Bramble v. Kansas City Life Ins. Co.
| Citation | 160 S.W.2d 746,349 Mo. 318 |
| Decision Date | 12 December 1942 |
| Docket Number | 37594 |
| Parties | Nellie M. Bramble, Administratrix of the Estate of Harley L. Bramble, v. Kansas City Life Insurance Company, a Corporation, Appellant. Nellie M. Bramble, Administratrix of the Estate of Harley L. Bramble, Appellant, v. Kansas City Life Insurance Company, a Corporation |
| Court | United States State Supreme Court of Missouri |
Rehearing Denied February 26, 1942. Motion to Modify Opinion Overruled April 16, 1942.
Appeal from Clinton Circuit Court; Hon. R. B. Bridgeman Judge.
Reversed.
McAllister Humphrey & Broaddus for appellant.
(1) The trial court erred in not giving defendant's instruction in the nature of a demurrer offered at the close of all the evidence for the reason the evidence conclusively shows that insured failed to pay the premium due February 13, 1935, and after deducting insured's indebtedness to defendant from the cash value of the policy, the balance remaining was only sufficient to purchase extended insurance under the provisions of the policy until January 17, 1936, and the policy was therefore not in force at the date of insured's death on April 23, 1936. Cleaver v. Central States Life Ins. Co., 142 S.W.2d 474, 346 Mo. 548; Heth v. John Hancock Mut. Life Ins. Co., 136 S.W.2d 392; Gibson v. Kansas City Life Ins. Co., 136 S.W.2d 131; Fox v. Mutual Benefit Life Ins. Co., 107 F.2d 715; Sec. 5852, R. S. 1939. (2) The court erred in giving Instruction III because it is not based upon the evidence and completely ignored the fact that the policy did not lapse and there was no failure to pay the premium due February 13, 1933, for the reason said premium was paid by insured procuring a loan on his policy, the request for which was made before the 31-day grace period had expired, and any delay of insured in returning the executed note was clearly waived by defendant. Cases cited under Point (1).
Harry A. Hall, William R. Ross and Cross & Cross for respondent.
(1) The reserve after deducting the indebtedness was sufficient to continue the policy from its lapse to the insured's death. (a) The contract entered into was a regular 20 pay life policy with the full reserve values. (b) In calculating the reserve value plaintiff is entitled to the reserve required by the statutes for registered policies, Secs. 6115, 6131, R. S. 1919. Lamar Life Ins. Co. v. Minor, 154 So. 542. (c) And also to any unused reserve resulting from yearly mortality savings. (2) Under the nonforfeiture statutes the policy loan made March 22, 1933, after the grace period, being after the lapse date, could not be taken from the net value on that date and thus shorten the period of extended insurance. Sec. 6151, R. S. 1919; Underwood v. State Life Ins. Co., 117 S.E. 790; Liebing v. Mutual Life Ins. Co., 191 S.W. 254; Smith v. Mutual Benefit Ins. Co., 72 S.W. 935; Burridge v. New York Life Ins. Co., 109 S.W. 560; Gillen v. New York Life Ins. Co., 161 S.W. 67; State ex rel. Huering v. Allen, 112 S.W.2d 843; Cleaver v. Central States Ins. Co., 142 S.W.2d 474; Equitable Life Ins. Co. v. Taylor, 17 N.E.2d 851.
Dalton, C. Hyde and Bradley, CC., concur.
This is an action on an insurance policy to recover $ 10,000, the face amount of the policy, together with interest, and penalty and attorneys' fees for vexatious refusal to pay. The jury returned a verdict for $ 7000 on the policy, with $ 2000 interest and $ 2500 attorneys' fees. On defendant's motion for a new trial, the trial court required a remittitur of the attorneys' fees, which was made, and judgment was entered for plaintiff for $ 9000. Plaintiff moved to modify and to enter judgment for $ 10,000 on the policy, plus the interest, but the motion was overruled. Both parties have appealed. We shall continue to refer to the parties as plaintiff and defendant.
On February 13, 1920, defendant issued the policy sued on, and thereby insured the life of Harley L. Bramble for $ 10,000. The insurance was made payable to his estate. Certain specific terms of the policy will be stated in the course of the opinion. It is admitted that the policy was in force up to February 13, 1933. Plaintiff contends that the policy lapsed on said date, while defendant contends it did not lapse until February 13, 1935. It is admitted the cash surrender or loan value of the policy on February 13, 1933, was $ 3326.40 and the total indebtedness $ 2798.22, leaving "a net equity" of $ 528.18; and that this sum, applied on said date as a net single premium for extended insurance, would have kept the insurance in force to a date considerably beyond the date of insured's death.
The annual premium of $ 337.90, due February 13, 1933, was not paid on or before said date, nor within the 31 days of grace thereafter. On March 7, 1933, and within the grace period, the insured wrote defendant as follows (omitting heading and signature): This letter was received by defendant on March 9, 1933, and, thereafter, on March 21, 1933, interest was credited to the insured's account in the sum of $ 188.17 and on March 22, 1933, the premium on the policy was credited in the sum of $ 337.90, both being paid from the proceeds of an additional loan (dated March 22, 1933) in the sum of $ 526.07, secured by the policy. The actual entry of credit for the premium, on March 22, 1933, was made a few days after the expiration of the grace period. The exact date of the execution of the note by insured, or the receipt thereof by defendant, did not appear.
Prior to the 1934 premium date, to-wit, on February 12, 1934, the insured wrote defendant as follows (heading and signature omitted): This letter was received by defendant on February 14, 1934, and the loan against the policy was thereafter increased a total of $ 567.63 to pay $ 337.90 premium and $ 219.73 interest. This loan increased the total indebtedness against the policy to $ 3881.92, for which sum a note was executed by the insured on February 20, 1934. The note recites that the policy was deposited and assigned as security. The premium due the following year, on February 13, 1935, was not paid on said date or within the grace period thereafter, but on March 21, 1935, and after the expiration of the grace period, upon the insured's application and the execution of an extension agreement an extension was granted for the payment of premium until September 1, 1935, but the premium was not paid. On February 13, 1935, "after the expiration of 15 years," the policy according to its terms had a cash surrender or loan value of $ 4027.80. The amount of indebtedness then due, as evidenced by insured's note, was $ 3881.92. On the basis of the net cash value over indebtedness, to-wit, $ 145.88, the policy was extended as term insurance for 338 days from February 13, 1935, to January 17, 1936. An additional value of $ 42.52 would have kept the policy in force as extended or term insurance from January 17, 1936 to April 23, 1936, the date of insured's death.
In submitting the cause to the jury the plaintiff requested and the court instructed the jury as follows: ". . . if you find and believe from the evidence that the premium due on said policy on February 13, 1933, was not paid at that time or within the 31 day grace period which expired March 16, 1933, then the policy lapsed and it was the duty of the defendant insurance company to continue the insurance as extended term insurance for such period of time as the reserve on the policy, less the indebtedness against it on February 13, 1933, would purchase, at Harley Bramble's attained age, and in this connection you are further instructed that even though you may find that Harley Bramble entered into a loan agreement and executed loan notes after such lapse, if any, yet under the law any such loan notes and agreements could not be used to shorten the term of extended insurance, or reduce the reserve value of the policy which was then available to purchase extended term insurance."
Defendant assigns error on the giving of this instruction and contends that it is not based upon the evidence and that "it completely ignored the fact that the policy did not lapse and there was no failure to pay the premium due February 13, 1933, for the reason said premium was paid by insured's procuring a loan on his policy, the request for which was made before the 31 day grace period had expired and any delay of insured in returning the executed note was clearly waived by defendant." Defendant further contends that "the trial court erred in not giving defendant's instruction in the nature of a demurrer offered at the close of all the evidence," because, at the time the policy lapsed, its cash value less the indebtedness was sufficient to purchase extended insurance only until January 17, 1936, and, therefore, the insurance was not in force at the date of insured's death on April 23, 1936.
Plaintiff first contends that "when the premium due February 13 1933, was not paid when due, the policy lapsed, and became subject to commutation under the nonforfeiture statutes, and the policy reserve available for extended insurance could not be reduced by a subsequent loan." Plaintiff says: ...
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