Christensen v. New York Life Ins. Company
| Decision Date | 07 November 1911 |
| Citation | 141 S.W. 6,160 Mo.App. 486 |
| Parties | ROSE E. CHRISTENSEN, Respondent, v. NEW YORK LIFE INSURANCE COMPANY, Appellant |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. Daniel D. Fisher Judge.
REVERSED.
Judgment reversed.
Judson and Green for appellant.
James J. O'Donohue for respondent.
The appeal in this case was prosecuted to this court, but it was transferred to the Springfield Court of Appeals under the provisions of an act of the Legislature, approved June 12, 1909. [See Laws of Missouri 1909, p. 396; see also Sec. 3939, R. S. 1909.] Afterwards, the Springfield Court of Appeals disposed of the case in an opinion prepared by Judge COX of that court, which may be found reported under the title of Christensen v. Life Ins. Co., 152 Mo.App. 551, 134 S.W. 100. Subsequently, the Supreme Court declared the legislative act, which purported to authorize the transfer of cases from one Court of Appeals to another for hearing and determination, to be unconstitutional, as will appear by reference to the cases of State ex rel. Dunham v. Nixon, 232 Mo. 98, 133 S.W. 336; State ex rel. Dressed Beef, etc. Co. v. Nixon, 232 Mo. 496, 134 S.W. 538; State ex rel. O'Malley v. Nixon, 233 Mo. 345, 138 S.W. 342. Because of such ruling of the Supreme Court, the case was thereafter transferred by the Springfield Court of Appeals to this court, on the theory that the jurisdiction of the appeal continued to reside here and the proceedings had in the Springfield Court with reference thereto were coram non judice.
The case has been argued and submitted here and duly considered. On examination of the several arguments advanced for a reversal of the judgment, we are prepared to concur in part with the views expressed by the Springfield Court, but not in toto. Nor do we concur in the conclusion of that court on the facts in judgment, in view of the statute, Sec. 7900, R. S. 1899 (see also Sec. 6949, R. S. 1909), which seems not to have been considered by the Springfield Court.
The suit is upon a policy of life insurance issued by defendant to plaintiff's husband. Plaintiff recovered a judgment of $ 741.60, after deducting a certain loan and unpaid premiums, and defendant prosecutes the appeal. The policy sued upon was issued December 21, 1901, to Anton Christensen, the husband of plaintiff, in the amount of $ 1000, and by its terms it was payable to the personal representatives of the insured. His widow, plaintiff, having qualified as administratrix, prosecutes the suit thereon, in her representative capacity, for $ 1000, the amount of the policy, less the amount of a loan procured by insured from defendant. The theory of the case is, that at the time of insured's death, the net value of the policy available to purchase temporary insurance was sufficient to, and did, through its automatic application as a net single premium, extend the insurance for a considerable time beyond the insured's death, and this, too, notwithstanding the fact insured had agreed that the amount of his loan might first be deducted from such net value, which agreement, if valid, wholly defeats plaintiff's right of recovery.
By the terms of the policy, the premium of $ 52.20 was to be paid annually upon the 18th day of December. Such premiums were duly paid on December 18, 1901, December 18, 1902, December 18, 1903, and December 18, 1904--in all four annual premiums. On March 7, 1905, the insured procured a loan, under the terms of the policy, from defendant for the sum of $ 133 and pledged the policy to defendant as collateral security therefor. The premium falling due December 18, 1905 and the interest on the loan due at that time were not paid, and no subsequent payment was made on either the premium of the policy or interest on the loan, nor was the loan repaid to defendant by the insured, except through a foreclosure and acquiescence to be hereinafter mentioned. By the terms of the loan contract, it was provided that if any premium on the policy or interest on the loan was not paid when such premium or interest was due, the loan might be foreclosed by satisfying the same in the manner provided in the policy. The policy and loan contract provide for the satisfaction of the loan out of the net reserve standing to the credit of the policy, which might be otherwise utilized as a net single premium for the purpose of purchasing temporary or extended insurance. On June 11, 1906, defendant, proceeding under the terms of the policy and loan contract, foreclosed the loan and, in accordance with the terms of such contract, returned the policy to the insured by a letter on June 18 with an indorsement thereon that extended insurance to the amount of $ 867 was granted to him to expire on January 18, 1907. No demand was made by the insured for a paid-up policy by written request or otherwise after the date of default at any time. The insured departed this life in the city of St. Louis, intestate, on or about the 8th day of June, 1907, and the policy containing the indorsement above referred to as to extended insurance expiring on January 18 of that year was found among his papers after his death. There is no controversy about the facts of the case. Indeed, all that are material to a determination of the controversy appear in an agreed statement of facts. It is agreed, too, that if three-fourths of the net value computed upon the actuaries' or combined experience table of mortality with four per cent per annum is available, notwithstanding the loan involved here, for the purpose of purchasing extended insurance, then the original policy of $ 1000 was continued in force long subsequent to the date of the death of the insured. On the other hand, it is agreed that if the amount of the loan of $ 133 was properly deducted from the net reserve, the amount of the net reserve remaining for the purpose of purchasing extended insurance was not sufficient to extend the policy to the time of the death of the insured.
At the time the policy was issued, Sec. 7897, R. S. 1899 was in force, and under this statute only notes or evidence of indebtedness to the company given on account of past premium payments on the policy issued to the insured might be deducted from three-fourths of the net value of the policy. But the case proceeds here as though this was a cash loan at large for a purpose other than the payment of past premiums and, as the loan was made on March 7, 1905, it is argued that it was competent for the insurance company to deduct its amount from that portion of the net reserve available as a net single premium for the purpose of purchasing extended insurance, because the statute was amended so as to authorize such course in 1903, or about two years before the loan was negotiated on the security of the policy. It is true Sec. 7897, R. S. 1899 was amended in 1903, as will appear by reference to Laws of Missouri 1903, p. 208, and, as so amended, now appears as Sec. 6946, R. S. 1909. The amendment of 1903 authorizes deducting from three-fourths of the net value of the policy, not only notes given on account of past premium payments on the policy, but "any evidence of indebtedness to the company" as well, and provides, too, that the balance of such net value shall be taken after such deduction as a net single premium for temporary insurance for the full amount written in the policy, etc. However, by the terms of the amended statute itself, as it appears in the Laws of Missouri 1903, p. 208, it only purports to apply to "policies of insurance on life hereafter issued," and that it is not retrospective in its operation has been expressly decided in Burridge v. New York Life Ins. Co., 211 Mo. 158, 109 S.W. 560. But it is argued, notwithstanding this, that as this loan was made in 1905, the amendment clearly authorizes the pledge of the net reserve of the policy as security therefor. Such a loan as this is stipulated for and contemplated in the policy, which was issued December 21, 1901, before the statute was amended; so we see the contract of insurance as originally entered into contemplated, if the parties so chose, an appropriation of a portion of the net reserve to a purpose other than that allowable under the statute (Sec. 7897, R. S. 1899). Our Supreme Court has twice ruled that no portion of the three-fourths of the net value of the policy may be appropriated to any purpose other than the payment for temporary or extended insurance or the liquidation of notes for past premiums, as the statute stood at the time the policy here in suit was issued. [See Smith v. Mutual Ben. Life Ins. Co., 173 Mo. 329, 72 S.W. 935; Burridge v. New York Life Ins. Co., 211 Mo. 158, 109 S.W. 560.] The theory of those cases goes to the effect that the non-forfeiture statute in force at the time the policy is issued enters into it as a parcel of the contract and operates to prohibit any subsequent change or modification thereof between the parties thereto affecting the application of the net value. Especially is this the rule of the Smith case, for there the contract of insurance was attempted to be modified subsequently to its issue by pledging the net value to another purpose, and the Supreme Court repudiated the attempt as unavailing. It is true that the loan involved in neither the Smith nor the Burridge case was negotiated after the amendment of 1903; but, be this as it may, the rule of those cases undoubtedly is, that the right to have the next reserve applied precisely as contemplated by the statute at the time the policy is issued is one which may not be waived nor contracted away, as between the insured and the insurer. This being true, it seems clear enough that the...
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