ins. Co., 104 U.S. 88. (3) The court below did not give full faith and credit to the judicial proceedings in Connecticut and refused to give any effect whatever to the decree of the Connecticut court, contrary to the command of the Federal Constitution. Ins. Co. v. Ibs, 237 U.S. 662; Royal Arcanum v. Green, 237 U.S. 531; Notions v. Johnson, 24 How. 195; Huntington v. Attrill, 146 U.S. 657; Ins. Co. v. Harris, 97 U.S. 381; Harris v. Balk, 198 U.S. 215; Selig v. Hamilton, 234 U.S. 652. (4) The plaintiff in this case stood as to the Dresser case in privity with her husband, and he was by representation a party to the Dresser case, and is bound by the decree in that case. Ins. Co. v. Ibs, 237 U.S. 662; Wallace v. Adams, 204 U.S. 415; 2 Perry on Trusts, sec. 885; 2 Beach on Trusts, sec. 498; Scott v. McDonald, 165 U.S. 116. (5) It was error to instruct the jury that it was incumbent upon the board of directors to levy this assessment. Fee v. National Assn., 110 Iowa 271; Ins. Co. v. Birnbaum, 116 Pa. 565; Niblack on Benefit Societies, sec. 280; 2 Cooley's Briefs on Insurance, p. 1027.

Nick M. Bradley, Robert Kelley and Charles E. Morrow for respondent.

(1) Assessment 126 is void because not made by the directors. (a) The charter places the management of the affairs of the corporation in the board of directors. The directors at no time delegated this important power to its ministerial officers, and the alleged assessment made by the president and secretary is void. (b) If the assessment calls for the exercise of discretion on the part of the directors it cannot be delegated. Ins. Co. v. Chase, 56 N.H. 341; Bacon on Benefit Societies, sec. 377; 10 Cyc. 770, 906-910. (c) The burden is on defendant to show the assessment was made by proper authority. No presumption exists in its favor. Niblack on Benefit Soc., sec. 252. It is incompetent to show that it was a custom of the president and secretary to make assessments without authority, unless it further appears that Frank Barber had knowledge of the custom. No such knowledge is shown. Niblack on Benefit Soc., sec. 252; Underwood v. Legion of Honor, 66 Iowa 134. (d) A corporation must speak through its record, and the proof that assessment 126 was made can only be shown by the record. In this case the testimony showed no record was made or kept of the alleged assessment and it cannot be proved by parol. Hannum v. Waddill, 135 Mo. 162. (2) Burden is on defendant to show the assessment was necessary, not excessive and legally made. No presumption of right acting in the levying will be entertained. Hannum v. Waddill, 135 Mo. 153; Earney v. Modern Woodman, 79 Mo.App. 385; Agnew v. A. O. U. W., 17 Mo.App. 254; Puschman v. Ins. Co., 92 Mo.App. 640; Johnson v. Ins. Co., 166 Mo.App. 275; King v. Ins. Co., 133 Mo.App. 612; Wayland v. Indemnity Co., 166 Mo.App. 221; Settle v. Ins. Co., 150 Mo.App. 520; Ibs v. Ins. Co., 121 Minn. 310. A policy-holder in an assessment company cannot be subjected to a forfeiture until he refuses to pay a lawful demand. If the assessment in question was illegal for any reason, the defendant is without legal reason in refusing to pay the loss. Johnson v. Ins. Co., 166 Mo.App. 275; Craig v. Ins. Co., 136 Mo.App. 5; Settle v. Ins. Assn., 150 Mo.App. 529. (3) If the assessment in question was excessive after making reasonable allowance for lapses and failure to make collections, that is, if the amount actually assessed exceeds materially the amount required to meet death claims, it was illegal and void, and the refusal to pay the same will not work a forfeiture. King v. Ins. Co., 133 Mo.App. 620; Johnson v. Ins. Co., 166 Mo.App. 261; Ibs. v. Ins. Co., 121 Minn. 310. (4) The right to assess must be strictly construed and it can be exercised only when the conditions prescribed in the contract of insurance exist. Wayland v. Indemnity Co., 166 Mo.App. 221; Ins. Co. v. Giese, 49 Mo. 239; 2 Joyce on Insurance, sec. 1310; Craig v. Ins. Co., 136 Mo.App. 10. "Forfeitures are not favored in the law, and before the courts will declare one it is essential for the party insisting upon it to show strict compliance with every term said to afford the basis for thus summarily divesting the right." Settle v. Insurance Assn., 150 Mo.App. 527. (5) The policy does not authorize assessments for future losses. Unless the Dresser decree should have been admitted in evidence, and unless this court is bound by that decree, the policy sued upon does not authorize the levy of an assessment for losses which may be anticipated to occur in the future. And in the absence of such authority, an assessment made for that purpose is void. Under all the authorities, an assessment made to pay death losses which have in fact been paid is void. Ibs v. Ins. Co., 121 Minn. 310; Johnson v. Ins. Co., 166 Mo.App. 261; King v. Ins. Co., 133 Mo.App. 612. (6) The validity of the assessment must be determined by the condition upon the date made. Death losses not then considered or mentioned in the notice cannot be considered. Ibs v. Ins. Co., 121 Minn. 313; 23 Cyc. 1527. The plea nowhere alleges that the court rendering the judgment had jurisdiction either of the parties or the subject-matter. This must be alleged. State to use v. Brooke, 29 Mo.App. 289. (7) Res adjudicata must be specially pleaded. Frauerman v. Lippincott, 39 Mo.App. 478; 23 Cyc. 1523. (8) The defendant did not offer the whole record in the Dresser case, but simply what purports to be the final judgment. It did not contain the pleadings so that the real issues could be determined. The court did not commit error in refusing it. The entire record must be offered. Crone v. Dawson, 19 Mo.App. 214; Williams v. Williams, 53 Mo.App. 623; 23 Cyc. 1568. It does not show particular matter in issue. "In order to constitute a former adjudication it must affirmatively appear that the matter in dispute was put in issue and tried." Drainage Dist. v. Turney, 235 Mo. 94; Turnverein v. Hagerman, 232 Mo. 703; Pierce v. Pierce, 139 Mo.App. 419; Dickey v. Henri, 48 Mo.App. 120; 23 Cyc. 1536-37. The Dresser judgment sought to be enforced against the plaintiff was not rendered until March 23, 1910, after the alleged forfeiture had taken place. Ordinarily as to the rights of parties to an action, a judgment takes effect upon them as they exist at the time of its rendition, and not as they existed at the commencement of the suit or before that time. This judgment ought not to be given a retroactive effect so as to bind this plaintiff by relation before it was rendered. 23 Cyc. 1106; Bacon v. Kimmel, 14 Mich. 201; Johnson County v. Hart, 3 Wyo. 563. (9) Sec. 7068, R. S. 1909, authorizing the assessment of ten per cent damages and attorney's fees for vexatious delay in paying policy of life insurance is constitutional. Keller v. Ins. Co., 198 Mo. 440; Farmer Ins. Co. v. Dobney, 189 U.S. 301; Fraternal Mystic Circle v. Snyder, 227 U.S. 497.

BROWN C. Railey, C., not sitting.

OPINION

BROWN, C. --

This is an action at law on policy number 174,416 issued by the defendant September 4, 1893, insuring the life of Frank Barber for $ 2000 for the benefit of the plaintiff, who was then his wife and is now his widow, and for damages for vexatious refusal to pay the loss under the provisions of section 7068, Revised Statutes 1909. Mr. Barber died June 5, 1910. There was a judgment in the circuit court for $ 2976, including $ 200 damages and $ 500 attorney's fee awarded by the jury for vexatious refusal to pay, from which this appeal is taken. The defendant is a life insurance company of Connecticut. It had a business department called the "Safety Fund Department," which was again divided into the "Men's Division" and "Women's Division," which issued policies payable on the assessment plan, and this policy was of course in the 'Men's Division," and was called a "Certificate of Membership Safety Fund Department."

The answer pleads that this certificate was conditioned upon the payment of periodical assessments; that on January 29, 1910 an assessment designated as "Call 126" was levied on it against Barber for $ 13, with dues amounting to $ 1.50, which became due by the terms of the certificate on March 1, 1910; that Mr. Barber failed to pay it on or before March 20th, to which time it had been extended; and in consequence thereof the insurance was, by the terms of the certificate, forfeited. The issues in the case grow out of this circumstance. It also pleads, in effect, that an action had been brought in the New Haven County Superior Court of Connecticut, by one Dresser, holding a similar certificate of membership in the safety fund department of defendant, on his own behalf, as well as on behalf of all others similarly situated, including the plaintiff, wherein the rights of plaintiff were fully adjudicated; that the mortuary fund of said...