Rechow v. Bankers' Life Co.

• Citation: 73 S.W.2d 794,335 Mo. 668
• Decision Date: 09 July 1934
• Docket Number: 32847
• Parties: Theodore G. Rechow v. Bankers Life Company, a Corporation, Appellant
• Court: Missouri Supreme Court

73 S.W.2d 794

335 Mo. 668

Theodore G. Rechow v. Bankers Life Company, a Corporation, Appellant

No. 32847

Supreme Court of Missouri

July 9, 1934

Respondent's Motion for Rehearing Overruled June 19 1934.

Respondent's Motion to Transfer to Banc Overruled July 9, 1934.

Appeal from Cedar Circuit Court; Hon. Charles A. Hendricks Judge.

Reversed.

F. M. McDavid, O. O. Brown, R. B. Alberson and Emory M. Nourse for appellant.

(1) The evidence introduced by plaintiff failed to sustain his alleged cause of action. (a) The guarantee fund of the association cannot be used to pay death losses; nor can any funds of the association be used for purposes other than fixed by the by-laws. Hoover v. Bankers Life Assn., 155 Iowa 322, 136 N.W. 119; McCoy v. Bankers Life Assn., 134 Mo.App. 35, 114 S.W. 551; Hay v. Bankers Life Co., 207 Mo.App. 294, 231 S.W. 1035. (b) Laws of association's domicile are integral part of contract. Royal Arcanum v. Green, 237 U.S. 531, 59 L.Ed. 1100. (c) Association may increase rates if necessary. Wall v. Bankers Life Co., 208 Iowa 1053, 223 N.W. 257; Garretson v. Sov. Camp, 210 Mo.App. 546, 243 S.W. 257. (d) Estoppel cannot be based on opinions or promises. Delaney v. Grand Lodge, 138 N.E. 923; Butler Bros. v. Levin, 207 N.W. 316; Illinois Life Ins. Co. v. Tully, 174 F. 365; State v. Trimble, 303 Mo. 276, 259 S.W. 1052. (2) The full faith and credit clause of the Constitution of the United States requires this court to follow the decisions of the courts of Iowa in the cases of Wall et al. v. Bankers Life Company as consolidated. Const. U.S., Art. IV, Sec. 1; United States Code Title 28, Sec. 687, R. S. 1905; Barnes Federal Code, sec. 1266; Royal Arcanum v. Green, 237 U.S. 531, 59 L.Ed. 1089; Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 59 L.Ed. 1165; Modern Woodmen v. Mixer, 267 U.S. 544, 69 L.Ed. 783. (3) An adjudication of a suit brought by members of a class on behalf of themselves and all other persons similarly situated is binding on plaintiff as a member of such class. Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 59 L.Ed. 1170; Lilly v. Tobbein, 103 Mo. 488, 15 S.W. 618.

Theodore G. Rechow and Herman Pufahl for respondent.

(1) As the question of jurisdiction was passed on by this court on the application for a writ of prohibition in the nature of an appeal from the ruling of Judge Hendricks in overruling its demurrer to plaintiff's petition upon the same ground now urged by appellant in its brief is conclusive upon the question that plaintiff's petition states a cause of action of which Judge Hendricks had jurisdiction and cannot now be reinvestigated. May v. Crawford, 150 Mo. 524; Carey v. West, 165 Mo. 455; 1 Herman Res. Adj., sec. 115. See this court's opinion in the files of this court, State ex rel. Banker's Life v. Hendricks, 36 S.W.2d 409. Judge Graves makes short work of those cases that would deprive the insured of what is coming to him. Dressanr v. Maccabees, 278 Mo. 73. (2) An action for damages for money had and received will lie when the insurance company has breached its contract. McKee v. Phoenix Ins. Co., 28 Mo. 383; Tutt v. Mut. Life Ins. Co., 19 Mo.App. 681; Sues v. Insurance Co., 64 Mo.App. 1; Slater v. Supreme Lodge K. & L. of H., 76 Mo.App. 390; Bishop v. Life Insurance, 85 Mo.App. 307; Shadley v. Grand Lodge Brotherhood of Railroad Trainmen, 212 Mo.App. 653, 254 S.W. 363; Hartford Life Co. v. Langsdale, 261 U.S. 476, 67 L.Ed. 754. (3) Acts and conduct of parties to a contract as to its interpretation will prevail if same can be harmonized with the terms. Patterson v. Camden, 25 Mo. 21; Dobbins v. Edmonds, 18 Mo.App. 307; Sedalia Brewing Co. v. Sedalia Water Works Co., 34 Mo.App. 56; Rose v. Eclipse Carbonating Co., 60 Mo.App. 28; Ridge v. Railroad Transfer Co., 56 Mo.App. 133; Richardson v. Railroad Co., 62 Mo.App. 1; Belch v. Miller, 32 Mo.App. 387; Strauss Saddlery Co. v. Kingman & Co., 42 Mo. 208; Carter v. Foster, 145 Mo. 383; Wetmore v. Crouch, 150 Mo. 671; St. Louis v. Laclede Gas Light Co., 155 Mo. 1; Foster Woolen Co. v. Wollman, 87 Mo.App. 658; Ireland v. Spickard, 95 Mo.App. 53; Meyer v. Christopher, 176 Mo. 580; Morton v. Supreme Council of the Royal League, 100 Mo.App. 76; Smith v. Crane and Gerke, 169 Mo.App. 695; Kastor & Sons Adv. Co. v. Elders, 170 Mo.App. 496; Krey v. Husman, 21 Mo.App. 343. (4) It was incumbent on the defendant to allege and prove that assessment 183 was necessary, not excessive and legally made. Earney v. Modern Woodmen of Am., 79 Mo.App. 385; Insurance Co. v. Suese, 49 Mo. 329; Settle v. Insurance Assn., 159 Mo.App. 529; King v. Hartford Life Ins. Co., 133 Mo.App. 620; Craig v. Ins. Co., 136 Mo.App. 10; Johnson v. Hartford Life Ins. Co., 166 Mo.App. 261; Young v. Life Ins. Co., 277 Mo. 700; Barber v. Ins. Co., 316 Mo. 316. (5) That matter more in the knowledge of one party than the other must be pleaded by the party having that knowledge. Owens v. Geigens, 2 Mo. 39; Goodfellow v. Morgan, 32 Mo. 284. (6) A prior judgment is only res adjudicata as to matter actual in judgment and decided. Young v. Life Insurance Co., 277 Mo. 694; Barber v. Insurance Co., 279 Mo. 316; Nevins v. Coleman, 198 Mo.App. 259; Grover & Baker S. Machine Co. v. Radcliffe, 34 L.Ed. 670; Debert v. DeGray, 248 Mo. 661; State to use of Duncker v. Hollingshead, 83 Mo.App. 678; Winham v. Klims, 77 Mo.App. 46; M. K. & T. Railroad Co. v. Am. Surety Co., 291 Mo. 109, 236 S.W. 657; Longlett v. Eisenberg, 10 S.W.2d 316; Pickle Stoner Co. v. Wall, 108 Mo.App. 295; M. K. & T. Railroad Co. v. Am. Surety Co., 291 Mo. 92. And is always subject to interpretation like any other writing. Raney v. Home Ins. Co., 213 Mo.App. 1; 2 Freeman on Judgments (4 Ed.), p. 572. Unless a transaction is absolutely prohibited by law ultra vires cannot arise. McCornick & Co. v. Citizens Bank of Hutchinson, 304 Mo. 270; Bank v. Trust Co., 187 Mo. 526; Ohio Miss. Railroad Co. v. McCarty, 24 L.Ed. 695; Cass County v. Insurance Co., 188 Mo. 1; Adams v. Farmers Mut. Ins. Co., 115 Mo.App. 27.

Cooley, C. Westhues and Fitzsimmons, CC., concur.

OPINION

COOLEY

This is an action at law for damages for alleged breach of a contract of insurance. Plaintiff, claiming that defendant had violated its contract, sued to recover assessments he had paid, with interest thereon. By agreement of the parties the cause was tried to the court without a jury, resulting in a finding and judgment for plaintiff for $ 1550.83, from which judgment defendant appealed. The appeal was granted to the Springfield Court of Appeals.

That court, deeming itself without jurisdiction of the appeal transferred the cause to this court. Defendant in its answer had pleaded as res adjudicata of the matters urged by plaintiff in his petition a judgment of the District Court of Polk County, Iowa, affirmed by the Supreme Court of that state, and that under Section 1 of Article IV of the United States Constitution the courts of this State are bound to give full faith and credit to such Iowa judgment and decision, giving thereto the same force and effect they would have in said sister state. We think, as did the Court of Appeals, that a constitutional question is presented, giving this court appellate jurisdiction. [See Barber v. Hartford Life Ins. Co., 269 Mo. 21, 187 S.W. 867.] That case was reversed by the United States Supreme Court in Hartford Life Ins. Co. v. Barber, 245 U.S. 146, holding that this court had failed to give full faith and credit to a Connecticut decree therein pleaded but such reversal does not affect the question of our appellate jurisdiction. The constitutional question was timely raised and has been kept alive.

Defendant is an Iowa corporation licensed to do business in this State. Its home office is at Des Moines, Iowa. It was organized about 1879 pursuant to the laws of Iowa under the name "Bankers Life Association," as an assessment insurance association or company and until October, 1911, was authorized to and did issue contracts of insurance only on the assessment plan. The certificates issued by the association admitting the recipients to membership in the association and evidencing the contracts of insurance were each for the sum of $ 2000 and were all alike, all certificate holders or members belonging to one class. By the terms of the certificate the application therefor and the articles of incorporation and by-laws of the association were made part of the contract. Upon becoming a member of the association and receiving a certificate the member paid one dollar for each year of his age, which went into a fund designated the guarantee fund. If a member died in good standing this contribution to the guarantee fund was to be paid to his beneficiary, together with the $ 2000 called for by his certificate. If he at any time forfeited his membership and certificate the sum he had paid into the guarantee fund was forfeited and thereupon went into a fund called the reserve fund, later by amendment to the by-laws designated as the surplus fund which, by the by-laws, was "set apart as an emergency fund for the purpose of providing for death losses in excess of one per cent per annum of the membership of the association, and for the further purpose of advances for the payment of death losses when the benefit fund is exhausted." This benefit fund is often referred to in the record as the emergency fund. Said fund was to consist of lapsed or forfeited guarantee deposits, as above indicated, and "the interest accruing from all funds of the association of whatever nature; all gains, discounts, and margins realized on sale of bonds and mortgages and on real estate, taken on foreclosure or otherwise, and all unused surplus arising from the contingent fund and all other sources." The contingent fund was a fund out of which the expenses of...