Davis v. Mutual Life Ins. Co.

• Decision Date: 09 September 1938
• Parties: ANNA C. DAVIS, RESPONDENT, v. MUTUAL LIFE INSURANCE COMPANY, A CORPORATION, APPELLANT
• Court: Missouri Court of Appeals

119 S.W.2d 488

234 Mo.App. 748

ANNA C. DAVIS, RESPONDENT, v. MUTUAL LIFE INSURANCE COMPANY, A CORPORATION, APPELLANT

Court of Appeals of Missouri, St. Louis

September 9, 1938

Motion for Rehearing Overruled September 23, 1938.

Petition for Writ of Certiorari Denied November 15, 1938.

Appeal from Circuit Court of the City of St. Louis.--Hon. Moses Hartmann, Judge.

Judgment reversed.

Dubinsky & Duggan for respondent.

(1) Green v. American Life & Accident Ins. Co., 93 S.W.2d 1119. (2) Schmidt v. Travelers Ins. Co., 189 S.W. 597.

Jones Hocker, Gladney & Grand and Vincent L. Boisaubin for appellant (defendant).

Frederick L. Allen, of counsel.

Brown v. Mutual Life Ins. Co. of N. Y., 195 S.E. 552 (S. Car.) reported in the Southeastern Advance Sheet of April 7, 1938; Equitable Life Ins. Co. of Iowa v. Horner et al., 97 Ind.App. 347, 182 N.E. 463; Carter v. Ins. Co., 161 So. 446; Bene v. N. Y. Life Ins. Co., 87 S.W.2d 979; Darby v. Equitable Life, 79 So. 329; Erickson v Equitable Life Ins. Co., 258 N.W. 736; Palmer v. Ins. Co., 258 N.W. 732; Neal v. Col. Mutual, 138 So. 353; Kurth v. Ins. Co., 79 S.W.2d 339; Williams v. U. Cent. Ins. Co., 291 U.S. 70; Intersouthern Ins. Co. v. Zerrell, 58 F.2d 135 (C. C. A. 8); Insurance Co. v. Pharr, 59 F.2d 65 (C. C. A. 6); Lindsay v. Prudential Ins. Co., 16 F.Supp. 880 (D. C. W. D. Mo.); Devitt v. Mutual Life, 22 D. L. R. 1915, 183; Life Ins. Co. v. Sluss, 11 N.E.2d 500; Carter v. Mut. Ben. Life Ins. Co., 161 So. 446, at p. 447; Southern Life Ins. Co. v. Zerrell (C. C. A.), 58 F.2d 135, 137; Moss v. Aetna Life Ins. Co. (C. C. A.), 73 F.2d 339; Lamar Life Ins. Co. v. Minor, 170 Miss. 223, 154 So. 542; Mutual Benefit Life Ins. Co. v. O'Brien (Ky.), 116 S.W. 750; Elms v. Mutual Benefit Life Ins. Co., 211 Mo.App. 514; Spears v. Independent Order of Foresters (Mo. App.), 107 S.W.2d 126; Payne v. Ins. Co., 195 Mo.App. 512; State ex rel. v. Vandiver, 213 Mo. 187, 214; Wilhelm v. Ins. Co., 227 S.W. 897; Marek v. Mutual Life Ins. Co., 279 N.Y.S. 532; Drechen v. Mutual Life Ins. Co., 29 F.2d 963 (C. C. A. 8); White v. New York Life Ins. Co. (Mass.), 86 N.E. 928; Robnett v. Cotton States Life (Ark.), 230 S.W. 257; Underwood v. Jefferson Standard Life (N. C.), 98 S.E. 832; Holly v. Metropolitan Life (N. Y.), 11 N.E. 507; Eddie v. New York Life (Calif.), 242 P. 501; Inter-Southern Life Ins. Co. v. Omer (Ky.), 38 S.W.2d 931; Slocum v. New York Life, 228 U.S. 364; Jeffers v. Bankers Life Co. (C. C. A.), 71 F.2d 603; Bankers Life Co. v. Burns (C. C. A. 5), 30 F.2d 327.

McCULLEN, J. Hostetter, P. J., and Becker, J., concur.

OPINION

McCULLEN, J.

This action at law was begun by Anna C. Davis, hereinafter called plaintiff, against the Mutual Life Insurance Company of New York, a corporation, hereinafter referred to as defendant, on four policies of life insurance which had been issued by defendant to George B. Davis. It was stipulated by the parties in the trial court that all four actions should be consolidated and proceeded with as one cause, which was accordingly done.

A trial before the court and a jury resulted in verdicts in favor of plaintiffs and against defendant on each of the policies upon which a judgment in favor of plaintiff and against defendant was rendered in the aggregate sum of $ 5170.10. Defendant in due course has brought the case to this court by appeal.

The policy provisions with which we are chiefly concerned in connection with this appeal are as follows:

"Section 6. Cash Value. At any time after at least three full years premium have been duly paid but not later than three months after default in payment of premium, this policy may be surrendered for its net cash value. Such net cash value shall be the cash value as defined below less any indebtedness to the Company hereon.

"(a) If all past due premiums have been paid, (1) the cash value on any anniversary of the date of the policy or any premium due date other than an anniversary shall be the reserve at such time for the face amount of this policy and for any dividend additions hereto increased by any accumulated dividend deposits and less a surrender charge of not more than one and one-half per cent of the face amount of this policy, or (2) the cash value on a prior date shall be the cash value mentioned in (1) less interest thereon at the rate of six per cent a year.

"After the policy has been ten years in force there shall be no surrender charge.

"(b) During three months after the due date of any premium in default the cash value shall be the same as at such due date except as decreased by the surrender of dividend additions or withdrawal of dividend deposits.

"After any premium has been in default more than three months from its due date, this policy shall have no cash value.

"Section 7. Options on Lapse. (a) Continued Term Insurance.--If any premium remain unpaid at the end of the days of grace, and if at least three full years' premiums have been paid, this policy will, without action on the part of the insured, continue, as from the due date of such premium in default, as paid-up non-participating term insurance.

"The amount of such term insurance shall be the face amount of this policy increased by any dividend additions and by any dividend deposits and decreased by any indebtedness to the company on this policy. The term shall be such as the net cash value at such premium due date provided for in section 6 (adjusted for any later loans, surrender of dividend additions, or withdraw of dividend deposits) applied as a net single premium will purchase.

"Within three months after the due date of such premium in default either of the following options may be exercised instead of having the policy continued as such term insurance.

"(b) Cash Value.--The policy may be surrendered for the net cash value provided for in section 6; or,

"(c) Paid-Up Insurance.--The policy may be surrendered for paid-up non-participating life insurance payable at the same time and upon the same conditions as this policy, the amount of such paid-up insurance being such as the net cash value applied as a net single premium will purchase.

"Section 8. Table of Cash and Loan Value and Options on Lapse. These values are computed in accordance with the provisions of sections 5, 6 and 7 and are on the assumption that all premiums to end of years indicated have been paid and that there are no dividends or indebtedness.

"Any dividend additions or dividend deposits will increase such values and any indebtedness to the company on this policy will decrease such values as provided in the above mentioned sections.

"Values for intermediate periods for which premiums have been paid will be calculated as provided in sections 5, 6, and 7."

Immediately following, as a part of section 8 of the policy, is a table showing the cash value as well as the loan value, as explained in section 5 of the policy, for each $ 1000 face amount thereof at the end of each policy year beginning with three years and ending with thirty years. The table also shows the paid-up non-participating life insurance for each $ 1000 face amount of the policy at the end of each policy year, beginning with three years to and including thirty years. According to said table, the cash value for each $ 1000 of the face amount of the policy at the end of the eighth policy year is expressly stated to be $ 88.28.

The provision of the policy upon which plaintiff bases her contention is as follows:

"Section 9. Reserves and Net Single Premiums. The reserve held for the face amount of this policy and for any dividend additions, and the reserves and net single premiums mentioned in this policy shall be computed in accordance with the American Experience Table of Mortality assuming interest at the rate of three per cent a year, the net single premiums being those at the attained age of the insured."

Section 5 of the policies provided for the terms and conditions under which loans may be made upon the security of the policies themselves. Since there is no dispute concerning the loans which were made to the insured by the defendant, it is unnecessary to set forth here said section of the policies.

It appears from the record, without dispute, that on May 8, 1925, defendant issued its policy No. 3478288 for $ 5000 upon the life of George B. Davis, in which Anna C. Davis, his mother, plaintiff herein, was named as beneficiary. The insured at that time was thirty years old. At the request of the insured and the beneficiary, made on November 4, 1932, defendant split up the $ 5000 policy into four policies which were issued by defendant on December 5, 1932, as follows: Policy 3574643 for $ 2000; policy 3574644 for $ 1000; policy 3574645 for $ 1000; and policy 3574646 for $ 1000. Each of the policies was dated as of May 8, 1925, which was the date of the original $ 5000 policy. Plaintiff was named as beneficiary in each of said four policies. The annual premium required to be paid by the terms of the $ 2000 policy was $ 48.76. Each of the $ 1000 policies provided for an annual premium of $ 24.38.

It further appears from the record, without dispute, that on September 8, 1932, defendant had granted a loan in the sum of $ 411.20 on the $ 5000 policy. It was provided that the loan would mature May 8, 1933. Later, when the $ 5000 policy was split up, the loan was split up and apportioned as follows:

$ 164.48 thereof to the $ 2000 policy, and $ 82.24 thereof to each of the three $ 1000 policies. The note for $ 411.20 representing the loan as originally made, was surrendered to the insured and new notes were executed, dated as of the same date, September 8, 1932, one for $ 164.48 and three for $ 82.24 each, said notes being apportioned to the four substituted policies...