Tennent v. Union Cent. Life Ins. Co.

Citation133 Mo. App. 345,112 S.W. 754
PartiesTENNENT v. UNION CENT. LIFE INS. CO.
Decision Date18 July 1908
CourtCourt of Appeal of Missouri (US)

Rev. St. 1899, § 7896 (Ann. St. 1906, p. 3750), declaring when suicide shall and shall not be a defense in an action on a life policy, is a part of a Missouri contract of insurance.

2. PLEDGES — CONSTRUCTION OF CONTRACT — WHAT LAW GOVERNS.

The lex loci contractus is a part of a contract for the loan of money and the pledge of property as security therefor.

3. SAME.

A loan from a foreign insurance company was negotiated at its home office in Ohio. The note containing the contract of pledge was dated at Ohio and made payable there, but was signed in Missouri. The acceptance by the company completing the bargain was made at its home office. Held, that the contract was an Ohio contract, and the rights of the parties must be determined by the laws of that state.

4. EVIDENCE—PRESUMPTIONS—LAWS OF OTHER STATES.

In the absence of any proof, the courts of a state having a common-law origin will presume that the law of a sister state having a common-law origin is the same as the law of the forum.

5. COURTS—RULES OF DECISION—PRECEDENTS —COMMON LAW.

Where a decision turns on the construction of the common law of a sister state, the court will follow its own precedents in expounding the rules applicable to a particular transaction.

6. PLEDGES—SALE BY PLEDGEE—VALIDITY.

A contract of pledge, which authorizes the sale of the security without notice, at public or private sale, on default in payment, does not authorize a public sale without public notice, though it dispenses with notice to the pledgor, and a public sale without public notice is invalid.

7. SAME—POSSESSION BY PLEDGEE AFTER INVALID SALE.

Where the pledge remains in the possession of the pledgee after an invalid sale, he continues to hold it as a pledge, subject to the rights of the pledgor as before the sale.

8. SAME—ACTION TO REDEEM—ADEQUACY OF LEGAL REMEDY.

A suit in equity to redeem a pledge after an illegal sale is not maintainable, the remedy at law by an action for conversion being adequate.

9. SAME.

Where, notwithstanding the payment of the debt secured by a pledge or a proper tender thereof, the pledgee continues to withhold the pledge from the pledgor, detinue or replevin, lies to reinstate the pledgor in possession.

10. SAME.

A pledgee, who insists that the indebtedness has been paid by the sale of the pledge, waives further tender of the debt.

11. SAME—ENFORCEMENT OF RIGHT OF ACTION PLEDGED.

While the pledgee of a chose in action has, as a general rule, the exclusive right to enforce it at maturity, and the pledgor cannot maintain the suit alone, it is proper to prosecute the suit in the name of both the pledgor and pledgee, so that all parties may be before the court, and their rights determined by the judgment.

12. ASSIGNMENTS—ACTIONS BY ASSIGNEE.

While at common law the assignee of a chose in action could sue thereon only in the name of his assignor, and while in the courts of equity the assignee, being the real party in interest, could maintain a suit in his own name, the assignee under the Code (Rev. St. 1899, §§ 539, 540 [Ann. St. 1906, pp. 574, 575]), abolishing forms of action, and requiring that the party in interest shall prosecute, may bring an action at law in his own name.

13. PLEDGES—"CONTRACT OF PLEDGE" — NATURE.

A "contract of pledge" is a legal obligation, made by the deposit with the pledgee of personalty as security for a debt or other engagement, with an implied power of sale on default, the pledgor retaining the general ownership, subject to the lien of the pledgee.

14. SAME—ACTION BY PLEDGOR.

The assignor of an obligation or lien as security, if he has an interest in it, may sue to enforce it, but the assignee is a necessary party.

15. SAME.

A beneficiary in a life policy, pledged to the insurer to secure a loan, may, on an invalid sale by the insurer, on default in payment of the loan, and after the death of insured, sue on the policy.

16. HUSBAND AND WIFE—MARRIED WOMEN— ESTOPPEL.

The enabling provisions of the married woman's statute render a married woman sui juris, and the doctrine of estoppel, with respect to persons other than her husband, obtains against her the same as against other persons not under disability.

17. ESTOPPEL—ESTOPPEL IN PAIS—GROUNDS.

The ground on which an estoppel in pais, in the nature of acquiescence by silence, proceeds, is fraud, actual or constructive, on the part of the person sought to be estopped.

18. SAME.

A debtor may lose his right to question the sale of his collateral by acquiescing therein for an unreasonable time, with knowledge of the material facts, especially when during such period the security has greatly increased by value.

19. SAME.

Estoppel by acquiescence in silence is founded on knowledge and assent; and, unless the party against whom the estoppel is invoked knew all the material facts, there is no estoppel.

20. SAME.

Insured and beneficiary in a life policy, being man and wife, pledged it to the insurer to secure a loan. Insured and beneficiary signed the note containing the contract of pledge, which permitted insurer on default to sell, without notice, at public or private sale. The insurer sold the policy on default at public sale without public notice. The beneficiary had no personal information that the policy was to be or was sold, and did nothing to encourage the insurer to believe that she acquiesced in the sale. Held, that she was not estopped to assert her rights in the policy, based on the invalidity of the sale.

21. SAME.

Insured and beneficiary in a life policy, being man and wife, pledged it to the insurer for a loan. Insured and beneficiary signed the note containing the contract of pledge, and designated insured's business address as the post office address of both. Insured received notice that the policy would be sold for default in payment, and after the sale he received notice thereof and of the amount realized, and acquiesced in the sale. Held, that the designation of the business address of insured as the address of both did not make insured his wife's agent to receive notice of the sale for her, so as to charge her with knowledge thereof which would support an estoppel by acquiescence against her to attack the sale.

22. PRINCIPAL AND AGENT—KNOWLEDGE OF AGENT—EFFECT.

Where insured, in a life policy pledged to insurer for a loan, was the agent of the beneficiary, who signed the note with him, to receive notice of a sale of the policy on default, only such knowledge could be imputed to the beneficiary as insured possessed as to a sale.

23. ESTOPPEL—KNOWLEDGE OF FACTS.

Where a pledgee's sale of a life policy pledged for a debt was invalid, either because the sale was without public notice, or because not made in a public place, mere knowledge by the pledgor that the sale was invalid for one reason was insufficient to estop her by acquiescence from attacking the sale.

Appeal from St. Louis Circuit Court; D. D. Fisher, Judge.

Action by May Scott Tennent against the Union Central Life Insurance Company. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

Kinealy & Kinealy, for appellant. James L. Minnis, for respondent.

NORTONI, J.

This suit is on a policy of life insurance. The finding and judgment were for the defendant in the circuit court, and the plaintiff prosecutes an appeal.

The plaintiff and her husband, the insured, jointly borrowed a sum of money from the defendant insurance company, and pledged the policy sued upon as collateral security for the loan. Default having occurred, under the stipulations of the collateral note, the insurance company sold the pledge to satisfy the indebtedness, became the purchaser thereof at the sale, and canceled the policy. Thereafter the insured departed this life, and the plaintiff, after offering to pay the loan for which the policy had theretofore been pledged and sold, instituted this suit to recover the amount of the policy, less the loan, notwithstanding the pledge, alleged sale, and cancellation of the policy. The theory of the plaintiff's case is that the sale and consequent cancellation of the policy by the defendant company was invalid, and therefore the policy remains in the possession of the company as pledgee, subject to her rights as general owner, identically as it did prior to the alleged sale.

The material facts out of which the controversy arises are as follows: During the month of December, 1900, John H. Tennent, Jr., negotiated an insurance to the amount of $4,000 on his life with the defendant company. The policy was made payable to his wife, May Scott Tennent, the present plaintiff. The annual premium was paid by him at the time. By a stipulation to that effect further premiums of the same amount fell due annually on the 15th day of December of each year. The insured paid the premiums which thereafter fell due on the 15th day of December in the years 1901 and 1902, and gave his notes for the premium which fell due December 15, 1903. These notes were outstanding and unpaid on June 25, 1904, at which date the insured and the plaintiff, his beneficiary, negotiated a loan from the defendant company for $155 on the security of the policy. For this amount the insured and the plaintiff executed their joint promissory note, dated Cincinnati, Ohio, June 25, 1904, whereby they jointly and severally promised to pay to the order of the defendant, Union Central Life Insurance Company, $155, at its office in Cincinnati, Ohio, with interest at 8 per cent. per annum, payable annually; the note falling due on or before five years after its date. While this note was actually signed by the parties in the city of St. Louis, Mo., the loan was negotiated with the insurance company at Cincinnati, Ohio, and the note was finally accepted and approved by the defendant...

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