Moore v. The Northwestern Life Insurance Co.

• Decision Date: 22 May 1905
• Parties: GEORGE W. MOORE, Administrator, etc., Respondent, v. THE NORTHWESTERN LIFE INSURANCE CO., Appellant
• Court: Kansas Court of Appeals

87 S.W. 988

112 Mo.App. 696

GEORGE W. MOORE, Administrator, etc., Respondent, v. THE NORTHWESTERN LIFE INSURANCE CO., Appellant

Court of Appeals of Missouri, Kansas City

May 22, 1905

Appeal from Saline Circuit Court.--Hon. Samuel Davis, Judge.

AFFIRMED.

Affirmed.

C. C Hammond and Brown & Kerr for appellant.

(1) The Missouri statute is not applicable to the policy in question. (a) Even if applicable there is no showing of any reserve or net value, in fact the testimony shows that the policy had no net value. (b) The statute refers to actual not theoretical value. (2) If plaintiff's theory of the statute was correct the maximum to which plaintiff would be entitled would be a paid up whole life policy purchased with the theoretical reserve in question, payable at the death of the insured. Nichols v. Ins. Co., 176 Mo. 355. The amount of such a paid up policy is not shown and cannot be surmised. Price v. Ins. Co., 48 Mo.App. 296. (3) The net value of the policy is computed on a given table of mortality, at a specified rate and upon the assumption that during the early years of the risk, the premium being the same each year, the insured pays more than the actual cost of insurance, the excess which is thus paid making good the deficit of the later years when it costs more to carry the risk. Mutual Reserve v. Roth, 122 F. 855; Wilson v. Life Assur. Soc. 73 P. 170. (4) The statute of Missouri, secs. 7897, 7898 and 7899, R. S. 1899, had for its purpose the establishment of a rule to enable the assured to reap full benefit of premiums paid before default on his part, and at same time to protect the insurance company, in case it is obliged to pay the full amount of the premiums which the terms of the policy call for. Carter v. Ins Co., 127 Mass. 153; Ins. Co. v. Howland, 48 A 485; Ind., et seq.; Wilson v. Ins. Co., 73 Pack. (Cal.) 170; Reserve Fund v. Roth, 122 F. 855. Par. 2 Conditions Policy; Nichols v. Ins. Co., 176 Mo. 355.

Fred Lamb for respondent.

(1) The policy in suit is subject to the nonforfeiture statutes of the State of Missouri. R. S. 1889, sec. 5855. (2) The statute fixes the rule by which all policies coming within its premises, may be valued and the extended insurance computed. This rule can not be altered or changed by the parties to the contract either directly or indirectly. R. S. 1889, sec. 5856. (3) Under these tables the statute furnishes, within itself, a complete rule for computing and applying net values. Folkens v. Ins. Co., 98 Mo.App. 483; Price v. Ins. Co., 48 Mo.App. 281; Horton v. Insurance Co., 151 Mo. 604. (See especially syllabi, sections 3 and 4.); Smith v. Ins. Co., 173 Mo. 341; Ins. Co. v. Clements, 140 U.S. 226; Cravens v. Ins. Co., 148 Mo. 601. (4) The statute overrides the freedom of the parties to contract and grafts itself upon the contract, and its provisions cannot be waived or defeated either directly or indirectly by any provision contained in the contract. Price v. Ins. Co., 48 Mo.App. 281; Cravens v. Ins. Co., 148 Mo. 601-2-3 and 4, and cases cited. (5) Common fairness to the trial court demands that every question presented for review to the appellate court must in some way first be called to his attention. No practice has been more severely condemned than that of abandoning the theory upon which a case is tried and attempting to inject new issues in the trial upon appeal. We cite the following: Querbeck v. Arnold, 55 Mo.App. 288; Mantz v. McQuire, 52 Mo.App. 149; Witascheck v. Glase, 46 Mo.App. 214; Tomlinson v. Ellison, 104 Mo. 112; Brooks v. Yocum, 42 Mo.App. 521; Nance v. Metcalf, 19 Mo.App. 190; Walker v. Owen, 79 Mo. 567; Brays' Admr. v. Seligman's Admr., 75 Mo. 40; Dunnigan v. Green, 165 Mo. 113.

OPINION

BROADDUS, P. J.

The plaintiff sues as administrator of the estate of Thomas Folkens, deceased, upon a life insurance policy issued by defendant for the sum of $ 1,000 payable to the estate of said Folkens within ninety days after the receipt and acceptance at its home office of satisfactory proof of the death of said insured. The policy was issued on the 9th day of December, 1896, and the insured died on the 29th of June, 1903. The insured paid five annual stated premiums of $ 13.14 endorsed on the back of said policy the last of which was due and payable December 8, 1901; but thereafter he made no further payments.

The plaintiff seeks to recover under section 7897, Revised Statutes 1899 pertaining to insurance of life, the insured having made five annual payments of premiums and claiming that by reason of such payments a net value fund with four and one-half per cent interest had accumulated in the hands of the defendant and which, as a single premium, carried said policy as extended insurance on the life of insured beyond the date of his death.

The defense is that the policy in question was a contract made in the State of Minnesota, the location of defendant corporation, and that there was not at the time said policy was issued, nor since then, any law of that state requiring defendant to furnish any extended insurance upon the lapsing of said policy, nor was there any law providing for the application of the net value of the same or any other amount to be used as a single premium, or in any other way to carry it as extended insurance.

The defendant relies on certain recitations of the policy to defeat the action, among which are the following: That it was stipulated that the consideration therefor should be the prepayment in advance by the insured to defendant of the sum of $ 13.14 on the 8th day of December of each year, and that the making of such payment was a condition precedent to the existence of the contract, and that if the said Folkens should fail at any time to make such payments in advance the policy should thereafter ipso facto become null and void, and all moneys paid thereon should be forfeited to the defendant. That it was agreed that the balance remaining of the first annual premium paid on said policy by the insured, after providing for its full pro rata share of actual death claims, should belong to the general expense fund of the defendant, and should be used only for the expense of operating and maintaining defendant, and that of each annual premium paid there should be deducted the sum of $ 4 which should belong to the expense fund, which reduced the net premium on said policy to the sum of $ 9.14; and that it was agreed that if there should be, after said policy had been in force five years, five annual premiums paid thereon, there should be extended insurance for six months only. The defendant alleges that it was an assessment company and was authorized to do business in this state as such at the time said policy was issued, and that it had no authority to do any other kind of insurance business.

There was no dispute as to the death of the insured and of due proof thereof. Folkens' age at the time the policy was issued was 24 years. It was delivered to him in Chariton county, Missouri. A jury was waived and the case was tried before the court. At the instance of the plaintiff the court gave the following declaration of law: "The court declares that under the law and the evidence in this cause the plaintiff is entitled to recover of the defendant the face of said policy, together with six per cent interest thereon from the filing of this suit, less all premiums that had become due up to the date of the death of deceased, including the whole of the year's premium in which the death occurred, together with six per cent compound interest from the dates such payments were due to the date of this judgment." The defendant asked no declaration of law. On the finding, the court rendered judgment for plaintiff against defendant for $ 986.69, from which it appealed. It is to be inferred from the declaration of law given by the court that, in deciding the case, the statutes of Missouri and not the statutes of Minnesota were applied to the contract in order to fix defendant's liability.

The testimony of life insurance actuaries was to the effect that what is called the net level premium of a whole life policy at the age of the insured when the policy was issued was $ 13; that the premiums or actual cost of carrying the policy, under the mortuary tables, and four and one-half per cent interest for the years during which the...