Langan v. U.S. Life Ins. Co.

• Decision Date: 07 July 1939
• Docket Number: 36427
• Citation: 130 S.W.2d 479,344 Mo. 989
• Parties: Blanche E. Langan v. United States Life Insurance Company, a Corporation, Defendant-Appellant
• Court: Missouri Supreme Court

130 S.W.2d 479

344 Mo. 989

Blanche E. Langan v. United States Life Insurance Company, a Corporation, Defendant-Appellant

No. 36427

Supreme Court of Missouri

July 7, 1939

Appeal from Circuit Court of City of St. Louis; Hon. J. W McAfee, Judge.

Reversed.

Atwood & Atwood and Jones, Hocker, Gladney & Grand for appellant.

The controlling point in the case is this: If the policyholder and the company agree that an understatement of his age in his application for life insurance shall entitle the insured to only so much insurance as the premium paid would have bought at his true age, is this contract stricken down by the terms of the Missouri Misrepsentation Statute, Section 5732, Revised Statutes 1929? Dolan v. Mut. Reserve Fund Life Assn., 173 Mass. 197, 53 N.E. 398; Keenan v. Mut Life Ins. Co., 77 N. J. L. 64, 71 A. 37; Liebing v Mut. Life Ins. Co., 269 Mo. 523; Carter v. Met. Life Ins. Co., 275 Mo. 84; Pisker v. Met. Life Ins. Co., 181 A. 31; McAuliffe v. Met. Life Ins. Co., 93 N. J. L. 189, 107 A. 258; Chorney v. Met. Life Ins. Co., 172 A. 392; Barker v. Met. Life Ins. Co., 74 N.E. 945; Logan v. New York Life Ins. Co., 181 P. 906; Southern Surety Co. v. Benton, 280 S.W. 551; Federal Life Ins. Co. v. Wright, 230 S.W. 800; Mutual Trust Life Ins. Co. v. Ossen, 77 F.2d 317; Lopardi v. Hancock Mut. Life Ins. Co., 194 N.E. 706; Prahm v. Prudential Ins. Co., 122 A. 752; Reid v. Amer. Natl. Assur. Co., 204 Mo.App. 643; Slaughter v. Protective League Life Ins. Co., 205 Mo.App. 352; Malone v. State Life Ins. Co., 213 S.W. 877; Long v. St. Joseph Life Ins. Co., 225 S.W. 106; Williams v. Natl. Life & Acc. Ins. Co., 1 S.W.2d 1034.

Leo F. Laughren and John P. Griffin for respondent.

The defendant made a contract with the insured in the form of the policy in suit which is incontestable, in which it obligated itself to pay the beneficiary $ 10,000 in consideration of the annual premium of $ 434 which was paid. The policy was incontestable one year from date of issue and it was issued January 21, 1927, and the insured died January 30, 1933, and there is no exception in the incontestable clause except the nonpayment of premiums. The entire rule applicable to incontestable clauses is well and ably stated by the Supreme Court of Illinois in Royal Circle v. Achterrath, 68 N.E. 492, 204 Ill. 560. In contestable and contest is defined in Missouri State Life Insurance Co. v. Cranford, 161 Ark. 609, 257 S.W. 69. "Incontestable means not contestable. A contest, in law, implies an adversary proceeding in which matters in controversy may be settled by the courts upon issues joined." Goodwin v. Provident Co., 97 Iowa 226, 66 N.W. 157, 32 L. R. A. 473, 59 Am. St. Rep. 411. "The policy having been prepared by the insurers, it should be constructed strongly against them." First Natl. Bank v. Hartford Co., 95 U.S. 673, 24 L.Ed. 563; Thompson v. Phoenix Co., 136 U.S. 287, 10 S.Ct. 1019, 34 L.Ed. 408; Kansas Mutual Life Ins. Co. v. Whitehead, 123 Ky. 21, 93 S.W. 609; Mutual R.F.L. Assn. v. Austin, 142 F. 398, 73 C. C. A. 498; Harris v. Security Life Ins. Co. of Amer., 154 S.W. 70.

Maurice H. Winger and George J. Winger for amicus curiae; Winger, Reeder & Barker of counsel.

Lathrop, Crane, Reynolds, Sawyer & Mersereau, Cyrus Crane, Richard S. Righter and Dean Wood for amicus curiae; Louis H. Cooke of counsel.

The Misrepresentation Statute, Section 5732, Revised Statutes 1929, does not apply to the provision of the policy in issue in this case, and the trial court erred in ruling that it does. Sec. 5732, R. S. 1929; Scheurmann v. Ins. Co., 156 Mo. 650, 65 S.W. 723; Kern v. Supreme Council, 167 Mo. 471, 67 S.W. 252; Salts v. Prudential Ins. Co., 140 Mo.App. 142, 120 S.W. 718; Dolan v. Mut. Reserve Life Fund Assn., 53 N.E. 400; Keenan v. Mut. Life Ins. Co., 71 A. 37; Liebing v. Mut. Life Ins. Co., 269 Mo. 523, 191 S.W. 254; Secs. 5741, 5742, 5743, R. S. 1929; Glaser v. Rothschild, 221 Mo. 1800, 120 S.W. 12; Bowers v. Mo. Mut. Assn., 333 Mo. 492, 62 S.W.2d 1063; Carter v. Met. Life Ins. Co., 275 Mo. 34, 204 S.W. 399; Reed v. Travelers' Ins. Co., 227 Mo.App. 1155, 60 S.W.2d 61; Becker v. Kansas Cas. & Surety Co., 181 P. 549; Burgess v. Pan-American Life Ins. Co., 230 S.W. 315; Burns v. Met. Life Ins. Co., 141 Mo.App. 212, 124 S.W. 539; Met. Life Ins. Co. v. Stiewing, 173 Mo.App. 108, 155 S.W. 900.

William C. Michaels for amici curiae; Alexander & Green, Harry Cole Bates, Frederick L. Allen, Alfred Hurrell, Michaels, Blackmar, Newkirk, Eager & Swanson, Kenneth E. Midgley and Ralph M. Jones of counsel.

Clark, J. All concur, except Hays, J., absent.

OPINION

CLARK

This case was tried in the Circuit Court of the City of St. Louis, resulting in a verdict and judgment for plaintiff. Defendant appealed to this court claiming, among other things, that construction of the State Constitution was involved. We held that no constitutional question was properly raised and transferred the case to the St. Louis Court of Appeals. That court rendered an opinion reversing the judgment of the trial court (121 S.W.2d 268), but transferred the case back to the Supreme Court because said Court of Appeals deemed its opinion in conflict with the cases of: O'Maley v. Ins. Co., 231 Mo.App. 39, 95 S.W.2d 852; Friedman v. Ins. Co., 108 S.W.2d 156; Burns v. Ins. Co., 141 Mo.App. 212, 124 S.W. 539.

Therefore, we rehear and determine the case as if we obtained jurisdiction by ordinary appellate process. [Mo. Const. Amend. of 1884, sec. 6.]

The suit is based on a life insurance policy issued to Oliver P. Langan, a citizen of Missouri, with his wife (plaintiff) as beneficiary. The policy is for the face amount of $ 10,000, annual premium $ 434, age of insured stated as 53 and contract commencing January 13, 1927. The policy provides that after one year from its date it shall be incontestable except for nonpayment of premiums and also contains the following:

"If the age of the Insured has been understated, the amount payable hereunder shall be such as the premium paid would have purchased at the correct age; if the age of the Insured has been overstated the company will return the excess premium, or premiums, paid." In his application the insured stated that he was born on July 14, 1873, and that his age at nearest birthday was 53 years. The insured died in January, 1933, with the policy in force. The beneficiary (plaintiff) furnished sworn proof of death to the defendant, in which she stated that insured was born on July 14, 1871, and that she derived this information from the family Bible. A statement furnished by the undertaker also stated that insured was born on July 14, 1871. These statements were received in evidence at the trial and defendant also proved that insured, in applications to two other life insurance companies, had stated the date of his birth as July 14, 1871. This was not contradicted by any evidence on the part of the plaintiff.

Upon receipt of proofs of death, the defendant paid to plaintiff the sum of $ 9,070.01, and took a receipt signed by her in which it was stated that the sum of $ 929.99 was "deducted for difference in age as now known and as stated at time of application for said policy, which difference is now ascertained and agreed upon and allowed to said company." The receipt also stated that it was "in full satisfaction of said policy and all claims whatsoever pertaining thereto." This payment was made and receipt taken after considerable correspondence between the company and the attorneys who then represented the beneficiary and one of said attorneys signed the receipt as a witness.

Later plaintiff demanded and defendant refused to pay the amount which had been deducted, and plaintiff sued therefor. The trial court overruled defendant's demurrers to the evidence and directed a verdict for plaintiff.

Defendant's answer set out the facts as to the application for and terms of the policy, contended that the policy had been fully paid according to its terms, and further pleaded the payment to plaintiff and the receipt by her of the reduced amount as a full accord and satisfaction. Plaintiff joined issue by reply.

The sole question here is as to the validity of the age adjustment clause contained in the policy; for, if that clause is invalid, there was no consideration for the claimed accord and satisfaction; if that clause is valid, there was no necessity for an accord and satisfaction for the policy has been paid in full.

The respondent (plaintiff) contended that the defendant could not legally avoid paying the face amount of the policy for two reasons: (1) because of the provision in the policy for incontestability; (2) because the age adjustment clause in the policy comes within the prohibition of our statute dealing with misrepresentations; Section 5732, Revised Statutes 1929 (Mo. Stat. Ann., p. 4373), which reads as follows:

Sec. 5732. "No misrepresentation made in obtaining or securing a policy of insurance on the life or lives of any person or persons, citizens of this state, shall be deemed material, or render the policy void, unless the matter misrepresented shall have actually contributed to the contingency or event on which the policy is to become due and payable, and whether it so contributed in any case shall be a question for the jury."

The appellant (defendant) contends: (1) the incontestability provision is not applicable because defendant is not contesting the provisions of the policy, but is only seeking to confine its liability within the express terms of the policy; (2) that the misrepresentation statute does not apply because it refers only to misrepresentations made to obtain a policy and not to terms agreed upon and expressly written in the policy itself.

Appellant further contends that if respondent...