First National Bank of Beeville v. Security Mutual Life Insurance Company of Binghamton

• Decision Date: 25 June 1920
• Citation: 222 S.W. 832,283 Mo. 336
• Parties: FIRST NATIONAL BANK OF BEEVILLE, TEXAS, v. SECURITY MUTUAL LIFE INSURANCE COMPANY OF BINGHAMTON, NEW YORK, Plaintiff in Error
• Court: Missouri Supreme Court

222 S.W. 832

283 Mo. 336

FIRST NATIONAL BANK OF BEEVILLE, TEXAS, v. SECURITY MUTUAL LIFE INSURANCE COMPANY OF BINGHAMTON, NEW YORK, Plaintiff in Error

Supreme Court of Missouri, Second Division

June 25, 1920

Appeal from Jackson Circuit Court. -- Hon. Allen C. Southern, Judge.

Affirmed (on condition).

Roland Hughes for plaintiff in error.

(1) There could be no recovery in this case for vexatious delay and attorney's fees. This was a Texas contract, and the penalties imposed by our statute do not extend to the obligations of a Texas contract. Thompson v. Traders Ins Co., 169 Mo. 12. (2) In an ordinary life insurance policy the beneficiary named in the policy becomes the owner of it the moment it is issued, and the person procuring the insurance cannot by any subsequent act of his, transfer to others the interest of the beneficiary. Splawn v Chew, 60 Tex. 534; U.S. Casualty Co. v. Kacer, 169 Mo. 301; Blum v. N.Y. Life, 197 Mo. 522. (3) The debt of Kennedy to the bank, to secure which Agnes Kennedy pledged the policy, was barred by Statute of Limitations before her death, and the policy was released from liability. The mere physical possession of the paper gave the bank no rights in it. Cheves v. Anders, 87 Tex. 287; 2 Briefs on Insurance Law by Cooley, 1112. (4) Plaintiff, being a national bank, could neither purchase this insurance policy nor loan money on it. It possibly might hold it to secure the past indebtedness of $ 1,034.61, if this debt had not been barred by limitation, or the time of payment extended, or the debt canceled and the security thereby released. First Nat. Bank v. First Nat. Bank, 92 A. 1076, 247 Penn. 44; McBoyle v. Union Natl. Bank, 122 P. 458, 162 Cal 277. (5) The debt for which Mrs. Kennedy pledged the policy being barred by limitation during her life, the security became released by act of law, and the bank could not sue on the policy. R. S. 1909, sec. 1892; Washington Life Ins. Co. v. Gooding, 19 Tex. Civ. App. 490, 49 S.W. 123; Vernon's Sayles's Statutes of Texas, art. 5688. (6) Where the wife assigned a policy to secure the debt of the husband the policy stands in the relation of surety for the debtor, and an extension of time or renewal of the note, without the consent of the wife, released the policy. Allis v. Ware, 28 Minn. 166; 27 Am. & Eng. Enc. Law (2 Ed.), 433; Brant on Suretyship & Guar., secs. 21, 22. The burden would be on plaintiff to show her consent. Touhy v. Woods, 122 Cal. 665; Same case, 55 P. 683; Okey v. Sigler, 47 N.W. 911; Same case, 82 Iowa 94; United States v. McIntyre, 111 F. 590. (7) The reply admits that Kennedy signed the note or certificate of loan pleaded in the answer. A party cannot traverse and at the same time confess and avoid. In this respect the reply is ambiguous. Cable v. McDaniel, 33 Mo. 363; Bliss on Code Pld. (2 Ed.) secs. 317, 332; Bredell v. Alexander, 8 Mo.App. 110; Barrett v. Donnelly, 38 Mo. 492; Adams v. Trigg, 37 Mo. 141. The contract of the bank with Kennedy, was against public policy and void. "Public policy will not recognize the transfer of a life policy of insurance to another whose interest is involved in the early death of the insured." Price v. Supreme Lodge, 68 Tex. 361; Tripp v. Jordan, 177 Mo.App. 339; Heusner v. Ins. Co., 47 Mo.App. 343; Ins. Co. v. Richardson, 99 Mo.App. 93; Bruer v. Ins. Co., 100 Mo.App. 627; Jenkins v. Morrow, 131 Mo.App. 288. (8) The petition does not allege facts which show that the insurance money was due. Shaver v. Mercantile Town Mut., 79 Mo.App. 420; Wanschaff v. Masonic Ben. Assn., 41 Mo.App. 206.

Charles N. Sadler for defendant in error.

(1) Plaintiff was entitled to recover attorney's fees under Sec. 7068, R. S. 1909. (a) Defendant says it was a Texas contract. Regardless of whether it was a Texas, New York or Missouri contract, there was no pleading or proof that the laws of Texas were different from Missouri, and in the absence of proof it will be presumed that the laws of another state are the same as the laws of the forum. Shelton v. Railroad, 167 Mo.App. 404; Gibson v. Railroad, 225 Mo. 473; Warren v. Lusk, 16 Mo. 102; Selking v. Hebel, 1 Mo.App. 340; Bergner v. Ry. Co., 13 Mo.App. 499; Silver v. Ry. Co., 21 Mo.App. 5; McDonald v. Ins. Co., 154 Mo. 618; R. S. 1909, sec. 7068; Thompson v. Ins. Co., 169 Mo. 12; Stix v. Ins. Co., 175 Mo.App. 171; Coscarella v. Ins. Co., 175 Mo.App. 130. (b) This being a life insurance policy executed by a New York Company in New York upon the life of a man then living in Texas, and sued upon in Missouri, the laws of Missouri are applicable. Beneficiaries in life insurance policies providing for change of beneficiary do not obtain such a vested interest that it cannot be ousted. (2) Mrs. Kennedy joined in the assignment of this policy, the policy provides in case of her death it shall be payable to A. G. Kennedy's estate, and she was dead long before this policy matured or suit brought. 25 Cyc. 892. Even if the debt was barred this defendant could not raise the point. It is a personal one, and if A. G. Kennedy did not want to avail himself of it this defendant could not avoid its just debts in such a manner. Columbia Ave. Sav. Fund Co. v. Strawn, 93 Tex. 48. (3) Plaintiff did not buy the policy sued on, nor did it loan money on it; it did not violate any national bank act. It had a perfect right to take an assignment of the policy as collateral security for its past due debt, and then in order to protect its security had a right to pay the premiums. This is all it did under the testimony. McBoyle v. Union Natl. Bank, 122 P. 458; 5 Cyc. 591. Even if it had bought the policy, or loaned money on it, this defendant could not raise that question. First Natl. Bank v. Wilson, 165 P. 859; Merchants Natl. Bank v. Weston, 168 P. 587; 5 Cyc. 590; Wherry v. Hale, 77 Mo. 20; Thornton v. Natl. Exchange Bank, 71 Mo. 221; Matthews v. Skinker, 62 Mo. 329. (4) The reply does not admit that Kennedy signed the so-called note, but expressly denies it. Even if the reply was ambiguous it is too late for plaintiff in error to complain now, and it could cut no figure in this case.

OPINION

WILLIAMSON, J.

The First National Bank of Beeville, Texas (hereinafter called the Bank), brought suit in the Circuit Court of Jackson County, Missouri, against the Security Mutual Life Insurance Company of Binghamton, New York (hereinafter called the Insurance Company), to recover an amount claimed to be due upon a life insurance policy issued by the company upon the life of Albert G. Kennedy. Plaintiff recovered a judgment in the sum of $ 7315.14 and $ 750 for attorney's fees. The company has duly brought the cause to this court upon a writ of error.

The suit grew out of the following facts: Albert G. Kennedy held a life insurance policy, nine years old, amount not stated and cash surrender value not disclosed, issued by the defendant. He was indebted to plaintiff in the sum of $ 1032.65. The policy was pledged for the payment of this debt. In August, 1905, at the solicitation of defendant, Kennedy took out the policy here in suit for $ 8000 on the twenty-payment plan. For the new policy, he surrendered the old one, and, so defendant says, gave his written promise to pay to defendant $ 3301.52, with interest at six per cent per annum, secured by a lien upon the new policy. The plaintiff, at defendant's request, consented to surrender the old policy and accept the new one in lieu thereof, and for eleven years paid the annual premium of $ 488.96. But plaintiff, for nine years after the new policy was issued, did not know of the agreement that the new policy should stand subject to defendant's lien for $ 3301.52. Neither did Kennedy, as he says.

In the end plaintiff had advanced, in loans, interest and premiums, a sum in excess of $ 7160 on the new policy, when it matured. Its maturity value was $ 7160. But defendant claimed the right to deduct $ 3301.52, together with interest at six per cent per annum from August 9, 1905, amounting in all to $ 5480.51, leaving, as defendant claimed, $ 1200, which it was willing to pay to the legal holder of the policy. Plaintiff declined to accept this offer and brought this suit. This is a bird's-eye view of the case. Further facts follow.

The plaintiff, after the usual formal allegations, averred that the defendant on the 9th day of August, 1904, insured the life of Albert G. Kennedy in the sum of $ 8000, to be paid upon his death to his wife, Agnes Kennedy; that it was provided in the policy that if the insured were living on the 9th day of August, 1915, the defendant would then pay to the legal holder or beneficiary of the policy, the sum of $ 5960, plus such profits as the defendant might have apportioned to this policy; that on the 14th day of September, 1905, said Kennedy and his wife, in consideration of an indebtedness in the sum of $ 1865.65 then due from said Kennedy to plaintiff, assigned the policy in writing to plaintiff, including in the assignment all rights which had accrued or which might accrue under the policy; that defendant was duly notified of the assignment and consented thereto, and on the 25th day of September, 1905, the defendant by a writing indorsed on the policy, substituted plaintiff as the beneficiary in lieu of Mrs. Kennedy, and that thereby plaintiff became and had ever since remained the owner thereof; that plaintiff had paid all premiums subsequently accruing upon this policy, and that the total amount of the premiums so paid was $ 4888.96; that on the 9th day of August, 1915, the insured was still living, and was then indebted to plaintiff in the sum of $ 5212.12, for money loaned and premiums paid as aforesaid; that on said date the profits which had been apportioned to this policy by defendant amounted to $ 1200, and that defendant...