Prentiss v. Illinois Life Ins. Co.

Decision Date19 July 1920
Docket NumberNo. 21278.,21278.
Citation225 S.W. 695
PartiesPRENTISS v. ILLINOIS LIFE INS. CO.
CourtMissouri Supreme Court

Appeal from Circuit Court, Lincoln County; E. B. Woolfolk, Judge.

Action by James H. Prentiss against the Illinois Life Insurance Company. From a judgment for defendant, plaintiff appeals. Affirmed.

Fauntleroy & Cullen, of St. Louis, Frederick A. Brown, of Chicago, Ill., and Avery & Killam and J. L. Burns, all of Troy, for appellant.

Henry W. Price, of Chicago, Ill., and Jones, Hocker, Sullivan & Angert, of St. Louis, for respondent.

SMALL, C.

I. This is a suit for $50,000, the amount of a life insurance policy issued on February 7, 1912, by the defendant on the life of Clinton Swallow Woolfolk. The insurance was payable to the estate of said Woolfolk upon his death. The policy was assigned to the plaintiff, James H. Prentiss, February 15, 1912, to secure an indebtedness of Woolfolk to plaintiff exceeding $60,000. Woolfolk died March 26, 1913.

The petition is in the usual form, but with the further allegation that on January 15, 1916, the circuit court of Cook county, Ill., issued an injunction against plaintiff from instituting suit against defendant on the policy in the state of Missouri, which injunction remained in force until May 4, 1917. The petition was filed on the 7th day of May, 1917, in the circuit court of Audrain county, Mo., and afterwards the cause was transferred by change of venue to Lincoln county.

The insured, Woolfolk, and the plaintiff, Prentiss, were at all times citizens of Illinois, and the defendant, a corporation organized in the state of Illinois with its head office at Chicago.

The answer was: First. That assured's death was occasioned by suicide within 2 years from the date of the policy, which was a risk not covered by the policy, and was a good defense under the policy and the law of Illinois, except as to premiums paid, part of which was a $1,200 note of insured, which had never been paid, which defendant was entitled to deduct from the amount of the policy, in case it was liable thereon, which defendant denied. Second. That assured in his application, which was a part of the policy, warranted absolutely that neither of his parents were ever afflicted with insanity, whereas his father had been so afflicted, and that under the terms of the policy and the law of Illinois, said warranty being untrue, the policy was void. Third. That the contract of insurance provided that no suit should be brought to collect the policy unless commenced within 3 years from the time the cause of action accrued, and within 4 years from the date of the death of the insured. That this suit was not so commenced. That said provision in the policy was valid under the law of Illinois, and plaintiff's action was therefore barred by such contractual limitation.

The reply, besides containing a general denial, admitted the payment of the premiums and the giving of the $1,200 note therefor, and that it was unpaid, as alleged, and that plaintiff offered to pay said note, and admitted that defendant was entitled to deduct the amount of it from the amount due on the policy sued on.

In advance of the trial, defendant deposited in court the cash received as premiums, with interest from date of payment, and also the $1,200 note, mentioned in the answer, as given by Woolfolk for a part of the second annual premium. At the trial, the court ruled that the burden of proof was upon the defendant. Thereupon the defendant introduced its testimony first.

The application for the insurance, signed by Clinton S. Woolfolk, was dated February 6, 1912, and contained the following:

"Except as mentioned above, have you or any of your grandparents, uncles, aunts, parents, brothers or sisters ever had any of the following diseases or ailments (explain affirmative answers): * * * "19. Insanity? No. * * *

"Agreement.—It is hereby declared and agreed: First. That all statements and answers in this application (in the part marked part I, as well as those in the part marked part II) are true, full and complete, and I do hereby warrant that the answers above given as to the condition of health of my living relatives, as to the cause of death of my deceased relatives, to questions 16, 17, 18 and 19, referring to diseases of myself and relatives, to question 20, with reference to coming in contact with consumptives, are not only true to the best of my knowledge, but that they are literally and absolutely true, and I agree that if any of said answers so warranted are false in any respect that any policy issued upon this application shall be null and void. Second. That this application of which this agreement forms a part, shall with any policy (whether of the kind applied for or otherwise) issued hereunder, and the benefits and conditions therein, be the sole basis of the contract between me and the company, and shall be binding on all parties in interest under such policy. * * * Fifth. That the policy applied for shall be of a form now in use by the company and that the contract contained in such policy and in this application shall be construed according to the law of the state of Illinois, it being understood and agreed that the place of said contract is the head office of the Company, at Chicago, Illinois. Sixth. That any policy that may be issued in pursuance of this application shall be in consideration of the statements, answers, warranties and agreement by me made in this application. * * *"

The policy was dated February 7, 1912. It was for $50,000 upon the life of said Woolfolk, payable—

"to estate of the insured, or to such other beneficiary as may have been duly designated at the head office of the company in Chicago, Illinois, immediately upon receipt of due proof of the death of Clinton Swallow Woolfolk, the insured, of Evanston, county of Cook, state of Illinois, provided this policy is in force at the time of the death of insured."

The policy also contained the following provisions:

"Suicide.—Death by the insured's own hand or act, whether sane or insane, within two years from the date hereof, is a risk not assumed by the company, and in event of death as aforesaid, the liability of the insurer hereunder shall be limited to an amount equal to the premiums actually paid hereon.

"Change of Beneficiary.—The insured may, without expense, at any time, and from time to time, during the continuance of this policy, provided it is not then assigned, change the beneficiary, or beneficiaries, by written notice to the company, at its head office, accompanied by this policy, such change to take effect only upon approval of the application therefor by the company and upon indorsement of the same on the policy by the company. If the beneficiary last designated shall not be living at the death of the insured, the amount then insured by this policy shall be paid to the estate of the insured. * * *

"(1) This policy and the application therefor, a copy of which is hereto attached, taken together, constitute the entire contract. * * * (7) No suit shall be brought or maintained to collect under this policy unless commenced within three years from the time the cause of action accrues, and within four years from the date of death of the insured. * * *

"This policy shall be incontestable after two years for the amount due, except for the nonpayment of premiums.

"This agreement is made in consideration of the written and printed application therefor, which is hereby made a part hereof."

Defendant's evidence tended to show that the insured and one Judson, for some years before the death of the insured, were engaged in buying and selling land in Texas, the insured, Woolfolk, stayed at home office in Chicago and managed the financial end of the business, while Judson stayed in Texas and bought and sold the land. They afterwards organized a corporation, of which they were practically the sole stockholders. That in 1912 and the early part of 1913, the business became greatly embarrassed, and Woolfolk threatened suicide frequently, in case of a failure. He was about at the end of his rope in March, 1913.

At the beginning of business on March 26, 1913, Woolfolk had checks outstanding amounting to $49,000, given by him on the. Colonial Trust & Savings Bank, exceeding the amount of money he had in that bank to meet such checks. On that day he deposited in such bank the following items:

                Money borrowed from C. B. Munday ............  $4,000 00
                Draft of James H. Prentiss (plaintiff in this
                 case) ......................................   4,500 00
                Proceeds from Thirty-Ninth and Michigan
                 Avenue property ............................   5,432 23
                Check from Henry S. Judson ..................   2,750 00
                Sale of stock ...............................   2,000 00
                

The draft on Prentiss was entirely fictitious, and was repudiated by him. The item of $5,432.23 was money that Woolfolk had collected for, and which belonged to, the Colonial Trust & Savings Bank, and which he had appropriated without its consent. The check from Judson was part of a "kiting" transaction. C. B. Munday was president of the La Salle Street Bank, and had personally loaned Woolfolk the $4,000 on his promise to return' the money the next day. About 6 o'clock in the evening of March 26, 1913, Woolfolk had a conversation with Keller, the cashier of the Colonial Trust & Savings Bank, at his office in the bank. Keller (who died 2 years before the trial) was overheard to say to him, "No, you have got your limit now," and to emphasize this remark by bringing down his clenched right hand into the palm of his left. During this conversation, Woolfolk appeared to be laboring under excitement and very much disappointed. On the evening of March 25th, Woolfolk had left the bank with Keller and the witness Ehman, and said, as they walked along the street, "If I get in such shape that can't pay out, my friends are going to be taken care...

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