Dickey v. Covenant Mutual Life Ass'n

ELLISON, J. Defendant in consideration of certain assessment premiums and 'an initiation fee issued to plaintiff a life benefit certificate or policy for $5,000. After making payments of such premiums during a course of several years, plaintiff failed to pay an assessment of $15.10 made against him by defendant and in consequence his certificate, by the terms of the contract between the parties as evidenced by the certificate and by-laws, became forfeited and of no effect, except that there was preserved to plaintiff a right of reinstatement under certain conditions set forth in the contract Plaintiff made application for reinstatement and was refused. He thereupon brought this action praying a recovery of the “present value of said policy,” in the sum of $4,500. Whether defendant rightfully rejected plaintiff’s application for reinstatement is the principal question in the case. Plaintiff had judgment in the circuit court for the aggregate amount of the premiums which he had paid defendant and. interest. Defendant claims such recovery was a departure from the petition and this is also made a point against the judgment. The contract itself in connection with the by-laws which were made a part thereof clearly gave plaintiff the right to reinstatement after forfeiture for nonpayment of an assessment provided he complied with certain prescribed conditions to that end. He was required to make application therefor and to pay the defaulted assessment. The following are the provisions of the by-laws in this respect which are cited by the parties: [375] “Art. II., Sec. 6. Medical Director. — The medical director shall examine all applications for membership or reinstatement, approve or reject the same, appoint local medical examiners and have supervision over them. He shall be at all times subject to the orders issued by the board of directors and the president, and shall perform such other duties in connection with his department .as may be required.” “Art. V., Sec. 5. Beinstatement. — Any member having forfeited his or her membership by failing to pay 'any assessment or advance premium, may apply for reinstatement by furnishing a certificate of good health upon the forms furnished by the association, and paying all arrearages; provided, however, said certificate is not satisfactory to the medical board, or when more than 90 days shall have elapsed, the lapsed member shall furnish a new and full medical examination in such form and manner as the medical director may require, and the determination, of the medical director 'as to whether such member shall be reinstated shall be final.” Plaintiff did make application for reinstatement on a form furnished by the company, accompanied by the defaulted payment. This application showed him to be in good health and did not disclose any change in his condition save as to increasing age. It was refused by defendant on the ground that its medical director had rejected it, and the 'accompanying money for arrearage was returned. Defendant’s contention is that the decision of the medical director was final and conclusive of plaintiff’s right to reinstatement and relies on the by-laws above set out to sustain the contention. Plaintiff contends that the contingency had not .arisen which authorized the medical director to act on his application and that the rejection of the .application being based solely on account of the decision of that officer it was not authorized by the by-laws, was wrongful and amounted to a violation .and an abandonment of the contract by defendant. We are of the opinion that plaintiff’s view is the correct one. [376] Construing together the 'two sections of the by-laws above set out, it is apparent that while it is the duty of the medical director to examine applications for reinstatement, such duty only 'arises in instances where the medical board is not satisfied with the application or certificate, or where more than ninety days have elapsed between the default and the application. In other instances .the application is passed upon by the medical board alone and if satisfactory, on a tona fide examination by such board, the assured’s right to reinstatement is complete. In the present case no contingency or condition existed for the exercise of the power of decision by the medical director1, since ninety days bad not elapsed and the medical board had not made known its dissatisfaction, if it had any. 2. On the question of the right to recover the premiums or assessments previously paid, we decided in the case of Suess v. Ins. Co., 64 Mo. App. 1, that where the insurance company abandoned the contract by wrongfully refusing to receive a premium when it was due and declaring the policy forfeited, the assured had a right to treat the contract as at an end and recover the money he bad paid under it with interest. The principle of that ease governs this, and is properly applied to a case where the company abandons the contract by wrongfully’ refusing reinstatement and declaring the policy forfeited. The right to reinstatement under certain conditions is a right vouchsafed by the contract. Bacon on Ben. Soc., sec. 385; Van Houten v. Pine, 38 N. J. Eq. 72; Nibblack on Ben. Soc., secs. 292, 293; Davidson v. Ins. Co., 39 Minn. 303. And if wrongfully refused the assured has the right to treat the contract as at an end. 3. But it is claimed that plaintiff’s petition does not justify such recovery. It is true, (the petition prays for recovery of $4,500, the present value of the policy. But it contains every allegation necessary to a recovery of the premiums or 'assessment paid, and we hold the mere fact of an improper prayer will not so govern the petition itself as to prevent a [377] judgment which is fully sustained by the matters alleged. Comings v. Railway, 48 Mo. 512; Kneale v. Price, 21 Mo. App. 295; Biddle v. Ramsey, 52 Mo. 153; Crosby v. Bank, 107 Mo. 436; Harper v. Kemble, 65 Mo. App. 514. "We rule the point against defendant. 4. It is suggested that plaintiff’s remedy should have been mandamus to compel his reinstatement. But if our view as to plaintiff’s right to treat 'the contract as at an end is correct, he has a right to maintain this action, whatever may have been his rights had he chosen to continue under the contract. "What we have said disposes of 'the action of the court on ■the instructions. The judgment will therefore be affirmed. All concur.