Stephan v. Prairie Life Ins. Co.
| Decision Date | 01 May 1925 |
| Docket Number | 23026 |
| Citation | 203 N.W. 626,113 Neb. 469 |
| Parties | AGNES STEPHAN, APPELLEE, v. PRAIRIE LIFE INSURANCE COMPANY, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: ALEXANDER C TROUP, JUDGE. Affirmed.
AFFIRMED.
Blackburn & King, for appellant.
McKenzie Burton & Harris, contra.
Heard before MORRISSEY, C. J., DAY, THOMPSON and EVANS, JJ., and SHEPHERD, District Judge.
This is an action on a policy of life insurance issued by defendant on the life of one Floyd E. Stephan in the sum of $ 5,000. Plaintiff, Agnes Stephan, mother of the insured, is the person named as beneficiary. The policy was issued March 20, 1918, and contained what is commonly denominated a military and naval clause, which reads as follows:
"If the insured at any time engage in military or naval service in time of war (the militia or national guard not in active service excepted) and death shall occur during such engagement or as a result thereof, the liability hereunder shall be limited to the cash surrender value of the policy at the date of death, unless the insured shall have obtained the company's written consent and paid the extra premium therefor at its established rate."
At the time the policy was issued, insured was a farmer, and, under the federal statute as it then existed, he was exempt from the operation of the selective service act, May 18, 1917, 40 U.S. St. at Large, ch. 15, sec. 4, p. 78. The statute was modified soon thereafter so as to make subject to its terms the class of persons to which insured belonged. In August, 1918, insured was inducted into the military service and sent to a training camp at Fort Dodge, Iowa, where in October, 1918, he died. The cause of insured's death is shown to have been influenza and pneumonia. Proof of death of insured was made in the usual way. The company asserted its exemption from payment of any sum in excess of the cash surrender value of the policy because the insured had entered the military service without having first "obtained the company's written consent and paid the extra premium therefor at its established rate," but offered to return the premiums paid. The beneficiary was a resident of Iowa, and it was agreed between the officers of the company and Frank C. Stephan, the son of the beneficiary, who was acting for her, that the insurance commissioner of Iowa should be consulted as to the liability of the company under the policy. Accordingly Frank C. Stephan wrote to the insurance commissioner of Iowa, and inclosed the policy. He said:
"In behalf of my mother, the beneficiary, I wish you would take this matter up with the company and see what can be done in the matter."
Subsequently the president of defendant company visited Mrs. Stephan's home at Ida Grove, Iowa, and, after a conference with the beneficiary, the following letter was written:
Des Moines, Iowa.
Dear Sir: You have in your office a policy of insurance issued on the life of Floyd E. Stephan by the Prairie Life Insurance Company of Omaha, Nebraska, on which he did not apply for nor obtain a permit to engage in military or naval service. He died while so engaged. If in your opinion the company is not liable for the face of the policy, you may consider this as a full instruction to receive for me the company's check for $ 120.35. Send same to me and deliver the policy to Dr. W. R. McGrew, president of the company.
We understand that this letter was composed by the president of the company, but it bears the genuine signature of the beneficiary. Apparently the insurance commissioner reached the conclusion that the company was not liable for the face of the policy, and accordingly the company's check for $ 120.35 was sent to the beneficiary and the policy delivered to the company. It may be noted that in Mrs. Stephan's letter there is no stipulation or agreement binding the insurance company to do anything or to pay any amount, but it is now claimed by the company that, at the time this letter was written, its president told the beneficiary that, if the commissioner should rule that the company was liable, the company would accept his decision as final and pay the face of the policy. Nearly two years subsequent to the acceptance of the check by the beneficiary and the delivery of the policy to the company, this action was instituted in the district court for Douglas county, Nebraska.
The original petition was filed by James E. Stephan, as guardian of his mother, Agnes Stephan, but the third amended petition, the petition on which the cause was tried, is signed by James E. Stephan, as next friend of Agnes Stephan. In this petition it is alleged that James E. Stephan is the son of plaintiff, the beneficiary; that he brings this action for her and in her behalf, as her next friend; and "that said Agnes Stephan is incompetent and a non-resident of the state of Nebraska; that there has been a guardian appointed for said Agnes Stephan in and for the state of Nebraska." By a subsequent allegation the petition alleged that a guardian had been appointed for the beneficiary in the state of Iowa, and that the beneficiary was incompetent. The petition alleged, also, and at considerable length, negotiations between the insured and an agent of the insurance company which culminated in the issuance of the policy in suit and the payment therefor by the insured, and alleged that, before payment was made, the insured had been informed by defendant's agent that the company so construed and interpreted the clause of its policy pertaining to military service that it did not apply unless the death of the insured was caused by the performance of some duty in the military service, and that it did not apply while insured was in a training camp, or within the borders of the United States. And it alleged the issuance and delivery of the policy to the insured under the interpretation pleaded; the payment of the premium; and the death of insured by influenza at Fort Dodge, Iowa, on October 15, 1918, "while he was in the service of the United States as a soldier." It is alleged that the policy was delivered in the state of Iowa; the premium paid in that state; and that the contract is governed by the laws of Iowa, which are alleged to be:
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