Smoot v. Bankers Life Association

• Decision Date: 08 June 1909
• Citation: 120 S.W. 719,138 Mo.App. 438
• Parties: JOHN D. SMOOT, Respondent, v. BANKERS LIFE ASSOCIATION, Appellant
• Court: Missouri Court of Appeals

120 S.W. 719

138 Mo.App. 438

JOHN D. SMOOT, Respondent, v. BANKERS LIFE ASSOCIATION, Appellant

Court of Appeals of Missouri, St. Louis

June 8, 1909

April 13, 1909, Argued and Submitted

Appeal from Scotland Circuit Court.--Hon. Chas. J. Stewart, Judge.

REVERSED.

STATEMENT.--The plaintiff in this case commenced his action in the circuit court of Scotland county, alleging in his petition that the defendant, a corporation organized and existing under the laws of Iowa and engaged in this State in carrying on the business of life insurance, had, on the 6th of December 1890, in consideration of the sum of $ 63, in hand paid by plaintiff, then forty-two years old, executed and delivered to him a certificate of membership and policy of insurance on his life whereby it promised for that consideration and for certain sums to be paid thereafter in quarterly payments, to pay the wife of plaintiff a sum of money equal to two per cent of the aggregate amount of the guarantee fund as might appear from the books of the defendant company on the first day of the month on which the death of plaintiff might occur not exceeding $ 2,000, and also the return of the guarantee deposit which was $ 42; that the policy contained the further provision that on the death of the beneficiary prior to that of the member in case none is named, the benefit should then be paid to the legal representatives of the deceased member. The death of the wife of plaintiff is averred and it is averred that on the issue and delivery of the policy plaintiff paid the company the $ 63, and continued to pay the quarterly premiums until the first of May, 1907, amounting to the sum of $ 310, and that on the first of May, 1907, or soon thereafter, the defendant wrongfully and without authority of law repudiated and cancelled the contract and policy of insurance, and that at the time of the cancellation of the contract the two per cent of the guarantee fund of the company as shown by the books of the defendant was sufficient to pay the sum of $ 2,000 and the guarantee deposit of $ 42 upon the policy, and it is averred that plaintiff has fully complied with and performed all the conditions of the policy that by reason of age and health he has been unable to procure reinsurance upon his life; that the action of the defendant in cancelling was wrongful, unlawful and in violation of the contract of insurance made with him and that by reason thereof he is damaged in the sum of $ 2,000.

In its answer the defendant denies that it is conducting the business of life insurance generally, but avers that it is carrying it on upon the assessment plan only, and that as an assessment association it issued to the plaintiff its certificate of membership at the date stated in the petition denies that plaintiff at any time paid quarterly premiums denies that it charged fixed or level premiums, but admits that plaintiff paid all quarterly assessments payable upon his certificate of membership, "except the assessment levied and payable for the month of April, 1907;" denied that it cancelled the membership certificate without authority; admits that two per cent of the guarantee fund of the association is more than sufficient to pay the $ 2,042; denies that plaintiff fully complied or performed the contract and conditions of membership; denies that he made the payment due April, 1907, and which was levied during that month as provided in the certificates of membership, and denies that its cancellation of the certificate was unlawful. Further answering, it sets up that it is incorporated as an assessment life insurance association under the laws of Iowa; that the laws of Iowa define and fix assessment associations as those which provide "for the payment of policy claims, accumulation of a reserve or emergency fund, the expenses of management and prosecution of the business, by payment of assessments or periodical calls, as provided in the contracts, and wherein the liability of the insured to contribute to the payment of policy claims is not limited to a fixed amount." The answer then sets out and pleads certain sections of the Code of Iowa, governing companies doing insurance on the assessment plan, and the articles of association and by-laws of defendant, the former showing organization and incorporation under the laws quoted avers that the articles and by-laws have been filed with and approved by the proper officers of the State of Missouri, and that it is licensed by the Insurance Department of the State of Missouri to do insurance business in this State on the assessment plan; avers that it had never charged or collected any fixed or level premiums, but that it has always provided for payment of death losses by levying assessments for each quarter--such assessments being a percentage upon a guaranty deposit made by each member, and the amount assessed to each member has always been levied and ascertained by multiplying the guaranty deposit by the rate of percentage so levied, and all death losses have been provided for by such quarterly assessment and in no other manner, and that the plaintiff has paid, without objection, to the defendant association sixty-two quarterly assessments (varying in amounts from $ 2.52 to $ 6.30) and extending over the entire period of his membership up to and including Call No. 95, paid in January, 1907. It is averred that on the 25th of March, 1907, at a regular meeting of the board of directors of the defendant, at which all the members were present, an assessment of ten per cent was levied upon the membership of the association, based pro rata upon the guaranty fund, for the purpose of providing funds for the payment of death losses, assessments to be due and payable during the month of April, 1907, to be designated as Call No. 96, and that in pursuance of this assessment, a notice, dated 25th of March, was addressed to plaintiff of this levy. The assessment notice or levy was given in evidence and is as follows:

"This Notice Should Be Sent With The Payment.

"Be Particular To Give Notice Of Change of Address.

"28th Year--Call No. 96.

THE BANKERS LIFE ASSOCIATION.

"42-18554 Des Moines, Iowa, March 25, 1907.

"John D. Smoot,

"Memphis, Mo.

"Sir:--This is to notify you that a levy of ten per cent upon the Guarantee Fund has been made to provide Benefit Fund for death losses, no part of which can be used for expenses.

"Your proportion for the benefit fund is

$ 4.20

"The interest accrued upon your Guarantee Note

to April 1, 1907, for the reserve fund is. . . .

"And one installment on the principal of your

Note for the Guarantee Fund . . . .

"Total

$ 4.20

"When more than one certificate is included herein an equal proportion of the above total is payable on each.

"This sum must be paid to the treasurer of this association at this office, or to a depository bank, during the month of April, 1907, and if not so paid, the Certificate or Certificates of Membership and all payments thereon will become forfeited and void.

"Respectfully,

"THE BANKERS LIFE ASSOCIATION,

"By H. S. NOLLEN, Secretary."

Appended to the notice is this:

"Don't Pigeon-hole This Notice But Pay At Once And Prevent Lapse of Membership.

"1. If paid at a Depository Bank, in April, this notice will be stamped 'Paid, ' by the Banker, and will then be your voucher for the amount. He will at the same time stamp and mail the enclosed postal card to notify us of the credit;

"2. Banks are not authorized to receive money on this call after April 30, 1907. See other side.

"3. Payments to banks not acting as Depositories by appointment of this Association will not be recognized, and if no authorized depository is convenient members must remit full amount to the Home Office.

"4. Remittances by mail should be by Draft or Money Order, payable to the Bankers Life Association but the same shall not constitute payment unless actually received at the Home Office during the month of April, 1907, in compliance with the by-laws and this notice."

On the back of the notice are printed, "Instructions as to Delinquent Payment," and printed in large type is this:

"5. If payment is not made on time, but is sent afterward, the health certificate below must be executed and the sum of fifty cents added to the remittance.

"6. All moneys received after the expiration of the time allowed for payment will be held subject to reinstatement or return at the option of the Association.

"7. This Association reserves the right to require a satisfactory medical examination prior to reinstatement. The examiner to be named by the Association and examination to be paid for by the person applying."

Following these instructions is the health certificate required, as follows: (It was in blank, but when sent on by plaintiff was filled up and we give it as it was filled up and sent to defendant by plaintiff.)

"HEALTH CERTIFICATE.

"I John D. Smoot of Memphis, State of Missouri, having lapsed my membership in The Bankers Life Association of Des Moines, Iowa, and desiring to be reinstated therein, do declare, guarantee and warrant that I am by occupation a lawyer, that I am of sound constitution, good health and temperate habits; that since the date of my application I have sustained no personal injury, and have been afflicted with no disease or sickness, and have been attended by no physician, except as written herein. (Give nature and date) . . . . I have fully recovered from such disability and I have not made an application for insurance to any other company, association or society upon which a policy or certificate has not been issued.

"It is agreed that the above statements are warranties and are the consideration for any reinstatement made hereon which reinstatement shall be void if the above...