Morrow v. National Life Association of Des Moines, Iowa, a Corp.

• Decision Date: 10 July 1914
• Citation: 168 S.W. 881,184 Mo.App. 308
• Parties: D. C. MORROW, Respondent, v. NATIONAL LIFE ASSOCIATION OF DES MOINES, IOWA, a Corporation, Appellant
• Court: Missouri Court of Appeals

168 S.W. 881

184 Mo.App. 308

D. C. MORROW, Respondent, v. NATIONAL LIFE ASSOCIATION OF DES MOINES, IOWA, a Corporation, Appellant

Court of Appeals of Missouri, Springfield

July 10, 1914

Appeal from Dunklin County Circuit Court.--Hon. T. R. R. Ely Special Judge.

REVERSED AND REMANDED (with directions).

Cause reversed and remanded.

Bartley & Douglass, Donaldson & Tribble, for appellant.

(1) Appellant, National Life Association, is an assessment company. McCoy v. Bankers Life Assn., 134 Mo.App 35. (2) The beneficiary named in a policy of insurance in an assessment company must have an insurable interest in the life of the assured and the rule of law permitting a person himself to insure his own life for the benefit of another is abrogated by the statute so far as assessment companies are concerned. R. S. 1909, sec. 6956. (3) Assessment insurance companies are expressly exempted by statute from the provision of the general insurance laws, allowing damages and attorney's fees for vexatious delay. R. S. 1909, sec 6959. (4) In an action on an insurance policy by a creditor named as the beneficiary or by assignment, it is necessary to both aver and prove an insurable interest and prove the exact amount of the debt due from the assured. Singleton v Insurance Co., 66 Mo. 63; Ryan v. Insurance Co., 117 Mo.App. 688; Crotty v. Ins. Co., 144 U.S. 621; Locke v. Bowman, 168 Mo.App. 121. (5) A person cannot procure insurance on his life for benefit of a creditor further than is necessary to secure the debt and premiums to keep same alive. Mutual Life Ins. Co. v. Richards, 99 Mo.App. 88; Deal v. Hainley, 135 Mo.App. 507; Locke v. Bowman, 168 Mo.App. 121. (6) One person cannot procure insurance on the life of another. Hewsner v. Insurance Co., 47 Mo.App. 336; Ryan v. Insurance Co., 117 Mo.App. 688; Deal v. Hainley, 135 Mo.App. 508. (7) Future or prospective obligations will not support an insurable interest in the absence of a contract entered into at the time of taking out the insurance or the assignment of the policy to the effect that the policy is to secure such future advancements or prospective obligations as well as the present indebtedness. Deal v. Hainley, 135 Mo.App. 508; Bruer v. Ins. Co., 100 Mo.App. 540.

C. P. Hawkins, Bradley & McKay for respondent.

(1) In this State it is settled law that it is not the nature of the society nor the character of the insurance or contract it may write but the terms of the contract which determines whether it is exempt from the general statute governing insurance. Williams v. Ins. Co. , 189 Mo. 70; Toomey v. Supreme Lodge, 147 Mo. 129; McDonald v. Bankers Life Assn., 154 Mo. 618; Folkens v. Ins. Co., 98 Mo.App. 480; Wilson v. Amer. Benev. Assn., 125 Mo.App. 597. (2) Both the application and the policy sued on in this cause states that D. C. Morrow, the beneficiary in said policy bears the relation of creditor to the insured. There being no statute in this State defining an insurable interest mentioned in Sec. 6956, R. S. 1909, the common law will prevail as to what constitutes an insurable interest. Warnock v. Davis, 104 U.S. 775; Mutual Life Ins. Co. v. Lucks, 108 U.S. 498; Wilkinson v. Life Ins. Co., 63 Mo.App. 404. (3) Respondent did aver and prove an insurable interest as a creditor of the insured. He also proved that this policy was taken out by Vines of his own volition and that he intended for Morrow to have the whole of the policy at the time he took the same out, and the questions of fact were fairly submitted to a jury and a verdict for respondent, and respondent ought to recover the full policy. Strode v. Drug Co., 101 Mo.App. 627; Deal v. Hainley, 135 Mo.App. 507; Mutual Life Ins. Co. v. Richards, 99 Mo.App. 88; Warnock v. Davis, 104 U.S. 775. (4) Respondent concedes that one person cannot procure insurance on the life of another, unless he does so to secure a debt and then he could only collect the amount of the debt, and premiums if paid by him, but the facts in the cause at bar show the insurance was not procured by Morrow, respondent herein, but that the same was taken out by Vines, the insured, of his own volition and with the intention that Morrow was to receive the full policy, and hence the cases cited are not in point. (5) Should the court hold that respondent's instruction number 1 did not properly declare the whole law of the case, the error, if any, has been cured by appellant's instructions numbers 1, 2, 4, 5, 6, 7, 8, 9, 10, 12, 13, 14, 16, 17, 18, 19 and 20, which fairly submit all the issues raised by both respondent and appellant, and all errors, if any, were cured. Scott Force Hat Co. v. Hombs, 127 Mo. 403; Reames v. Jones D. G. Co., 99 Mo.App. 403.

STURGIS, J. Farrington, J., concurs. Robertson, P. J., concurs and dissents.

OPINION

STURGIS, J.

The defendant on May 16, 1911, issued its policy of insurance on the life of Charles P. Vines, of Gibson, Dunklin county, Missouri, wherein it agreed to pay the plaintiff, therein designated as "creditor," the sum of $ 2000. In the event of the death of the plaintiff prior to that of the insured no other beneficiary is named. As a part of the policy it is stated: "The foundation principle of the system of insurance carried out by this association is to collect from the members such sums as are necessary for the payment of death and disability claims, accumulate a reserve fund and pay legitimate expenses, the same being apportioned among the members according to their ages, and the amount of insurance held by each. The reserve fund is held for the payment of death and disability losses in excess of twelve thousand dollars per annum for each one million dollars of insurance in force (or twelve deaths to each thousand members). The reserve is invested in interest bearing securities which are deposited with the Auditor of State, of the State of Iowa, as required by the laws of said State; the principal and interest of said fund can only be used for the payment of losses as above stated."

Vines died September 14, 1912, plaintiff made proof of death, demanded payment of the $ 2000, which was refused, and thereupon brought this suit seeking to recover said amount together with attorneys' fees and damages as provided for in the amendment. [Laws of 1911, p. 282, of section 7068, R. S. 1909.] The defendant appeared and filed an answer containing a general denial and alleging false representations by the insured in his application.

Plaintiff was engaged in the mercantile business at Gibson at the time the policy was taken out and had an account, as he testified, against Vines amounting to $ 95, which had been placed in the form of a note. The application for the policy states that plaintiff bore the relation of "creditor" to Vines. After the policy was issued plaintiff claims to have advanced further sums to Vines for premiums, burial expenses, etc., making the total indebtedness amount to $ 750. Plaintiff paid all of the assessments on the policy and in addition thereto deposited $ 25, apparently to be used as a fund to meet future assessments. The testimony is conflicting as to who procured or caused the insurance to be taken out in plaintiff's favor, but plaintiff testified that it was done by Vines without any suggestion or instigation upon plaintiff's part and the jury so found. He also testified that soon after the policy was taken out Vines sold his restaurant business, was insolvent, in poor health and went away for the purpose of regaining his health, and that the expenses of the trip were paid by donations of his neighbors; that later, after he returned, a fraternal order sent him to Colorado Springs, where he died. The plaintiff testified that before the assured left for that point he furnished him with clothing and some money and that he also went to attend to his burial at that place, a portion of the expense of which, including the trip, constitutes a part of the amount of the indebtedness claimed here. Shortly before Vines died he executed a note to plaintiff for $ 1800, although he owed plaintiff not to exceed $ 750.

We consider it unnecessary to discuss the instructions further than to state that they authorized a recovery by plaintiff of the full amount of the policy if he was not the procuring cause of its being taken out and if the jury believed he was a creditor of the deceased at the time it was applied for and issued. Under the instructions a recovery was allowed for damages and attorneys' fees if the jury believed defendant vexatiously refused to pay the policy. There were also evidence and instructions on the question of misrepresentations in the application for the insurance, which question was found against the defendant and no error is assigned thereon.

The jury returned a verdict in favor of the plaintiff in the sum of $ 2000 and $ 100 interest and found that the defendant had vexatiously refused to pay the amount after demand and, therefore, found for the plaintiff in the sum of $ 300 for attorneys' fees. Whereupon, judgment was entered for $ 2400, from which the defendant has appealed.

That the defendant was authorized to do business in this State is alleged in plaintiff's petition and that it was operating under the assessment plan (Section 6950, et seq., R. S. 1909) appears to be a subject of so little doubt as to require only brief notice. Said section 6950 reads as follows: "Every contract whereby a benefit is to accrue to a person or persons named therein upon the death or physical disability of a person also named therein, the payment of which said benefit is in any manner or degree dependent upon the collection of an assessment upon persons holding similar contracts, shall be deemed a contract of insurance upon the assessment plan, and the business involving the issuance of such...