Packard v. Connecticut Mut. Life Ins. Co.

• Decision Date: 01 February 1881
• Citation: 9 Mo.App. 469
• Parties: THEOPHILUS PACKARD ET AL., Plaintiffs in Error, v. CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, Defendant in Error.
• Court: Missouri Court of Appeals

9 Mo.App. 469

THEOPHILUS PACKARD ET AL., Plaintiffs in Error,

v.CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, Defendant in Error.

St. Louis Court of Appeals, Missouri.

Feb. 1, 1881.

1. The refusal of an insurance company to issue a paid-up policy is no breach of the contract of insurance where the policy contains no provision that the company shall do so.

2. The retention by the insurer of a policy returned by the insured with a qualified surrender indorsed thereon is no ground for demanding a return of the premiums paid.

3. A refusal by the insurer to receive payment of a premium from the insured, where the same had been paid by another is not a breach of the contract.

4. The insured and the insurer cannot so change the policy of life insurance as to destroy the interest of the beneficiary named therein, without his consent.

5. Intimations of legal conclusions do not constitute an estoppel.

ERROR to the St. Louis Circuit Court, THAYER, J.

Affirmed.

JOHN M. GLOVER, for the plaintiffs in error: The receipts of the premium of July 28, 1874, with notice that Mrs. Packard claimed to be sane, and that the relation of husband and wife between her and Theophilus Packard had not ceased, estops the defendant to plead these statements against plaintiff as a ground for avoiding the policy.-- Wiele v. Germania Ins. Co., 26 Iowa, 9; Mershon v. National Ins. Co., 34 Iowa, 87; Armstrong v. Turquand, 9 Irish L. T. (N. S.) 32; Rathbone v. City Fire Ins. Co., 31 Conn. 194. When the company issued the policy of 1860, upon the application of 1849, they knew that Theophilus Packard was over forty-eight years of age, and therefore are now estopped to object on that score.-- Sweeney v. Provident Life Ins. Co., 14 Irish L. T. (N. S.) 476; Pimus v. Lewis, 2 Fost. & Fin. 178. When the insurer wrongfully refuses to receive the annual premium, the insured may treat the contract as at an end, and recover all the premiums paid under it.-- Cohen v. New York Mutual Life Ins. Co., 50 N. Y. 610; Smith v. Charter Oak Life Ins. Co., 1 Cent. L. J. 76; s. c. affirmed, 64 Mo. 330. The company having expressly assured the beneficiaries that the new policy would be valid if changed, and the change having been made upon the faith of that assurance, the defendant is now estopped to deny its validity.-- Evers, Tr., v. Life Association, 59 Mo. 429; Steele v. St. Louis Mutual Life Ins. Co., 3 Mo. App. 329. The measure of damages is all the premiums from 1849 to 1876.-- McKee v. Phœnix Ins. Co., 28 Mo. 353. Theophilus Packard having taken out the policy for the separate use of Elizabeth Packard, and having retained it in his possession and himself paid the premiums upon it until it was changed in 1860, had the right to change it with the consent of the company.-- Gambs v. Covenant Mutual Life Ins. Co., 50 Mo. 46; Charter Oak Life Ins. Co. v. Beach, 47 Mo. 419; Clark v. Durand, 12 Wis. 223; Kernan v. Howard, 23 Wis. 108; Barry v. Equitable Life Ins. Co., 59 N. Y. 587; Palmer v. Merrell, 6 Cush. 286. Should it be held that the change of benefits in 1860 was of no effect to divest the rights of Elizabeth P. W. Packard, the plaintiffs in this action would still be entitled to all the premiums paid by them since the change as between them and E. P. W. Packard.-- Connecticut Mutual Life v. Burroughs, 34 Conn. 103; Eadie v. Slimmon, 26 N. Y. 1; Lemon v. Phœnix Mutual Ins. Co., 38 Conn. 294. In a direct action by plaintiffs against the company, defendant cannot plead the equity of the w in the proceeds of the policy as a defence.-- Barry v. Brune, 15 N. Y. S. C.-- Burroughs v. State Mutual Life Assur. Co., 97 Mass. 359; Palmer v. Merrell, 6 Cush. 288, note; Kingsley v. New England Ins. Co., 8 Cush. 393.

LEE & CHANDLER, for the defendant in error: The proof does not sustain the allegations of the petition, and, therefore, plaintiffs were not entitled to recover.-- Jones v. Louderman, 39 Mo. 287; Murphy v. Wilson, 44 Mo. 313; Robinson v. Rice, 20 Mo. 229. A trustee, having accepted the trust, cannot abandon it at pleasure, but only with the consent of the cestui que trust, if competent to consent, and with the sanction of the court.-- Jones v. Stockett, 2 Bland, 409; Cruger v. Halliday, 11 Paige, 314; Lathrop Campton, 31 Cal. 17. The insurer and the insured had no lawful right to change the beneficiary in the original policy, issued in the year 1849, and they could not affect Mrs. Packard's rights by so doing; her interests were vested, and could not be divested without her consent.-- Chapin v. Fellows, 36 Conn. 132; Lemon v. Phœnix Mutual Ins. Co., 37 Conn. 294; Gould v. Emerson, 99 Mass. 154; Glendale v. Proctor, 21 Conn. 37; Rupert v. Union Mutual Ins. Co., 7 Robt. 155; Gambs v. Insurance Co., 50 Mo. 44. Money paid under a mistake of law, with full knowledge of the facts, is not recoverable.-- Elliott v. Swartout, 10 Pet. 137; Bank of United States v. Daniels, 12 Pet. 32; Haven v. Foster, 9 Pick. 112; Wharton v. Wharton, 9 Conn. 96; Pinkham v. Gear, 3 N. H. 173; Hubbard v. Martin, 8 Yerg. 498: Ege v. Koontz, 3 Barr, 109; Lyon v. Tallmadge, 14 Johns. 526; Clark v. Dutcher, 9 Cow. 674.

LEWIS, P. J., delivered the opinion of the court.

In the year 1849 a policy of insurance was issued by the defendant on the life of the plaintiff, Theophilus Packard, upon his application, in the sum of $4,000, payable on the event of his death, to his wife, Elizabeth P. W. Packard, and in the event of her death prior to that of the insured, then to her children. Theophilus Packard paid the annual premiums until the year 1860. He then opened a correspondence with the defendant concerning a change of the policy which should leave out his wife, and make his children the only beneficiaries. He was informed that this could be done without his wife's consent. The old policy was returned to the defendant, and another was issued, bearing the same number, date, and amount of premium, and being a reproduction of the first in all particulars, excepting the names of the beneficiaries, of whom Mrs. Packard was not made one. No additional premium was required on account of the change, although the insured was older, by eleven years, than when the first policy was issued. The change was made without the knowledge or consent of Mrs. Packard, who, in 1873, notified the defendant of this fact, and of her claim to be still considered a beneficiary. Mr. Packard continued to pay the annual premiums until the year 1876, inclusive. In 1877, he applied to the defendant for a paid-up policy in lieu of the one he held. Some correspondence ensued, in which the defendant expressed a willingness to issue a paid up policy, but took the ground that the change of 1860 was made under a mistaken view of the law governing the case, and was unauthorized, and that a paid up-policy, if issued, must be for the beneficiaries who were named in the original policy of 1849. Mr. Packard wrote upon his changed policy a qualified surrender, and mailed it to the defendant. In this surrender he copies from the defendant's letter what he calls a written promise to give him a paid-up policy upon surrender of the original; and assuming that by the expression “original policy” the defendant means the substituted policy of 1860, he claims that the paid-up policy shall be, as to parties, in the same form with that. He omits to copy, however, the next following sentence in the same letter, wherein the defendant carefully explains that the paid-up policy, if issued, must follow the terms of the first policy, issued in 1849, and not those of the erroneously substituted policy. There was some further correspondence, in which both parties adhered to their respective positions, Mr. Packard still insisting that the paid-up policy must be made for the beneficiaries named in the substituted policy, and the defendant refusing to frame it otherwise than as the first was issued, in 1849. In 1878, Mrs. Packard paid the annual premium of $160.40 a few days before it fell due; and on the day when it became due Mr. Packard tendered the proper sum in payment, but the defendant refused to receive it. The policy was not delivered to Mrs. Packard, nor was it ever in her possession. This suit is brought by Theophilus Packard and his children to recover back the premiums paid, with interest. The Circuit Court, sitting as a jury, found for the defendant.

If the claim of the plaintiffs, that the substituted policy of 1860 was and is the true contract between the parties, could be sustained, it would still be difficult to perceive upon what ground the plaintiffs ought to recover in this action. The mere retention of the policy by the defendant, against the plaintiffs' demand for possession, would certainly furnish no reason for a compulsory return of all the premiums paid. If not lost or destroyed, together with all proofs of its provisions, the contract could be observed and enforced in all its terms, whatever it might be. But the plaintiffs charge that the defendant has broken its contract, and therefore they are entitled to rescind, and to demand restitution. How has the defendant broken its contract? This must be either by its failure to issue a paid up policy, or by its refusal to receive from Mr. Packard the annual premium for 1878. As to the first of these supposed breaches, we do not perceive that the defendant was ever under obligation to issue a paid-up policy of any sort. No such obligation was expressed or implied in the original or the substituted contract. The promise by letter, on which the plaintiffs rely, was distinctly qualified by a reservation that the paid-up policy should be for the beneficiaries first named in 1849. But such a policy as this Mr. Packard was unwilling to receive. There was, therefore, no violation of any promise in the premises. Nor was there any breach of contract in the refusal of the annual premium for 1878. That refusal was not based on any indisposition to abide by...