Goodson v. National Masonic Accident Ass'n

ELLISON, J. — This is an action to recover a balance alleged to be due on a certificate of life insurance issued by a foreign insurance company on the statute relating to insurance on the assessment plan. The cause was tried by the court without the aid of a jury and judgment rendered for plaintiffs. The facts are as follows: The defendant is a company organized in the State of Iowa but does business in this State as provided by our statute. In June, 1899, it issued to Henry Graves, a real estate and loan agent, a certificate policy of insurance payable to his’ wife, worded as follows: “In consideration of the warranties and agreements in the application for this certificate, which application is indorsed upon the back hereof and made a part hereof, does hereby accept Henry Graves of Maryville, county of Nodaway, State — 347 — of Missouri, occupation real estate and loans, a member of Division B, in Class No. 1, of this association, subject to all the conditions and provisions of the articles of incorporation and by-laws thereof. “y\.nd subject to such conditions and provisions, which are hereby made conditions precedent to the accruing or payment of benefits, such member is entitled to the benefits appertaining to the division and class of which he is a member under article 10 of the articles of incorporation and the classification contained therein, which classification of benefits is a part of the said application, indorsed on the back hereof. “Benefits in case of death by accident are payable to Eunice Graves (wife) if living; if not, to the legal heirs of said member; in all other cases to the member in person.” On the back of the policy was printed article 10, of the articles of incorporation, which showed that the amount of insurance in “class one” for death was $5,000, and it also showed that in “class six,” the amount of insurance was $1,000. The application for the policy showed the same thing. Section 10, of the by-laws of the defendant company provided a number of instances by reason of which, if death resulted, the company would be excused from paying any sum. It then further provided: “Neither shall any benefits accrue on account of any injury or death happening through or while in any degee under the influence of intoxicating liquors or narcotics; nor shall any greater amount be paid to any member or his beneficiary than the amount named in class six, for or on account of any injury received by any member'while hunting or while in any way using or handling firearms/’ After-wards, Graves was killed by the accidental discharge of a pistol Avhile he was handling the same. The defendant company then made claim that as deceased’s death was caused by his handling firearms, the policy, under the by-la-ws just quoted, was reduced from class one for $5,000, to class six for $1,000. — 348 — And so claiming, the company settled with the widow and took her receipt in full of all claim under the policy. These plaintiffs were sureties on the official bond of Graves as public administrator, he having theretofore held that office, and they became liable on such bond for a sum of money much larger than $5,000 which they were compelled to pay. The widow coming to believe that she was entitled to the full sum fixed by class one, as called for in the policy, for a valuable consideration assigned her right and title to the balance of $4,000 to these plaintiffs, who have brought the action as aforesaid. It being conceded that the assured came to his death by the accidental discharge of a pistol while he was handling it, we will first consider whether defendant is liable for the $5,000 due under class one, referred to in the policy, or the $1,000 due under class six, as specified in the foregoing italicised words from the by-laws. We have heretofore ruled that in order that the by-laws of mutual insurance companies shall have sufficient influence to control or change the terms of the policy, they should be made a part of the policy. Elliott v. Ins. Co., 76 Mo. App. 562; Wallace v. Ins. Co., 80 Mo. App. 106. But in this case it will be seen that the policy does make the' by-laws of defendant a part of the policy. Therefore, ordinarily, as is shown by the authorities cited in defendant’s brief, the by-laws would have controlling effect; and we should so hold as applied to this case, but for the following consideration. It is enacted in section 7903, Revised Statutes 1899: “Every policy or certificate hereafter issued by any corporation of this State doing business in conformity with the provisions of this article, and promising a payment to be made upon a contingency of death, sickness, disability or accident, shall specify the exact sum of money which it promises to pay upon each contingency insured against, and . . . the corporation shall be obligated to the beneficiary for such payment at the time and to the amount specified in the policy or — 349 — certificate.” By reference to the terms of the policy above set out, it will be seen that while no sum is specified in the face of the policy, it is there stated that the sum of money promised to be paid is found indorsed on the bach of the policy in article 10 of the articles of incorporation which is made a part of the policy; and this article does specify the sum to be paid for class one, named in the policy, to be $5,000. This, though somewhat indirect, is a specification in the policy of an exact sum of money to be paid on the contingency of death. Eor the indorsement on the bach of the policy, referred to, as this is, in the face thereof, is actually a. part of the policy itself. But this is not the case with the provision for the payment of $1,000. That sum is not specified in the policy. But for a separate and distinct by-law no one would suppose that there was any insurance for the sum of $1,000. There is no intimation in the policy, much less a specification, that a contingency could arise whereby the assured would only be insured in the sum of $1,000. It is true that the policy refers to the by-laws, mahing them a part of the contract, and we have said that in such case the by-laws might have effective control' of the contract. But not so in view of this statute. The sense 'of the statute is that the sum insured must be found in the policy itself. Defendant urges that the only object of the statute was to avoid the uncertainty of amounts and disputes arising thereon, in cases where the sum insured was made to depend upon the collection of assessments and the condition of _ various funds, etc. Doubtless that was an object of the statute, but not the only one. A further object is seen in this case. Here is a foreign insurance company which issues a policy in this State, now claiming that the amount agreed to be paid under its contract, shall only be one-fifth the sum named on account of a by-law in its foreign office which the assured never saw. It is, however, suggested hv defendant that section 1903 does not apply to foreign insurance companies — that by its — 350 — terms it is restricted to local companies. Tbe wording of the statute does not, in terms, say either foreign or local'. It says: “any corporation of this State doing business in conformity to the provisions of this article.” Both hinds of corporations are authorized to do business by that article and we are inclined to the view that the Legislature meant by the words aforesaid to include both foreign and domestic corporations. The foreign corporation entering this State, complying with our laws, subjecting itself to the jurisdiction of our courts and pursuing its business, does become a corporation “of this State” in the sense of the statute. There is no reason why the Legislature should apply the burden of the enactment to domestic companies. It would be a discrimination which can not be supposed, in the absence of clear expression, to have been intended. Though the point thus made by defendant was not brought to the attention of the Supreme Court, yet in the case of McFarland v. Ins. Co., 124 Mo. 221, the statute was applied to a foreign company. We therefore hol'd that Mrs. Graves, at the death of her husband, was entitled to the sum of $5,000 specified in the policy. But defendant contends that though the wife of deceased was entitled to that sum at his death, she, on a settlement with the company, accepted $1,000 in full discharge of the policy and that she executed a paper containing a receipt- for that sum in which she discharged the company from further liability. In support of this branch of defendant’s objection to the judgment, it is said that the money was paid as in full discharge of the policy and that before it could be avoided the amount paid should be- tendered back and the discharge set aside for fraud or mistake; and we are cited to the cases of Och v. Railway, 130 Mo. 27; Homuth v. Railway, 129 Mo. 629; Hancock v. Blackwell, 139 Mo. 440, and Courtney v. Blackwell, 150 Mo. 245. In those cases it is decided that a release of a cause of action for an unliquidated demand, obtained on a consideration, but fraudulently, was a bar to a suit — 351 — on. the cause of action until it was first set aside in equity; and in tlie last case cited, it is held by a majority of the court that the issue of a fraudulent procurement of the release could be first tendered by plaintiff in the reply. But whatever opinion may have formerly prevailed, it is now settled by the statute that a plea of fraudulent, or wrongful procurement of a release can be set up in plaintiff’s reply and that that issue shall be tried by a jury with and as a pcurt of the whole case and a general verdict returned. Sec. 654, R. S. 1899. ' In this case the defendant set up the release in his answer ; and the plaintiffs by reply, while not specifically alleging fraud, stated facts showing that it was wrongfully procured from Mrs. Graves and distinctly alleged that it was without consideration. The issue was therefore properly presented to the trial court and was determinable as any other issue in an action at law. But counsel say that however the issue should be tendered, and whether at law or in equity, the release should be first set aside before plaintiffs could recover. If it is meant that the release should be set aside as a separate issue by separate trial, it is in the face of the statute to which we have just referred. If it is meant that the release must be avoided by the plaintiffs by proper showing at the trial before a judgment could properly be rendered for them, we agree to that, and we think plaintiffs have met that requirement. But defendant insists that when the payment of one thousand dollars was admitted that that was a consideration. We are not of that opinion. We have already seen that under the contract of insurance the defendant company owed Mrs. Graves the fixed sum of five thousand dollars. This was a liquidated sum and could not be discharged by the smaller amount unless there was some consideration for it. To say that the payment of the less sum was the consideration, is to argue in a circle. In determining whether there was a consideration the question is, what was the legal benefit to Mrs. Graves, or else, what was the loss to defendant by the payment of one thousand dollars — 352 — in discharge of five thousand ? She certainly did not gain by it, and defendant did not lose by it, since it was only one-fifth of what it rightfully owed. And so it has many times been held that the payment of a sum less than a liquidated demand is no consideration for a discharge of the whole demand: Winters v. Railway, 73 Mo. App. 173, 194; s. c., 160 Mo. 159 ; Henson v. Stever, 69 Mo. App. 136. And this is true even though the creditor, as in this case, gives a receipt for the whole agreeing therein to receive it for the whole Riley v. Kershaw, 52 Mo. 224. Rut the further insistence is, that Avhen one is tendered a sum of money on condition that it be taken in full of the demand and he accepts the sum tendered he also, ipso facto, accepts the condition. We so ruled in St. Joseph School Board v. Hull, 72 Mo. App. 403. But that rule presupposes there is a dispute or disagreement, in good faith, as to the amount of the demand. The rule has no application where a part of a claim is accepted under the mistaken view that it was the whole claim. , That was this case. Mrs. Graves was shown defendant’s by-law which made her claim only one thousand dollars on account of the manner of her husband’s death. There was no dispute about it. There was no tender coupled with a condition. Defendant said to her that it only owed her one thousand dollars and she, laboring under a mistake, thought defendant was right and took the money. Such state of facts leave no room for the application of the rule stated above. Neither do we think that it was necessary for plaintiffs to tender to defendant the $1;000 received by Mrs. Graves. The role, in that respect, is that a party need never restore that which in any event of the dispute he is entitled to retain. Alexander v. Railway, 54 Mo. App. 66; Winter v. Railway, 13 Mo. App. 173, and same case, 160 Mo. 159. In this case the defendant concedes, and has at all times since Graves’ death, conceded, that it owed $1,000 on account thereof. To show the uselessness of returning it, it meed only be stated — 353 — that if it should be returned, defendant would be compelled to pay it again, on its own concession. As a final objection to the judgment of the trial court, it is claimed that Mrs. Graves could not make the assignment— that her acts in receiving the $1,000 from defendant and assigning her remaining rights in the proceeds of the policy, to these plaintiffs amounted to dividing her cause of action. That she thereby split her cause of action into two demands; a thing which the law, ordinarily, refuses to countenance. We do not think that that rule of law applies to this case. She did not divide the cause of action. She merely received a payment which was a part payment of her legal demand and assigned the balance due to these plaintiffs. It was no more splitting the cause of action than would be the assignment of a note or an account on which payment had been made and on which a balance was due. In further objection under this head, defendant says that the law disapproves of an assignment of a bare right to bring an action, and claims that such was this assignment. We do not think this was such an assignment. This was an assignment of a substantial claim owned by Mrs. Graves, to these plaintiffs for what the law recognizes as a valuable consideration. The amount of that consideration does not concern the defendant. If it was satisfactory to Mrs. Graves no one can complain. The fact that the large sum of money which the deceased owed these plaintiffs for payments made on his account, as his sureties, was not a debt due from her and for which she could not in any way be made liable, did not, as a legal proposition, prevent her, as a free agent, from selling and assigning her property to them; or, if she so chose, from giving it to them. An examination of the whole case has satisfied us that the judgment of the trial court should not be disturbed and it is accordingly affirmed. * All concur.