Legrand v. Central States Life Ins. Co. of St. Louis

• Decision Date: 07 November 1939
• Citation: 132 S.W.2d 1105,235 Mo.App. 323
• Parties: ROSA LEGRAND, RESPONDENT, v. CENTRAL STATES LIFE INSURANCE COMPANY OF ST. LOUIS, MISSOURI, A CORPORATION, APPELLANT
• Court: Missouri Court of Appeals

132 S.W.2d 1105

235 Mo.App. 323

ROSA LEGRAND, RESPONDENT, v. CENTRAL STATES LIFE INSURANCE COMPANY OF ST. LOUIS, MISSOURI, A CORPORATION, APPELLANT

Court of Appeals of Missouri, St. Louis

November 7, 1939

Motion for rehearing overruled November 21, 1939.

Writ of Certiorari denied January 9, 1940.

Appeal from Circuit Court, City of St. Louis.--Hon. Joseph J. Ward Judge.

REVERSED.

Judgment reversed.

Jones Hocker, Gladney & Grand and Vincent L. Boisaubin for appellant.

(1) Prange v. International Life Ins. Co., 329 Mo. 651 660, 46 S.W.2d 523; Tabler v. General American Life Ins. Co., 342 Mo. 726, 117 S.W.2d 278. (2) There is no reserve at the end of the term in term insurance. Westerman v. Grand Lodge, 196 Mo. 670, 729; Rose v. Franklin Life Ins. Co., 153 Mo.App. 90; Mutual Life Ins. Co. v. Roth, 122 F. 853 (C. C. A. 8). (3) Horton v. Atlantic Life Ins. Co., 197 S.E. 512, 187 S.C. 155; Felderman et al. v. Inter-Southern Life Ins. Co., 190 A. 723, 325 Pa. 389; Kramer v. Mutual Life Ins. Co. (Pa.), 196 A. 614; Atlantic Life Ins. Co. v. Pharr, 59 F.2d 1024 (C. C. A. 6); Moss v. Aetna Life Ins. Co., 73 F.2d 339, 341 (C. C. A. 6). (4) Sec. 5741, R. S. Mo. 1929; Davis v. Mutual Life Ins. Co. (Mo. App.), 119 S.W.2d 488, 494; Elms v. Mutual Ben. L. Ins. Co., 211 Mo.App. 514, 231 S.W. 653; Lacy v. American Central Life Ins. Co. (Mo. App.), 115 S.W.2d 193. (5) Davis v. Mutual Life Ins. Co., 119 S.W.2d 488, 492; Adair v. General American Life Ins. Co. (Mo. App.), 124 S.W.2d 657, 660; Wendorff v. Missouri State Life Ins. Co., 318 Mo. 363, 370; State ex rel. Mutual Benefit etc. v. Trimble et al., 334 Mo. 920, 925-926, 68 S.W.2d 685; Schott v. Cont. Auto Ins. Underwriters, 326 Mo. 92, 31 S.W.2d 7; 12 Am. Juris., sec. 241, "Contracts." (6) Logan v. F. & C. Co., 146 Mo. 114, 125; Old Colony Tr. Co. v. Commissioner, 102 F.2d 380; Physicians' Defense Co. v. O'Brien, 111 N.W. 396, 398, 100 Minn. 490; And authorities cited under Point 5. (7) Alleged ambiguities are not to be lightly indulged, and especially where, if allowed, they would upset the calculations of the company upon which its reserves and very solvency are based. Davis v. Mutual Life Ins. Co., 119 S.W.2d 488, 493; Williams v. Union Central Life Ins. Co., 291 U.S. 170, 180. (8) The construction of the Insurance Department is strongly persuasive upon the courts, and especially where the construction has subsequently received legislative sanction and recognition. State ex rel. White v. Fendorff, 317 Mo. 579, 586; Laws of Missouri (Extra Session) 1933-1934, pp. 74, 76 (repealing and re-enacting Section 5720, R. S. Mo. 1929). (9) Where the policy as delivered contains provisions in conflict with or not contemplated by the application, the policy provisions prevail. Baker v. Keet-Rountree D. G. Co., 318 Mo. 969, 2 S.W.2d 733, 738; Tate v. Jasper County Farmers Mut. Ins. Co., 133 Mo.App. 584, 588, 113 S.W. 659. (10) Sec. 5929, R. S. Mo. 1929; Non-Royalty Shoe Co. v. Phoenix Assurance Co., 277 Mo. 399, 420, 422, 423; Aufrichtig v. Columbia Nat. Life Ins. Co., 298 Mo. 1, 16-17; State ex rel. Continental Life Ins. Co. v. Allen, 303 Mo. 608, 620-621; State ex rel. Gott v. Fid. & Dep. Co., 317 Mo. 1078, 1095; Grand Lodge v. Massachusetts Bonding Co., 324 Mo. 938; Camdenton Consol. School Dist. v. N. Y. Cas. Co., 340 Mo. 1070, 104 S.W.2d 319; Meisenbach v. National Life Ins. Co. (Mo. App.), 241 S.W. 450, 451-452; Bailey v. American Life & Accident Ins. Co. (Mo. App.), 96 S.W.2d 903, 909.

Dubinsky & Duggan and Claude O. Pearcy for respondent.

(1) Dakan v. Union Mutual Life Ins. Co., 125 Mo.App. 451; Dodson v. American Central Life Ins. Co. (Mo. App.), 112 S.W.2d 148; LaMar Life Ins. Co. v. Minor, 170 Miss. 223, 154 So. 542; Mutual Ben. L. Ins. Co. v. First Nat. Bank, 24 Ky. L. Rep. 580, 69 S.W. 1; (Later appeal decided on other grounds in 115 Ky. 757, 74 S.W. 1066). (2) Howell v. Security Mut. Life Ins. Co., 215 Mo.App. 692, 253 S.W. 411; Rice v. Provident Life & Accident Ins. Co., 231 Mo.App. 560, 102 S.W.2d 147; The National City Bank v. Mo. State Life Ins. Co., 332 Mo. 182, l. c. 191, 57 S.W.2d 1066, l. c. 1069; Sulliman v. International Life Ins. Co., 131 Tenn. 303, 174 S.W. 1131; Gans v. Aetna Life Ins. Co., 214 N.Y. 326, 108 N.E. 443; 6 Couch's Cyclopedia of Ins. Law, sec. 1262M, p. 4653, par. 2; 32 C. J., Title Ins., p. 1165, sec. 277. (3) Gibson v. State Mutual Life Assurance Co., 184 Mo.App. 656, l. c. 661; 171 S.W. 979; The National City Bank v. Mo. State Life Ins. Co., 332 Mo. 182, l. c. 191, 57 S.W.2d 1066, l. c. 1069; Rose v. Life Ins. Co., 153 Mo.App. 98. (4) In a conflict between the provisions of the policy and the table of values, the terms of the policy must control. Dakan v. Union Mut. Life Ins. Co., 125 Mo.App. 451; Daly v. Sovereign Camp, etc., 226 Mo.App. 629, 44 S.W.2d 229; LaMar Life Ins. Co. v. Minor, 170 Miss. 223, 154 So. 542; Gibson v. State Mutual Life Assurance Co., 184 Mo.App. 656, 171 S.W. 979. (5) Price v. Conn. Mut. Life Ins. Co., 48 Mo.App. 281; Leeker v. Prudential Ins. Co., 154 Mo.App. 450, 163 Mo.App. 523; Liebing v. Ins. Co., 269 Mo. 523. (6) Sec. 5720, R. S. Mo. 1929, as to the valuation of policies, does not control the contract in this case and is not even persuasive upon the question of construction. The statute was amended in 1933 and 1934 by the addition of a provision which authorized the insurance companies by a clear provision to that effect to provide for one year preliminary term insurance. This has no bearing upon the contract as between the insured and the insurer. Even in the event it were applicable, it could not affect this policy, as it was issued long prior to the passage of that law. Laws of Missouri, 1933, 1934, pp. 74, 76; Smith v. Mutual Ben. L. Ins. Co., 173 Mo. 329, 72 S.W. 935; Burridge v. New York L. Ins. Co., 211 Mo. 158, 109 S.W. 560; Christensen v. New York L. Ins. Co., 160 Mo.App. 486, 141 S.W. 6. (7) The construction by the State Insurance Department as to the legality of the provision making the first year insurance term insurance, being a purely legal question involving only the construction of the contract, was for the Court and should not be persuasive either in the trial court or in this Court. Laws of Mo. 1933, 1934; Federal Life Ins. Co. v. Sayre, 195 Ind. 7, 142 N.E. 223. (8) Minter v. Bradstreet, 174 Mo. 444, l. c. 502; Lindsey v. Stephens, 229 Mo. 600, l. c. 619. (9) The question of vexatious delay was properly submitted to the jury. Rice v. Provident Life & Acc. Ins. Co., 231 Mo.App. 560, 102 S.W.2d 147; Coscarella v. Metropolitan Life Ins. Co., 175 Mo.App. 130, 157 S.W. 873; Keller v. Home Life Ins. Co., 198 Mo. 440, 95 S.W. 903; Cox v. Kansas City Life Ins. Co., 154 Mo.App. 464, 135 S.W. 1013; Williams v. St. Louis Life Ins. Co., 189 Mo. 70, 87 S.W. 499; Brown v. Railway Passenger Assurance Co., 45 Mo. 221, l. c. 227.

BENNICK, C. Becker and McCullen, JJ., concur; Hughes, P. J., not sitting because not a member of the court at the time of the submission of the case.

OPINION

BENNICK, C.

This is an action by plaintiff as the beneficiary under a policy of insurance which was issued by defendant upon the life of her husband. Upon a trial of the case to a jury, a verdict was returned in plaintiff's favor for the aggregate amount of $ 7,087.50, comprising items of $ 5000 as the face amount of the policy; $ 1,087.50 as interest from the date of the insured's death to the date of trial; and $ 1000 as an attorney's fee which was allowed by way of a finding of vexatious refusal to pay. Judgment was rendered in conformity with the verdict, and defendant's appeal to this court has followed in the usual course.

The policy, which was issued by defendant on September 24, 1921, was thereafter kept in force by the insured by the payment of the successive premiums called for by the policy until September 24, 1933, when the insured defaulted in the payment of the premium due on that date. It appears that there was a loan outstanding against the policy in the amount of $ 1490, and the broad question at issue between the parties is whether, at the time of the insured's default in the payment of premium, there was a sufficient reserve available under the policy, after the deduction of the amount of such loan, to have purchased extended term insurance for the full face amount of the policy for a term extending beyond the date of the death of the insured, which occurred on August 3, 1934. It was conceded that following default the insured had failed to exercise his option to receive either nonparticipating paid-up insurance or the cash surrender value of the policy, with the result that under the terms of the policy the nonforfeiture provision for extended term insurance had automatically become operative as of the due date of the premium in default.

Plaintiff's theory is, in brief, that the reserve value of the policy on September 24, 1933, the date of default, was $ 1,728.95, and that after deducting from this the sum of $ 1490 as the amount of the loan outstanding against the policy, there was left the sum of $ 238.95 as a net reserve, which, if such sum was actually the amount of the net reserve, would have concededly purchase extended term insurance for the full face amount of the policy for a term extending well beyond the date of the death of the insured.

Defendant's theory, on the other hand, is that under the terms of the policy the cash surrender value at the time of default was only $ 1635, and that after deducting from this the sum of $ 1490 as the amount of the loan outstanding against the policy, there was left only the sum of $ 145 as the net reserve to be employed towards the purchase of extended term insurance, which sum, if it was actually the amount of the net reserve, would have concededly carried...