Byers v. Security Beneficiary Society

• Decision Date: 06 January 1941
• Docket Number: No. 19839.,19839.
• Citation: 147 S.W.2d 116
• Parties: WILLIAM T. BYERS, RESPONDENT, v. THE SECURITY BENEFICIARY SOCIETY, APPELLANT.
• Court: Missouri Court of Appeals

147 S.W.2d 116

WILLIAM T. BYERS, RESPONDENT, v. THE SECURITY BENEFICIARY SOCIETY, APPELLANT.

No. 19839.

Kansas City Court of Appeals, Missouri.

January 6, 1941.

Appeal from Circuit Court of Boone County. — Hon. W.M. Dinwiddie, Judge.

REVERSED.

Edwin C. Orr for respondent.

(1) The trial court did not err in refusing to give Instruction 2 in the nature of demurrer to the evidence at the close of the whole case, requested by the defendant, and correctly submitted the case to the jury. (a) This case is to be reviewed in the court of appeals on the same theory it was tried below. Kelley v. United Mutual Ins. Ass'n (Mo. App.), 112 S.W. (2d) 929, 931; Cook et ux. v. Sears Roebuck & Co., 71 S.W. (2d) 73, 74; Brann v. Missouri State Life Ins. Co. (Mo. App.), 226 S.W. 48; Wells v. Covenant, 126 Mo. 630, 29 S.W. 607; Doty v. Mumma, 305 Mo. 188, 264 S.W. 656; Jamison v. Culligan, 151 Mo. 410, 52 S.W. 224. (b) Plaintiff made submissible case and since insured received nothing from the company at time of alleged transaction there was nothing to tender back, therefore, tender was unnecessary because impossible. Doty v. Mumma, supra; Kelley v. United Mutual Ins. Ass'n, supra. (c) Insanity is a good defense at law to the enforcement of a contract against the insane person. 31 C.J., 785, par. 636-7; 14 R.C.L., 554, par. 5; 14 R.C.L. 582, par. 38; Nichols & Shepherd Co. v. Hardman, 62 Mo. App. 153; Collins v. Trotter, 81 Mo. 275; Cutler v. Zollinger, 117 Mo. 101; Tock v. Tock, 120 S.W. (2d) 169; Kelley v. United Mutual Ins. Ass'n, supra; Doty v. Mumma, supra. (d) Defendant's Points I D and I E of nonpayment of premiums by insured on old contract are not in the case on the pleadings, and if in the case were questions for the jury. Ash-Grove Lime & Portland Cement Co. v. Southern Surety Co., 39 S.W. (2d) 440; State Bank of Anderson v. Dunn, 325 Mo. 709, 29 S.W. (2d) 79; Sec. 965, R.S. 1929, R.S. Ann. 1235. (2) The trial court did not err when it sustained plaintiff's objection to defendant's statement and testimony of nonpayment of premiums on certificate No. 263659 because that defense was not pleaded by defendant in its answer. Chadwick v. Order of Triple Alliance, 56 Mo. App. 463, 474; Hanheid v. Tribe, 223 S.W. 684, 688; Sharp v. Supreme Council of Royal Arcanum (Mo. App.), 251 S.W. 159; Stout v. Independent Order of Foresters, 115 S.W. (2d) 32; Garofalo v. Societa Operaia Di Mutuo Soccorso St. Giuseppe, 112 S.W. (2d) 934; Bedwell v. Capital Mutual Association of Jefferson City, 66 S.W. (2d) 962; Wilson v. Most Worshipful Grand Lodge of A.F. and A.M., 114 S.W. (2d) 173; Chambers v. Sovereign Camp W.O.W., 33 S.W. (2d) 1029; Wooden v. Modern Woodmen, 194 Mo. App. 666, 189 S.W. 394; Welch et al. v. Fraternal Aid Union, 214 Mo. App. 443, 253 S.W. 187. (3) The court did not err in giving the instruction offered by the plaintiff. Nichols & Shepard Co. v. Hardman, 62 Mo. App. 153; Cutler v. Zollinger, 117 Mo. 101; Acor v. School District, 141 S.W. (2d) 197. (4) The court did not err by abusing its judicial discretion in refusing to grant leave to defendant to amend its answer for the purpose of pleading the defense of nonpayment of dues, increases and assessments on the old certificate No. 263659. Reutner, Klaus & Co. v. Nelson Chesman & Co., 9 S.W. (2d) 655, 658; Ash-Grove Lime & Portland Cement Co. v. Southern Surety Co., 39 S.W. (2d) 441; Yerxa, Andrews & Thurston v. Randazzo Macaroni Mfg. Co., 288 S.W. 20, 31, par. 24; Simon v. S.S. Kresge Co., 103 S.W. (2d) 523. (5) The court did not err in permitting Mabel Allen, Albert Byers and William Byers, three lay witnesses, to testify that Flemon Byers was mentally incompetent and insane; and did not err in permitting Dr. Stephen Smith, insured's life-long physician, to testify that Flemon Byers was insane prior to and on July 25, 1934. (a) The testimony of these witnesses was admissible and the facts testified to sufficient to permit the witnesses to give their opinion as to the insanity of the insured. Acor v. School Dist. No. 9 of Lincoln Co., 141 S.W. (2d) 197. (b) Even if the admission of the testimony of witnesses as to insanity was error, said error was not reversible, and error, if any, was waived by the defendant. Continental Casualty Co. v. Monarch Transfer Storage Co., 23 S.W. (2d) 209, 212; Holloway v. Barnes Grocer Co., 15 S.W. (2d) 917, 920; Cole v. St. Louis-San Francisco Ry. Co. (Mo.), 61 S.W. (2d) 344, 347; Stewart v. Kansas City Pub. Serv. Co. (Mo. App.), 49 S.W. (2d) 1061, 1064; General Motors Acceptance Corp. v. Lyman et al. (Mo. App.), 78 S.W. (2d) 109; Callahan v. Kansas City, 226 Mo. App. 408, 41 S.W. (2d) 894; Wielms v. St. Louis County Gas Co., 37 S.W. (2d) 454; Swift & Co. v. Epps, 182 S.W. 1024. (c) Defendant does not claim that the admission of the testimony of Mabel Allen, Albert Byers and William Byers was prejudicial. Spann v. Coal & Mining Co., 322 Mo. 158, 178, 16 S.W. (2d) 190; Mundy v. Mo. Power & Light Co., 231 Mo. App. 555, 558, 101 S.W. (2d) 740. (5) The court did not err in giving Instruction 4 requested by defendant for the reason that non-payment of premiums was not pleaded.

Donald Lamm, Lawrence Barnett, A.W. Fulton and Harry L. Ladbury for appellant.

(1) The court erred in overruling defendant's demurrer at the close of the case, and in not directing a verdict for defendant. (a) Insanity alone, before adjudication thereof, does not make a contract of novation void, but only voidable. Brann v. Mo. State Life Ins. Co. (Mo. App.), 226 S.W. 48; Wells v. Covenant Mutual Benefit Ass'n, 126 Mo. 630, 29 S.W. 607. (1) Where the contract was entered into in good faith, without fraud or imposition, for a fair consideration and without knowledge of insanity, it shall not be set aside. Doty v. Mumma, 305 Mo. 188, 264 S.W. 656; Jamison v. Culligan, 151 Mo. 410, 52 S.W. 224. (b) Plaintiff made no offer or attempt to place the parties in status quo, a condition precedent to setting aside a contract. Wells v. Covenant Mutual Benefit Ass'n, 126 Mo. 630, 29 S.W. 607; Doty v. Mumma, 305 Mo. 188, 264 S.W. 656; Jamison v. Culligan, 151 Mo. 410, 52 S.W. 224. (c) A contract made before adjudication of insanity can only be set aside in a proceeding in equity for that purpose. Brann v. Missouri State Life Ins. Co. (Mo. App.), 226 S.W. 48; Wells v. Covenant Mutual Benefit Ass'n, 126 Mo. 630, 29 S.W. 607. (d) Under the undisputed documentary (and therefore conclusive) evidence, Flemon Byers did not pay a sufficient amount to keep his old certificate in force until the time of his death. Kazee v. K.C. Life Ins. Co. (Mo. App.), 217 S.W. 339; Constable v. Maccabees, 219 Mo. App. 632, 284 S.W. 515; Jackson v. S.B.A., 139 S.W. 1014; R.S. Mo., 1929, sec. 5997. (e) By confession and avoidance, plaintiff admitted the execution of the application for exchange. 49 C.J., 281; George v. Kansas City American Ass'n Baseball Co., 219 S.W. 134. (2) The trial court erred in sustaining the objection of plaintiff to that part of defendant's opening statement to the jury, and defendant's evidence, proving that the rates on the old certificate increased from time to time and that the payments made on the new certificate were not sufficient to carry the old certificate in force until the death of Flemon Byers. (a) The old contract, which was cancelled by the contract of novation, was not in existence and there was no liability for premiums thereunder until the contract of novation was set aside, and, therefore, the defense of nonpayment of premiums was not available to defendant at the time the pleadings were made up. Brann v. Missouri State Life Ins. Co. (Mo. App.), 226 S.W. 48; Wells v. Covenant Mutual Benefit Ass'n, 126 Mo. 630, 29 S.W. 607; Kevan v. John Hancock Mutual Life Ins. Co., 3 Fed. Supp. 288. (b) The evidence showed that the application for exchange was beneficial to Flemon Byers, which was a material issue. Jamison v. Culligan, 151 Mo. 410, 52 S.W. 224; Doty v. Mumma, 305 Mo. 188, 264 S.W. 656. (c) Defendant was not bound to anticipate plaintiff's claim that a release was not binding because of insanity, and should be permitted to show that the premiums paid on the new contract were not sufficient to keep the old contract in force. Sawyer v. Wabash Ry. Co., 57 S.W. 108, 110; Spann v. Mining Co., 16 S.W. (2d) 190; Burton v. Drennan, 58 S.W. (2d) 740; Stock v. Schloman, 42 S.W. (2d) 61; Babcock v. United Rys. Co., 158 Mo. App. 275, 138 S.W. 53, 56. (3) The trial court erred in instructing the jury to find for plaintiff if Flemon Byers was not sane at the time he executed the application for exchange. (a) An instruction which covers the entire case and directs a verdict, which omits an essential element prerequisite to plaintiff's recovery, is reversible error. Finley v. Continental Ins. Co. (Mo. App.), 299 S.W. 1107, 1111. (1) Said instruction omitted the defense that the contract was not void, but simply voidable; that defendant had no knowledge of the alleged insanity; that the new contract was in no way inequitable or unjust; and that plaintiff had not restored to defendant the consideration received, (4) The trial court erred in refusing to grant leave to defendant to amend its answer by alleging more fully that Flemon Byers had not paid sufficient premiums to keep his current cost certificate in force and effect to the time of his death. (a) It is the general rule to allow amendments, and the exception to refuse them. People's Trust & Savings Co. v. Arthaud, 22 S.W. (2d) 860. (b) A refusal of leave to amend, where such ruling deprives defendant of a principal defense, is erroneous. State ex rel. Mackey v. Thomas, 81 Mo. App. 549; Estey v. Walker, 222 Mo. App. 619, 253 S.W. 38. (1) There was no surprise, since plaintiff was advised weeks ahead of the trial that defendant would offer such evidence. (2) There was no laches, because defendant's position that it could offer such evidence without affirmatively pleading nonpayment of premiums is supported by many...