Western Life Ins. Co. v. White

• Decision Date: 15 December 1959
• Docket Number: No. 7779,7779
• Citation: 331 S.W.2d 19
• Parties: WESTERN LIFE INSURANCE COMPANY, Defendant-Appellant, v. T. H. WHITE, Plaintiff-Respondent.
• Court: Missouri Court of Appeals

Page 19

331 S.W.2d 19

WESTERN LIFE INSURANCE COMPANY, Defendant-Appellant, v. T. H. WHITE, Plaintiff-Respondent.

No. 7779.

Springfield Court of Appeals, Missouri.

Dec. 15, 1959.

R. H. McRoberts, Jr., Bryan, Cave, McPheeters & McRoberts, St. Louis, for appellant.

Ward & Reeves, Caruthersville, for respondent.

McDOWELL, Judge.

In this action plaintiff, as beneficiary, sought to recover $547, balance due on a policy of life insurance issued by defendant on life of plaintiff's mother, Clara White. The cause was tried before the court (jury waived), and resulted in a verdict for plaintiff for $547 plus penalty of ten per cent of amount recovered with interest and $200 attorney fees. Defendant appealed.

The petition alleged that on February 17, 1956, defendant issued its policy of insurance whereby, in consideration of the payment of the premiums thereon, it agreed and undertook to pay plaintiff $1,000 upon the death of Clara White; that on December 10, 1957, while said insurance was in force and effect, the insured died, and, by reason of such death, defendant became indebted to plaintiff in the sum of $1,000. It alleged that all conditions of the policy had been conformed with, both before and after said loss and that demand had been made upon defendant to pay said sum and defendant had neglected to pay.

It alleged that defendant paid the sum of $453 under modified liability clause of the policy and pleaded that the additional sum of $547 is due under the primary liability clause; that defendant's refusal to pay has been vexatious and without reasonable cause and, because of such facts, plaintiff is entitled to damages in the amount of ten per cent of said loss with reasonable attorney fees for the prosecution of the suit.

Defendant filed its amended answer and cross claim. The answer admitted the issuance of the policy sued on, the payment of premium and death of the insured; but denied defendant agreed to pay $1,000 to plaintiff upon death of insured except as conditioned in the policy. It denied vexatious delay, admitted the payment of $453 as alleged in the petition and pleaded that this sum was accepted in full satisfaction of the amount due on the policy and further pleaded that plaintiff is not entitled to any sum under the policy.

In the counterclaim defendant alleged that plaintiff is the son of Clara White; that on February 11, 1956, he made application for the policy sued upon; that in the application he made the following statements respecting the health and condition of insured:

'(a) That the mother, the insured, did not then have and never did have any infirmity of the body.

'(b) That his mother, the insured, had not been sick and had not received any medical treatment during the five (5) years prior to the date of the application, to-wit: February 11, 1956.

'(c) That the mother, the insured, had not been intimately associated with anyone having tuberculosis and that there had not been any tuberculosis in the family.'

That these statements were false and known to be false at time of application, and were a fraud upon the defendant; that had the true conditions respecting insured's health been stated, defendant would not have issued the policy; that the premium paid for said policy was $86.52. It pleaded that because of the fraud the policy of insurance was void ab initio and prayed for recovery of the $453 paid less premium of $86.52.

Plaintiff's reply denied that he accepted the $453 in full satisfaction of the amount due on the policy and affirmatively alleged that the fraud and misrepresentation relied upon in the cross complaint constitute an attempt to contest the policy of insurance, which contract states on its face that it was issued in accordance with the provisions of the stipulated premium law, Sec. 377.320 RSMo 1949, V.A.M.S., which section provides:

'In the event of death after any policy of insurance has been issued by any corporation, company or association, doing business under the provisions of sections 377.200 to 377.460, and after the policy has been in force for the period of one full year, then such policy of insurance shall be incontestable for any cause.'

That said policy of insurance was in force for a period of one full year prior to the death of the insured. It affirmatively denied that part of the answer which states 'plaintiff accepted said sum in full satisfaction of the policy sued on'. It pleaded that no bona fide dispute existed so as to constitute sufficient consideration for the payment of $453; that this payment was a partial payment of the liquidated amount due and defendant had no right to recover for partial payment of liquidated sum due under the policy. It stated that at time of the endorsement of the draft for $453, plaintiff was of the age of 20 years, and incompetent to enter into a contract of release.

The issuance of the policy sued on, death of insured, proof of death, payment of premium and the receipt by plaintiff of $453 payment are admitted.

Plaintiff offered in evidence the policy of insurance sued on, which contained an incontestability clause, to wit:

'This policy, and the application, a copy of which is attached hereto, shall constitute the entire contract between the parties thereto, and shall be incontestable as to each insured after it shall have been in force during the lifetime of each insured for one year from date, except for nonpayment of premiums.'

Plaintiff's oral testimony is that he was at the time of the making of the application for insurance, 18 years of age; that he did not tell defendant's agent his age; that he accepted from defendant's agent defendant's check for $453 and cashed the same the next day; that at the time of receiving the check he was informed by the agent that it was in full settlement of the policy. On the back of the check was the following clause: 'By endorsement below the payee of this check does hereby acknowledge full settlement and satisfaction of claim to which reference is made on face hereof.'

Plaintiff says that at the time he received the check the agent represented that the cause of insured's death was heart trouble.

The evidence shows that $200 is reasonable attorney fees for work performed for plaintiff.

Defendant offered to show that at the time of the application for insurance plaintiff made misrepresentations as to the physical condition and health of insured in said application. This offer was refused by the court because of the incontestable clause in the policy and the provisions of the statute. The application was offered in evidence and contained the following:

'I and the above named applicants have not now, nor have had, any infirmity in mind or body or any defect in hearing or vision or lost any part of the body, except: None

'I and the above named applicants have not been sick nor received medical treatment during the past five years, except: None.

'I and others of the above named applicants have not been intimately associated with any one having tuberculosis nor has there been any tuberculosis in the family history, except: None.'

The application contained a declaration and agreement as follows: 'I understand and agree that I have made each of the foregoing statements as a basis for the issuance of the policy for which this application is made, and that all statements in this application shall in the absence of fraud, be deemed to be representations and not warranties. * * *

'I understand and agree that in the absence of medical examination insurability is predicated on my statements that I am and all the above named applicants are free from all infirmities of mind and body at the date of this application and I further understand and agree that the insurance applied for will not be in force and effect until the delivery of the policy to me and while I and all of the above applicants are free from all injury or sickness. * * *' The application shows insured to be 54 years of age.

The insurance policy contained the following provisions:

'In the event tuberculosis, diabetes, cancer, myocarditis or other organic heart affection is the cause or the contributory cause of death of the insured within two years from the date this policy is issued, the Company will pay one-half the amount otherwise payable under this policy.'

Proof of death, dated December 16, 1957, was duly submitted to the company [plaintiff's exhibit B]. It gave the immediate cause of death as 'diffuse bronchiectasis', and, as a contributory cause 'recurrent infection', and that insured had suffered from degenerative cardiovascular disease and cor pulmonale. It showed that insured had been treated by C. F. Cain, M. D. of Caruthersville, Missouri, and R. S. Smith, M. D. of Portageville, Missouri, during the last five years of her lifetime and showed that insured was 56 years of age at date of application for insurance.

Defendant's documentary evidence was the check for $453, the application for the policy, proof of death, and a copy of the death certificate. It is admitted by plaintiff that defendant delivered to him a check for $453, which it claimed to be in full settlement of plaintiff's claim under the policy.

In addition to the documentary evidence, it offered the depositions of Drs. C. F. Cain of Caruthersville and R. S. Smith of Portageville. This evidence shows that the insured was treated for chest troubles or bronchitis within the last five years of her life; that in 1955, at the suggestion of Dr. Cain, insured went to the sanatorium at Mt. Vernon. The trouble was not tuberculosis. The doctor testified that to his knowledge, while he was treating insured, she had no tuberculosis, diabetes, cancer, or any kind of heart disease. He defined bronchiectasis bronchial pneumonia, and pulmonary edema (referred to in the certificate of death) as contributing causes of death, as being conditions of lung trouble.

Dr. R. S. Smith, who was attending physician for insured at time she went to...