State ex rel. Prudential Ins. Co. of America v. Bland

• Decision Date: 04 September 1945
• Docket Number: 39399
• Citation: 190 S.W.2d 234,354 Mo. 495
• Parties: State of Missouri at the Relation of the Prudential Insurance Company of America, a Corporation, Relator, v. Ewing C. Bland, Nick T. Cave and Samuel A. Dew, Judges of the Kansas City Court of Appeals
• Court: Missouri Supreme Court

190 S.W.2d 234

354 Mo. 495

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

No. 39399

Supreme Court of Missouri

September 4, 1945

Rehearing Denied November 5, 1945.

Original Proceeding in Certiorari.

OPINION OF COURT OF APPEALS QUASHED.

Roy P. Swanson and Henry I. Eager for relator Harry H. Edel and Michaels, Blackmar, Newkirk Eager & Swanson of counsel.

(1) The opinion of the Kansas City Court of Appeals is in conflict with opinions of this court (and also contains errors of law). In holding that the alleged agent's knowledge should be and is imputed to the principal, whereas the circumstances here are such as to raise clearly, and as a matter of law, a presumption that he would not communicate the facts to the principal: and in view of the fact that the fiction of imputed knowledge, if applied here, would clearly work an injustice rather than protect an innocent party. Emery v. New York Life, 316 Mo. 1292, 295 S.W. 571; Leavell v. Blades, 237 Mo. 695, 141 S.W. 893; Kirk v. Metropolitan, 336 Mo. 765, 81 S.W.2d 333; Mutual Life Ins. Co. v. Hilton-Green, 241 U.S. 613; New York Life v. Fletcher, 117 U.S. 519; Traber v. Hicks, 131 Mo. 180; Smith v. Boyd, 162 Mo 146, 62 S.W. 439; Citizens Trust Co. v. Tindle, 194 S.W. 1066. (2) In holding that no collusion was shown nor could any be inferred from the facts in evidence, and that there was "no evidence whatever which tends to establish such a conspiracy or collusion" -- for collusion was established as a matter of law under the opinions of this court. Emery v. New York Life, 316 Mo. 1292, 295 S.W. 571; State ex rel. Metropolitan v. Allen, 310 Mo. 378, 276 S.W. 877; American Ins. Co. v. Neiberger, 74 Mo. 167; Ijams v. Provident Savings, 185 Mo. 466, 84 S.W. 51. (3) In failing and refusing to enforce and give effect to the contract according to its plain, ordinary, meaning and sense, and in ignoring the contract provision, as contained in the application and made a part of both policies, that the insurance would only take effect if the first premium thereon was paid and the policy (or policies) received while the applicant's health was as described in the application. Kirk v. Metropolitan Life, 336 Mo. 765, 81 S.W.2d 333; State ex rel. Prudential v. Shain, 344 Mo. 623, 127 S.W.2d 675; State ex rel. Prudential v. Bland, 185 S.W. 654. (4) In holding that although the consolidated case involved two law suits, each being a separate and distinct cause of action, based on a different insurance policy (dated on a different date, issued pursuant to a different application and concerning which different evidence was introduced at the trial), nevertheless only one general verdict was necessary. Bricker v. Railroad, 83 Mo. 391; Pitts v. Fugate, Admx., 41 Mo. 405; Seibert v. Allen, 61 Mo. 482; Bigelow v. Railroad, 48 Mo. 510; Brownell v. Pacific R. Co., 47 Mo. 239; City of St. Louis to Use of Seibert v. Allen, 53 Mo. 44; Sturgeon v. St. Louis, K.C. & N. Ry. Co., 65 Mo. 569; State ex rel. v. Peterson, 142 Mo. 526; State ex rel. Collins v. Dulle, 45 Mo. 269; Clark's Admx. v. Hannibal & St. Joseph R. Co., 36 Mo. 202; Owens v. Hannibal & St. Joseph R. Co., 58 Mo. 386; Cramer v. Barmon, 193 Mo. 327; State ex rel. Kansas City So. v. Shain, 340 Mo. 1195, 105 S.W.2d 915. (5) Under Article V, Section 10, of the new Missouri Constitution (effective March 29, 1945) this court has the power and the duty to re-examine the law governing this case, irrespective of the question of conflict, and it may and should write its own opinion and decide the case on the merits. Constitution of Missouri, Art. V, Sec. 10.

Cornelius Roach, Daniel L. Brenner and Theodore F. Houx, Jr., for respondents.

(1) Article V, Section 10, of the new Missouri Constitution, has no application to the proceeding in certiorari. The writ of certiorari in the case at bar was granted February 5, 1945. The new Constitution was not submitted to a vote of the people until February 27, 1945, and did not become effective until March 29, 1945. This proceeding in certiorari is governed by the old Constitution and is to be determined by the regular rules applying to such proceedings, that is, to harmonize conflicting opinions of the Kansas City Court of Appeals with the latest controlling decisions of this court. Further, no application for transfer of this case from a Kansas City Court of Appeals to this court was made as provided by Supreme Court Rule 2.061 adopted April 18, 1945. State ex rel. Appel v. Hughes, 173 S.W.2d 45. (2) The opinion of the Kansas City Court of Appeals is not in conflict with any controlling decision of this court in holding that under the facts as disclosed by the opinion, the knowledge of the agent of the relator was imputable to the relator and constituted a waiver of any breach of the sound health provision of the policies. State ex rel. Appel v. Hughes, 173 S.W.2d 45; State ex rel. Ben Hur Life Assn. v. Shain, 119 S.W.2d 236; State ex rel. Ocean Acc. & Guar. Corp. v. Hostetter, 108 S.W.2d 17; State ex rel. Missouri Mut. Assn. v. Allen, 78 S.W.2d 862; State ex rel. Mulcahy v. Hostetter, 139 S.W.2d 939; State ex rel. Elmer v. Hughes, 146 S.W.2d 889; State ex rel. Fletcher v. Blair, 178 S.W.2d 322; State ex rel. W.E. Callahan Const. Co. v. Hughes, 159 S.W.2d 251; State ex rel. John Hancock Mut. Life Ins. Co. v. Hughes, 152 S.W.2d 132. (3) The opinion of the Kansas City Court of Appeals is not in conflict with any controlling decisions of this court in holding that under the facts as disclosed by that opinion, there was no collusion shown nor could any be inferred from the facts in the evidence. The facts disclose that there was no evidence whatsoever to establish fraud, collusion and conspiracy between the plaintiff, the insured and the agent. See cases cited under (2), supra. Emery v. New York Life, 316 Mo. 1292, 295 S.W. 571. (4) The opinion of the Kansas City Court of Appeals is not in conflict with any controlling decision of this court in holding that a single verdict based upon consolidated actions involving liquidated demands is proper or, if erroneous, was not prejudicial to the relator. See cases cited under (2) supra; Sec. 1094, R.S. 1939; Bricker v. Railroad, 83 Mo. 391; Strickland v. Quick, 45 Mo.App. 610.

OPINION

Ellison, J.

Certiorari to the respondent judges of the Kansas City Court of Appeals to review their record and opinion in Carr v. Prudential Ins. Co. of America, 184 S.W.2d 133. We shall not attempt to recount the facts in full, as they will be found in respondents' opinion.

The plaintiff Carr sued the relator Insurance Company in the circuit court on two $ 2000 insurance policies on the life of his deceased wife. He recovered judgment on both policies. The trial court sustained relator's motion for new trial on the ground that the plaintiff husband had not made a case for the jury. The plaintiff appealed and respondents' opinion reversed and remanded the cause with directions to reinstate the verdict and enter judgment thereon for plaintiff. The defenses of the relator Insurance Company, as appears from respondents' opinion, were that the issuance of the policies had been obtained by fraudulent collusion or conspiracy, and that there had been a breach of material conditions precedent in the policies.

There is little, if any, dispute about the facts. The five parties to the transactions involved were: the plaintiff husband, beneficiary in the two policies; his wife Mary, the insured, who was the owner of the business that plaintiff operated; Ted Minkin, an insurance agent or broker who had sold insurance to plaintiff for many years, and who wrote the instant insurance; the relator Insurance Company, the insurer; and relator's examining physician. The first policy was issued on or about Jan. 7 and the second on Jan. 27, both in 1941. About 2-1/2 years earlier, in June, 1938, the wife's right breast had been amputated because of a lump diagnosed as cancer. In May, 1940, about seven months before the insurance was issued, she had been a hospital patient and received X-ray treatments for metastic (roving) cancer. She died of that disease on Jan. 4, 1942, about a year after the policies were issued.

The plaintiff husband knew of her condition; Minkin, the agent or broker, knew of it because plaintiff had told him; and the wife knew -- must have known -- of it. Neither the relator Insurance Company nor its examining physician knew of it unless -- as to the relator, the knowledge of Minkin, the agent or broker, was imputable to it. All these facts the opinion concedes. The theory on which respondents' opinion decided the case was that: (1) the evidence made it a jury question whether Minkin was relator's agent (rather than a mere broker, or independent contractor); (2) if he was its agent relator was bound by his guilty knowledge; (3) notwithstanding the conceded guilty knowledge of the plaintiff, his wife and the agent Minkin severally, the evidence did not show concerted or collusive action between them, such as would prove conspiracy and purge the relator of the constructive knowledge derived through its agent.

On this question of concerted action the undisputed evidence is that the agent, Minkin, took the wife's Application for the first policy. It was in two parts, the first part containing only questions of a general nature, which she answered truthfully. In connection therewith, Minkin signed an "Agent's Statement" containing, among others two questions inquiring: (1) whether the agent was aware of anything about the insured's health history that would render the risk undesirable; (2) whether she appeared in good health. He answered the...