Robb v. Metropolitan Life Ins. Co.
| Decision Date | 01 November 1943 |
| Docket Number | 38673 |
| Citation | 174 S.W.2d 832,351 Mo. 1037 |
| Parties | Frances Robb, Appellant, v. Metropolitan Life Insurance Company, a Corporation |
| Court | Missouri Supreme Court |
Appeal from the Circuit Court of the City of St. Louis; Hon David J. Murphy, Judge.
Affirmed.
A Lowell Morris and John P. Griffin for appellant.
(1) The policy in suit is dated December 9, 1931, but it is agreed that it was not delivered to the insured or the premium paid until January 9, 1932; therefore, the insured was entitled to a full year's insurance from January 9, 1932, and the defendant breached its contract by demanding payment of a premium on December 9, 1934, and lapsing the policy within thirty-one days thereafter. Halsey v. American Central Life Ins. Co., 258 Mo. 659, 167 S.W. 951; Howard v Aetna Life Ins. Co., 346 Mo. 1068, 145 S.W.2d 113; Hampe v. Metropolitan Life Ins. Co., 21 S.W.2d 926; Johnson v. American Central Life Ins. Co., 212 Mo.App. 290, 249 S.W. 115; Newman v. John Hancock Mutual Life Ins. Co., 7 S.W.2d 1015. (2) After the defendant breached its contract by demanding payment of the premium by the insured on December 9, 1934, and the lapsing of the policy within the days of grace, the insured did not have to tender the premium to keep the policy in force, as the same would have been a futile act, because the defendant would have compelled the insured to apply for reinstatement of the policy according to its terms and undergo a physical examination as to his insurability. Newman v. John Hancock Mutual Life Ins. Co., 216 Mo.App. 180, 257 S.W. 190; Newman v. John Hancock Mutual Life Ins. Co., 7 S.W.2d 1015; Smith v. Means, 170 Mo.App. 158, 155 S.W. 454; Bellis v. Modern Woodmen of America, 49 S.W.2d 1059; Spencer v. Security Benefit Assn., 297 S.W. 989; 3 Couch, sec. 637 A, p. 2058. (3) The insured had a right to treat the contract as breached and his beneficiary has the same right to proceed to treat the contract as in force, and sue for the benefits. Palmer v. Mutual Life Ins. Co., 121 Minn. 395, 141 N.W. 518. (4) The face of the policy is $ 6,000, although it is stated therein that the commuted value of it is $ 5,557, therefore, it is ambiguous to say the least, and the court will have to construe it favorably to the plaintiff, namely, on the basis of $ 6,000. Henderson v. Mass. Bonding Ins. Co., 337 Mo. 1, 84 S.W.2d 922. (5) The loan and interest on the policy was $ 328, and the premium was paid thereon for three years, and the table in the policy shows that the cash or loan value of the policy, after the premiums were paid for three (3) years, at the end of the third year was $ 59 per $ 1,000 and, therefore, the cash or loan value of the policy was $ 354 and not $ 328 as contended by the defendant. Therefore, the defendant had no right to cancel and forfeit the policy until the loan and interest equalled the cash or loan value of the policy, and then only "after one month's notice shall have been mailed by the company to the last known address of the insured, and of the assignee of record, if any." McDonnell v. Hawkeye Life Ins. Co., 64 S.W.2d 748; Crabtree v. Bankers Life Ins. Co., 128 S.W.2d 1089. (6) It is agreed that the annual premium of the policy was $ 215.67, and the insured elected to pay the premium semiannually and the defendant charged him $ 112.20, which would include interest in the sum of $ 8.73. In other words, the insured paid the semiannual premium claimed by the defendant to be due on December 9th of each year, leaving $ 107.83 due to be paid at the end of six months, and the interest on this sum at the legal rate of 6 per cent per annum would be $ 3.23, and the defendant charged him at the rate of 16.4 per cent or $ 8.73, and, therefore, this overcharge of interest is void, and the plaintiff is entitled to credit on the loan for said amount. The defendant is not entitled to any more consideration than any other money lender, and all it has a right to collect for the forbearance of money is interest. Emig v. Mutual Benefit Life Ins. Co., 127 Ky. 588, 106 S.W. 230; New York Life Ins. Co. v. Curry, 115 Ky. 100, 72 S.W. 736. (7) The collection of the above interest is usurious and void, and in determining whether it is usurious, the court will disregard the form and look only to the substance of the transaction. Securities Inv. Co. v. Rottweiler, 7 S.W.2d 484; R. S. 1939, secs. 3229, 3231. (8) By charging usurious interest the lien of defendant on the cash value of the policy became void, and it had no right to enforce it against the reserve, or cash value of the policy. This left the entire reserve intact to be used to carry the policy as extended or term insurance and the defendant had only a personal claim against the insured. R. S. 1939, sec. 3231; Western Storage & Warehouse Co. v. Glasner, 169 Mo. 38, 68 S.W. 917; Securities Inv. Co. v. Rottweiler, 7 S.W.2d 484; Bahl v. Miles, 6 S.W.2d 661. (9) The policy provides that in the event of the default in the payment of the premium after two years, if the insured does not elect to take one of the other options it is carried as extended term insurance.
Fordyce, White, Mayne, Williams & Hartman and R. E. LaDriere for respondent; Harry Cole Bates of counsel.
(1) The amount of insurance is $ 5557 and not $ 6000, as claimed by the plaintiff; therefore, the loan value is $ 328. Kapralian v. Central Life Ins. Co. of Ill., 267 N.W. 598, 276 Mich. 85; State ex rel. Clark v. Becker, 73 S.W.2d 769, 335 Mo. 785; Adams v. Ohio Natl. Life Ins. Co., 105 S.W.2d 64, 231 Mo.App. 881; Columbian Natl. Life Ins. Co. v. Griffith, 73 F.2d 244. (2) There was not sufficient difference between the cash value at the end of three years on $ 6000 of insurance and the cash value on $ 5557, to keep the policy for either of these amounts in force to the date of death of the insured. Heuring v. Central States Life Ins. Co., 120 S.W.2d 176; McQueeny v. Natl. Fidelity Life Ins. Co., 166 S.W.2d 461. (3) There was no forfeiture of the insurance on the theory that the loan and interest exceeded the cash value, but the policy simply lapsed for nonpayment of the premium which was due and there was no value to keep any insurance in force. Vail v. Midland Life Ins. Co., 108 S.W.2d 147; Rick v. John Hancock Mutual Life Ins. Co., 93 S.W.2d 1126, 230 Mo.App. 1084; Gibson v. Kansas City Life Ins. Co., 136 S.W.2d 131; McDonnell v. Hawkeye Life Ins. Co., 64 S.W.2d 748; Crabtree v. Bankers Life Ins. Co., 128 S.W.2d 1089; Dougherty v. Mutual Life Ins. Co. of N. Y., 44 S.W.2d 206; Coons v. Home Life Ins. Co. of New York, 13 N.E.2d 482; Palmer v. Central Life Assur. Society of United States, 258 N.W. 932, 193 Minn. 306; Neighbors v. Union Central Life Ins. Co., 69 S.W.2d 618, 17 Tenn.App. 612; Boring v. Kentucky Home Mut. Life Ins. Co., 7 So.2d 587; Brisbay v. Prudential Ins. Co. of America, 89 S.W.2d 642, 262 Ky. 161; General American Life Ins. Co. v. Brown, 56 P.2d 809; Merz v. Prudential Ins. Co. of America, 57 P.2d 747; Strong v. Hercules Life Ins. Co., 280 N.W. 55, 284 Mich. 573; Smith v. John Hancock Mut. Life Ins. Co., 114 S.W.2d 15 (Ark.), l. c. 17; Penn Mutual Life Ins. Co. v. Fiquett, 155 So. 703, 229 Ala. 203; Toole v. Natl. Life Ins. Co. of United States of America, 14 P.2d 468, 169 Wash. 627; Phillips v. Prudential Ins. Co. of America, 8 N.E.2d 450, 54 Ohio App. 554; Columbus Mut. Life Ins. Co. v. Hines, 129 Ohio St. 472, 196 N.E. 158; Moss v. Aetna Life Ins. Co., 73 F.2d 339; Hawthorne v. Bankers Life Co., 63 F.2d 971; Mayers v. Mass. Mutual Life Ins. Co., 11 F.Supp. 80; Shira v. New York Life Ins. Co., 15 F.Supp. 259; Pacific Mut. Life Ins. Co. v. Davin, 5 F.2d 481. (4) There was no overcharge or unauthorized interest in selling the insured an insurance policy for a premium proportionately larger on a semi-annual than on an annual basis. Sec. 3232, R. S. 1939; Benz v. Powell, 93 S.W.2d 877, 338 Mo. 1032; Goldman v. Indemnity Ins. Co., 72 S.W.2d 866; Kelly v. United Mutual Ins. Assn., 112 S.W.2d 929; Henry v. First Natl. Bank, 115 S.W.2d 121, 232 Mo.App. 1071; 3 Couch, Cyclopedia of Insurance, sec. 623, p. 1996; Worthington v. Charter Oak Ins. Co., 41 Conn. 372, 19 Am. Rep. 495; Noble v. Southern States Ins. Co., 157 Ky. 46, 162 S.W. 528; Serabian v. Metropolitan Life Ins. Co., 17 S.W.2d 646; Prange v. International Life Ins. Co., 46 S.W.2d 523; Mutual Life Ins. Co. v. Hill, 193 U.S. 511; Atkinson v. Metropolitan, 234 Mo.App. 357, 131 S.W.2d 349.
This case was heard and determined by the St. Louis Court of Appeals and transferred here because of the dissent of one of the judges of that court. We determine the case as though the appeal had properly come here in the first instance. [Mo. Const., Art. 6, Amendment of 1884, sec. 6.]
The suit is to recover five monthly payments aggregating $ 500.00, less a loan of $ 328.00, claimed to be due on a policy of insurance issued by respondent [defendant] on the life of Omar G. Robb with appellant [plaintiff] as beneficiary. On a trial by the court without a jury, on an agreed statement of facts, judgment was for defendant and plaintiff appealed.
The policy was dated December 9, 1931, and delivered to insured on January 9, 1932, at which time the first semiannual premium was paid. By the policy respondent promised to pay to insured, if living on December 9, 1968, or to the beneficiary upon due proof of prior death of the insured, the sum of $ 100.00, and thereafter the monthly sum of $ 100.00 until the total sum of $ 6,000.00 should be paid. On the face of the policy it was stated: "The commuted value of all the above payments is $ 5,557.00, herein called the amount of insurance". The policy provided for an annual premium of $ 215.67, but before it was delivered, at request of insured the premiums were changed to a semiannual basis of $...
To continue reading
Request your trial