Brancato v. Ben Hur Life Ass'n

• Decision Date: 29 May 1939
• Docket Number: No. 19028.,19028.
• Citation: 128 S.W.2d 1108
• Parties: BRANCATO v. BEN HUR LIFE ASS'N.
• Court: Missouri Court of Appeals

128 S.W.2d 1108

BRANCATO v. BEN HUR LIFE ASS'N.

No. 19028.

Kansas City Court of Appeals. Missouri.

May 29, 1939.

Appeal from Circuit Court, Jackson County; Brown Harris, Judge.

Action by Victor Brancato against the Ben Hur Life Association on life policy. From judgment on a verdict for plaintiff, defendant appeals.

Affirmed.

Ira B. Burns and Arthur J. Stanley, both of Kansas City, for appellant.

Samuel M. Carmean and Edward E. Naber, both of Kansas City, for respondent.

KEMP, Judge.

Upon a trial of this case in Division 4 of the Circuit Court of Jackson County, there was a verdict in favor of the plaintiff for $2,000, upon which judgment in said amount was duly entered. From this judgment defendant appeals.

Following our previous ruling upon this appeal, we granted defendant's motion for rehearing and the case is now before us for our reconsideration.

This is a suit on an insurance policy issued on May 2, 1930, at Kansas City, Missouri, by the Loyal American Life Association (hereinafter referred to as Loyal American) to one Sam Brancato, now deceased, whereby the life of Sam Brancato was insured in the sum of $2,000, in consideration of the payment by him of annual, semi-annual, quarterly or monthly premiums to be made thereon as provided therein. Under an agreement dated July 14, 1934, between defendant and the Loyal American, defendant acquired all of the properties and assets of the Loyal American and, subject to the conditions of said agreement, assumed its liabilities and agreed to discharge its obligations under its outstanding policies of insurance.

The plaintiff (respondent herein) was the son of assured and was named as the beneficiary in the policy. The Loyal American was at the time of the issuance of the policy an insurance society organized and existing under the laws of the State of Illinois, with its principal office at Chicago. The assured, Sam Brancato, was at all the times herein mentioned a resident of Kansas City, Missouri. The policy was issued upon the assured's application therefor, and was delivered to him at Kansas City, Missouri, on June 21, 1930.

The policy contained a "Table of Loan Values, Paid-Up Insurance and Extended Insurance" and a provision that same was based on the National Fraternal Congress Table of Mortality, with interest at four per cent, and that the reserve thereof should be computed on such basis. Premiums thereon were paid by the assured from the delivery of the policy to December 1, 1932, at which time, by reason of the default in the payment of further premiums, the provisions of the policy for extended insurance applied. At this time the reserve thereon available for extended insurance, computed according to the Table of Mortality referred to therein, was $75.36, which was sufficient to, and did, carry the extended insurance to May 21, 1935. The assured died on April 5, 1935, while, under its provisions for extended insurance, such policy was in full force and effect.

The agreement of July 14, 1934, among other things, provided for the transfer of the membership of each of the members of the Loyal American holding a policy of insurance therein to the defendant, and for each of such members becoming a member of the defendant association, "provided application for such reinstatement, accompanied by payment of all amounts due, is received by the Ben Hur within 60 days from the effective date of this contract", and provided that the defendant should give notice of such agreement, by mail, to the holders of membership certificates in the Loyal American or to any assignee thereof, setting forth the details and provisions of said agreement, such notice to be addressed to such member or assignee at his last known adddess, as shown by the records of the Loyal American. Such notice of course was for the purpose of giving an opportunity to the members of the Loyal American to take such action as they should see fit, to best protect their interests in the premises. There is evidence tending to show that such notice and information were timely given to the assured herein at his last known address, and there is likewise evidence that no such notice was given until long subsequent to the death of the assured. The jury, by its verdict, found that no such notice was given.

The plaintiff first learned of the agreement after the assured's death and thereupon wrote to the defendant and made inquiry concerning it, and following the course of some correspondence between plaintiff and defendant, defendant mailed to plaintiff a copy of said agreement. In this correspondence, following the death of the assured, defendant advised plaintiff that said policy had been suspended on December 1, 1932, for non-payment of premiums thereon, further stating that the provisions of the insurance contract required that the policy be continued in good standing for a period of three years before any reserve accumulation would be available, and that the policy was permitted to lapse prior to the completion of the third anniversary, and that hence no values had ever attached thereto. Plaintiff thereupon wrote defendant, calling attention to the fact that under the terms of the policy, reserve accumulations became available following the payment of the premiums for a two-year period, whereupon defendant replied, admitting that this was correct but denied liability on another ground, stating that under the "Reorganization Agreement" there was a 74 percent policy lien attaching to the policy, which left only an $8.80 reserve which would extend the protection 83 days, or from July 14, 1934 to October 5, 1934, and further stating that "your father passed away April 5th, this year, after the extended protection period had expired".

The petition alleges the corporate capacity of both the Loyal American and the defendant; that the defendant was engaged in the life insurance business in the State of Missouri, with its home office at Crawfordsville, Indiana; that the Loyal American had been organized and was existing under the laws of the State of Illinois and engaged in the writing of life insurance in Missouri; that the Loyal American issued and delivered said policy to the assured and agreed thereby to pay, upon the death of the assured, the sum of $2,000, to the beneficiary named therein, for the consideration of the payment by the assured of the annual, semi-annual, quarterly or monthly premiums provided therein.

The petition further alleges the compliance by the assured and by the beneficiary (plaintiff herein) with all the terms, conditions and requirements of said policy upon their parts, the death of the assured on April 5, 1935, and that the policy was in full force and effect at such time. It alleges that on the 14th day of July, 1934, and while said policy was in full force and effect, the Loyal American assigned, transferred and delivered to the defendant all of its assets and property and outstanding contracts of insurance, and, in general, its life insurance business, and the defendant then and there assumed all of the outstanding contracts of insurance which had been issued by the Loyal American and which were then in force, without notice to the assured or plaintiff, and agreed to carry out and perform the terms thereof and to continue in force said insurance contracts, and that the defendant now has in its possession all of said assets and insurance business of said Loyal American; that defendant assumed the liability upon the policy herein sued upon, which was then in full force and effect, and continued to be in full force and effect until the 31st day of July, 1935; that the assured died on April 5, 1935, whereupon said policy matured and plaintiff became entitled to the face amount thereof. It alleges notice of the death of the assured to defendant and request of the plaintiff to furnish blank forms on which to submit proofs of the assured's death, and the failure and refusal of the defendant to comply with such request and further alleges that the defendant thereupon claimed that said policy was not in force at the death of the assured and denied any liability under such policy, whereupon plaintiff prays judgment for the face amount of the policy, $2,000, together with interest thereon.

The defendant, in its answer, alleges that it is a fraternal beneficiary corporation, organized and existing under the laws of the State of Indiana, and engaged in the business of fraternal insurance within the meaning of the law of the States of Missouri and Indiana; that the Loyal American was a fraternal insurance corporation organized under the laws of the State of Illinois. It admits the issuance and delivery of said policy of insurance to the assured named therein. There is, however, in the answer no allegation that either the Loyal American or the defendant ever qualified as fraternal societies to do business in the State of Missouri, as such, or that either was ever authorized to do business, as such, in this state. It alleges that on or about November 1, 1932, the assured permitted said policy to lapse by reason of non-payment of the premiums and that the insured was thereupon suspended as a member of the Loyal American and that he was never reinstated as such. The answer then sets out the agreement between the Loyal American and itself, under which certain of the liabilities of the Loyal American were assumed, and by which it acquired the property and assets of the Loyal American and assumed certain of the liabilities of the Loyal American, and alleged that the assured was bound by the terms of said agreement, and that by the terms thereof the policy in question had been automatically terminated on June 18, 1934.

Plaintiff, by his reply, sets up the failure of the defendant to give any notice to the assured or to the beneficiary (plaintiff herein) of the agreement between the Loyal American and the defendant, or of its terms and provisions under which it was required so...