Smith v. Mutual Benefit Life Insurance Co.
| Decision Date | 20 March 1903 |
| Citation | 72 S.W. 935,173 Mo. 329 |
| Parties | SMITH, Plaintiff in Error, v. MUTUAL BENEFIT LIFE INSURANCE COMPANY |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. C. O. Tichenor, Special Judge.
Reversed and judgment here.
James H. Austin for plaintiff in error.
(1) Under section 5983, Revised Statutes 1879, and section 5856, Revised Statutes 1889, no policy of insurance on life, issued by any life insurance company authorized to do business in this State on or after August 1, 1879, after payment on it of two full annual premiums, could be forfeited by reason of the non-payment of premium thereon, but would be entitled to the benefits prescribed in said sections. The beneficiary of any such policy written after such date is entitled to the benefits of said statute, anything in the policy to the contrary notwithstanding. Clements v. Eq. Life Soc., 140 U.S. 226; Cravens v. Ins. Co., 148 Mo. 583. (2) The policy does not contain a provision for an unconditional cash surrender value, or for an unconditional commutation of the policy to non-forfeitable paid-up insurance. Under its provisions the assured is entitled to these, in the one case only "upon the written application by the owner of this policy and the surrender thereof to the company at Newark within three months from non-payment of premium;" in the other only upon the "surrender of the policy, fully receipted, within the said three months," and these conditions apply whether there be a loan upon a policy or not. Under these provisions of the policy, it is made a condition precedent that the assured in either case shall surrender his policy, fully receipted, within three months from the non-payment of premiums. Such being the case, the policy is not brought within the first two exceptions mentioned in said section 5859, insisted upon by respondent. Houthorne v. Ins. Co., 5 Mo.App. 73; Cravens v. Ins Co., supra. (3) Life insurance policies are liberally construed in favor of the assured so as not to defeat without a plain necessity, his claim to the indemnity, which, in making the insurance, it was his object to secure. If two interpretations may be made, that one should be adopted which is most favorable to the assured. May on Insurance (2 Ed.), sec. 175; Bliss on Life Insurance (2 Ed.), pp. 656, 657. Our statute concerning non-forfeiture of life insurance policies is a remedial statute and should be construed liberally so as to effectuate the benign spirit and purpose of its enactment. Vogler v. Montgomery, 54 Mo. 577; Sedgwick on St. and Const. Law, p. 366.
J. Hugo Grimm for defendant in error; Dodd & Dodd, Charlton T. Lewis, Edward Lynam Short, James L. Blair and Frederick N. Judson of counsel.
The policy meets and more than meets all the requirements of sections 5856, 5857, 5858, Revised Statutes 1889, and as plaintiff has already received $ 200 more by the terms of the policy than these sections secure the assured, she can not recover. Section 5856 must be read in connection with the remaining three sections of the act, and of the entire chapter on life insurance, and the legislative intent derived from the entire act. If this section is susceptible of a construction harmonizing it with the rest of the act, such construction will be adopted even if it requires the omission, addition or transposition of a word or phrase; and this is especially true where such construction avoids injustice and wrong and great public inconvenience. Railroad v. Gray, 126 Mo. 472; St. Louis v. Kane, 110 Mo. 254; State ex rel. v. Slover, 126 Mo. 652; State ex rel. v. Life Ins. Co., 44 Mo. 283; State ex rel. v. King, 44 Mo. 283; Greeley v. Railroad, 123 Mo. 157; State ex rel. v. Emerson, 39 Mo. 80; Dowdy v. Wamble, 110 Mo. 280; Connor v. Railroad, 59 Mo. 285; Bryant v. Russell, 127 Mo. 422; Andrew Co. ex rel. v. Schnell, 135 Mo. 31; Carson-Rand Co. v. Stern, 129 Mo. 381; Sutherland, Stat. Constr., p. 288; U. S. v. Freight Assn., 166 S.W. 326; State ex rel. v. Diveling, 66 Mo. 375; Bank v. Skeen, 101 Mo. 687; Kane v. Railroad, 112 Mo. 34; Bowers v. Smith, 111 Mo. 45; Chouteau v. Railroad, 122 Mo. 375; Cole v. Skrainka, 105 Mo. 303; State ex rel. v. Herman, 70 Mo. 441; Plum v. N. C., 101 Mo. 525; State v. Bennet, 102 Mo. 356; Bingham v. Birmingham, 103 Mo. 345; Deardorf v. Roy, 50 Mo.App. 70; State ex rel. v. Field, 112 Mo. 554; Ross v. City of Kansas, 111 Mo. 18; Bowers v. Smith, 111 Mo. 45; State v. Howard, 119 Mo. 41; Fosburg v. Rogers, 114 Mo. 122. The policy in this case comes within three exceptions of section 5859, and therefore sections 5856, 5857 and 5858 are not applicable to this case.
VALLIANT, J. Brace, Gantt, Burgess, concurring; Robinson, C. J., Marshall and Fox, JJ., dissenting.
In Banc.
Upon a hearing of this cause by the Court in Banc the following opinion by Valliant, J., in Division One is adopted as the opinion of the court.
This is a suit on a policy of life insurance issued by the defendant, which is a New Jersey corporation, on the life of Samuel I. Smith for the benefit of his wife, the plaintiff, for $ 10,000. Smith and wife were residents of this State, the application was made to an agent of defendant in St. Louis, and the policy issued there; it is therefore a Missouri contract. There is no dispute on that point. The policy was issued June 10, 1884. The premiums were to be paid semiannually and were so paid up to and including the one due December 10, 1896, which continued the policy in full force up to June 10, 1897, when default in payment of the premium was made. Samuel I. Smith, the assured, died July 1, 1898. Plaintiff claims that by force of the statute, section 5856, Revised Statutes 1889, the net value of the policy applied, as in the statute required, to temporary insurance, carried it for its full amount to a date beyond that of the death of the assured, and that is unquestionably so, unless the facts relied on by defendant are sufficient to take the case out of the operation of the statute, or unless in estimating the net value of the policy as called for by the statute, the defendant is entitled to deduct the whole amount of indebtedness owing by Smith to it. There is little, if any, dispute as to the facts, and the differences as to the law come down at last to the question of whether or not the defendant is entitled to deduct from the net value of the policy, before investing it in extended temporary insurance, the cash loan made by it to Smith.
Defendant's position is that the non-forfeiture provision of the statute above mentioned, does not apply to this case for three reasons: First, that the policy contains an agreement for an unconditional cash surrender value greater than the net value called for in section 5856; second, that it contains an agreement for the unconditional commutation of the policy for non-forfeitable paid-up insurance of a larger value than that required by section 5857; third, that the laws of New Jersey, the home of the defendant corporation, prescribe, in such case, a surrender value or paid-up or temporary insurance and the policy sued on contains an agreement for such, in conformity to the laws of New Jersey.
A reference to the several sections of our statute on this subject is here necessary. Section 5856, Revised Statutes 1889, provides that no life insurance policy shall, after the payment of two full annual premiums, be forfeited for the non-payment of a further premium thereon, but shall be commuted as follows: "The net value of the policy, when the premium becomes due and is not paid, shall be computed upon the American experience table of mortality, with four and one-half per cent interest per annum, and after deducting from three-fourths of such net value any notes or other indebtedness to the company, given on account of past premium payments on said policy issued to the insured, which indebtedness shall then be cancelled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy, and the term for which such temporary insurance shall be in force shall be determined by the age of the person whose life is insured at the time of default of premium," etc.
Section 5857 provides that in the contingency referred to, in the foregoing section, the policy-holder may, within sixty days, demand a paid-up policy for an amount that the net value as above computed would buy at the usual rates of the company.
Section 5858 provides that when the death of the insured occurs within the period of the extended insurance called for in section 5856 (), the company shall pay the full amount that would have been due on the policy if no default in the payment of the premium had been made, "anything in the policy to the contrary notwithstanding."
Section 5859 provides that the three preceding sections shall not apply, "if the policy shall contain a provision for an unconditional cash surrender value at least equal to the net single premium for the temporary insurance provided hereinbefore, or for the unconditional commutation of the policy to non-forfeitable paid-up insurance for which the net value shall be equal to that provided for in section 5857, or if the legal holder of the policy shall, within sixty days after default of premium, surrender the policy and accept from the company another form of policy, or if the policy shall be surrendered to the company for a consideration adequate in the judgment of the legal holder thereof."
From the beginning, by agreement, the assured borrowed of defendant, thirty per...
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