Bush v. Block

• Decision Date: 12 June 1916
• Docket Number: No. 12026.,12026.
• Citation: 187 S.W. 153,193 Mo. A. 704
• Parties: BUSH v. BLOCK et al.
• Court: Missouri Court of Appeals

187 S.W. 153

193 Mo. A. 704

BUSH v. BLOCK et al.

No. 12026.

Kansas City Court of Appeals. Missouri.

June 12, 1916.

Appeal from Circuit Court, Jackson County; E. E. Porterfield, Judge.

"To be officially published."

Suit by Charles M. Bush against Maurice Block and another. From a judgment for plaintiff, defendants appeal. Affirmed.

F. Titus and S. A. Dew, both of Kansas City, for appellants. R. W. Crimm and Chas. M. Bush, both of Kansas City, for respondent.

TRIMBLE, J.

This suit in equity was brought originally against the defendant Block alone, to foreclose his interest in a policy of life insurance for $2,000 issued to said Block by the Equitable Life Assurance Society of the United States, dated July 13, 1891. The foreclosure was sought upon the ground that the policy had been assigned as security for a debt now held and owned by plaintiff, and which defendant Block had failed to pay.

It seems that on October 30, 1896, Block executed to John P. Loomas his promissory note for $500 due December 30th, after date, bearing 8 per cent. interest from date until paid; that Block delivered to said Loomas, as security, the aforesaid policy of insurance with the following assignment or mortgage attached thereto:

                         "Kansas City, Mo., Dec. 22, 1896
                

"I hereby assign policy number 540329, which is hereto attached, to J. P. Loomas, his heirs and assigns, as his interest may appear.

"This assignment is made to protect said J. P. Loomas against loss on my note for ($500.00) five hundred dollars, which he holds, and also to protect him against loss by reason of his indorsement on the note of the M. Block Produce Co. now held by the American Nat. Bank for ($900.00) nine hundred dollars. These notes will be reduced from time to time and the assignment of this policy is made to protect and pay these notes for whatever amount remains unpaid at my death, or when payment is demanded.

                                  "[Signed] Maurice Block."
                

Afterwards, in May, 1901, Loomas died leaving a will in which his widow was made residuary legatee. While the said note, policy, and assignment were in the hands of the executrix of the will as a part of the assets of said estate, said Block appeared before a notary public (plaintiff herein) on the 5th of December, 1902, and acknowledged the assignment to be his free act and deed, and the certificate of said acknowledgment was duly indorsed upon said assignment. After Loomas' estate was duly settled in the probate court, said $500 note, with the security therefor, passed to and became the property of said widow, Mary I. Loomas, on November 25, 1903.

It seems that the premium on the policy due October 2, 1903, was not paid, and, as Block could not be induced to pay further premiums, the policy was, after due notice to Block, forwarded to the company to be converted into a paid-up policy, in accordance with the terms thereof, for as many twentieths of the original policy as there were complete annual payments made, and the insurance company accordingly converted said policy into a paid-up policy for $1,200. This was done April 29, 1904.

Afterwards, Mrs. Loomas brought suit on said note against Block in the circuit court of Jackson county, Mo., in which personal service was obtained, and judgment in her favor was rendered March 7, 1907.

On August 31, 1909, Mrs. Loomas assigned, in writing, said judgment and also all interest in the policy (now changed to a paid-up policy for $1,200) to the plaintiff, Charles M. Bush. He instituted the present suit to foreclose on April 25, 1914. The defendant Block, through his counsel Frank Titus, filed an answer setting up various defenses which will be stated and considered later. The cause was heard at the September term, September 29 and 30, 1914, and was taken under advisement. At the time of the institution of the suit on down to and during the hearing of the case and after the submission to the court, the defendant Block was the sole owner of the equity of redemption in said policy. While said cause was being held by the court under advisement and waiting for briefs, the defendant Block, on October 7, 1914, executed a bill of sale attempting to transfer and assign said policy to his said attorney Titus. Thereupon, on October 16, 1914, at the same term, plaintiff filed an amended petition which stated the same cause of action as the original petition, but which made Titus a defendant also, and alleged that defendant Block was the sole owner of the equity of redemption in the policy down to and after the taking of the case under advisement, and that, while said case was so under advisement, said Block, for a consideration of $1, had assigned said policy to said Titus, who received same with full knowledge of plaintiff's rights and of the proceedings in the trial of the case, and that the purpose of said assignment was to take the title to said equity of redemption out of defendant Block and beyond the scope of any judgment that might be rendered, making it necessary that said Titus be made a party, and praying, in addition to the prayer of the former petition, that Titus be enjoined from transferring the equity of redemption to other persons, and thereby render it impossible to secure an adjudication of plaintiff's rights and cause him irreparable injury, since Block was insolvent and could not be compelled to respond in damages. The court set the hearing on the restraining order for October 17, 1914, after bond had been filed and approved. On that day the hearing was reset for October 20, 1914. On October 19, 1914, defendant Frank Titus appeared and filed motion to strike out the amended petition, which was taken under advisement by the court and on January 16, 1915, was overruled; the defendant Titus excepting. The case was then set down for further hearing on March 22, 1915, at which time defendant Block appeared by his counsel Titus, but the latter for himself individually declined to plead to the amended petition and was adjudged to be in default. At the final hearing on this date, defendant Block, through his attorney Titus, disclaimed any desire to have further time to introduce evidence. Whereupon the plaintiff introduced evidence showing the transfer to Titus after the submission of the case. No evidence was offered in behalf of either defendant upon this branch of the case. The court thereupon rendered judgment in favor of plaintiff, finding that plaintiff had a lien or mortgage on the policy superior to the rights of said defendants, and that the title of Titus was subject to the rights of plaintiff; that there was due on the indebtedness to plaintiff the sum of $1,303.43. The court then decreed that the equity of redemption in the policy be foreclosed, and that defendants and each of them be restrained and enjoined from disposing of the policy, and that defendant Block take nothing on account of his counterclaim. Both defendants appealed.

The point that the original petition failed to state facts sufficient to constitute a cause of action is without merit. A number of objections are made to the petition, each on the ground that it fails to state a certain fact, but a reading of the petition discloses that the claim that such facts are omitted is groundless. Other facts which defendants claim were not stated were not necessary to be stated in view of the general judgment obtained against Block on said $500, which was pleaded in the petition, and which judgment conclusively settled all facts involved therein. One of the objections, however, deserves special notice. It is contended that Mrs. Loomas and plaintiff as her assignee must be deemed to have elected, as a matter of law, to look to the defendant Block in person and not to the security offered by the policy because the right to foreclose was lost by suing Block personally on the note. The rule, however, is that the obtaining of a general judgment for a debt does not bar the remedy for the enforcement of a lien upon the security for that debt. Funk v. Seehorn, Adm'r, 99 Mo. App. 587, loc. cit. 600, 74 S. W. 445; Maffat v. Greene, 149 Mo. 48, 50 S. W. 809; Board of Trustees v. Fry, 192 Mo. 552, loc. cit. 561, 91 S. W. 472; McCauley v. Brady, 123 Mo. App. 558, loc. cit. 563, 100 S. W. 541; 23 Cyc. 1193. Nor does the amended petition state any different cause of action, as to the foreclosure sought, from the original. A comparison of the two amply demonstrates this.

The assignee of the policy had the right, upon Block's refusal to pay further premiums, to convert it into a paid-up policy. Block, in the policy, contracted to pay the premiums. The value and life of the policy depended upon their regular payment. If premiums stopped, the only right, of value under the policy, was to have it converted into as many twentieths of its face value as there were premiums paid. The assignment of the policy to Loomas as security for the note did not relieve Block of the obligation to pay premiums. Grant v. Alabama Gold Life Ins. Co., 76 Ga. 575; In re Davison (D. C.) 179 Fed. 750; 25 Cyc. 774, 775; Killoran v. Sweet, 72 Hun, 194, 25 N. Y. Supp. 295, affirmed 144 N. Y. 703, 39 N. E. 857; 19 Am. & Eng. Ency. of Law (2d Ed.) 88. It was still his duty to pay them. From 1902 there was difficulty in getting Block to pay them. Finally, in October, 1903, he refused to pay any longer, and, in 1904, he was notified in writing that on a certain date Mrs. Loomas would apply to the insurance company for a paid-up policy. On default in the payment of premiums the policy could be converted into a cash surrender value or into paid-up insurance. Of course, the former would be much smaller than the latter. With Block refusing to pay premiums, Mrs. Loomas was in a position where she must either pay the premiums herself or take the cash surrender value or a paid-up policy. If she paid the premiums, there was no telling how long she would be compelled to do so, and, if the insured lived long, the premiums...