Mitchell v. Am. Mut. Assn.

• Decision Date: 11 January 1932
• Docket Number: No. 17330.,17330.
• Citation: 46 S.W.2d 231
• Parties: BERNICE MITCHELL, RESPONDENT, v. AMERICAN MUTUAL ASSOCIATION, APPELLANT.
• Court: Missouri Court of Appeals

46 S.W.2d 231

BERNICE MITCHELL, RESPONDENT, v. AMERICAN MUTUAL ASSOCIATION, APPELLANT.

No. 17330.

Kansas City Court of Appeals. Missouri.

January 11, 1932.

Appeal from the Circuit Court of Saline County. — Hon. Robt. M. Reynolds, Judge.

REVERSED.

Daniel Herider, Louis J. Rasse and Jerry M. Jeffries for respondent.

Hargus & Johnson and Duggins & Johnson for appellant.

BOYER, C.

This is an action to recover upon an alleged certificate of membership and of insurance issued by defendant to J. Ralph Mitchell, husband of plaintiff, the beneficiary. Upon trial before a jury, plaintiff had a verdict for $2000, and defendant duly appealed. The principal point urged by appellant is that the trial court erred in refusing defendant's peremptory instruction in the nature of a demurrer to the evidence requested at the close of the case.

The petition alleges that defendant is a corporation engaged in life insurance with its chief office at Osceola. Missouri; that J. Ralph Mitchell on the 8th day of April, 1930, made application for insurance in said company and became a member thereof; that plaintiff, his wife and now his widow, was the named beneficiary; that at said time the application fee for membership and the fee for disability benefits were paid to defendant: and at said time the applicant agreed and bound himself to pay an annual membership fee thereafter so long as he remained a member; that defendant received the application and payment and accepted and held same; and "that said association then and there contracted and agreed with said J. Ralph Mitchell to issue to him the certificate of membership, and that by virtue of his membership in said association defendant contracted and agreed on the death of said J. Ralph Mitchell to levy an assessment upon the remaining members of said association and within sixty (60) days thereafter deliver, transmit and pay the plaintiff herein the sum of two thousand ($2000) dollars." It is further alleged that the application and the payments were made to one Daniel Herider, agent of defendant, who "then and there acting for and on behalf of said defendant's company informed and led him, the said J. Ralph Mitchell, to believe that on such payment and delivery of said application to him the said Herider, agent, as aforesaid his membership in said association became complete and on his death at any time thereafter the defendant's association would pay to this plaintiff the said sum of two thousand ($2000) dollars that two days thereafter it would deliver to him a certificate of his membership. She further says that the said Daniel Herider, agent, and said defendant company did not use diligence and issue such certificate though in the usual course of business and according to agreement such certificate should have been and would have been issued by the 10th day of April 1930. That such delay was caused by the negligence of defendant, its officers and agents; that on the 16th day of April, 1930, the defendant its officers and agents, then fully knowing all the matters and things herein alleged, accepted said application as to its date, issued a certificate of insurance and membership to said J. Ralph Mitchell certifying that the said J. Ralph Mitchell had become and was a member of said association and thereafter delivered to this plaintiff said certificate of membership." It is further alleged that J. Ralph Mitchell died April 13, 1930, "while a member in good standing in said association:" that within a reasonable time thereafter due notice was given defendant of said death and forms for proof of death were requested and that demand was made upon defendant for payment: "that on her demand as aforesaid the defendant denied liability under said membership and certificate of membership and refused to do or perform any of the things under its contract it was bound to do and refused to pay to plaintiff said sum of two thousand ($2000) dollars or any part thereof, and on April 26, 1930, wrongfully attempted to cancel the certificate of membership and insurance so issued ..." The prayer was for judgment for $2000, with interest from April 26, 1930.

The answer admits that defendant is a corporation and as such was doing life insurance business in the State of Missouri, with its chief office at Osceola. It is admitted that plaintiff at the time mentioned was the wife of J. Ralph Mitchell: that he died April 13, 1930, and that plaintiff is his widow. Each and every other allegation of the petition is denied. For further defense it is alleged that defendant is organized under Article III. Chapter 50. Revised Statute 1919, and is doing business on the assessment plan of insurance; that during the month of April 1930. Dan Herider was acting for defendant as one of its soliciting agents to secure applications for insurance at Marshall, Missouri, and surrounding territory; that Herider is the father of plaintiff and the father-in-law of J. Ralph Mitchell; that they all resided together in the same home in Marshall; that on the 15th day of April, 1930, defendant received from said Herider an application for membership; that on the 16th day of April, 1930, the defendant received from Herider the office fee required to be sent to the home office with all applications and without any knowledge of the death of Mitchell the association issued its certificate of membership to him; and "defendant further states that said Dan Herider and the plaintiff conspired to cheat and defraud this defendant by mailing said purported application to the defendant at its home office at Osceola, Missouri, subsequent to the death of J. Ralph Mitchell, each well knowing that it was their duty to notify said defendant of his death, but conspired to conceal and did conceal said fact from this defendant, and knowing that said defendant had no knowledge that said J. Ralph Mitchell was dead." The answer sets forth provisions of the application and of the certificate. The application recites:

"(9) I understand that this application and the certificate of membership to be issued hereon, contain all the conditions and provisions relating to or affecting my membership in the association, and which constitutes a contract between the association and me, subject only to such modifications that may be made therein by the by-laws of the association.

"(12) I hereby warrant and agree that the statements above made are true and that the truthfulness of the same is a condition precedent to any liability on any certificate of membership issued to me by said association. It is further expressly agreed and understood that no agent of this association or any other person has any right or authority to waive the truthfulness of the answers to the foregoing questions and that said association shall not be bound by any act, statement or representation by any such agent or other person not contained and set forth in this application."

"This application made this 8th day of April, 1930, subject to the approval of the board of directors of the association at the home office at Osceola, Missouri."

The certificate contains the following provision: "(5) This certificate is null and void and of no effect, if the applicant to whom issued is not in normal good health, or under the care of a physician or unable to attend to his usual vocation when issued, or at any subsequent reinstatement; and no reinstatement shall be made for any member not insurable by law in this association."

The answer also pleads a tender to plaintiff of the sum which Herider reported he had received from Mitchell, and again tenders said sum to plaintiff. The reply denied each and every allegation of new matter contained in the answer.

Plaintiff offered in evidence the certificate sued on and the application for membership. They contained among others the provisions set out in the answer. Further evidence on behalf of plaintiff tends to show that Dan Herider was the local agent of defendant and was appointed such by the superintendent of agents named Strother. Such appointment was evidenced by the agent's contract executed in writing. It recites that defendant appointed Herider its agent with limited authority to solicit memberships at Marshall and open territory, and defendant agreed to furnish him with all necessary supplies pertaining to said agency. The agent agreed to solicit memberships for the association in the territory named and to collect with each application for membership the sum of five dollars and with each application for disability benefits the sum of one dollar, and to forward all applications promptly to the home office at Osceola accompanying each application with remittance of fifty cents, it being understood that no application would be accepted unless accompanied by said remittance. Herider agreed to be subject to the supervision of Strother, the superintendent of agents at Eldon. Missouri, as to territory and methods of work and in other instructions pertaining to the interest of said association, and that at any time his work was unsatisfactory he would surrender his credentials and supplies. The agent's contract was made September 23, 1929.

Herider was the father of plaintiff and father-in-law of J. Ralph Mitchell. Plaintiff and her husband resided in the household of her father. Prior to April 8, 1930, Herider and the superintendent of agents, Strother, had talked to Mitchell about insurance and solicited his application, and on the last named date, shortly after breakfast in the home, Mitchell signed the application for both life insurance and for disability benefits and paid Herider the sum of six dollars. This sum was retained by the agent except fifty cents which was sent to the company as the office fee required with each application. The application was for membership in the association in accordance with its by-laws. Plaintiff was named beneficiary as wife of the applicant. By the terms of the application the applicant...