Green v. American Life & Accident Ins. Co.

• Decision Date: 01 February 1938
• Docket Number: No. 24251.,24251.
• Citation: 112 S.W.2d 924
• Court: Missouri Court of Appeals
• Parties: GREEN v. AMERICAN LIFE & ACCIDENT INS. CO.

112 S.W.2d 924

GREEN v. AMERICAN LIFE & ACCIDENT INS. CO.

No. 24251.

St. Louis Court of Appeals. Missouri.

February 1, 1938.

Rehearing Denied February 16, 1938.

Appeal from St. Louis Circuit Court; Frank Landwehr, Judge.

"Not to be published in State Reports."

Action by Fannie Green, widow of Gabe Green, deceased, against the American Life & Accident Insurance Company, a corporation, to recover on the policies of life insurance issued on the life of the deceased by the Quick Payment Old Line Life Insurance Company, on theory that defendant had assumed liability on the policies. At a trial de novo in circuit court on appeal from justice court, judgment was entered against defendant for the face amount of the policies which totaled $285, plus $228.50 by way of penalty and attorney's fees, and defendant appeals.

Reversed.

Jones, Hocker, Gladney & Grand and Warren F. Drescher, Jr., all of St. Louis, Mo., for appellant.

S. R. Redmond and Henry D. Espy, both of St. Louis, for respondent.

BENNICK, Commissioner.

This is an action upon two policies of insurance which were issued by the now defunct Quick Payment Old Line Life Insurance Company upon the life of plaintiff's husband, Gabe Green, who died on April 26, 1934. However, the action is brought against defendant, American Life & Accident Insurance Company, upon the theory that it had assumed whatever liability was outstanding on the policies; and that it had done so was admitted by defendant itself in the course of the making of its own proof.

The one policy, identified as No. 49205, had been issued on March 15, 1920, and was for the face amount of $135, which sum was made payable to the executors or administrators of the estate of the insured, or any relative by blood or connection by marriage of the insured, or to any person appearing to the company to be equitably entitled to the proceeds of the policy by reason of having incurred expense on behalf of the insured for his burial.

It appears, incidentally, that plaintiff, who is the widow of the insured, maintains this action by virtue of an order of the probate court of the city of St. Louis refusing letters of administration on the estate of the insured and authorizing and empowering her, as such widow, to sue for, collect, and retain the proceeds of the two policies as her absolute property.

The policy in question provided for the payment of a monthly premium by the insured, but with a grace period of four weeks allowed for the making of payment.

Among the other provisions of the policy was one for the revival of the same upon certain specified conditions after a lapse of the policy for the nonpayment of premium; another providing that no agent should have the power on behalf of the company to modify any of the terms of the contract, and that no condition, provision, or privilege thereof could be waived or modified except by indorsement thereon signed by one of the officers of the company; and still another that if, after premiums had been paid for three full years, the policy should be allowed to lapse for nonpayment of premium, the insured would automatically become entitled to such extended term insurance for the face amount of the policy as its cash surrender value, less any indebtedness, would purchase at the attained age of the insured, unless he should elect in lieu thereof to receive either a paid-up life policy for the amount available at the date of lapse, or else the cash surrender value of the policy.

Upon the back of the policy was an indorsement by defendant purporting to show that the policy had been revived on June 13, 1932, and that a lien of $2.25, bearing simple interest at the rate of 6 per cent. per annum, existed against the policy, subject to the terms of a premium note dated June 13, 1932, the date of the revival.

The other policy, identified as No. 19142, which had been issued on April 16, 1917, was for the face amount of $150, but was otherwise identical with policy No. 49205 as to its provisions, including the indorsement on the back with regard to the lien which had been placed against it.

Both policies would appear to have lapsed for nonpayment of premium on or about March 27, 1933, which was approximately thirteen months before the date of the death of the insured; and, if plaintiff is to recover on the policies, it can only be upon the theory that at the date of lapse there was then a reserve available with which to have purchased extended term insurance for the face amount of the policy for a period of time sufficient to have embraced the date of the death of the insured.

Originating in a justice's court, the case was taken on appeal to the circuit court, wherein, upon a trial de novo, a verdict was returned in favor of plaintiff, and against defendant, for the face amount of both policies, with interest, together with a further allowance of $228.50 by way of penalty and attorney's fees for vexatious refusal to pay. Judgment was rendered accordingly; and, following the refusal of its motion for a new trial, defendant's appeal to this court has been perfected in the usual course.

Though there are other points raised, the decisive question in the case is that of whether defendant should have had a directed verdict at the close of all the evidence.

In view of the fact that defendant had not issued the policies upon which plaintiff has sued but had merely assumed certain liability thereunder, the determining point in the case is that of the extent, if any, to which plaintiff's rights were affected by the limitations put upon defendant's liability in the contract by which it claims that it assumed and took over the policies.

Defendant's evidence disclosed by certified copies of the records of the insurance department that on February 8, 1927, the Quick Payment Old Line Life Insurance Company, which had issued the policies, had changed its name to First National Life Insurance Company of America, and that on August 18, 1931, a reinsurance agreement had been entered into between said First National Life Insurance Company of America and the Mississippi Valley Life Insurance Company by which the latter took over certain of the former's policies, including the two policies now in suit.

It was an admitted fact that thereafter one Moran, a policyholder in the Mississippi Valley Life Insurance Company, instituted a receivership suit in the circuit court of the city of St. Louis, in which suit he alleged that said Mississippi Valley Life Insurance Company was insolvent and mismanaged; that two receivers were appointed for the company, one of whom was the superintendent of the insurance department, who had meanwhile intervened in the suit; and that the company was enjoined by the court from further transacting any insurance business, or from in any manner creating or attempting to create any obligation on behalf of itself. Elsewhere it appeared from the records of the court that the order of dissolution of the corporation was entered on April 25, 1932.

During the progress of the receivership, defendant, American Life & Accident Insurance Company, entered into negotiations with the receivers of the Mississippi Valley Life Insurance Company with a view to taking over certain of the latter's monthly industrial and stipulated premium policies, among which, under defendant's version of the facts, were included the two policies now in suit, and as a result of these negotiations a contract or reinsurance treaty was agreed upon and prepared as of May 14, 1932, on which date the court authorized its receivers to execute the same, after specifically finding that it was to the best interest of the policyholders that defendant's offer of reinsurance be accepted.

Bearing in mind that plaintiff...