Liebing v. Mutual Life Ins. Co. of New York

• Decision Date: 13 December 1920
• Docket Number: No. 21639.,21639.
• Citation: 226 S.W. 897
• Parties: LIEBING v. MUTUAL LIFE INS. CO. OF NEW YORK NEW YORK.
• Court: Missouri Supreme Court

226 S.W. 897

LIEBING v. MUTUAL LIFE INS. CO. OF NEW YORK NEW YORK.

No. 21639.

Supreme Court of Missouri, in Banc.

December 13, 1920.

1899, § 7897, as amended by Laws 1903, p. 208), despite a loan made on the policy by the insurer, a New York company, damages and attorneys' fees for refusal to pay cannot be allowed under the statute on the theory the refusal was vexatious.

Graves, J., Walker, C. J., and Williams, J., dissenting.

Appeal from St. Louis Circuit Court; Robert W. Hall, Judge.

Action by Mary S. Liebing against the Mutual Life Insurance Company of New York. From a judgment for plaintiff, defendant appeals. Affirmed on condition that plaintiff enter remittitur; otherwise reversed and remanded.

See, also, 191 S. W. 250.

This suit was instituted in the circuit court of the city of St. Louis by the plaintiff against the defendant to recover the sum of $65,250 in gold, less certain credits to be later mentioned, alleged to be due her as the widow of Frederick W. V. Blees, and assignee of a policy of insurance issued by the defendant on the life of said Frederick W. V. Blees, a citizen of Macon county, Mo., and of the United States of America.

The trial before the court and jury resulted in a verdict and judgment for the plaintiff in the sum of $107,542.09. After moving unsuccessfully for a new trial, the defendant duly appealed the cause to this court.

The petition upon which the case was tried was substantially as follows:

After pleading that the defendant was a corporation of New York," doing business under license in the state of Missouri, plaintiff alleged that on September 29, 1901, at Macon, Mo., Frederick W. V. Blees applied to defendant for a policy of insurance, and that on the 29th day of September, 1901, the defendant, at Macon, Mo., issued its policy No. 1207072, filed with said petition, by which the defendant insured the life of said Blees and promised in case of his death and acceptance of due proofs thereof by the defendant to deliver to his executors, administrators, or assigns 50 bonds of par value of $1,000 each, payable in 20 years, with interest at 5 per cent. per annum, or at the option of said executors, adminstrators, or assigns, to pay the sum of $65,250 in cash in lieu of said bonds; that Blees was a resident and citizen of Missouri; that he died on or about the 8th day of September, 1906; that the plaintiff is his widow and the assignee in said policy; and that all the conditions of the insurance were complied with by the insured during his lifetime and by the plaintiff since his death.

The petition next averred that Blees continued to pay the premiums on said policy until the 29th day of September, 1905, when he discontinued the payment of further premiums, and that at the time of the lapse, viz., September 29, 1905, four annual premiums had been paid on the policy, and the value of the policy at said date, under the nonforfeiture statutes of Missouri, amounted to $11,230.83.

That on the 12th day of October, 1904, Blees, the insured, and the plaintiff, at Macon, Mo., made application to the defendant for a loan of $9,550, and signed and executed a loan agreement therefor, and that the defendant on or about said date, at the city of Macon, Mo., loaned the insured said sum of $9,550, at 5 per cent. per annum; the proceeds of said loan being distributed and applied as follows:

$4,290.50 to pay the annual premium due September 29, 1904.

$468 to pay interest on said loan to September, 29, 1905, together with interest on said premium, and

$4,790.50 in cash.

Plaintiff further says that, as above stated, at the date of lapse, namely, on the 29th day of September, 1905, the net or reserve value of said policy, calculated under the nonforfeiture statutes of the state of Missouri, in such cases made and provided, amounted to the sum of $11,230.83; that three-fourths of said net value is $8,423.12; that deducting $4,759.50 therefrom (which is the aggregate amount applied to pay the premium due on the 29th day of September, 1904, and to pay interest on said loan and premium) leaves $3,663.62, which sum taken or applied as a net single premium, as provided by the Missouri nonforfeiture statutes in force when said policy was issued, extends said policy in full force for the full amount written therein from date of lapse, September 29, 1905, for a period of 4 years, 9 months, and 18 days, and the insured died within said period, for he died on the 8th day of September, 1906; that is, 11 months and 10 days from the 29th day of September, 1905, date of lapse.

Plaintiff further states that she has elected to take cash in lieu of bonds.

Plaintiff further states that at the time said policy was issued the insured was of the age of 41 years, and the highest gross annual ordinary life premium per thousand ever charged by defendant on a policy issued at age 41 years is $34.16 (this is equal to or greater than the ordinary life premium mentioned in the Missouri nonforfeiture statutes); that the gross annual ordinary life premium on the policy in suit, calculated at the rate of $34.16 per thousand, is the sum of $2,228.94; and the interest thereon at the rate of 6 per cent. per annum from the date when due (the 29th day of September, 1905) to the day the insured died (the 8th day of September, 1906-11 months, 10 days) amounts to the sum of $125.98.

Plaintiff further states that interest at the rate of 5 per cent. per annum is due and unpaid on said loan of $9,550 from the 12th day of October, 1905, to the 8th day of September, 1906, the day the insured died; that is, 10 months, 27 days, and amounts to the sum of $433.65.

Plaintiff further states that said unpaid gross annual ordinary life premium ($2,228.94), and interest thereon ($125.98), together with said loan ($9,550), and interest thereon ($433.65), aggregate the sum of $12,338.57, and that the same may be deducted from the face amount of said policy ($65,250), being, as plaintiff believes, a proper deduction therefrom under the nonforfeiture laws of the state of Missouri, thus reducing said policy to the sum of $52,911.43.

Plaintiff further states that at the city of Macon, Mo., Frederick W. V. Blees duly assigned said policy to plaintiff, and said defendant accepted said assignment and acquiesced therein in said city and state; that the premiums which were paid on said policy were thus paid to defendant in the state of Missouri.

Plaintiff further states that on divers occasions prior to the institution of this action, especially on or about the 3d day of November, 1906, plaintiff duly demanded of defendant payment of the amount due under said policy, but said defendant, on sundry occasions, particularly on the 20th day of November, 1906, vexatiously refused to pay the same or any part thereof, and then and there vexatiously disclaimed all liability under said policy.

Wherefore, plaintiff prays for judgment against defendant for the sum of $52,911.43, with interest thereon at the rate of 6 per cent. per annum from the 20th day of November, 1906 (the date defendant denied liability under said policy), together with 10 per cent. on the amount due under said policy as damages, and a reasonable fee for her attorney's services in preparing and prosecuting this action because of the vexatious refusal of defendant to pay said policy.

The answer contained the following defenses:

(1) A general denial.

(2) A plea admitting the issuance of the policy and the payment of four annual premiums thereon, the assignment of the policy to the plaintiff, the execution of the loan agreement, which was set out in full in the answer; that said loan agreement was accepted by the defendant in the city and state of New York, and the loan made in the city and state of New York, and that the loan agreement and policy remained from the date thereof, viz., October 12, 1904, in the possession of the defendant in the state of New York; that the premium due on the policy, September 29, 1905, was not paid nor was the loan paid; that thereafter, in accordance with the provisions of the loan agreement, the policy was canceled and the surrender value thereof, namely, the sum of $9,550, applied in payment of the loan of like amount.

The answer then pleaded the common law of New York and the statute law of New York, and averred that the loan agreement was governed by these laws, was valid under these laws, and that the action taken in canceling the policy was according to the laws of the state of New York, and that to deny to the defendant the benefit of said laws in the state of New York would be to refuse to give full faith and credit of the public acts, records, and judicial proceedings in the state of New York, in violation of section 1 of article 4 of the Constitution of the United States, and to deny to the defendant the equal protection of the laws, and to deprive the defendant of its property without due process of law in violation of section 1 of the Fourteenth Amendment to the Constitution of the United States.

(3) The answer next set up the issuance of the policy, the assignment of the same to the plaintiff, the failure to pay premium and loan on September 29, 1905; that the repayment of the loan was a condition of the insurance provided for in the policy, and the failure to repay the same was a violation of said condition, and therefore there had been a violation of a condition of the insurance other than the nonpayment of premiums at the death of the insured, and therefore the plaintiff was not entitled to claim extended insurance on said policy under the provisions of section 6948, R. S. of Missouri 1900.

(4) The answer next set up the fact that section 7897, R. S. of Missouri 1899, was amended by act of the Legislature of Missouri at its session in 1903 (Laws 1903, p. 208), and that by the terms of said amendment the defendant was permitted to deduct from three-fourths of the net value of the policy, computed in accordance with the...