Cravens v. New York Life Ins. Co.

• Decision Date: 21 February 1899
• Citation: 50 S.W. 519,148 Mo. 583
• Court: Missouri Supreme Court
• Parties: CRAVENS v. NEW YORK LIFE INS. CO.

50 S.W. 519

148 Mo. 583

CRAVENS v. NEW YORK LIFE INS. CO.

Supreme Court of Missouri.

February 21, 1899.

LIFE INSURANCE — CONTRACTS — WHAT LAW GOVERNS — TEMPORARY INSURANCE — SURRENDER VALUE — WAIVER — UNCONDITIONAL COMMUTATION — LEGISLATIVE POWERS.

1. A policy of life insurance issued by a New York company on an application made in Missouri, which provides that the policy is not to be in force until actual payment of the premium to the company, and delivered to the insured in Missouri on payment of the premium, is a Missouri contract, and subject to its insurance laws, though New York City, by the policy, is made the place of contract.

2. Rev. St. 1879, § 5983, provides that no life insurance policy shall become void after the payment of two annual premiums, but its value shall be commuted according to a given scale, and the amount applied as a single premium for temporary insurance for the full amount of the policy. Under section 5985 the amount is to be paid if the insured dies during the period of temporary insurance. Held, that a waiver in a policy of any surrender value other than specified in the policy, whether provided for by the statute of any state or not, is ineffectual to nullify the statute.

3. Rev. St. 1879, § 5984, providing that after payment of two annual premiums on a life insurance policy, on demand made within 60 days after default in the payment of a premium, the company shall issue its paid-up policy for a fixed amount, cannot control the rights of parties unless demand is made within the time limited.

4. Rev. St. 1879, § 5983, provides that no life insurance policy, after the payment of two annual premiums, shall be forfeited, and that temporary insurance shall be issued for the full amount of the policy, and fixes the period such insurance shall be in force; section 5985 provides that, if the insured dies within the temporary period, the company shall pay the policy; and section 5986 provides that policies providing for the unconditional commutation of nonforfeited, paid-up insurance of a fixed minimum amount shall not be affected by the foregoing sections. Held, that a policy providing that if, after being in force for three years, it becomes forfeited for nonpayment of any premium, a paid-up policy will be issued on demand made in six months after such lapse, with the surrender of the policy, is not within the exemption.

5. The legislature, in passing Rev. St. 1879, § 5983 et seq., prohibiting the forfeiture of life insurance policies on which two annual premiums have been paid, and providing for temporary insurance, did not exceed its constitutional power nor contravene the constitution of the United States.

In banc. Appeal from circuit court, Jackson county; J. H. Slover, Judge.

Action by Fannie Cravens against the New York Life Insurance Company. There was a judgment for defendant, and plaintiff appeals. Reversed.

Wm. B. C. Brown, Jas. H. Cravens, and Karnes, Holmes & Krauthoff, for appellant. F. N. Judson, for respondent.

BURGESS, J.

This is a suit upon a policy of life insurance for $10,000, issued by the defendant company upon the life of J. K. Cravens, deceased, in favor of the plaintiff, who was his wife. The case was tried by the court, a jury being waived. There was judgment in favor of plaintiff in the sum of $2,670, from which, after an unsuccessful motion for a new trial, she appeals, claiming that she is entitled to recover the sum of $8,749.21; that is, the face of the policy, $10,000, less the two unpaid premiums which were due at the time of the death of the assured, together with interest thereon. The petition alleges that the policy was issued on the 11th day of May, 1887; the payment of all annual premiums until May, 1891; the death of the assured on November 2, 1892; that under the statute the insurance was extended, and was in force at the date of the death of the assured, — and asks judgment for the amount of the policy, less the unpaid premiums. The answer of defendant alleges that it is a mutual insurance company duly incorporated under the laws of the state of New York, and doing business in this state; that by agreement of the parties the law of that state was made the law governing the contract set up; that the assured made default in May, 1891, after paying four annual premiums, — and tendered the sum of $2,670, the amount of paid-up or commuted policy to which the original policy was entitled by its terms on such default, waiving failure to make demand therefor. It also alleges that other policy holders — that is, other members of the same tontine class — had by the terms of their respective policies acquired with plaintiff contingent and mutual interests in the profits and surplus to be derived from the premiums on all policies of such class, and that the company, on the faith of plaintiff's contract, had incurred obligations to the other members of the tontine class, and that plaintiff is now estopped from setting up any other or different claim under the policy. The answer further alleges that if the statute of Missouri relied on by plaintiff was construed so as to nullify the nonforfeiting agreement upon the faith of which the policy was issued, and without which it would not have been issued, and to create and enforce an obligation contrary to the expressed intent of the parties, then the statute so construed is repugnant to the constitution of Missouri and to the constitution of the United States.

The application for the policy is made part of the contract, and contains the following provisions: "(2) That inasmuch as only the officers of the home office of the said company in the city of New York have authority to determine whether or not a policy shall issue on any application, and as they act on the written statements and representations referred to, no statements, representations, promises, or information made or given by or to the person soliciting or taking this application for a policy, or by or to any other person, shall be binding on said company, or in any manner affect its right, unless such statements, representations, or information be reduced to writing and presented to the officers of the company at the home office in the application. * * * (4) That under no circumstances shall the policy hereby applied for be in force until the actual payment to and acceptance of the premium by the company, or its authorized agent, during the lifetime and good health of the person on whose life insurance is applied for. * * * (6) That the entire contract contained in the said policy and in this application, taken together, shall be construed and interpreted as a whole, and in each of its parts and obligations, according to the laws of the state of New York, the place of the contract being expressly agreed to be the principal office of the said company in the city of New York." The policy contains this further provision: "That if the premiums are not paid, as hereinafter provided, on or before the days when due, then this policy shall become void, and all payments previously made shall be forfeited to the company, except that if this policy, after being in force three full years, shall lapse or become forfeited for the nonpayment of any premium, a paid-up policy will be issued, on demand made within six months after such lapse, with the surrender of this policy, under the same conditions as this policy, except as to payments of premiums, but without participation in profits, for an amount equal to as many fifteenth parts of the sum above insured as there shall have been complete annual premiums paid hereon when said default in the payment of premiums shall be made; and all right, claim, or interest arising under statute, or otherwise, to or in any other paid-up policy or surrender value, and to or in any temporary insurance, whether required or provided for by the statutes of any state or not, is hereby expressly waived and relinquished."

The cause was tried upon an agreed statement of facts, the material parts of which are as follows: "(1) That the defendant is a corporation organized and existing under the laws of the state of New York as a mutual life insurance company, without capital stock, having its chief office in the city of New York, and was at the date of issuing the policy in question, and since has been, and now is, engaged in the business of insuring lives through branch offices situated in the different states and territories of this country and certain foreign countries. (2) That the defendant, for many years past, has maintained branch offices in the state of Missouri, and has employed agents to solicit applications for insurance from citizens of Missouri, and in the year 1887, as both prior and subsequent thereto, defendant had received from the superintendent of insurance a certificate of authority to transact business in said state. (3) That during the year 1886, and prior to the issuance of the policy sued upon, the amount of policies issued by defendant to citizens of Missouri was $1,617,985, and the amount of insurance in force on the lives of citizens of Missouri on December 31, 1886, was $8,886,542, and the total amount of policies issued by defendant in said year 1886 was $85,178,294, and the total amount of policies in force on December 31, 1886, issued by defendant, was $304,373,540. (4) That on the 2d day of May, 1887, and long prior thereto, John K. Cravens was a citizen of the state of Missouri and resident of the county of Jackson, in said state; that on the said date, and long prior thereto, said John K. Cravens was the husband of Fannie Cravens, the plaintiff herein, and thereafter continued to be the husband of said plaintiff, Fannie Cravens, until the time of his death. (5) That the defendant, in the transaction of its business, had adopted different forms of policies, embodying different and varying plans of insurance, all of them being on the mutual plan; the premiums paid, less the expense of...