Missouri Valley Life Ins. v. Kelso

The opinion of the court was delivered by Valentine, J.: On the 23d of March 1871, the plaintiff in error issued to Joseph A. Cox and Mary Cox a joint life-policy of insurance in the sum of $5,000, loss payable to the survivor, the annual premium on which was $285, payable on or before the 23d day of March in each year. The first and second annual premiums were paid, but the premium which became due March 23d 1873 was not then paid, nor has it since been paid. In the body of the policy is a stipulation in these words: “And the said company promises and agrees, that if default shall be made in the payment of any premium after the second annual payment it will issue a paid-up policy for a sum equal to the full amount of the ordinary annual premiums so paid at the time of such default, provided written application be made therefor, and this policy and all interest therein, be surrendered within three months from the date of such default.” In the body of the policy were several conditions, the 2d, 3d, and 5th being in the words following: “ 2d. If the said premiums shall not be paid at or before 12 o’clock noon, on or before the day above mentioned for the payment thereof, at the office of the company, or to agents when they produce receipts signed by the president or secretary, then and in every such case, the company shall not be liable for the payment of the whole sum insured, but only such parts thereof as is expressly stipulated above, and the remainder shall cease and determine. “ 3d. In case this policy shall cease - and become null and void, all payments thereon shall bé forfeited^to the company.” “ 5th. If this policy is assigned or held as security, written notice shall be given to the company, and due proof of interest produced with proof of death.” A complete copy of the policy is attached to the answer. [483] "The assured, on the 21st of April 1873, returned the policy ' to the company for the purpose of obtaining a paid-up policy. The policy has ever since remained with the company, and no paid-up policy has ever been issued. The policy was not assigned to the plaintiff below, nor ever delivered to him. On the 23d of January 1874, the assured made a written assignment, as follows: “For value received we hereby transfer and assign to David Kelso our claim and account amounting to $570, with the interest thereon, against the Missouri Valley Life Insurance Company. Joseph A. Cox, “ Oswego, Kansas, January 23d, 1874. Mary Cox.” The insurance company now claims that neither the petition below, nor the evidence, shows any cause of action in favor of the plaintiff below and against the insurance company. We however think they both do. The fault of the insurance company was, in failing and refusing to issue a paid-up -policy in accordance with the terms of its agreement. And this failure and refusal we think the petition sufficiently alleges, and the evidence sufficiently proves. A correspondence was had between the company and the insured with regard to the issuing of a paid-up policy prior to any default on the part of the insured, and the correspondence was continued until after such default. The company seemed to be entirely willing to issue a paid-up policy until April 23d, 1873, when its secretary wrote and sent the following letter to the insured, to-wit: Leavenworth, Kansas, April 23d, 1873. J. A. Cox, Oswego, Kansas. Dear Sir: We are in receipt of your favor of the 21st instant, with policy 2870, for commutation. We discontinued the issue of joint policies a year ago, and consequently have no blanks of that form. We would be glad to issue you a paid-up policy of increased amount upon the life of either yourself or Mrs. Cox, if such an arrangement could be effected. Please let us hear from you. Truly yours, J. I. Jones, Secretary. No offer was ever subsequently made by the company to issue [484] a paid-up policy on the joint lives of Cox and his wife. And no paid-up policy of any kind was ever in fact issued. This letter we think proves that the insured made the proper application for a paid-up policy, and it, together with the fact that the company never issued such paid-up policy, proves that the company were in default. And this default we think furnished a sufficient basis for a cause of action. But it is claimed that an action for damages cannot be maintained, but only an" action for the specific performance of the contract. Now we should think that the insured would have his election as to which kind of action he would bring. He might not want a paid-up policy in an insurance company that had already violated its contract with him. He might not consider a policy in such a company as very valuable. But whatever his opinion might be, we would think that he would have the right to sue the company for damages for the breach of the contract, or to sue the company for a specific performance of the contract, at his option. But. probably the most difficult question in an action for damages, such as this, is, what should be considered the measure of the damages? In the present case the paid-up policy should have been issued on the joint lives of Cox and wife, and under it the survivor would have been entitled at the death of the other to the sum of $570. But when such death would occur, or when this sum would become due, of course no one can tell. It might be on the same day on which the policy were issued, or it might not be for fifty years thereafter. Evidently then, while both the parties are living, they should not be entitled to recover in an action for a failure to issue the policy more than one of them would be entitled to recover on such policy at the death of the other. In fact, it would not seem that they would be entitled to recover as much. The use of the money is surely worth something. If one of the parties should die before judgment were rendered, then the amount of the judgment should probably be the amount for which the policy should have been issued, together with interest from the date of such death. If how [485] ever both of the parties were living at the date of the judgment, the judgment should probably be for a sum which would purchase such a policy in a good and responsible life-insurance company. But if no evidence should be introduced —and that is the case — to show what such a policy could be purchased for, then we would think that the judgment should be rendered for nominal damages only. It always devolves upon the plaintiff to prove his casé, and to prove his damages; and where he does not do so he can at most recover only nominal damages. In the present case, the insured are both still living, and there was no evidence introduced to show what their damages were. We would therefore think that it would hardly be fair that the plaintiff should now recover, because of said failure to issue said paid-up policy, more than either of the parties could ever under any circumstances recover under or by virtue of the said paid-up policy if the same had been issued. As we have before stated, the amount for which the policy should have been issued was $570. The court below however rendered judgment in favor of the plaintiff and against the defendant for $614 and costs. And this was done without any evidence or finding showing specifically what the damages were. The case was tried by the court without a jury, and no evidence was introduced showing what the damages were, and the only finding of the court is in the following words, to-wit: “It is the finding of the court therefrom, that the plaintiff’s petition is true, and that he is entitled to the judgment therein demanded.” The defendant moved the court for a new trial upon nearly all the statutory grounds, but the court overruled the motion. In this we think the court erred. And the court also erred in rendering the judgment it did. As the cause of action in this case arose out of contract, and is for damages to be paid in money only, we suppose there can be no queston as to its assignability. The judgment of the court below will be reversed for the errors above mentioned, and cause remanded for a new trial. All the J ustices concurring.