McDonnell v. Hawkeye Life Ins. Co. of Des Moines, Iowa, 17846.

• Decision Date: 06 November 1933
• Docket Number: No. 17846.,17846.
• Citation: 64 S.W.2d 748
• Parties: McDONNELL et al. v. HAWKEYE LIFE INS. CO. OF DES MOINES, IOWA.
• Court: Missouri Court of Appeals

64 S.W.2d 748

McDONNELL et al. v. HAWKEYE LIFE INS. CO. OF DES MOINES, IOWA.

No. 17846.

Kansas City Court of Appeals. Missouri.

November 6, 1933.

Appeal from Circuit Court, Adair County.

"Not to be published in State Reports."

Action by Leo McDonnell and another against the Hawkeye Life Insurance Company of Des Moines, Iowa. Judgment for plaintiffs, and defendant appeals.

Reversed and remanded.

Murrell & Murrell, of Kirksville, and Cosson & Newcomb, of Des Moines, Iowa, for appellant.

E. M. Jayne, of Kirksville, and Raymond N. Klass, of Cedar Rapids, Iowa, for respondents.

BLAND, Judge.

This is an action upon a life insurance policy. There was a verdict and judgment in favor of plaintiffs in the sum of $5,466.45, and defendant has appealed.

The facts show that on the 3d day of June, 1921, the defendant, an Iowa insurance company, insured the life of one Charles Francis McDonnell, in the sum of $5,000; that the beneficiary named in the policy was the insured's mother, Margaret J. McDonnell, or "such other beneficiary as may be designated by the insured, otherwise to the executors, administrators or assigns of the insured." After the issuance of the policy the insured moved to the state of Arizona, where he died on July 6, 1928.

The application and the policy provided that the latter should not take effect until the first premium was paid during the good health of insured and the risk approved by the company. The evidence shows that the application was approved on June 15, 1921. However, the policy was dated June 3, 1921, and this was treated by the company as its anniversary date.

For some years prior to June 14, 1927, the insured had borrowed money under the terms of the policy from the company and on said date increased the loan to $544, its full loan value. These loans were made upon the sole security of the policy which was pledged to the company. The loan agreement signed on June 14, 1927, provided that interest at the rate of 6 per cent. should be paid in advance to the company from the date of the loan agreement to June 3, 1928, the anniversary date of the policy; that interest at the same rate should become due and payable annually, in advance, on said anniversary date and that if the interest was not paid when due it should be added to and become a part of the principal; that the loan and the accrued interest might be paid at any time before default in the payment of any premium on the policy. The loan agreement further provided: "That should the total indebtedness to said company upon or on account of said policy at any time equal or exceed the loan available thereunder, said policy shall thereupon cease and become null and void, and without further liability of said company be deemed surrendered to said company in consideration of the cancellation of such indebtedness." The loan agreement also provided for a method of service of "any notice under this agreement."

The policy, itself, provided: "Failure to repay such loan or to pay interest thereon shall not void this policy unless the total indebtedness thereon shall equal the total loan value, nor until thirty days after notice shall have been mailed to the last known address of the insured and the assignees, if any." It also provided for 30 days' grace for the payment of the premiums and contained a provision for each, paid-up and extended values. It and the loan agreement provided that any indebtedness to the company should be deducted in any settlement of the policy.

The facts further show that on October 7, 1924, the beneficiary was changed by the insured to his wife, who predeceased insured. There was no further designation of a beneficiary by the insured, so, under the terms of the policy, it became payable to his executors, administrators or assigns.

A certified copy of the order or judgment of the District Court of the state of Iowa, having jurisdiction in probate matters, was introduced in evidence, over the objection of the defendant, which order or judgment recites that the sole and exclusive title to the policy of insurance in question and all rights thereunder "are hereby vested in Margaret J. McDonnell." The evidence shows that Margaret J. McDonnell was the sole heir of the insured and distributee of his estate and that all of the insured's debts had been paid.

The evidence further shows that on June 18, 1932, Margaret J. McDonnell, assigned all of her right, title and interest in the policy in suit to the plaintiffs and that thereafter these plaintiffs brought this suit.

The answer sets up two defenses to the suit on the policy:

(1) That the insured did not pay the annual premium required to be paid by him on the policy on June 3, 1928, and that by reason thereof the policy became forfeited under the terms thereof.

(2) That insured failed to re-pay the loan made to him on June 14, 1927 by the company, together with interest thereon, during his lifetime and that by reason of the provisions of the policy and the loan agreement, the policy became forfeited.

The facts in connection with these defenses show that all of the premiums were paid by the insured except that for the policy year beginning in 1928, which was not paid, nor was the loan or the interest thereon paid, nor was the loan extended prior to the death of the insured. Due notice was given to the insured on May 27 and 29, 1928, of the premium which was to become due upon the policy during the month of June. On June 1, 1928, the company wrote the insured as follows:

"The total loan or indebtedness against your policy, No. 1106 is $544.00. As the total loan or indebtedness on the policy equals the total loan or cash value, we will be obliged to lapse or void the policy according to its terms on July 3rd, 1928.

"To continue the policy in force, a premium must be paid on or before the above date, or the policy will terminate as outlined above."

On June 26, 1928, in answer to a letter of the insured asking that he be given a paid-up policy in the sum of $1,434, the company wrote him that no paid-up policy in that amount could be given the insured, unless he paid the loan upon the policy. The next correspondence that appears in the record is a letter written by the company, dated July 14, 1928, acknowledging receipt of a letter from insured's brother, dated July 13, 1928, advising the company of the death of the insured and stating that the policy had lapsed on July 3, 1928, by reason of the fact that the full amount of the cash value of the policy had been borrowed upon it and that the premium due on June 3, 1928, had not been paid by July 3, 1928 (the end of the 30 day grace period).

On July 28th, the company again wrote insured's brother that under the provisions of the policy "where the full cash value of the policy has been taken in loan and the interest on same is not paid at maturity, and where the premium is not paid when due, the policy becomes null and void."

The evidence further shows that no entry was made upon the company's records forfeiting the policy until August 3, 1928, which was after the death of the insured, when an entry was made showing that the policy was terminated on July 3, 1928.

Before filing its answer defendant specially appeared and filed a motion to quash the summons, the sheriff's return and to dismiss the cause on the ground that the defendant was an Iowa corporation; that the plaintiff, Leo McDonnell, was a citizen of the state of Iowa; that the plaintiff, H. M. Crabtree was not a resident of the state of Missouri and that the alleged assignment from Margaret J. McDonnell to the plaintiffs was fraudulently made for the purpose of attempting to confer jurisdiction upon the circuit court of Adair County, service and process having been made upon the superintendent of insurance.

The evidence shows that the plaintiff, H. M. Crabtree, was a resident of the state of Missouri. The court overruled this motion. The defendant assigns this action of the court as error. Defendant is in no position to urge the point for the reason that after the ruling of the court on its own motion it filed its answer to the merits and went to trial defending the action to the end. It introduced testimony in its own behalf and, at the conclusion of the trial, offered instructions to the jury, including a demurrer to the evidence, thus waiving the point of lack of jurisdiction, if any, and entering its general appearance. Moseley v. Victory Life Ins. Co., 226 Mo. App. 566, 45 S.W.(2d) 119. The situation in the case of State ex rel. v. Landwehr, 318 Mo. 181, 300 S. W. 294, cited by the defendant is in no wise similar to that in the case at bar. In the Landwehr Case the question of jurisdiction was not waived and the defendant applied to the Supreme Court for a writ of prohibition.

Complaint is made of the giving of various instructions on behalf of the plaintiffs, but we are of the opinion that as the defenses set up in the answer wholly failed, plaintiffs are entitled to recover, as a matter of law, provided their right to sue upon the policy is...