State ex rel. Northwestern Mut. Life Ins. Co. v. Bland

• Decision Date: 04 September 1945
• Docket Number: 39361
• Citation: 189 S.W.2d 542,354 Mo. 391
• Parties: State of Missouri, at the Relation of the Northwestern Mutual Life Insurance Company, a Corporation, Petitioner, v. Ewing C. Bland, Nick T. Cave and Samuel A. Dew, Judges of the Kansas City Court of Appeals
• Court: Missouri Supreme Court

189 S.W.2d 542

354 Mo. 391

State of Missouri, at the Relation of the Northwestern Mutual Life Insurance Company, a Corporation, Petitioner, v. Ewing C. Bland, Nick T. Cave and Samuel A. Dew, Judges of the Kansas City Court of Appeals

No. 39361

Supreme Court of Missouri

September 4, 1945

Rehearing Denied October 1, 1945.

Original Proceeding in Certiorari.

OPINION OF KANSAS CITY COURT OF APPEALS QUASHED AND JUDGMENT OF TRIAL COURT AFFIRMED.

Opinion of Kansas City Court of Appeals quashed and judgment of trial court affirmed.

E R. Morrison, James E. Nugent and Maurice E Benson for petitioner; G. M. Swanstrom, Wm. E. Jones and Morrison, Nugent, Berger & Johns of counsel.

(1) The assignment agreement is not inconsistent with the policy provisions. Penn Mut. Life Ins. Co. v. Marshall, 49 Ga.App. 287, 175 S.E. 412; Senin v. Metropolitan Life Ins. Co., 34 A.2d 910, 153 Pa.Super. 658; New York Life Ins. Co. v. Statham, 93 U.S. 24, 23 L.Ed. 789; Barutio v. New York Life Ins. Co., 177 S.W.2d 685; New York Life Ins. Co. v. Board of Assessors, 158 F. 462, 216 U.S. 517. (2) Plaintiffs' construction of the policy would produce discrimination contrary to the Missouri statute. Landau v. New York Life Ins. Co., 199 Mo.App. 544, 203 S.W. 1003; Metropolitan Life Ins. Co. v. Lillard, 118 Okla. 196, 248 P. 841; Emig's Admr. v. Mutual Benefit Life Ins. Co., 127 Ky. 588, 106 S.W. 230; Sec. 5840, R.S. 1939; New York Life Ins. Co. v. Scheuer, 198 Ala. 47, 73 So. 409; Security Life Ins. Co. v. Watkins, 189 Ky. 20, 224 S.W. 462. (3) The evidence shows the complete fallacy of the Stauffer case and similar decisions. New York Life Ins. Co. v. Statham, 93 U.S. 24, 23 L.Ed. 789; Bean v. Minn. Mut. Life Ins. Co., 151 Minn. 41, 185 N.W. 946; Life Assurance Primer, Henry Moir, F.F.A., F.I.A., The Spectator Co. (3 Ed.), 1925; Adams v. Mut. Life Ins. Co., 76 Ind.App. 598, 132 N.E. 688; Ruane v. Manhattan Life Ins. Co., 194 Mo.App. 214, 186 S.W. 1188; Palmer v. Mutual Life Ins. Co. of New York, 114 Minn. 1, 130 N.W. 250; Sherman v. Mutual Life Ins. Co., 52 Wash. 523, 102 P. 419; French v. Columbia Life & Trust Co., 80 Ore. 412, 156 P. 1042; State Life Ins. Co. of Indianapolis v. Tyler, 147 Ga. 287, 93 S.E. 415; Goodwin v. Northwestern Mut. Life Ins. Co., 196 Wash. 391, 83 P.2d 231; McWilliams v. Northwestern Mut. Life Ins. Co., 285 Ky. 192, 147 S.W.2d 79; Murray v. Prudential Ins. Co. of America, 18 A.2d 820, 144 Pa.Super. 178; Principles and Practices of Life Insurance, Nathan Willey, The Spectator Co. (6 Ed.), 1892.

Lester McRoberts and White & Hall for respondents.

(1) The judgment of the Court of Appeals is a final judgment. State ex rel. Kennedy v. Remmers, 340 Mo. 126, 101 S.W.2d 70; State ex rel. v. Hostetter, 139 S.W.2d 939; State ex rel. Berkshire v. Ellison, 287 Mo. 654, 230 S.W. 970. (2) Plaintiffs' rights being vested in the final judgment are not affected by the amendment of the Constitution. 12 C.J. 986; Nelson v. Nelson, 282 Mo. 412, 221 S.W. 1066; Chiles v. School District, 103 Mo.App. 240, 77 S.W. 82. (3) Respondents properly construed the policy as a whole authorizing simple interest only on policy loans. Stauffer v. Northwestern Mut. Ins. Co., 184 Wash. 431, 51 P.2d 390; Goodwin v. Northwestern Mut. Ins. Co., 196 Wash. 391, 83 P.2d 291; McWilliams v. Northwestern Mut. Ins. Co., 285 Ky. 192, 147 S.W.2d 79; Murray v. Prudential Ins. Co., 144 Pa. Sup. 178, 18 A.2d 820; Stoner v. Evans, 38 Mo. 461; Poulson v. Collier, 18 Mo.App. 583; Tynes v. Terrill, 19 S.W.2d 505; Williams v. Carroll County, 66 S.W. 955; St. Louis Gas Light Co. v. St. Louis, 11 Mo.App. 65; 33 C.J. 191; Ramer v. Reserve Life Ins. Co., 213 Ill.App. 164; Union Life Ins. Co. v. Caldwell, 58 S.W. 355. (4) Under the policy loan interest was not due annually but when the principal matured. Koehring v. Muemminghoff, 61 Mo. 403; Frye v. Shepherd, 156 S.W. 717; Canton Trust Co. v. Durrett, 9 S.W.2d 925. (5) Respondents fully considered the subject matter of the policy and construed it in accordance with its plain, ordinary meaning. 13 Appleman, Insurance Law, sec. 7381; Henderson v. Mass. Bonding Co., 337 Mo. 1, 84 S.W.2d 922; Farmer v. Railway Mail Assn., 227 Mo.App. 1082, 57 S.W.2d 744; Taylor v. Aetna Life Ins. Co., 236 Mo.App. 435, 154 S.W.2d 421; Cleaver v. Central States Ins. Co., 346 Mo. 548, 142 S.W.2d 474; Brannaker v. Prudential Ins. Co., 236 Mo.App. 239, 150 S.W.2d 498; Kimbrough v. Natl. Protective Assn., 225 Mo.App. 913, 35 S.W.2d 654. (6) The policy loan created a debtor-creditor relationship. Smith v. Mutual Life Ins. Co., 173 Mo. 329, 72 S.W. 935; Fitzsimmons v. American Union Ins. Co., 234 Mo.App. 878, 133 S.W.2d 680; New York Life Ins. Co. v. Curry, 72 S.W. 736, 61 L.R.A. 268; Northwestern Mut. Ins. Co. v. Barker's Ex'x., 44 S.W.2d 292; O'Boyle v. Home Life Ins. Co., 20 F.Supp. 33; Gillen v. New York Life Ins. Co., 178 Mo.App. 89, 161 S.W. 667. (7) The construction of the policy by other policyholders, other insurance companies, the Missouri Insurance Department and the insured constitutes no defense. 1 Couch on Insurance, sec. 192; 13 Appleman, Insurance Law, p. 46; Wolff v. Campbell, 19 S.W. 622, 110 Mo. 114; State ex rel. v. Public Serv. Comm., 269 Mo. 63, 189 S.W. 377; Union Life Ins. Co. v. Caldwell, 58 S.W. 355; Rose v. Franklin Life Ins. Co., 132 S.W. 613, 153 Mo.App. 90; Mutual Benefit Ins. Co. v. First Natl. Bank, 74 S.W. 1066; Ramer v. Reserve Life Ins. Co., 213 Ill.App. 164; State ex rel. Bell v. Phillips Petroleum Co., 160 S.W.2d 764; State v. Davis, 73 S.W.2d 406, 335 Mo. 159. (8) The loan agreement varies the policy loan provisions, and is void. 32 C.J., sec. 250; Welsh v. Chicago Guar. Life Society, 81 Mo.App. 30; Knapp v. John Hancock Ins. Co., 259 S.W. 862, 214 Mo.App. 151; Rice v. Provident Life & Acc. Ins. Co., 231 Mo.App. 560, 102 S.W.2d 147; Tegethoff v. Sidmon, 158 S.W.2d 224; Lingenfelder v. Wainwright Brew. Co., 103 Mo. 578, 15 S.W. 844; McDonald v. Hulse, 16 Mo. 503; Liptold v. Held, 58 Mo. 213. (9) Plaintiffs' construction of the policy does not violate the anti-discrimination statute. O'Maley v. Northwestern Mut. Ins. Co., 95 S.W.2d 852, 231 Mo.App. 39; Landau v. New York Life Ins. Co., 199 Mo.App. 544, 203 S.W. 1003.

OPINION

Douglas, J.

This is a suit on a life insurance policy. The policy was issued in 1919. In 1923 insured obtained a policy loan from the insurance company which was later increased from time to time and never repaid. Interest that was not paid annually when due was added to the principal. In 1938 the policy lapsed for nonpayment of the premium. Thereupon, in accordance with the provisions of the policy, the entire indebtedness was deducted from the cash surrender value and the policy changed to extended term insurance. The extended term insurance expired May 31, 1938. Insured died August 17, 1939. It is conceded that had the company charged only simple interest on the loan instead of compound interest the balance of the policy reserve, after deducting the indebtedness, at the time the policy lapsed would have been sufficient to carry the extended insurance beyond the date of death.

The question for decision is whether the policy loan provision permits the company to charge compound interest under the collateral agreement governing the loan.

Trial was by the court, a jury being waived. Judgment was for the insurance company. Plaintiffs appealed to the Kansas City Court of Appeals which reversed and remanded with directions to enter judgment for plaintiffs. Edwards et al. v. Northwestern Mut. Life Ins. Co., (Mo. App.), 183 S.W.2d 359.

On January 2, 1945 this court granted a writ of certiorari to review the decision of the Kansas City Court of Appeals for conflict with our decisions under the Amendment of 1884 to Article VI of the Constitution of 1875. On March 30 the new Constitution of 1945 went into effect having been adopted by the people on February 27. Section 10 of Article V of the 1945 Constitution provides in part: "The supreme court may finally determine all causes coming to it from any court of appeals, whether by certification, transfer or certiorari, the same as on original appeal."

Plaintiffs argue since the judgment in their favor in the court of appeals became final with the overruling of the motion for rehearing, their rights under it then became fixed and may not be affected by a subsequent change in the law. But the judgment was not then final in sense that it was not subject to review and reversal. Review by certiorari was still available. Timely notice was given and timely application for certiorari was made. See State ex rel. Berkshire v. Ellison, 287 Mo. 654, 230 S.W. 970. Our issuance of the writ to the Kansas City Court of Appeals operated to suspend any right to enforce the judgment until we should complete our review of the case. The general rule is: "The writ of certiorari takes the record out of the custody of the inferior tribunal, leaves nothing there to be prosecuted or enforced by execution, and operates as a stay of execution . . ." 14 C.J.S., "Certiorari", sec. 108. See also State ex rel. Adler v. Ossing, 336 Mo. 386, 79 S.W.2d 255; State ex rel. Berkshire v. Ellison, supra.

The new constitutional power granted this court to determine a case which comes to it by certiorari in the same manner as one which comes on original appeal, that is to determine it on the merits, is one having to do with procedure. It is the rule in this State that a law dealing with procedure applies to all actions falling within its terms whether commenced before or after its enactment unless the contrary intention is expressed. Wentz v. Price Candy Co., 352 Mo. 1 175 S.W.2d 852. While the ruling in the Wentz case applied to a statute, the same ruling is pertinent, in our opinion, to a constitutional...