Tutt v. Covenant Mut. Life Ins. Co.

• Decision Date: 08 December 1885
• Citation: 19 Mo.App. 677
• Parties: D. G. TUTT, Respondent, v. COVENANT MUTUAL LIFE INSURANCE COMPANY, Appellant.
• Court: Missouri Court of Appeals

19 Mo.App. 677

D. G. TUTT, Respondent,

v.COVENANT MUTUAL LIFE INSURANCE COMPANY, Appellant.

St. Louis Court of Appeals, Missouri.

Dec. 8, 1885.

APPEAL from the St. Louis Circuit Court, AMOS M. THAYER, Judge.

Affirmed.

O'NEIL RYAN, for the appellant: The cause of forfeiture was a continuing cause of forfeiture, and defendant had the right under the terms of the policy, to forfeit it at the time it did so. Continental Life Ins. Co. v. Robinion, (Ohio), Western Ins. Review, March, 1884, 259; Marston v. Mass. Life Ins. Co., Id. 260. Defendant under the terms of its contract had the right to forfeit the policy for non-payment of the interest on the note. Brooklyn Ins. Co. v. Dutcher, 95 U. S. 269 (Bk. 24, Law Ed. 410); N. Y. Ins. Co. v. Eggleston, 96 U. S. 572 ( Id. 841); Russum v. St. L. Mut. Life Ins. Co., 1 Mo. App. 228; Moser v. Phænix M. L. Ins. Co., 2 Mo. App. 408. The surrender value of the policy is the true measure of damages. Rumbold v. Ins. Co., 7 Mo. App. 71; Lovell v. St. L. Ins. Co., 111 U. S. 274 (Bk. 28, Law Ed. 423).

W. C. MARSHALL, for the respondent: The defendant having wrongfully refused to receive the premiums tendered, the plaintiff was entitled to recover as if he had paid. McKee v. Ins, Co. 28 Mo. 383.

ROMBAUER, J., delivered the opinion of the court.

This is an action to recover damages for breach of a contract of life insurance. Two questions arise upon the record: first, whether the plaintiff is entitled to recover; and, next, whether the damages awarded to him are excessive.

One Pastorius was insured on his life, for the sole use and benefit of the plaintiff, by the defendant company, May 6, 1870. The annual premium required by the policy was $62.65, of which $42.65 was to be paid annually in cash and twenty dollars by note. The policy became by its terms non-forfeitable, after the payment of three annual premiums, and contained this clause:

“2. If the said insured * * * shall fail to pay annually the interest on any unpaid notes or loans which may be owing by said insured to said company, on account of any of the above mentioned annual premiums * * * then and in any such case the company shall not be liable for the sum assured or any part thereof, and this policy shall cease and determine.”

Pastorius paid three of the annual premiums, which made the policy non-forfeitable except for causes stated in clause two. When the fourth annual premium fell due, May 6, 1873, instead of paying the cash amount due, he executed his note at thirty days, bearing ten per cent. interest, for $46.70 to the defendant company, in payment of the $42.65 cash premium, and $4.05 then due, as interest on his outstanding premium note, and the company gave him a receipt for that amount as if paid in cash. After the year 1873 the plaintiff himself paid the cash part of the premium, and notes were given for the note part of the premium, the aggregate amounts paid in cash by Pastorius and the plaintiff amounting to $491.61, exclusive of the note for $46.70, at the date of the cancellation of the policy.

There was evidence tending to show that the plaintiff was advised from time to time of the outstanding of the Pastorius note for $46.70, but no demand was made of him for its payment until May, 1881. At that date the company demanded of the plaintiff payment of this note and accrued interest as a condition precedent to the renewal of the policy for another year, and upon the plaintiff's refusal to pay it, it notified him that it cancelled the policy “for non-payment of premium due May 6, 1881, and default in payment of interest on note given for premium due May 6, 1873, in accordance with conditions of policy.”

The plaintiff was prepared and did offer in due time to pay the cash premium due May 6, 1881, and tendered that amount and note for the aggregate note part of premium prior to this notice of forfeiture.

Upon these facts appearing the defendant demurred to the evidence, and also asked the court to instruct, that if the facts were found as hereinabove stated, the plaintiff was not entitled to recover. The court refused these instructions, and found in favor of the plaintiff for $184.40. Both parties moved for a new trial, but the defendant alone appeals.

We think the court was right in refusing to instruct as requested by the defendant. The right given to the company by the terms of clause two, to forfeit the policy for a failure to pay annually the interest on any unpaid notes or loans owing by the assured to the company on account of annual premiums, refers to the note part of the premium and not to outside loans which the company might see fit to make to the assured. When the company in 1873, took the note of Pastorius for the cash premium, its right to forfeit the policy for non-payment of any cash premium was gone, and it could not revive it by turning the cash premium into a note. Certainly not without the consent of the assured. In fact, the entire transaction bears no other just or...