Miller v. Missouri State Life Insurance Co.

• Decision Date: 22 May 1916
• Citation: 186 S.W. 762,194 Mo.App. 265
• Parties: THOMAS H. MILLER, Appellant, v. MISSOURI STATE LIFE INSURANCE COMPANY, Respondent
• Court: Kansas Court of Appeals

186 S.W. 762

194 Mo.App. 265

THOMAS H. MILLER, Appellant, v. MISSOURI STATE LIFE INSURANCE COMPANY, Respondent

Court of Appeals of Missouri, Kansas City

May 22, 1916

Rehearing Granted 194 Mo.App. 265 at 281.

Appeal from Johnson Circuit Court.--Hon. Sam'l Davis, Judge.

AFFIRMED.

Judgment reversed and cause remanded.

Nick M Bradley and M. D. Aber for appellant.

Jones Hocker, Hawes & Angert and J. W. Suddath & Son for respondent.

OPINION

JOHNSON, J.

This is an action at law begun January 8, 1914, to recover the cash value of a policy of life insurance issued to plaintiff. The petition alleges that "on the 11th day of August, 1903, defendant issued and delivered to this plaintiff, its certain policy obligation or contract numbered 11774, which was duly executed, and registered in the office of the Superintendent of Insurance of the State of Missouri on August 12, 1903, by which said policy or contract it promised and agreed, for a consideration, well and truly to pay or cause to be paid to a beneficiary therein named, the sum of two thousand dollars at the death of this plaintiff with other provisions for the payment of increased amounts in the event such death occurred at stated periods prior to the 1st day of August, 1913.

"And by the terms of said policy or contract it was further promised and agreed by defendant that if this plaintiff were alive and said policy or contract had been kept in full force by the payment of all premiums to the first day of August, 1913, the defendant would pay to the insured, this plaintiff, or his assigns, the surplus accumulations then apportioned to said policy by defendant to the credit thereof, and that if plaintiff so elected, he should also at said date have the option to draw the entire cash value of said policy or contract, which it was agreed by defendant should be the sum of twelve hundred and ninety-six dollars ($ 1296) together with such surplus accumulations. . . . That on said 1st day of August, the said surplus accumulations apportionable to said policy contract amounted to the sum of three hundred and sixty-four dollars and fifty-eight cents ($ 364.58), which sum was by the defendant then duly ascertained, determined upon and apportioned to the credit of said policy.

"That on said 1st day of August, 1913, this plaintiff, in accordance with the provisions of said policy contract, and exercising the right therein given him, elected to take said cash surrender value and said surplus accumulations, amounting to the sum of sixteen hundred and sixty dollars and fifty-eight cents, and duly advised and notified the defendant thereof," and prays judgment against defendant "for the amount of said cash surrender value, together with the amount of said surplus accumulations, making a total of sixteen hundred and sixty-eight dollars and fifty-eight cents, with interest thereon from August 1, 1913, with damages for said vexatious refusal to pay, amounting to one hundred and sixty-six dollars and three hundred dollars attorneys' fees."

The answer admits the execution and delivery of the policy and that, by its terms, defendant agreed "that if plaintiff was alive and the policy had been kept in full force by the payment of all premiums to August 1, 1913, defendant would pay to the plaintiff herein, if he so elected, or to his assigns, the surplus accumulations then apportioned to said policy by the defendant, and if the plaintiff so elected he should also at that date have, in addition, to said surplus accumulations as aforesaid, the option of drawing the entire cash value of said policy or contract, which was agreed by defendant in said contract should be the sum of $ 1296; admits that on August 1, 1913, the surplus accumulations apportionable to the policy sued on herein amounted to $ 364.58; admits that on or about August 1, 1913, plaintiff, in accordance with the conditions of said contract elected to take the cash surrender value and surplus accumulations and demanded of the defendant the sum of $ 1660.58, which defendant admits it refused to pay."

In reduction of this conceded liability of $ 1660.58 which matured August 1, 1913, the answer pleads an indebtedness from plaintiff to defendant of $ 1206.46 upon a certificate of loan, signed by plaintiff, and delivered to defendant on the date of the application which provided for a lien on the policy to secure the payment of a loan of $ 754.06, which the certificate recites was made on that date by defendant to plaintiff and which plaintiff agreed to repay with simple interest at six per cent. per annum. It is alleged that "after deducting the said amount from the guaranteed cash value and surplus accumulations of said policy on August 1, 1913, that is from the sum of $ 1660.58, the plaintiff was entitled to the sum of $ 454.12, which amount defendant offered to pay plaintiff and is still ready and willing to pay plaintiff, and defendant admits its liability to plaintiff for said sum of $ 454.12."

The reply, under oath, denies the execution of the certificate of loan and pleads facts which, if true, show that the execution of the certificate by plaintiff was procured by fraud.

The jury, in obedience to a peremptory instruction returned a verdict for plaintiff for the admitted liability of $ 454.12, judgment was rendered accordingly, and plaintiff appealed.

The peremptory instruction was given on the theory that plaintiff, on August 1, 1913, was indebted to defendant upon the certificate of loan and that the amount of that indebtedness should be deducted from the conceded value of the policy on that date. The position of plaintiff is that the policy and certificate of loan were independent contracts and that he is entitled to stand on the policy in an action at law for the enforcement of a benefit it conferred upon him and to repudiate the obligation the certificate purports to lay upon him on the ground that his signature to the certificate was procured by false and fraudulent representations and a fraudulent trick.

The material facts of the case chronologically stated are as follows: On May 31, 1893, plaintiff made written application to the Safety Fund Life Association of Monroe City, Mo., a life insurance company incorporated in this State on the assessment plan, for a policy of $ 2000 on his life payable in the event of his death to his wife, Elizabeth Miller, and agreed that if he should "neglect or refuse to make any of the payments at the place and within the time which they are required to be made by the certificate of membership to be issued hereon and the by-laws of the Association, then and in either event, the said contract and certificate of membership shall be null and void and all monies which have been paid shall be forfeited to said Association."

This application was accepted and a "Certificate and Policy of Insurance" was issued to plaintiff who was forty-six years old, which required the Association to pay the beneficiary $ 2000 within ninety days after proofs "of the death of said member" and provided that quarterly payments of $ 7.80 should be made by the insured "for the full term of five years beginning with the month of October next" and that "at the end of said term the quarterly payments defined in Provision No. 1 hereof shall be made to the Association at the place and within the month aforesaid of each and every year during the continuance of this certificate of membership. Provision No. 1 was that "the quarterly payments from and after the expiration of the term of five years herein specified shall include quarterly dues of seventy-five cents on each $ 1000 insurance carried, and pro rata amounts necessary for mortuary purposes, provided: that such pro rata amounts shall be sufficient to pay annually not less than five deaths to the one thousand members, and provided further: that if during any one year the total cost of insurance under this certificate exceeds the annual payments shown in the Table of Rates hereto appended, the Safety Fund shall be used to pay such excess."

The certificate contained no reference to the constitution or by-laws of the Association but stated that it was issued "in consideration of the representation, agreements and warranties made in the application herefor." This insurance was continued in force eight years until it was superseded by the policy in suit and during that period plaintiff made all the required quarterly payments of the total sum of $ 250.30.

It appears that defendant, an old line company, entered into an arrangement with the Safety Fund Life Association to issue policies of its own in exchange for outstanding certificates of the Association and near the end of July, 1903, H. G Parr, an agent of defendant, called upon plaintiff who was a merchant at Holden, and urged him to surrender his certificate in exchange for a policy of the same amount to be issued by defendant on the "twenty year fifty per cent. Return Premium plan" offering to date the policy back ten years and to give plaintiff the premium rate applicable to the age of forty-four instead of fifty-four, his age at the time. At first plaintiff declined the offer on the ground that he was satisfied with his policy in the Association, but on being assured that the Association could not continue and had been ordered by the State to take up the certificate, plaintiff consulted his attorney and had an interview with the agent in the attorney's office at which the offer of the agent was accepted and the transaction closed. The agent prepared the necessary papers and submitted them to plaintiff and the attorney who examined and approved them. They were then signed and delivered and the agent departed with those signed by plaintiff. The wife of plaintiff had a certificate for $ 200...