Jacobs v. Omaha Life Ass'n.

• Decision Date: 15 November 1898
• Citation: 146 Mo. 523,48 S.W. 462
• Parties: JACOBS v. OMAHA LIFE ASS'N.
• Court: Missouri Supreme Court

48 S.W. 462

146 Mo. 523

JACOBS v. OMAHA LIFE ASS'N.

Supreme Court of Missouri, Division No. 1.

November 15, 1898.

INSURANCE — PREMIUM POLICY — BREACH OF CONDITIONS.

1. A life policy provided for annual premiums based on insured's age, and stated that they were advance deposits to pay the death losses and the expenses of insurer. Out of the premiums two funds were created, and death losses were payable therefrom only. Premiums paid in to pay such losses, and not used for that purpose, were to be applied on future premiums. When the reserve fund reached a stated sum, dividends were to be declared therefrom, which policy holders might use in paying premiums, in purchasing paid-up insurance, or might leave with the company for investment, or receive them in cash on surrender of the policy. After 15 years the policy was to become full paid. It further stipulated that nothing in the policy should be a bar to a call for contributions in excess of those provided in case of a deficiency in the mortuary fund. Held, that the policy was a premium, and not an assessment, policy, under Rev. St. 1889, § 5855, requiring an assessment policy to show that the liabilities of members are not fixed or artificial premiums, and section 5860, defining "assessment insurance" as an insurance contract, the benefit of which is dependent on the collection of an assessment from persons holding similar contracts, and hence was subject to Rev. St. 1889, § 5849, providing that policies shall not be rendered void for misrepresentations in securing them, except for such as actually contribute to the contingency or event on which the policy is to become due.

2. When applying for a policy, insured executed his note, payable to insurer's agent individually, who indorsed it and discounted it; giving insured a receipt for the premium, which he reported to the company as paid, and for which he accounted. The policy, executed the day following, recited that it was given in consideration of payment of the first premium in cash on or before its delivery. After insured's death the note was paid by his estate. Held, that there was a cash payment of the premium, within a provision of the policy requiring that to be done before the policy took effect.

Appeal from circuit court, Ray county; E. J. Broaddus, Judge.

Action by Lizzie C. Jacobs against the Omaha Life Association. There was a judgment for plaintiff, and defendant appeals. Affirmed.

Lavelock & Kirkpatrick, P. P. Divilbliss, and Byron G. Burbank, for appellant. J. W. Garner and C. T. Garner, for respondent.

BRACE, P. J.

This is an action upon a policy of insurance for $5,000 issued by the defendant to Robertson L. Jacobs, payable to his wife, Lizzie C. Jacobs, the plaintiff, and dated the 1st day of June, 1894. Robertson L. Jacobs died on the 29th day of June, 1894; and the suit was instituted by his widow on the 9th of April, 1895, in the Ray county circuit court, where the defendant obtained judgment, from which the plaintiff appealed to this court. On the 7th of December, 1897, the judgment of the circuit court was reversed by this court, and the case remanded to the circuit court. 142 Mo. 49, 43 S. W. 375. On the second trial the plaintiff obtained judgment for the sum of $4,417.02, from which the defendant appeals. The pleadings in the case and the policy are set forth in the opinion on the former appeal, and need not be repeated here. It appeared from the evidence that on the 16th of March, 1893, the said Robertson L. Jacobs had his leg broken, which was then set and treated by Dr. Buchanan and his family physician, Dr. Jacobs. In his application, which was made a part of the contract of insurance by the policy, the following interrogatories and answers appear: "(8) Name and residence of your usual medical attendant? Dr. M. C. Jacobs, Richmond, Mo. (9) For what disease or ailment have you required his advice or attendance? Nothing of importance. (10) Have you consulted or obtained the advice of any other medical man within the past ten years? (If so, state full particulars.) No." "(26) State particulars of any illness, constitutional disease, or injury you have had; giving date, duration, and remaining effects, if any. None, except broken leg, March, '83. (27) When did you last consult a physician? When leg was broken. (27b) For what did you consult him? Above. (28) Have you consulted or obtained the advice of any other medical man within the last ten years? No." The first question before us is substantially the same as on the former appeal; i. e. whether or not the incorrect answers of the applicant in respect to the date of his injury, and of the medical attention received therefor, vitiated the policy.

1. On the former appeal we held that the character of the contract was put in issue, and that, "if the contract was not on the assessment plan, then the false date of the injury will not avoid it, unless material to the risk," and said: "An examination of the contract itself, and of the application, which is made a part of it, fails entirely to show that the `benefit is in any manner or degree dependent upon the collection of an assessment upon persons holding similar contracts.' The contract is conditioned upon the payment of the fixed sum of $26.60 quarterly. It is said in the Hanford Case, 122 Mo. 50, 26 S. W. 680: `It is true, the fifteen dollars to be paid, and used as an expense fund, is a fixed and defined sum, paid annually, and is in no sense an assessment. According to the first clause of the seventh condition of the policy, the member must make a monthly payment at fixed and defined dates during his life, and the amount to be paid bimonthly is also fixed by the table of rates. Thus far these policies are premium policies, for it does not make these fixed rates, payable at specified dates, assessments, to call them by that name.' The fixed quarterly payments required under the contract in question are not even called `assessments.' They are in fact simply premiums to be paid quarterly for the period of fifteen years, if the insured lives that long. It is true, the contract is made subject to all the conditions, requirements, and benefits stated on the second and third pages of the policy; but neither party has incorporated these in the abstracts furnished us, so we are not informed what they require." On the trial anew in the circuit court the defendant introduced in evidence the second and third pages of the policy, and it contends that it appears therefrom that the contract of insurance was on the assessment plan; and this is the principal question in the case. The evidence on said pages bearing upon the character of the contract, is as follows:

"By-Laws, Conditions, Requirements, and Benefits.

"I. Premiums. Section 1. An annual premium (which may be paid in equal quarterly or semiannual installments, if so stated in the application herefor) shall be paid to the association at the times and in the manner stipulated on the face of this policy for the payment of premiums, which premium shall be in amount, on each certificate of $1,000, according to the age of the insured at the date hereof, as provided in the premium table as herein contained.

"II. Time of Payments. Section 1. Notices of premiums becoming due shall be sent from the office of the association thirty days before they are made payable. Sec. 2. A printed or written notice, directed to the address of a member as it appears at the time on the books of the association, and deposited in the post office in Omaha, with postage prepaid, shall be deemed a legal and sufficient notice of premiums becoming due. A certificate or memorandum, made by the secretary or bookkeeper, showing such fact, shall be taken and accepted as conclusive evidence of the mailing of such notice. Sec. 3. All premiums are due within thirty days of date of notice thereof. And, in case of failure to pay when due, a second notice shall be mailed and directed as before, which second notice shall be due and payable within twenty days from date thereof; twenty-five cents shall be added to pay cost of such second notice, and, if not paid at the expiration of such twenty days, then membership and the policy of such member shall be deemed forfeited, and ipso facto null and void. Reinstatement may be had on application, if approved by medical director, by giving reasonable assurance of good health and continued good family history, payments of arrearages, and a reinstatement fee of fifty cents. But a notice to pay premiums or dues, sent to a lapsed member, shall not be deemed a recognition of his membership, which shall be suspended until reinstated in the manner above indicated. Sec. 4. Notices of premiums becoming due shall contain an itemized statement of the approved death losses reported for the previous quarter, showing the name, age, number, and date of policies held, name of beneficiary, with cause of the death of each such deceased member. Sec. 5. Each premium is due in cash at the head office of the company, in the city of Omaha, but will be accepted elsewhere when duly tendered in exchange for the company's receipt signed by the president or secretary. Notice that each premium due at the date named in the policy is given and accepted by the delivery and acceptance of this policy, and any further notice required by any statute is thereby expressly waived. That part of the full year's premium, if any, which is not due at the time of the death of the insured, shall be deducted from the first installment paid. If this policy shall become void by nonpayment of any premium, all payments previously made shall be the absolute property of the company, except as hereinafter provided. Sec. 6. Each member of the association, or his representatives, shall at once notify the association of any change in his residence or post-office address.

"III. Reserve Fund. Section 1. Twenty-five per cent of the premiums paid, after deducting $4.00 per $1,000...