Doty v. American Nat. Ins. Co.

• Decision Date: 07 April 1942
• Parties: E. L. DOTY, ASSIGNEE OF ROSA C. BOSWELL (PLAINTIFF), RESPONDENT, v. AMERICAN NATIONAL INSURANCE COMPANY, A CORPORATION (DEFENDANT), APPELLANT
• Court: Missouri Court of Appeals

160 S.W.2d 810

236 Mo.App. 955

E. L. DOTY, ASSIGNEE OF ROSA C. BOSWELL (PLAINTIFF), RESPONDENT, v. AMERICAN NATIONAL INSURANCE COMPANY, A CORPORATION (DEFENDANT), APPELLANT

Court of Appeals of Missouri, St. Louis

April 7, 1942

Appeal from Circuit Court of Audrain County.--Hon. Frank Hollingsworth, Judge.

REVERSED AND REMANDED (Cause certified to Supreme Court).

Judgment reversed and cause remanded. Cause certified to Supreme Court.

Kenneth I. Fligg and Fry & Edwards for appellant.

Messrs Wayman & Kleinecke of counsel.

(1) (a) Secs. 5852-55, R. S. Mo. 1939; State ex rel. Adams et al v. Allen et al. (Mo.), 125 S.W.2d 854; Magers v Northwestern Mutual Life Ins. Co. (Mo.), 152 S.W.2d 148; Lindsey v. Prudential Ins. Co., 16 F.Supp. 880; Sec. 40-420, Gen. Statutes Kan. 1935; Prange et al. v. International Life Ins. Co. of St. Louis (Mo.), 46 S.W.2d 523; Finnegan v. Am. Nat. Ins. Co. (Mo. App.), 137 S.W.2d 698; Wells v. Met. Life Ins. Co. (Mo. App.), 125 S.W.2d 86; Gooch v. Metropolitan Life Ins. Co. (Mo.), 333 Mo. 191, 61 S.W.2d 704; Prudential Ins. Co. of America v. Pearson et al. (Mo.), 24 F.Supp. 311; Brannaker v. Prudential Ins. Co. of America (Mo. App.), 150 S.W.2d 498; Davis v. Mutual Life Ins. Co. (Mo. App.), 119 S.W.2d 488, 493; State ex rel. Clark v. Becker et al. (Mo.), 73 S.W.2d 769; Clark v. John Hancock Mutual Life Ins. Co., 58 S.W.2d 484; Fidelity Natl. Bk. & Tr. Co. v. Met. Life Ins. Co. (Mo.), 12 F.Supp. 524; Trapp v. Metropolitan Life Ins. Co., 70 F.2d 976. (1) (b) Legrand v. Central States Life Ins. Co., 132 S.W.2d 1105; Vail v. Midland Life Ins. Co. (Mo. App.), 108 S.W.2d 147; Lacy v. American Central Life Ins. Co. (Mo. App.), 115 S.W.2d 193; (2) Secs. 5852-55, R. S. Mo. 1939; Smith v. Equitable (Mo. App.), 107 S.W.2d 195; Cleaver v. Central States Life Ins. Co. (Mo.), 142 S.W.2d 474, 477; Valenti v. Prudential Ins. Co., 71 F.2d 229; Fletcher v. Metropolitan Life Ins. Co., 137 S.W.2d 621; Salamone v. Prudential Ins. Co. (Mo. App.), 103 S.W.2d 506; Rositzky v. New York Life Ins. Co. (8 C. C. A.), 45 F.2d 758; Smith v. Equitable Life Ins. Co. (Mo. App.), 107 S.W.2d 191.

C. C. Franklin for respondent.

(1) Mills v. Robinson, 80 Mo. 47; Majors v. Maxwell, 120 Mo.App. 281-85, 96 S.W. 731; Merchants Exchange Bank v. Bankers Life, 104 S.W.2d 744; State ex rel. v. Eldridge, 65 Mo. 584-86; Weintraub v. Abraham Lincoln Life Ins. Co., 89 S.W. 160; Woodard v. Life Insurance Co., 156 Mo.App. 244, 137 S.W. 63. (2) Finnegan v. American National Ins. Co., 137 S.W.2d 698; Westerman v. Supreme Lodge, 196 Mo. 760, 94 S.W. 470; Boulware v. Missouri State Life Ins. Co., 159 S.W. 761; Spink v. United States Life (Ky.), 96 S.W. 889, 13 L. N. S. 1053. The purpose of the Legislature in enacting the nonforfeiture statute was to secure to the policyholders substantially what the excess of premiums paid over the cost of insurance will buy in the way of extended or paid-up insurance. Under the law of Missouri the statute must be so construed as to effectuate this purpose. Secs. 5852-55, R. S. Mo. 1939; Secs. 5741-44, R. S. Mo. 1929; Finnegan v. American National Ins. Co., supra; Gooch v. Metropolitan Life Ins. Co., 61 S.W.2d 704; Lacy v. American Life Ins. Co., 115 S.W.2d 193; American National Ins. Co. v. Foster (Texas), 130 S.W.2d 287; Cravens v. New York Life, 148 Mo. 583, 50 S.W. 519 (affirmed); 178 U.S. 389, 20 S.Ct. 962, 44 L.Ed. 1116; Smith v. Mutual Benefit Life Ins. Co., 173 Mo. 329; Rose v. Franklin Life Ins. Co., 153 Mo.App. 90, 132 S.W. 613; Union Brewing Co. v. Ehlhardt, 139 Mo.App. 129, 120 S.W. 1193; Shohoney v. Q. O. & K. C. R. R., 231 Mo. 1131, 132 S.W. 1059; Westerman v. Supreme Lodge, 196 Mo. 670, 95 S.W. 470; Stoner v. New York Life, 85 S.Ct. 276; Erie R. R. Co. v. Tompkins, 58 S.Ct. 817, 304 U.S. 61, 114 A. L. R. 1487. (3) The plaintiff would be entitled to recover on this policy under the statutory method of valuation. Secs. 5852-55, R. S. Mo. 1939; Secs. 5741-44, R. S. Mo. 1929; Finnegan v. American National Life Ins. Co., supra; Lacy v. American National Life Ins. Co., supra; Gooch v. Metropolitan Life Ins. Co., supra; Moore v. Northwestern Life Ins. Co., 112 Mo.App. 696, 87 S.W. 988; Rose v. Insurance Co., supra, 153 Mo.App. 90, 132 S.W. 613; Horton v. Insurance Co., 151 Mo. 604; LeGrand v. Central States Life, 132 S.W.2d 1105. (4) Under the terms of the policy when construed with the statute, accidental death benefits as well as the face amount of the policy are payable. Secs. 5852-5844, R. S. Mo. 1939; Fletcher v. Metropolitan Life Ins. Co., 137 S.W.2d 621; Rositzky v. New York Life, 45 F.2d 758; Salamone v. Prudential Ins. Co. of America, 103 S.W.2d 506; Logan v. Fidelity & Casualty Co., 146 Mo. 114. (5) Defendant's appeal is vexatious and without merit, and the statutory penalties should be assessed. Sec. 1064, R. S. Mo. 1929; Bonzon v. Metropolitan Life Ins. Co., 143 S.W.2d 336, 341; President Mining Co. v. Coquard, 40 Mo.App. 40; Johnson v. American Surety Co., 292 Mo. 521, 238 S.W. 500; Prudential Ins. Co. v. German Mutual Ins. Co., 142 S.W.2d 500, 504.

BENNICK, C. Anderson, J., concurs; Hughes, P. J., concurs with respect to count one of the petition, and concurs in the result only with respect to count two. McCullen, J., in a separate opinion, concurs and dissents.

OPINION

BENNICK, C.

This is an action upon a policy of industrial insurance issued by defendant, American National Insurance Company, upon the life of one Dorothy O. Boswell, whose mother, Rosa C. Boswell, was designated as beneficiary. Plaintiff, E. L. Doty, brings the action as assignee of Rosa C. Boswell.

The policy, which was for the principal sum of $ 300, was issued on September 2, 1929, and provided for the payment of a weekly premium of ten cents. The insured, at the time, was to be ten years of age at her next birthday following the issuance of the policy.

There was a provision in the policy that the first year's insurance was term insurance; and a further provision that if the insured should die while the premiums on the policy were in arrears for a term not exceeding four weeks, the company would pay the benefits provided in the contract according to its conditions, but subject to the deduction of the premiums in arrears.

With respect to the benefits payable in the event of accidental death, the policy provided that upon receipt of due proof that the insured, after the attainment of age ten, and prior to the attainment of age seventy, had sustained bodily injury solely through external, violent, and accidental means occurring after the date of the policy and resulting in the death of the insured within ninety days from the date of such bodily injury, "while this policy is in force and while there is no default in the payment of premiums," the company would pay, in addition to any other sums due under the policy, and subject to its provisions, an accidental death benefit "equal to the face amount of the insurance stated in this policy," less the amount of any disability benefit which had become payable on account of the same bodily injury.

The policy also contained the following "Whole Life-Free Policy" provision:

"At any time after premiums have been paid hereon for three full years, and while this Policy is in force, the Company will, upon written application to the Home Office upon blank furnished by the Company accompanied by this Policy and all Receipt Books, grant the Insured a Free Policy of life insurance, payable at the same time and under the same conditions as this Policy, but upon which no further payment of premiums shall be required, in accordance with the following table: . . ."

Then followed a table setting forth certain cash and paid-up values depending upon the attained age of the insured and the number of years that the policy had been continued in force, which values (so the policy recited) were based upon the American Experience Table of Mortality with interest at 3 1/2 per cent per annum.

A still further provision accompanying the table was that at any time after premiums had been paid for ten full years, and while the policy was in force, the company, upon application by the insured and his surrender of the policy, would pay the insured, as a cash surrender value, an amount as indicated in the table.

Premiums were paid on the policy until March 18, 1935, or for a period of 5 years and 197 days; and the parties agree that the policy lapsed as of that date for the nonpayment of premium. It is further agreed that the policy did not, by its own terms, provide for extended insurance as a nonforfeiture benefit, and that in such situation the rights of the parties are governed by Section 5852, Revised Statutes of Missouri, 1939 (Mo. Stat. Ann., sec. 5741, p. 4388).

The insured died on November 8, 1937, as the immediate result of a bodily injury sustained solely through external, violent, and accidental means.

Thereafter a demand was made for the payment of the policy, which demand was refused by defendant upon the ground that at the time of the death of the insured the policy had lapsed for nonpayment of premium, and that the term of temporary or extended insurance provided by Section 5852 had meanwhile expired.

Upon defendant's denial of liability, this action followed in two counts, the first, for the principal sum of the policy, which, if due, was payable regardless of the cause of death; and the second, for the double indemnity benefit on account of the accidental death of the insured.

The case was tried to the court alone upon an agreed statement of facts, and resulted in a finding for plaintiff on both counts of his petition, with judgment entered in plaintiff's favor for the aggregate amount of $ 716. Defendant's appeal from such judgment has followed in the usual course.

It is...