Elliott v. Des Moines Life Ass'n.

• Decision Date: 21 May 1901
• Citation: 63 S.W. 400,163 Mo. 132
• Parties: ELLIOTT v. DES MOINES LIFE ASS'N.
• Court: Missouri Supreme Court

63 S.W. 400

163 Mo. 132

ELLIOTT v. DES MOINES LIFE ASS'N.

Supreme Court of Missouri, Division No. 2.

May 21, 1901.

LIFE INSURANCE — ASSESSMENT PLAN — SUICIDE — APPLICATION — FALSE ANSWERS — EVIDENCE.

1. Two months before insured committed suicide, defendant issued a $5,000 policy on her life, payable to plaintiff, her mother. Insured's life was already insured for $12,000, and she afterwards took a policy for $10,000, and applied for $21,000 further insurance. She had no property with which to pay the premiums, except a farm worth $4,500, mortgaged for $2,600, which she conveyed to plaintiff after defendant's policy was issued. Defendant claimed fraudulent intent to commit suicide when she applied for and received its policy. Held, that it was error to exclude letters, written by insured a few days before her death, urging agents of other insurance companies to take her application for further insurance on her life, and the deed conveying her farm, since such excessive insurance and parting with her only means of paying the premiums were evidence of her fraudulent intent to commit suicide, and, she being a party to the contract, her acts tending to show the fraud could be shown.

2. Policies issued by defendant require payment of fixed annual premiums, and also contain a safety clause providing that, in case the death rate exceeds the estimated rates, or the reserve fund is exhausted, additional premiums may be levied pro rata by the executive board to meet such deficiency. Held, that defendant is a life insurance company, doing business on the assessment plan, under Rev. St. 1889, § 5860, providing that every contract whereby a benefit is to accrue on the death of a person named therein, the payment of which benefit is in any manner dependent on the collection of an assessment on all persons holding similar contracts, shall be deemed a contract of insurance on the assessment plan.

3. Life insurance companies organized under the statutes of 1887 on the assessment plan are not subject to the provisions of Rev. St. 1889, §§ 5849, 5850, that "no misrepresentations made in procuring a policy shall be deemed material, or render the policy void, unless the matter thus represented shall have actually contributed to the contingency or event on which the policy is to become due and payable, and whether so contributed in any case shall be a question for the jury."

4. Under Rev. St. 1889, § 5869, providing "that this proviso does not require an insurance company on the assessment plan to show as a defense that the insured contemplated suicide at the time he or she applied for his or her policy," suicide of the insured within three years is a complete defense, where the policy provides that it shall be void if, within three years, the insured die by her own hand.

5. In an action on a life policy, it was error to refuse to charge that, if the jury believe insured in her application answered "No" to the question, "Do you now use or have you ever used opium, chloral, cocaine, or any other narcotic drug?" and that the answer was knowingly untrue, the verdict must be for the defendant, where such issue was raised by the pleadings.

Appeal from circuit court, Chariton county; W. W. Rucker, Judge.

Action by Hettie V. Elliott against the Des Moines Life Association. From a judgment for plaintiff, defendant appeals. Reversed.

This is an action on a life insurance policy issued by the defendant association on the life of Coda M. Elliott for the benefit of her mother, the plaintiff, and numbered 17,080. The suit was commenced December 5, 1896, in the circuit court of Chariton county. The policy was issued December 30, 1895. Plaintiff, in her petition, alleged that she was the mother of Coda M. Elliott, and the beneficiary named in said policy No. 17,080; that said policy was issued to Coda M. Elliott by the defendant company in consideration of a quarterly payment of $18.50 and the execution of a guaranty note in sum of $50, in said petition set out; the due performance of all the conditions of said contract on the part of Coda M. Elliott and Hettie V. Elliott, the plaintiff herein; the death of Coda M. Elliott on the 2d day of March, 1896; that the plaintiff furnished defendant with proofs of the death of Coda M. Elliott on the 26th day of March, 1896, and that the same were accepted and received by the defendant. Plaintiff's prayer was for $5,000, the amount of the policy, and interest at 6 per cent. per annum from June 26, 1896. The defendant, answering, denied the principal allegations of plaintiff's petition, and set up as an affirmative defense that it was an assessment company; that it had complied with all the provisions of article 3, c. 89, of the Revised Statutes of Missouri for the year 1889, and was authorized under and by virtue of said article 3, c. 89, to do the business of life insurance on the assessment plan in the state of Missouri at the date of the application and the issue of the policy in suit, and held a certificate of authority authorizing it to do such business from the insurance department of the state of Missouri; that said policy No. 17,080 was an assessment policy, and provided that if a member, within three years from the date thereof, should die by his own hands, whether sane or insane, said policy should be void, except as to payments made thereon, with interest; that on or about the 1st day of March, 1896, Coda M Elliott did die by her own hands by means of opium or morphine poison by herself administered with suicidal intent; that on the date of the application by Coda M. Elliott for the policy sued on the said Coda M. Elliott premeditated and contemplated suicide, and that said policy was fraudulently applied for with the intent to commit suicide and self-destruction; that in her written application and medical examination Coda M. Elliott stated the insurance then carried by her to be "Monroe City $2,000, National Life $5,000," and that she had never used opium, chloral, or other narcotic drug, and that she had never suffered from rheumatism; that all of said answers were knowingly false and fraudulent, though warranted by the applicant to be full, complete, and true; and were offered to the defendant as the basis and consideration for the contract of insurance applied for. Defendant tendered into court the $18.50 paid on the policy, with interest; also the guaranty note of $50, and one note for $74, given for the first year's premium on said policy. The plaintiff replied by special and general denial of all the allegations of defendant's answer, and the further allegation that, though the misrepresentations were made as alleged in defendant's answer, they were not material, and did not contribute to the event upon which said policy would become due and payable, to wit, the death of Coda M. Elliott. Upon the issues thus framed as above set out, the evidence discloses that at the date of the issuance of the policy sued on Coda M. Elliott was about 35 years of age, in good health, and a good specimen of physical womanhood; that at that time she lived with her mother on a farm of 70 acres, about one-half mile west of Salisbury, Mo. At this time Coda M. Elliott, her mother, and an elder brother constituted the entire family. The title to the farm above referred to was in Coda M. Elliott at the date of the issue of the policy sued on. At that time there was a valid and subsisting incumbrance upon said farm in the sum of $2,600, dated September 5, 1895. At the date of the trial — July 17, 1897 — no part of this incumbrance, principal or interest, had been paid. This farm was valued by different parties at about $4,500. From the assessment list of Coda M. Elliott for the year 1895 this farm was assessed at $825. From said assessment list and the testimony of the plaintiff, Hettie V. Elliott, it appears that the assured had no other real property, and but little personal. On December 27, 1895 (the day prior to the date of application for the policy in suit), Coda M. Elliott wrote W. H. Lewis, making a most extraordinary offer for the sale of her farm if sold before January 15, 1896. She writes: "I wish a payment of $2,500 down, and I will place as a forfeit $700 in any bank you may name, and, if I fail to buy the farm back before July 16, 1896, at $1,500 more than you pay for it, then the farm and the $700 are your property;" or, "I will give you $150 to make me a loan of $500 by January 15th, or a few days thereafter." On December 30th she directed a letter, which is almost an exact copy of the letter to Lewis, to William Hammack, of Salisbury. Some time in January, 1896, a letter of like purport was addressed to J. B. Hyde, a banker of Salisbury, Mo. At the date of the application, Coda M. Elliott had insurance on her life in the sum of $10,000 in the National Life Insurance Company of Vermont. Five thousand dollars of this was payable to her mother, Hettie V. Elliott, and $5,000 to William Cravens. At this time there was an additional policy on her life for $2,000 in the Safety Fund Life Association, which was also payable to her mother, Hettie V. Elliott, the plaintiff. This policy was issued in consideration of a quarterly payment of $7.50. In her application for the policy in suit she states her total insurance to be $5,000 in National Life and $2,000 in the Monroe City Company. On the 3d day of February, 1896, the assured, under the policy sued on, made application to the Massachusetts Benefit Life Association for insurance in the sum of $10,000. Policies were issued in accordance with said application in the same month in consideration of the yearly sum of $179. For this premium she gave her note dated February 3, 1896. In her application for these policies she represented her entire insurance to be $5,000 in the National Life, and $2,000 in the Monroe City Company, and $5,000 in the Des Moines Life Association. On February 6, 1896, Coda M. Elliott made application to the United...