Bearup v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 06 July 1943
• Docket Number: 38465
• Parties: Frank Bearup, Appellant, v. The Equitable Life Assurance Society of the United States, a Corporation
• Court: Missouri Supreme Court

172 S.W.2d 942

351 Mo. 326

Frank Bearup, Appellant, v. The Equitable Life Assurance Society of the United States, a Corporation

No. 38465

Supreme Court of Missouri

July 6, 1943

Appeal from Jackson Circuit Court; Hon. Ben Terte, Judge.

Affirmed.

Dwight Roberts and Earl J. Boughan for appellant.

(1) This binding receipt and application constituted a completed contract of insurance entered into on the 11th day of February, 1935, in Missouri which was the date the application was taken and the premium accepted. Kempf v Equitable Life Assur. Soc. of U.S., 184 S.W. 133; State ex rel. Equitable Life Assur. v. Robertson, 191 S.W. 989; Keim v. Home Mut. Fire & Marine Ins Co., 42 Mo. 38; Brownfield v. Phoenix Ins. Co., 35 Mo.App. 54; National City Bank v. Mo. State Life Ins Co., 57 S.W.2d 1066; 32 C. J., pp. 1123-1124, sec. 226. (2) At most the receipt is ambiguous, and in that event, the ambiguity should be resolved in favor of the insured. Block v. U.S. Fid. & Guaranty Co., 316 Mo. 278, 290 S.W. 429; Wendorff v. Mo. State Life Ins. Co., 1 S.W.2d 99; State ex rel. Mut. Benefit v. Trimble, 68 S.W.2d 685; Ragsdale v. Brotherhood of Railroad Trainmen, 80 S.W.2d 272. (3) It is a well-established principle that defendant is estopped by its acts from denying that this is a Missouri contract. Kusnetzky v. Security Ins. Co., 281 S.W. 47; Priest v. Oehler, 41 S.W.2d 783; Riggins v. Missouri River, Fort Scott & Gulf R. Co., 73 Mo. 598; Runnells v. Lasswell, 219 S.W. 980; Hartman v. Chicago, B. & Q. R. Co., 192 Mo.App. 271, 182 S.W. 148; 32 C. J., pp. 1135-1136, sec. 242. (4) It is the general rule in this State that an application for a contract of insurance made in Missouri, where the insurance was paid for in Missouri, and the policy was delivered in Missouri, is a Missouri contract. Johnson v. American Cent. Life Ins. Co. of Indianapolis, Ind., 249 S.W. 115; Ragsdale v. Brotherhood of Railroad Trainmen, 80 S.W.2d 272; Price v. Connecticut Mut. Life Ins. Co., 48 Mo.App. 281; Hoffman v. North American Union, 56 S.W.2d 599. (5) If it is found that the contract of insurance was not made on the date of application, then it must be held that the contract was not made until the delivery of the policy to the insured as there was no meeting of the minds until insured had been appraised of the acceptance of the policy by the home office officers through delivery of the policy to the insured in Missouri. Limbaugh v. Monarch Life Ins. Co., 84 S.W.2d 208; Byrne v. Prudential, 88 S.W.2d 344; Kilcullen v. Metropolitan Life Ins. Co., 108 Mo.App. 61, 82 S.W. 966.

William C. Michaels, Kenneth E. Midgley and Michaels, Blackmar, Newkirk, Eager & Swanson for respondent.

(1) The petition shows that the contract sued on was made in New York, and that under New York law there is no liability; hence the demurrer was properly sustained. State ex rel. Equitable Life Assur. Soc. v. Robertson, 191 S.W. 989; Fields v. Equitable Life Assur. Soc., 118 S.W.2d 521; Pickett v. Equitable Life Assur. Soc., 27 S.W.2d 452; Bowen v. New York Life Ins. Co., 33 F.Supp. 705; Yeats v. Dodson, 127 S.W.2d 652; Schwartz v. Northern Life Ins. Co., 25 F.2d 555; Beswick v. Natl. Cas. Co., 206 Mo.App. 67, 226 S.W. 1031; Winters v. Reserve Loan Life Ins. Co., 221 Mo.App. 519, 290 S.W. 109. (2) Delivery in Missouri did not make the contract a Missouri contract, delivery not being a condition to its creation. See cases cited under Point (1).

Bohling, C. Westhues and Barrett, CC., concur.

OPINION

BOHLING

The issue presented is whether a certain contract of insurance is a New York or Missouri contract, and, consequently, governed by the law of New York or of Missouri. The insurer's demurrer to the named beneficiary's assignee's (hereinafter designated beneficiary) petition was sustained. The following is the effect of the allegations in the petition.

Insurer's agent secured insured's application on February 11, 1935, at Kansas City, Missouri, for a $ 5,000 ordinary life insurance policy, carrying double indemnity accidental death benefits. Insured's application for insurance to insurer recited that insured agreed "that any policy issued hereon shall not take effect until the first premium thereunder has been paid during my good health"; that only insurer's president, vice-president, secretary, treasurer, a registrar or an assistant registrar had power to make or modify any contract or waive any of insurer's requirements, et cetera; that the statements in the application and medical examination were true and offered as an inducement for the issuance of the policy applied for; and that insured paid to a local agent $ 172.20 annual premium in accordance with a receipt, which insured accepted and agreed to. Said receipt (immaterial portions omitted) read:

"Received of Murray Barrett One Hundred Seventy two & 20/100 Dollars, the first annual premium on proposed insurance, for $ 5,000.00 on the life of Murray Barrett for which Part I of an application . . . is this day made to The Equitable Life Assurance Society of the United States. Insurance . . . shall take effect as of the date of this receipt, provided satisfactory Part II of the application is furnished to the Society and provided the applicant is on this date in the opinion of the society's authorized officers in New York, an insurable risk under its rules and the application is otherwise acceptable on the plan and for the amount and at the rate of premium applied for; otherwise the payment evidenced by this receipt shall be returned on demand and the surrender of this receipt. . . ."

The policy, dated February 11, 1935, was issued insuring insured "against the loss of life," and said policy further provided that if death resulted solely from (briefly stated) accidental means "an additional death benefit" of $ 5,000 would be paid. Insured committed suicide while insane on November 15, 1940. The petition further explicitly alleged: "Plaintiff further states that under the laws of New York, death by suicide while sane or insane is not accidental death." [Missouri law differs. Sec. 5851, R. S. 1939.] Insurer paid the $ 5,000 ordinary life benefit. The beneficiary seeks the recovery of the $ 5,000 accidental death benefit, with interest thereon from November 15, 1940, plus $ 500 for "vexatious refusal to pay" and "$ 2,500 for the institution and prosecution of this action," total $ 8,000.

Insurer makes a point that appellate jurisdiction is in the proper court of appeals on the ground claims of the beneficiary amounting to $ 3,000 based on vexatious refusal to pay are sham and colorable only. Cleaver v. Central States L. Ins. Co., 346 Mo. 548, 562[9], 142 S.W. 2d 474, 481[9, 10]; McNabb v. Niagara Fire Ins. Co., 224 Mo.App. 396, 403, 22 S.W. 2d 364, 367[4]; Delametter v. Home Ins. Co., 233 Mo.App. 645, 666, 126 S.W. 2d 262, 271[14, 16]; Harms v. Mutual L. Ins. Co. (Mo. App.), 127 S.W. 2d 57, 60[4], are cited to the vexatious delay issue being sham and colorable; and Wolff v. Mathews, 98 Mo. 246, 247, 11 S.W. 563, May v. Jarvis-Conklin Mtg. Trs. Co., 138 Mo. 447, 449, 40 S.W. 122; Ashbrook v. Willis, 338 Mo. 226, 228, 89 S.W. 2d 659, 660; Vandenberg v. Kansas City, Mo., Gas Co., 199 Mo. 455, 458, 97 S.W. 908, 909; Esmar v. Haeussler, 341 Mo. 33, 34[1], 106 S.W. 2d 412[1], on the amount in dispute. The cited cases do not rule the precise issue, which, somewhat novel, may possess merit. Our review of cases treating of the merits indicates that conflicting remarks exist in different opinions; remarks that cannot be harmonized, if they be followed to their logical conclusions, with results reached in the several cases. The case is before us on a demurrer to the petition, admitting the truth of the facts well pleaded. We think we may not say that the existing state of the law is so stare decisis on the precise issue on the merits as to cause the beneficiary's claim for vexatious delay to be "not in good faith," a "sham," "colorable only," and nothing more than a "mere stroke of the pen in the petition." The point is disallowed in the instant case.

The litigants are agreed that the law of the place where the contract was made governs. The beneficiary contends the insurance was consummated upon the taking of the application and medical examination, the payment of the first year's premium and the issuance of a receipt therefor in Missouri on February 11, 1935. Insurer contends the contract was completed upon insurer's authorized officers accepting insured's application in New York.

The beneficiary says the identical issue was discussed in Kempf v. Equitable L. Assur. Soc. (Springfield Ct Apps.), 184 S.W. 133, l. c. 136-137; and the theory is not new, having been recognized in Keim v. Home Mut. F. & M. Ins. Co., 42 Mo. 38, 41, 42; Brownfield v. Phoenix Ins. Co., 35 Mo.App. 54, 67; National City Bank v. Missouri St. L. Ins. Co., 332 Mo. 182, 57 S.W. 2d 1066. He states the Kempf case "was reversed" on a different theory in State ex rel. Equitable L. Assur. Soc. v. Robertson (Banc), 191 S.W. 989, 922[4]. The Kempf case involved a like receipt by this insurer. The receipt (there stressed) was dated June 12, 1913, and was to the effect the insurance should take effect on the date of the receipt "provided the applicant is on this date in the opinion of the society's authorized officers in New York an insurable risk under its rules and the application is otherwise acceptable on the plan and for the amount applied for . . ." Insurer's authorized officers refused Kempf's application but tendered a counter proposition based on a premium adding five years to Kempf's age, an annual premium of $ 137.55 instead of $ 115.25. Kempf committed suicide before the policy reached him. The insurer contended, first, no contract of insurance was ever...