Payne v. Minnesota Mutual Life Insurance Co.

• Citation: 191 S.W. 695,195 Mo.App. 512
• Parties: MARY E. PAYNE, as Trustee, Appellant, v. MINNESOTA MUTUAL LIFE INSURANCE COMPANY, a Corporation, Respondent
• Decision Date: 16 December 1916
• Court: Missouri Court of Appeals

191 S.W. 695

195 Mo.App. 512

MARY E. PAYNE, as Trustee, Appellant, v. MINNESOTA MUTUAL LIFE INSURANCE COMPANY, a Corporation, Respondent

Court of Appeals of Missouri, Springfield

December 16, 1916

Motion for Rehearing Granted January 1, 1917.

Opinion Refiled February 14, 1917.

Appeal from Polk County Circuit Court.--Hon. C. H. Skinker, Judge.

AFFIRMED.

Judgment affirmed.

Rechow & Pufahl and Humphrey, Boxley & Reeves for appellant.

Butler Mitchell & Hoke and Clyde Taylor for respondent.

FARRINGTON J. Robertson, P. J., and Sturgis, J., concur.

OPINION

FARRINGTON, J.

This case was appealed from the circuit court of Polk county where judgment was rendered in defendant's favor. HONORABLE C. H. SKINKER, the judge before whom the case was tried in the circuit court, rendered a written opinion a copy of which is furnished us in respondent's brief. The disposition of the case made by him is so thorough and his finding so conclusively correct that we shall adopt his opinion as our opinion in this appeal.

In view of the fact that appellant is contending there is no forfeiture clause whatever in the policy in question we quote the following provision of the policy which is not set forth in Judge SKINKER'S opinion: "Tenth: . . . If any premium, or any note given for premium or any indebtedness is not paid on or before the day when due, this policy shall become void, and all payments previously made shall remain the property of the Company, except as hereinbefore provided."

Judge SKINKER'S opinion is as follows:

"This is a suit upon a life insurance policy, dated June 18, 1912 and issued in lieu of an assessment certificate, dated September 7, 1892. The policy in suit provided that in construing its provisions it shall be considered as having been in force from the 18th day of June, 1893, except as otherwise provided in the policy. As this policy was issued for a premium rated for a person of the age of the insured on June 18, 1893, it was issued subject to a lien and indebtedness of $ 326.74, bearing interest at five per cent. Item seven on the second page of the policy provides that: 'If said indebtedness shall ever exceed the reserve for this policy, computed as below provided, and according to the actuary's or combined experience table of mortality, the excess shall be paid by the insured.' Following said item seven is a table of the loan, paid-up, and extended insurance value of said policy at the end of each year, reckoning from the date of the surrender of said assessment certificate, which is the same as the date of the issuance of this policy. Following said table in the policy is a provision that if no request for paid-up insurance is made, in case default is made in the payment of any premium, the insurance shall be automatically extended according to said table, provided, that should any indebtedness to the Company exist, then in ascertaining the single premium upon which the calculations for extended insurance are to be made, such indebtedness shall first be deducted and the net premium thus arrived at shall form the basis for the said calculations, and the calculations shall result in a proportionate and equitable reduction of the term of extended insurance.

"The assured made default in the payment of the premium due June 18, 1913. At this time the reserve on the policy was $ 809.16, but the assured was then indebted to the Company in the sum of $ 713.83, of which indebtedness $ 558.83 was the $ 326.74 with interest referred to in the policy, and the balance represented a loan of $ 155 made to the assured on June 26, 1912, of which last amount $ 65 was to apply on the premium payment due June 18, 1912.

"The assured died on April 21, 1914. If the assured had not been indebted to the Company at the time he made default in the payment of premium, on June 18, 1913, the policy would have been automatically extended for seven years and six months. The net single premium necessary to extend said policy for seven years and six months was $ 646.82, and the net single premium necessary to extend said policy from June 18, 1913, the date of default, to April 21, 1914, the date of the assured's death, is $ 77.01.

"The facts as thus outlined are either admitted or clearly established, and upon them two principal questions arise:

"First: Does the nonforfeiture statute, section 6946, Revised Statutes 1909, providing that three-fourths of the reserve shall be taken as the net single premium for extended insurance apply to and control this policy? If the statute applies, then plaintiff cannot recover, as three-fourths of the reserve does not equal the indebtedness, and there was nothing to extend the policy.

"Second: If the statute does not apply, then under the terms of the policy, was the indebtedness due from the assured to the Company, to be deducted from the entire reserve of said policy, or shall said indebtedness be deducted from the sum required to extend said policy seven years and six months? If the indebtedness should be deducted from the sum required to purchase seven years and six months' extended insurance, then again plaintiff cannot recover. If, however, the indebtedness should be deducted from the entire reserve of said policy, then would remain a sum sufficient to extend said policy beyond the date of the assured's death, and the plaintiff is entitled to recover.

"Considering the second proposition first, and construing the policy as though the statute does not control, does the policy provide that upon default in the payment of premium, the indebtedness of the assured to the Company shall be deducted from the entire reserve and the sum thus obtained used to extend the policy?

"Plaintiff contends that not to give the assured the benefit of the entire reserve is to virtually read a forfeiture, a thing the law abhors, into the policy; that the reserve is but the accumulation of the money the assured has paid to the Company and that he ought to have the benefit of it.

"But the law seems to be settled that in the absence of a statute, or some provision in the policy giving the assured a right to the reserve, the reserve belongs to the insurance company and not to the assured. [State ex rel. Supreme Lodge Knights of Pythias v. Vandiver, 213 Mo. 187, 111 S.W. 911.]

"If the reserve belongs to the assured and not to the Company then section 6946 giving the assured the benefit of three-fourths of the reserve, and usually referred to as the nonforfeiture statute, deprives the assured of one-fourth of the reserve he would otherwise get, and is, to that extent, a forfeiture statute. I think it is clear...