Nichols v. Mutual Life Insurance Company of New York
| Decision Date | 30 June 1903 |
| Citation | 75 S.W. 664,176 Mo. 355 |
| Parties | NICHOLS et al., Trustees, Appellants, v. MUTUAL LIFE INSURANCE COMPANY OF NEW YORK |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. H. D. Wood, Judge.
Affirmed.
Stewart Cunningham & Eliot for appellants.
(1) This policy is a Missouri contract. The rights and obligations of the parties to it are controlled and determined by the statutes of Missouri in force when the policy was issued, April 9, 1896, no matter what the language or stipulations of the policy itself may be. Cravens v Ins. Co., 148 Mo. 599; Equitable Society v Clements, 140 U.S. 232; Price v. Ins. Co., 48 Mo.App. 294. (2) The body of section 5859 does not, but the proviso does apply to and control this case. Section 5859 amended is not intended to abrogate or derogate from section 5856. Its meaning and purpose are to except from the operation of section 5856 such policies as contain agreements in substantial conformity with the provisions of section 5856 -- such agreements at least as will fairly accomplish the object of section 5856, which is to prevent forfeiture for non-payment of premiums after two full annual premiums have been paid. Price v. Ins. Co., 48 Mo.App. 296. The fact, then, that any given policy does not by its terms prevent a forfeiture after payment of two full annual premiums are paid, leads logically towards the conclusion that that policy is not such an one as section 5859 intends shall be excepted or excluded from the application to it of section 5856. Cravens v. Ins. Co., 148 Mo. 605; Laws 1895, p. 197; Equitable Society v. Clements, 140 U.S. 233; Price v. Ins. Co., 48 Mo.App. 281. (3) The body of section 5859 amended is in pari materia with sections 5856 and 5858; that is to say, non-forfeiture of policies on which two annual premiums have been paid. It permits provision to be made in the policy, by unconditional agreements, for instances in which only two annual premiums have been paid. The proviso of section 5859, however, plainly limits that permission; limits the right and power of the parties to agree by the policy; limits the application of the body of the section itself, to instances or cases in which only two annual premiums have been paid -- by declaring that "in no instance shall a policy be forfeited for non-payment of premiums after the payment of three annual premiums thereon; but in all instances where three annual premiums shall have been paid on a policy of insurance, the holder of such policy shall be entitled to paid-up insurance, the net value of which shall be equal to that provided for in section 5856 of this article," and thus relegates to section 5856 every case and instance in which three annual premiums have been paid. Laws 1895, p. 197; R. S. 1889, secs. 5856, 5858; Cravens v. Ins. Co., 148 Mo. 583. (4) According to the terms and provisions of this policy, and of the statute of New York, there would in this case be complete and final forfeiture, notwithstanding that not only two, but three full annual premiums had been paid before default. As the facts are, the insurer, according to the terms of the policy and the New York statute, is bound for nothing. As the facts are, the insurer is by the statute of Missouri (secs. 5856 and 5858) bound to pay $ 4,882.87, that sum being the face of the policy ($ 5,000), less one unpaid annual premium and interest. Cravens v. Ins. Co., 148 Mo. 583; Hanthorne v. Ins. Co., 5 Mo.App. 73; Ins. Co. v. Barbour (Ky. Ct. App.), 17 S.W. 796; Knapp v. Ins. Co., 117 U.S. 411; Sheerer v. Ins. Co., 20 F. 886; Ashbrook v. Ins. Co., 94 Mo. 72; Bank v. Ins. Co., 81 F. 935, 84 F. 122. This policy, therefore, has not by its terms accomplished the object of the Missouri statutes in this case. Price v. Ins. Co., 48 Mo.App. 296; Cravens v. Ins. Co., 148 Mo. 605. (5) This policy does not contain agreements such as the body of section 5859 requires it shall have in order that it may escape the application to it of "the three preceding sections" 5856 and 5858. It does not nor does the New York statute make any provision whatever for non-forfeiture where only two annual premiums have been paid on the policy. (a) The New York statute does not "prescribe" nor does the policy contain any unconditional agreement for non-forfeiture, surrender value, temporary insurance or paid-up insurance. The policy does not contain agreements for such non-forfeiture or paid-up temporary or lifetime insurance as the New York statute conditionally provides for. The policy does not give the insured such rights as the New York statute conditionally provides. (b) This policy does not contain any provision for an unconditional cash surrender value. (c) Nor for the unconditional commutation of the policy. (d) Nor did the holder within sixty days after default, or ever, surrender the policy, or accept another. (e) Nor was the policy ever surrendered. Therefore, there is nothing in the policy or the facts in this case to bring it under the control or application of the body of section 5859. Cravens v. Ins. Co., 148 Mo. 607; Hanthorne v. Ins. Co., 5 Mo.App. 73; Northwestern Ins. Co. v Barbour, 17 S.W. 796; Knapp v. Ins. Co., 117 U.S. 411; Sheerer v. Ins. Co., 20 F. 886; Ashbrook v. Ins. Co., 94 Mo. 72; Bank v. Ins. Co., 81 F. 935, 84 F. 122; Price v. Ins. Co., 48 Mo.App. 283. (6) Three full annual premiums having been paid on this policy, this case falls not under the body but under the proviso of section 5859 amended, and is by that proviso relegated to section 5856, under which section as well as by this proviso plaintiffs are "entitled to paid-up insurance, the net value of which shall be equal to that provided in section 5856." (7) The "paid-up insurance" to which the proviso of section 5859 and also section 5856 entitle the plaintiffs is the paid-up, extended "temporary insurance for the full amount written in the policy" for such term as the net value of the policy, taken as a net single premium, will keep the policy in force, as is prescribed in section 5856. These words "paid-up insurance" in that proviso do not mean a "new paid-up policy . . . for such an amount as the net value of the original policy . . . will purchase applied as a single premium," as is provided for at the option of the insured by section 5857. The former is as aptly designated as the latter by words "paid-up insurance." The policy designates both as "paid-up" insurance. The former is, the latter is not, "provided for in section 5856 of this article." R. S. 1879, sec. 5986; R. S. 1889, secs. 5856 and 5858; Laws 1895, p. 197; Knapp v. Ins. Co., 117 U.S. 414; Price v. Ins. Co., 48 Mo.App. 283. (8) The circuit court erred in holding that sections 5856 and 5858 do not, and that the proviso of section 5859 does not, but that the New York statute or the terms of the policy do control this case, and that the body of section 5859, Revised Statutes 1889, amended, does apply to this case; and the circuit court erred in not giving plaintiffs judgment for $ 4,882.87, with interest and costs. R. S. 1889, secs. 5856 and 5858; Laws 1895, p. 197; R. S. 1889, sec. 5857; Cravens v. Ins. Co., 148 Mo. 605; Ins. Co. v. Cravens, 178 U.S. 389.
Seddon & Blair and Nathaniel S. Brown for respondent; James L. Blair and Edward Lyman Short of counsel.
(1) The policy in suit was delivered April 9, 1896, while the amendment by the Act of 1895 was in force. It follows, therefore, that the Act of 1895 governed the insurance contract. Epperson v. Ins. Co., 90 Mo.App. 432; Christian v. Ins. Co., 143 Mo. 460. (2) The Act of 1895 is a legislative declaration that the parties to a contract of life insurance may, by agreement, substitute the non-forfeiture law of a foreign State in lieu of sections 5856, 5857 and 5858, Revised Statutes 1889, but with the proviso or condition that after at least three premiums have been paid, the policy-holder shall be entitled in any event to a paid-up policy for some amount. (3) The body of the Act of 1895 applies in all cases where the policy is issued by a company organized under the laws of a foreign State, and authorized to do business in Missouri, provided the laws of such foreign State "prescribe a surrender value or paid-up or temporary insurance in case of default in the payment of premiums," and the policy "shall contain an agreement for such surrender value, paid-up or temporary insurance as prescribed by such other State." The proviso of said act applies to all policies of life insurance, whether issued by a foreign or domestic company. It follows, therefore, that, since three annual premiums were paid on this policy before default, both the body of the Act of 1895 and the proviso thereto apply to and control this case. The benefit to the policy-holder may be greater, but can not be less than that provided for by the proviso. (4) The proviso to the Act of 1895 materially modifies the body of the act in that after at least three premiums have been paid the policy-holder must have paid-up insurance of at least a certain amount, even if the Missouri non-forfeiture law does not apply in its entirety. Epperson v. Ins. Co., 90 Mo.App. 436. (5) The policy in suit contains an agreement for paid-up insurance as prescribed by the State of New York in that it ousts the operation of the Missouri law, except as to the proviso. (6) The words "paid-up insurance" as used in the proviso to the Act of 1895, do not mean "term insurance," or "extended insurance," or "temporary insurance;" they mean a paid-up policy for life. Hamilton v. Ins. Co., 109 Ga. 381; Knapp v. Ins. Co., 117 U.S. 411.
This is a suit upon a policy of life insurance issued and delivered April 9, 1896, in Missouri, to a citizen of Missouri by the defendant, respondent, a corporation of the State...
To continue reading
Request your trial