King v. Hartford Life & Annuity Ins. Company

• Decision Date: 05 October 1908
• Citation: 114 S.W. 63,133 Mo.App. 612
• Parties: MATTIE A. KING, Respondent, v. HARTFORD LIFE & ANNUITY INSURANCE COMPANY, Appellant
• Court: Kansas Court of Appeals

114 S.W. 63

133 Mo.App. 612

MATTIE A. KING, Respondent, v. HARTFORD LIFE & ANNUITY INSURANCE COMPANY, Appellant

Court of Appeals of Missouri, Kansas City

October 5, 1908

Appeal from Jackson Circuit Court--Hon. Henry L. McCune, Judge.

Judgment affirmed.

Lathrop Morrow, Fox & Moore for appellant.

(1) The admission of the reports of December 31, 1900, and December 31, 1901, as evidence, was error: (a) Because the law does not require that the funds belonging to the different forms of policies, should be separately stated, and the plaintiff failed to show that the funds referred to in said reports pertained only to the single form of policy or contract of insurance in controversy. Reynolds v. Insurance Co., 88 Mo.App. 679. (b) Because the reports are in respect to matters necessarily and by their very nature shifting from day to day; hence as they relate to conditions six months prior and six months subsequent to the time of the default in the payment of the assessment they afford no presumptive evidence of the condition of the particular safety fund pertaining to these policies in question even assuming that the amount of such safety fund is shown by the reports on said dates. Janssen & Freyschlag v. Stone, 60 Mo.App. 402. (c) The report of December 31, 1901, being subsequent to the date of default, was in no event admissible. Schwartz v. Frank, 183 Mo. 447.

Fyke & Snider for respondent.

(1) The statements made by appellant to the insurance department of Missouri were made by requirement of law and were properly admitted in evidence. R. S. 1899, sec. 7880; R. S. 1899, sec 7839; Insurance Society v. King (Ill.), 75 N.E. 166. (2) Under the terms of the contract after the safety fund reached one million dollars all interest accruing thereon, and all additions thereto by payments of new members, was to be distributed to the policy-holders in reduction of their premiums. Insurance Co. v. Shinks (Ky.), 96 S.W. 889. (3) In this case there is no evidence that any assessment has ever been made by the board of directors of the defendant or any other proper authority. The burden is upon defendant to prove that such assessment had been properly and legally made. Earney v. Modern Woodmen of America, 79 Mo.App. 385; Agnew v. A. & W. W., 17 Mo.App. 254; Puschman v. Life & Annuity Co., 92 Mo.App. 640; Stewart v. Grand Lodge (Tenn.), 46 S.W. 579; Hannum v. Waddill, 135 Mo. 153; 2 Bacon, Benefit Societies (3 Ed.), sec. 377, p. 938; Johnson v. Insurance Co., 68 N.W. 299; Lewis v. Benefit Association, 77 Mo.App. 586; Banhazer v. A. O. U. W., 96 S.W. 953; Insurance Co. v. Babbett, 7 Allen (Mass.) 235; Margessen v. Benefit Association (Mass.), 42 N.E. 1132; Larydon v. Same (Mass.), 44 N.E. 266; Benjamin v. Association, 79 P. 517; Logsdon v. Supreme Lodge, 76 P. 292.

OPINION

JOHNSON, J.

Action on two policies of life insurance of one thousand dollars each, issued by defendant to Edward M. King, on February 4, 1882. The beneficiaries named were the children of the assured living at the time of his death and plaintiff was the only child. Mr. King died July 4, 1901, at his home in Appleton City. The two policies were issued at the same time, were identical in form and belonged to what defendant called its "Safety Fund" class. Defendant was incorporated in 1867 under the laws of Connecticut, and was authorized by its charter to write any legal form of life insurance contract. It began business on the "old line" plan and in 1879 added the Safety Fund department as a new feature of its business, and out of that department, issued policies or certificates of membership on what is known as the assessment plan.

It is admitted Mr. King made the payments required to initiate his insurance and that he paid the first ninety assessments levied, the last one of which fell due in March, 1901, but defendant alleges in the answer that he failed to pay the ninety-first assessment which amounted on both policies to $ 13.50, and should have been paid not later than June 5th, and that on account of this default, defendant declared the policies forfeited and afterward declined to pay the loss.

The reply is a general denial. The cause was tried before a jury, verdict and judgment were for plaintiff and defendant appealed.

On the issue of forfeiture, plaintiff contends that the evidence shows, first, that the ninety-first assessment (non-payment of which is admitted) was not ordered to be levied by defendant's board of directors, a step made essential by the contract, and, second, that the levy of the assessment was wholly unnecessary or, at least, excessive, and, therefore, would have been invalid had it been ordered by the directors. The forfeiture clause in the certificate on which defendant relies provides: "The holder of this certificate further agrees and accepts same upon the express condition that if either the monthly dues, assessments, or the payment of $ 10 towards the safety fund as hereinbefore required, are not paid to said company on the day due, then this certificate shall be null and void," etc.

Defendant issued a separate certificate for each $ 1,000 of insurance in the "Safety Fund" class, which certificate called for the payment by the holder of an "admission fee" (agent's commission), another fee of $ 10 as a contribution to a "Safety Fund," and bound the holder to pay $ 3 per annum to the expense fund "on the 1st day of the month after date of issue and at every anniversary thereafter so long as this certificate shall remain in force or by monthly or other pro rata instalments." And also, "to pay said company upon each certificate that shall become a claim, an assessment, in accordance with the table of assessment rates as printed hereon, within 30 days from day on which notice bears date." As to the disposition to be made of the "Safety Fund" fee, the certificate specified: "That said company will deposit said sum of ten dollars, when received, with the trustee named in a contract made with it (of which a copy is printed hereon), as a Safety Fund in trust for the uses and purposes expressed in said contract; and shall at the expiration of five years from July 1, 1879, if said Safety Fund shall then amount to three hundred thousand dollars, or whenever thereafter said sum shall be attained, make a semiannual division of the net interest received therefrom by it, pro rata among all the holders of certificates in force in said department at such times, who shall have contributed, five years prior to the date of any such division, their stipulated proportion of said fund, by applying the same to the payment of their future dues and assessments; and that, whenever said fund shall amount to one million dollars, all subsequent receipts therefor shall be divided by the said company in like manner as the interest. Said company further agrees that if at any time after said fund shall have amounted to three hundred thousand dollars, or after five years from January 1, 1880, if that amount shall not have been attained before that date, it shall fail by reason of insufficient membership, or shall neglect if justly and legally due, to pay the maximum indemnity provided for by the terms of any certificate issued in said department, and such certificate shall be presented for payment to said trustee by the legal holder thereof, accompanied by satisfactory evidence, as hereinafter provided, of its failure to pay, after demand upon it within the time herein stipulated for limitation of action, then it shall be the duty of said trustee to at once convert said Safety Fund into money and divide the same (less the reasonable charges and expenses for the management and control of said fund) among all the holders of certificates then in force in said department, or their legal representatives, in the proportion which the amount of each of their certificates shall bear to the amount of the whole number of such certificates in force; and that in such event it shall file with said trustee a correct list, under oath, of the names, residences and amounts of the certificates of all members entitled to participate in such division. . . . And said company further agrees that so long as any certificate of membership in its Safety Fund Department shall remain in force, said fund shall be in no wise chargeable or liable for any use or purpose except as above mentioned."

Important provisions of the contract between defendant and the trustee (The Security Company of Hartford) are as follows: "It is hereby mutually understood and agreed by both parties hereto that all the hereinbefore recited agreements of the first party with the certificate holders shall constitute the uses and purposes of the trust expressed herein. And it is hereby further understood and agreed that at such time as it shall be shown that all certificates of membership issued by the party of the first part in its Safety Fund Department have been legally settled and surrendered to it, or properly cancelled in accordance with their terms, it shall be held and considered that the uses and purposes of said trust have been fully accomplished by said insurance company, and the balance of said fund, if any, shall be paid over to the party of the first part. . . . It being understood and agreed that said fund belongs to the party of the first part (defendant) subject to the expressed trust herein provided. . . . That as often as the sum composing such fund shall be in amount sufficient to purchase one thousand dollars, par value, of United States Bonds, said trustee shall make investments of such funds therein and register the same in its name as trustee of the Safety Fund of the said insurance company, and, provided no default by the party of the first part as hereinbefore recited shall occur, shall accumulate...