Shearlock v. Mutual Life Ins. Co. of New York

• Citation: 182 S.W. 89,193 Mo. App. 430
• Decision Date: 08 January 1916
• Docket Number: No. 1634.,1634.
• Parties: SHEARLOCK v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: Court of Appeal of Missouri (US)

182 S.W. 89

193 Mo. App. 430

SHEARLOCK v. MUTUAL LIFE INS. CO. OF NEW YORK.

No. 1634.

Springfield Court of Appeals. Missouri.

January 8, 1916.

Rehearing Denied January 26, 1916.

Appeal from Circuit Court, Phelps County; L. B. Woodside, Judge.

Action by Ida J. Shearlock against the Mutual Life Insurance Company of New York. From a judgment for defendant, plaintiff appeals. Reversed and remanded, with directions.

Lorts & Breuer, of Rolla, and James J. O'Donohoe, of St. Louis, for appellant. Fordyce, Holliday & White, of St. Louis, and Frank H. Farris, of Rolla, for respondent.

STURGIS, J.

This suit is on a 15-payment policy on the life of plaintiff's husband. But one point is made as to the pleadings, and that will be noted later. The case was submitted to the court on an agreed statement of facts. The facts necessary to be considered are that the policy was issued on July 15, 1886, to plaintiff's husband, and is a Missouri contract under the ruling of Cravens v. Insurance Co., 148 Mo. 583, 50 S. W. 519, 53 L. R. A. 305, 71 Am. St. Rep. 628, that the insured paid the premiums due in quarterly installments to April 15, 1894, 7 ¾ years; that default in payment of premium was then made and none paid thereafter; that the insured died August 18, 1897; that under the laws of this state in force when this policy was issued (section 5983, R. S. 1879) the policy was not forfeited by the nonpayment of premium, but the amount of premium paid on the policy was sufficient to, and did, keep the policy in force for the full amount under the rule of commutation there specified for a term of temporary insurance extending beyond the death of the insured, and by the terms of section 5985 R. S. 1879, the insured having died within the time of temporary insurance, the defendant became bound to pay the amount of said policy, unless there be something shown to defeat such liability.

Only two defenses are made to the defendant's otherwise conceded liability. They are: (1) The statute of limitations of 10 years; and (2) that no proofs of death of the insured were submitted to defendant within 90 days of his death, as required by section 5985, R. S. 1879.

As to the first defense, we have no doubt but that plaintiff's cause of action accrued to her on the death of her husband, plus, at most, a reasonable time within which to make proof of his death. Such is the ruling in Kauz v. Great Council, 13 Mo. App. 341, 344. In 25 Cyc. 1198, the law is stated to be:

"Where plaintiff's right of action depends upon some act to be performed by him preliminary to commencing suit and he is under no restraint or disability in the performance of such act, he cannot suspend indefinitely the running of the statute of limitations by delaying the performance of the preliminary act; if the time for such performance is not definitely fixed, a reasonable time, but that only, will be allowed. The rule that where the right of action depends upon a preliminary step to be taken by plaintiff he cannot indefinitely delay the taking thereof rests upon the principle that plaintiff has it in his power at all times to do the act which fixes his right of action."

See Boyd v. Buchanan, 176 Mo. App. 56, 60, 162 S. W. 1075. It is clear, therefore, that as the insured died in 1897 and this suit was commenced in 1915, the plaintiff's cause of action is barred, unless defendant has waived or estopped itself from availing itself of this defense, of which we will speak later.

It is likewise conceded that no proofs of loss were submitted to the defendant within 90 days of the insured's death, and in fact not until shortly before this suit was commenced, more than 17 years after the death of the insured. It is argued here, in able briefs of counsel both for and against the proposition, that section 5983, R. S. 1879, forbids any forfeiture of the policy for nonpayment of premium in case two annual premiums have been paid, as here, regardless of any proof of loss being made, and that even section 5985 does not contain any words of forfeiture for not furnishing proofs of death, and that the law, which abhors forfeitures, will not supply the same. We think, however, that this question is not necessary for decision here, as the same or stronger grounds are presented for claiming a waiver of this defense than of the statute of limitations. In other words, if defendant waived the defense of the statute of limitations, it also waived this defense of failure to furnish timely proofs of death; and if it did not waive the defense of the statute of limitations, then defendant does not need any other defense.

This brings us to the all-important question of waiver. The facts on which a waiver of both the defenses mentioned is predicated are briefly thus: No suggestion of any claim on this policy was made until by letter, July 5, 1914, the plaintiff informed the defendant that her husband died August 18, 1897, and asked the status of this policy. To this defendant replied, July 11, 1914, that its record showed that the policy on her husband's life was forfeited in accordance with its terms for the nonpayment of the premium due in 1894 and has no value. The plaintiff then wrote to defendant, with the assistance of a friend, stating that her husband had died within 3 years after default in payment of premium, and that the insured had paid about 8 annual premiums on the policy. To this defendant replied that it could not recognize any claim under the policy because the contract was issued in 1886, when policies of the company provided for forfeiture of the same in case the laws of the respective states were not fully complied with; that under the laws of New York when three annual payments had been paid, the policy had a surrender value in paid-up insurance if applied for within six months, but that none had been applied for, and consequently the policy was forfeited in 1894 and has no value; that in case such conditions were not complied with, it was the custom of the company in 1894 to forfeit the policy and carry any profit thereon to the general profits of that year. To this letter the plaintiff replied, calling specific attention to sections 5983 and 5985, R. S. 1879; that under the rule provided by these statutes, the premiums paid were sufficient to purchase temporary insurance, carrying the policy beyond the death of the insured; that under the ruling in Cravens v. Insurance Co., 148 Mo. 583, 50 S. W. 519, 53 L. R. A. 305, 71 Am. St. Rep. 628, the policy was governed by the laws of Missouri and not those of New York; that the custom of the company or any policy provision could not override the laws of Missouri (Price v. Insurance Co., 48 Mo. App. 281); that such being the facts, the company ought to pay this policy. To this letter the company, by its general solicitor, replied:

"Your letter of the 23d inst. to Associate Actuary Hall has been referred to this department for attention. For the purpose of bringing the matter before the company's committee on mortuary claims I inclose a blank form of proof of death, which, if properly executed and returned to me, I will submit to the committee for its action. It must be distinctly understood, however, that the company by furnishing these blanks does not waive any legal defenses that may exist in its favor, the blanks being furnished merely to facilitate the orderly consideration of the claim. The blanks are sent on the assumption that Mr. Shearlock's death occurred in 1896 or 1897."

Proofs of death were duly made on the blanks inclosed and forwarded to the company. It is agreed that plaintiff expended $21.50 in making up such proofs of death. Thereupon the defendant, by its general solicitor wrote a letter, acknowledging receipt of the proofs of death, and stated that the company declined to make any payment; that the policy is null and void, as no claim was made for either term or paid-up insurance within the time required by the Missouri statutes, nor was any claim made within the time required by the New York statutes; that the policy has long ceased to be a contract under both the laws of Missouri and of New York, and the statutes of limitations of both states has run against any action in the matter.

We think there is no doubt that both the defenses here interposed are affirmative and special and in the nature of personal privileges. The law allows them to a defendant if he chooses to insist upon same in the proper way and, at the proper time, but they are not matters going to extinguish the cause of action, but merely to bar the remedy, and, being for defendant's benefit, may be waived by it. Such defenses are generally termed "forfeitures;" that is, the plaintiff forfeits his cause of action (or, as defendant claims, does not bring it into being) by failure to furnish proofs of loss or to bring his suit within a certain time. Forfeitures are not favorites of the law, and especially of the insurance law. In Keys v. Knights & Ladies of Security, 174 Mo. App. 671, 680, 161 S. W. 345, 348, the court said:

"Slight evidence, indicating an intention to waive, will be sufficient to prevent a forfeiture from taking effect and thereby defeating valuable rights. Francis v. A. O. U. W., 150 Mo. App. 347, loc. cit. 356 . A waiver of forfeiture may be inferred when the insurer, after knowledge of the act of forfeiture, requires the assured, by virtue of the requirements in the policy, to do some act or incur some expense."

The leading case on this subject seems, from its frequent citations in so many jurisdictions, to be Titus v. Insurance Co., 81 N. Y. 410, where the court stated the law thus:

"But it may be asserted broadly that if, in any negotiations or transactions with the insured, after knowledge of the forfeiture, it recognizes the continued validity of the policy, or does acts based thereon, or requires the insured, by virtue thereof, to do some act or incur some trouble or expense, the forfeiture is, as matter of...