Columbian Nat. Life Ins. Co. v. Keyes

• Decision Date: 31 January 1944
• Docket Number: No. 12602-12604.,12602-12604.
• Citation: 138 F.2d 382
• Parties: COLUMBIAN NAT. LIFE INS. CO. v. KEYES (two cases). SAME v. MARGUERITE KEYES, Inc.
• Court: U.S. Court of Appeals — Eighth Circuit

138 F.2d 382 (1943)

COLUMBIAN NAT. LIFE INS. CO. v. KEYES (two cases). SAME v. MARGUERITE KEYES, Inc.

Nos. 12602-12604.

Circuit Court of Appeals, Eighth Circuit.

October 25, 1943.

Rehearing Denied November 16, 1943.

Writ of Certiorari Denied January 31, 1944.

D. A. Murphy, of Kansas City, Mo. (John T. Harding, R. Carter Tucker, and John Murphy, all of Kansas City, Mo., on the brief), for appellant.

Roscoe C. Van Valkenburgh, of Kansas City, Mo. (Arthur Miller and Miller, Gumbiner, Sheffrey & Van Valkenburgh, all of Kansas City, Mo., on the brief), for appellee.

Before WOODROUGH, THOMAS, and JOHNSEN, Circuit Judges.

Writ of Certiorari Denied January 31, 1944. See 64 S.Ct. 521.

WOODROUGH, Circuit Judge.

The Columbian National Life Insurance Company, a Massachusetts corporation, appeals in these three cases to reverse judgments against it on three life insurance policies which it wrote on the life of George T. Keyes and delivered to the insured at Kansas City, Missouri, upon his applications there executed before the company's medical examiner. The policies were in force at the time of the death of the assured on April 10, 1942, but though due proof of loss was made, the company refused to pay. The proof of loss was dated April 17, 1942, and no word having been received from the company, demand for payment was made upon it by a letter of May 7, 1942. The letter elicited no response, but about the middle of May, 1942, the local general agent of the company called on plaintiffs' counsel "to see if he could get a lump sum settlement on all these policies." After another letter had been written to the company demanding payment, the company's vice-president and general counsel wrote on May 21, 1942, that he had advised the company to resist payment of the policies. His letter contained no denial of liability under the policies and no reason was given for the "resistance" or refusal to pay.

Thereupon the suits were brought and the company plead in defense (1) that the insured had committed suicide. It admitted that Section 5851, Revised Statutes of Missouri, 1939, Mo.R.S.A., commonly known as the "Missouri Suicide Statute", provided as follows: "Suicide no defense, when. In all suits upon policies of insurance on life hereafter issued by any company doing business in this state, to a citizen of this state, it shall be no defense that the insured committed suicide, unless it shall be shown to the satisfaction of the court or jury trying the cause, that the insured contemplated suicide at the time he made his application for the policy, and any stipulation in the policy to the contrary shall be void."

But it alleged that the statute was invalid under the Missouri constitution in that it was not clearly expressed in the title of the Act of May 24, 1879, in which it was included as a part, contrary to the requirement of Section 28 of Article IV of the constitution of 1875 Mo.R.S.A.; (2) that although it was agreed in each of the insurance contracts by provision duly stamped thereon that "Any policy of insurance issued upon this application shall be considered a Missouri contract and its terms shall be construed in accordance with the laws of the State of Missouri unless otherwise specified herein by the applicant," nevertheless the contracts were Massachusetts contracts because the last acts done in their consummation were done in Massachusetts; (3) that the Missouri Suicide Statute is "in conflict with the law and public policy of the State of Massachusetts" where the provisions contained in the policies prescribing very small payments in the event of death of the insured by suicide, are enforceable.

Motions to strike each of the defenses as insufficient in law were sustained by the court, and on the company's refusal to plead further, motions for judgments for plaintiffs on the pleadings were sustained and judgments entered accordingly.

The Supreme Court of Missouri sustained the constitutionality of the "Missouri Suicide Statute" against the attack on the stated grounds, before the trial of the cases in the District Court, and defense (1), supra, was no longer urged. Edwards v. Business Men's Assurance Co., Mo.Sup., 168 S.W.2d 82.

We find no merit in the plea that construction of the insurance contracts was controlled by Massachusetts law. The express contract of the parties to the contracts that they should be considered Missouri contracts and be construed in accordance with the laws of Missouri was perfectly valid and binding and required the Missouri court to apply the Missouri law on the trial of the cases in Missouri. Fidelity Loan Securities Co. v. Moore, 280 Mo. 315, 217 S.W. 286; Hansen v. Duvall, 333 Mo. 59, 62 S.W.2d 732, 739; see, also, Brotherhood of Railroad Trainmen v. Adams, 222 Mo.App. 689, 5 S.W.2d 96, and Zarnecke v. Blue Line Co., Mo.App., 54 S. W.2d 772. We cannot be concerned with the course the defense of suicide might have taken in trials in Massachusetts on the same insurance contracts. The suicide provision in each of the policies is in manifest conflict with the public policy of Missouri declared in the statute, and the District Court was not in error in sustaining the motion to strike the same where pleaded as constituting no defense in law to the suits on the policies.

Recoveries for attorney's fees and statutory damages on account of the company's alleged vexatious refusal to pay under Section 6040, Revised Statutes of Missouri, 1939, Mo.R.S.A., were also sought in the suits, and the issue as to the plaintiffs' claim to such recoveries was tried out by the court on evidence additional to the pleadings, jury being waived. The court found in each case "that the defendant's refusal to pay the amount of the insurance benefits provided in the policy of insurance was for the mere purpose of vexatiously delaying the payment thereof to the plaintiff." It rendered judgment for ten percent damages and attorney's fees in the aggregate amount of $10,000.

On the several occasions when this court has been called on to apply Section 6040, we have fully recognized that insurance companies must...