Leeker v. Prudential Ins. Co.

• Decision Date: 03 January 1911
• Citation: 154 Mo. App. 440,134 S.W. 676
• Parties: LEEKER et al. v. PRUDENTIAL INS. CO. OF AMERICA.
• Court: Missouri Court of Appeals

134 S.W. 676

154 Mo. A. 440

LEEKER et al. v. PRUDENTIAL INS. CO. OF AMERICA.

Springfield Court of Appeals. Missouri.

January 3, 1911.

Rehearing Denied February 20, 1911.

1. INSURANCE (§ 350) — LIFE POLICIES—DEFAULT IN PREMIUM—NONFORFEITURE STATUTES.

Where a life insurance policy contains no provision for an unconditional surrender value equal to the net single premium as provided in Rev. St. 1899, § 7900 (Ann. St. 1906, p. 3755), section 7897 (page 3752), providing that after payment of three annual premiums a policy is not forfeited by subsequent default regardless of its terms, applies.

2. EVIDENCE (§ 18)—JUDICIAL NOTICE.

The rule that courts will take judicial notice of ordinary mathematical propositions and scientific facts has no application to the ascertainment of the present net value of a life insurance policy, depending partly on extraneous facts and partly on the accuracy of an intricate computation, and hence a beneficiary of a policy relying upon extended insurance computed upon the present value of a policy at the time of lapse failed to make out a case when that value was not shown by actuarial witnesses.

3. INSURANCE (§ 665)—LIFE INSURANCE—DEFAULT.

In an action by the beneficiary of a life insurance policy whose case depended upon the amount of extended insurance computed upon net value of the policy at the time of lapse, evidence held to show that the net value was not sufficient to carry the extended insurance up to the time of the insured's death.

4. INSURANCE (§ 367) — LIFE INSURANCE — LOANS UPON POLICY AFTER PAYMENT OF PREMIUM.

The beneficiary of a life insurance policy which provided that the insured might borrow upon the policy cannot, in asserting the right to extended insurance after default, question the validity of a loan upon the policy for the purpose of paying a premium.

Appeal from St. Louis Circuit Court; George H. Williams, Judge.

Action by Louis Leeker and Albert Leeker by his next friend, Annie Leeker, against the Prudential Insurance Company of America. From a judgment for defendant, plaintiffs appeal. Affirmed.

James J. O'Donohoe, for appellants. Fordyce, Holliday & White, for respondent.

NIXON, P. J.

This was an action upon a policy of life insurance issued by the respondent upon the life of Louis E. Leeker, of St. Louis, Mo., whereby said life was insured to the amount of $500. The plaintiffs were the beneficiaries named in the policy. The case was tried by consent of parties before the circuit judge sitting as a jury, and judgment was rendered for the defendant company from which the plaintiffs appealed to the St. Louis Court of Appeals. The cause was thereupon transferred to this court, and an abstract and briefs were prepared and filed in this court by both parties. The appellants agreed that the case should be submitted on the brief they had filed, and the respondent argued the case, neither side in any manner questioning the jurisdiction of this court to hear and determine this cause.

As we have stated, the life of Louis E. Leeker was insured by a policy issued by the respondent company on January 19, 1901, the consideration being the payment on or before the 19th day of January, April, July, and October in each year, during the continuance of the policy, of the quarterly premium of $6.29. Among other "special privileges" to which the holder of the policy was entitled, as a part of the policy, was the following: "Grace in Payment of Premiums.— In the payment of any premium under this policy, except the first, a grace of one month will be allowed, during which time the policy will remain in force." The insured paid his quarterly premiums in cash until the payment of January 19, 1904, became due. At that time insured was a cab driver, but was on a strike and financially embarrassed, and on the 18th day of February, 1904, the same being the last day of grace allowed by the policy for the payment of the past-due premium, he called on the superintendent of the company for the purpose of borrowing money to pay the premium which had become due on the 19th of January, 1904. By the terms of the policy, a provision was made for loans, and under the head "Privileges" it was provided as follows: "Cash Loans.—If this policy be continued in force, the insured may borrow from the company the amount specified in the following table, by making written application for the loan and assigning the policy to the company as security in accordance with the terms of the company's loan certificate, provided five per cent. interest on the whole amount of the loan be paid annually in advance; but no loan will be made for less than twenty dollars, except to pay premiums on this policy." The table referred to, providing for cash loans, contains this provision: "The benefits stated in the following tables apply to the original sum insured only. Any indebtedness to the company placed on the policy will operate to reduce the benefits."

Under the "age of the insured" which applied to the case of Louis E. Leeker the table shows that by reason of the agreement he was entitled to borrow the sum of $18 at the time he applied for the loan. When he applied for the loan, the superintendent of the company told him the policy had a loan value of less than $20, and therefore, under its terms, the insured could borrow only for the purpose of paying premiums. Thereupon the insured executed to the company, under the terms of its policy, a loan certificate, containing, among others, the following provisions: "This is to certify that I, the undersigned Louis E. Leeker, the insured, * * * have this day borrowed from the said company the sum of $12.58, and hereby assign, transfer and set over unto the said company, its successors and assigns, the said policy and all benefits now due or which may hereafter become due thereon, to secure the repayment of said loan and the interest thereon as herein provided. It is understood and agreed: First. That the sum borrowed shall bear interest at the rate of five per cent. per annum, payable in advance, and that said interest unless duly paid shall be added to the above loan and bear interest at the same rate and on the same conditions."

This loan certificate was sent to the home office of the company, and the loan was approved and the account of Louis E. Leeker was credited with the sum of $6.29 for the unpaid premium of January 19, 1904, then past due, and for the quarterly payment that would become due on April 19, 1904. At the time the loan was made no money was paid to the insured, but the proceeds of the loan were credited in premium payments, as above stated. These credits covered the entire proceeds of the loan and paid in full the premiums due prior to July 19, 1904, but the quarterly payment due on that date was not paid, nor were any subsequent premiums paid on the policy by any person. The insured died on the 10th day of February, 1908, being indebted to the company in the sum of $12.58 as evidenced by the loan certificate above referred to. It thus appears that insured died 3 years and 214 days after he had refused or neglected to pay his policy premium, and that his policy lapsed and became forfeited under its terms, by reason of the nonpayment of these premiums, after it had been in force three full years and after three annual payments has been made on the policy. It is therefore seen that this policy came within the express terms of section 7897, Rev. St. 1899 (page 3752, Ann. St. 1906), which is as follows: "No...