State ex rel. Continental Life Insurance Company of Kansas City v. Allen

• Decision Date: 13 May 1924
• Docket Number: 24894
• Citation: 262 S.W. 43,303 Mo. 608
• Parties: THE STATE ex rel. CONTINENTAL LIFE INSURANCE COMPANY OF KANSAS CITY v. WILLIAM H. ALLEN et al., Judges of St. Louis Court of Appeals
• Court: Missouri Supreme Court

262 S.W. 43

303 Mo. 608

THE STATE ex rel. CONTINENTAL LIFE INSURANCE COMPANY OF KANSAS CITY v. WILLIAM H. ALLEN et al., Judges of St. Louis Court of Appeals

No. 24894

Supreme Court of Missouri

May 13, 1924

Rehearing Denied May 13, 1924.

Writ quashed in part and awarded in part.

Jones Hocker, Sullivan & Angert and Charles G Revelle for relator.

(1) The provision in the policy sued on, to the effect that the policy shall not take effect until delivery thereof during the lifetime of the insured and while he was in good health was valid and binding, and unless complied with, or waived by the proper officers of the defendant, the contract was never in force. Carpenter v. Life Ins. Co., 246 S.W. 623; Cravens v. N. Y. Life Ins. Co., 148 Mo. 599; Kirk v. Woodmen, 169 Mo.App. 449; Ansin v. Insurance Co., 134 N. E. (Mass.) 350; Missouri State Life Ins. Co. v. Salisbury, 279 Mo. 40. (2) Waiver is the intentional relinquishment of a known right, and since there is no proof that the company or Passer knew false answers had been made to the medical examiner, no waiver is shown. 27 R. C. L. 904; 14 R. C. L. 1155; Carpenter v. Life Ins. Co., 246 S.W. 626. (3) In order to bind the defendant, knowledge on the part of the soliciting agent, Passer, must have been procured in connection with his duties while acting within the scope of his employment. Since he had nothing whatever to do with the medical examination of the insured, he had no authority to bind the company on account of knowledge or acquiescence on his part. Hickman v. Green, 123 Mo. 174; Donham v. Hahn, 127 Mo. 446-447; Smoot v. Judd, 184 Mo. 583; Mallen v. Ins. Co., 168 Mo.App. 505. (4) The insured committed a fraud in concealing his condition from the medical examiner, and if plaintiff's evidence is true, Passer was also guilty of fraud in not communicating his knowledge to his principal. Under such circumstances, the knowledge of Passer cannot be imputed to the company. Hickman v. Green, 125 Mo. 176; Traber v. Hicks, 131 Mo. 192; Smith v. Boyd, 162 Mo. 157; Mechanics Bank v. Schaumburg, 38 Mo. 243; Merchants Nat'l Bank v. Lovitt, 114 Mo. 525. (5) The evidence is wholly insufficient to authorize a finding of vexatious refusal to pay, and the respondents failed to follow controlling decisions of the Supreme Court on this question. Non-Royalty Shoe Co. v. Assur. Co., 227 Mo. 399; State ex rel. v. Allen, 243 S.W. 839.

Edward W. Foristel and James J. O'Donohoe for respondents.

(1) The stipulation in the policy sued on, to the effect that the policy shall not take effect until delivery thereof during the lifetime of the insured and while he was in good health, was waived. "An agent who solicits insurance, writing the application, delivering the policy and collecting the premium, has authority to make a waiver or create an estoppel, and even if his authority is limited to the knowledge of the insured, his acts are those of the insurer and bind, though exceeding the limitation." Bush v. Insurance Co., 85 Mo.App. 155; Saeteelle v. Insurance Co., 81 Mo.App. 509; Scarritt Estate v. Casualty Co., 166 Mo.App. 567; Shuler v. Insurance Co., 191 Mo.App. 52; Coolidge v. Insurance Co., 1 Mo.App. 109. (2) A soliciting agent is the alter ego of the company, with power "to alter, waive, rescind or vary the whole or any provision of the policy, notwithstanding the policy provides that 'no contract, alteration or discharge of contract, waiver of forfeiture, nor granting of permits or credits, shall be valid unless the same shall be in writing, signed by the president or vice-president and one other officer of the association.'" James v. Life Association, 148 Mo. 1. (3) The knowledge of Passer, the soliciting agent, is imputable to the company. His knowledge of insured's condition is the company's knowledge. Leonard v. Shale, 266 Mo. 123; Cooper v. Newell, 263 Mo. 190; Henry v. Sneed, 99 Mo. 407; Meier v. Blume, 80 Mo. 179, 183. Upon the same principle a waiver of the condition as to delivery while the insured is in good health is implied while he is not in good health within the knowledge of the agent making the delivery. Manning v. Insurance Co., 176 Mo.App. 678, 688. (4) Relator, with proofs of death in its possession, from the 17th day of November, 1919, held on to the premium until the day of trial, which was in November, 1920, although the insured had died on the 7th day of November, 1919. And by its actions in that behalf it ratified the waiver. The right to rescind a contract on the ground of fraud must be on discovery of the fraud. Relator elected to hold on to the consideration and treat the policy as a valid contract. Wood v. Telephone Co., 223 Mo. 537, 565; Taylor v. Short, 107 Mo. 384; Lierheimer v. Life Ins. Co., 122 Mo.App. 374; Bell v. Ins. Co., 166 Mo.App. 390; Meinershagen v. Taylor, 169 Mo.App. 12. (5) Relator asserts that "if plaintiffs' evidence is true, Passer was also guilty of fraud in not communicating his knowledge to his principal; under such circumstances the knowledge of Passer cannot be imputed to the company." This question was not embraced in the pleadings or suggested at the trial or advanced at the hearing before respondents. It found its way into the case for the first time in the relator's motion for rehearing. The question, even if meritorious, came altogether too late, for questions not raised below will not be reviewed. And the question that the insured and beneficiary, in conjunction with Passer, were guilty of collusion and fraud, was imported into the case for the first time in relator's motion for rehearing, thus depriving plaintiff of any opportunity to refute that ugly and groundless charge. Brunswick v. Ins. Co., 278 Mo. 154; Palmer v. Alexander, 162 Mo. 127; Laclede Nat. Bank v. Richardson, 156 Mo. 270, 285. Neither of those questions was before respondents when they decided the case. Hence this court will not consider them. State ex rel. Continental Ins. Co. v. Reynolds, 289 Mo. 382; State ex rel. Packing Co. v. Reynolds, 287 Mo. 697. (6) Respondents did not fail to follow any controlling decision of this court on the allowance of damages and attorney's fee, for this court has never ruled on the question of damages and attorney's fee on the same or a similar state of facts. And respondents clearly recognized the general principles found in the decisions of this court. And whether respondents made a correct application of said principles on the facts before them is not for the determination of this court. State ex rel. v. Agricultural Ins. Co., 254 S.W. 194, 198. And in view of the evidence and the fact that the law involved had previously been well settled by decisions of this court, respondents committed no error in affirming the judgment on the questions of damages and attorney's fee. R. S. 1919, sec. 6337; Barber v. Ins. Co., 279 Mo. 316, 12 A. L. R. 758; Young v. Ins. Co., 269 Mo. 1; Fay v. Ins. Co., 268 Mo. 373; Keller v. Ins. Co., 198 Mo. 440; Williams v. Ins. Co., 189 Mo. 70.

OPINION

David E. Blair, J.

This is an original proceeding in certiorari whereby relator seeks to have quashed an opinion of respondents as judges of the St. Louis Court of Appeals, affirming the judgment of the trial court in the case of Ira May Brabham, respondent, against relator here, as appellant in that court, on the ground that said opinion is in conflict with certain decisions of this court. To avoid confusion we will refer to Mrs. Brabham as plaintiff, as in the trial court.

It is unnecessary to detail all the facts. The opinion of respondents is reported in 253 S.W. 786, to which reference is made for facts not herein recited. It is sufficient to say that on February 25, 1919, insured, the deceased husband of plaintiff, made application to relator for insurance in the sum of $ 2000. A policy was delivered to him by relator March 4, 1919, and subsequently the premium was paid.

According to the opinion of respondents, the evidence shows that on January 20, 1919, insured, who was a physician, was assaulted and beaten and thereby received severe physical injuries which caused his death on November 7, 1919. He was suffering from such injuries at the time the application was signed by him and when the policy was delivered to him. The evidence of plaintiff tended to show that the condition of insured was apparent to any layman and that Passer, the agent of relator, actually knew all about his condition and the injuries he had received. Respondents had the following to say concerning the effect of the testimony of Antonio Haskell, brother of the plaintiff:

"According to his testimony the agent was fully informed of the prior assault upon the insured and that the latter was then suffering from the result thereof, and with this knowledge told the insured that it would be very necessary for him to have this insurance on account of his physical condition in order to protect his wife and family."

The petition was in usual form, asking for judgment for the face of the policy, together with damages and attorney's fees for vexatious delay. Among other things, the answer set up the affirmative defense that insured, in answer to questions propounded to him in his application for the policy, made a part of the contract of insurance, falsely stated that he had suffered no injury or disease during the last five years prior thereto and was then in good health. The answer then pleaded that he was severely injured on January 20, 1919, and was suffering from the effects thereof at the time the application was made and that he died as the result of such injuries. The answer further alleged that he was not in good health at the time of said application and therefore the policy never became effective. The answer also pleaded a provision in the policy providing that it should not...