Young v. Hartford Life Insurance

BOND J. Plaintiffs are the children and heirs at law of J. J. Fulkerson (who died June 6,1914) and the beneficiaries of a policy of insurance for three thousand dollars, issued to him on October 7,1892, for the amount of which they asked judgment. The defendant is a- Connecticut corporation, licensed to transact the business of life insurance under the laws of this State, and in defense of its refusal to pay the amount of the policy avers that on January 30, 1914, it duly assessed the assured, J. J. Fulkerson, by computing the amount of said assessment (No. 142) by the method precribed in its contract with him, and adding to this computation a tax thereon, making a total of $61.47; that notice thereof was sent by mail on that date to the address of the assured, and in addition thereto and by the same notice, it demanded of assured the payment of $2.25 as dues for the quater ending May 30, 1914; that the assured failed to pay said dues and said assessment on or before March 1, 1914, or on March fifth or twentieth, thereafter, at which dates defendant was willing to accept payment, and that assured has never at any time paid said assessment and quarterly dues, thereby terminating the policy of insurance or certificate of membership issued to him by defendant. Defendant further avers that the purpose of said assessment was to create a “Mortuary Fund” referred to in the certificate sued on;- that such certificate is payable only out of said Mortuary Fund, and defendant [698] is not otherwise liable for the indemnity provided by said certificate; that. defendant is trustee of said fund for the beneficiaries of said certificate; that a court of competent jurisdiction in the State of Connecticut in a suit brought in that State by persons holding certificates similar to the one in suit, has adjudicated. the rights of the holders of such certificates and that a copy of the judgment and proceedings of said court is attached, as an exhibit, to its answer; “that under the Constitution of the United States, full faith and credit must be given to the judgments and decrees of the courts of Connecticut; that under the terms of said trust as construed and adjudicated by said courts, defendant is without, authority to pay out of said Mortuary Fund the amount of any certificate of membership, where, as in the case of J, J. Fulkerson, the member has failed or refused to pay the assessment levied against him to maintain such fund. Wherefore, defendant shows to the court that it is not liable to plaintiffs in this case, and prays to be dismissed with its costs.” Under a peremptory instruction the jury returned a verdict of $3265; from which defendant duly appealed to this court upon the theory that a Federal question is involved. The decree in the Connecticut court and all the proceedings culminating therein, were admitted in evidence on the trial of the present case without objection. That they are entitled. to full faith and credit in the courts of this State, whenever relevant to any issue before them, is the mandate of the Constitution and has been recently affirmed by the Supreme Court of the United States. [Hartford Ins. Co. v. Barber, 245 U. S. 146.] The points ruled in that case were that it was within the province of the Connecticut court to determine the rule of assessments under the charter of the company and the method by which they can be made. In the case then under review, this court had held that a particular assessment complained of [699] was void for excess in amount and because not made directly by tbe board of directors of tbe company. Tbe Supreme Court of tbe United States beld, however, on a writ of error from tbe judgment of tbis court, that tbe conclusions of tbis court on these points were erroneous and were predicated upon a failure to give full faith and credit to tbe method of assessment prescribed by tbe decree of tbe Connecticut court. Neither of these questions is presented by tbe appeal in the present case. Nor did tbe learned trial court in its consideration of tbe decree of tbe Connecticut court, in' any respect, fail to give it full faith and credit as determinative of tbe rights of tbe parties concluded thereby. The learned trial judge in tbe present case instructed tbe jury to bring in a verdict for tbe plaintiff for tbe amount of tbe policy in suit and interest thereon. His decision in that respect may well consist with full compliance with tbe rule as to assessments and tbe designation of' parties by whom they are to be made in tbe decision and judgment of tbe Connecticut court. For if it be conceded for argument, that tbe portion of tbe assessment (Call 142) intended for tbe benefit of tbe Mortuary Fund of tbe defendant insurance company was in all respects computed and .ascertained as prescribed by tbe Connecticut court, yet that concession does not affirm tbe correctness of tbe action of defendant in adding to such assessment $1.25 as a tax due tbe State of Missouri; for tbe Connecticut court did not rule on that point. Hence tbe propriety of making that addition to tbe assessment presents a question outside tbe scope of tbe adjudication of the Connecticut court. Tbe defendant bad no legal right to increase its assessment for tbe Mortuary Fund, by adding thereto tbe amount of tbis tax and demanding payment of both. No such tax was demandable, under tbe statutes and decisions of tbis State, by any company doing business on tbe assessment plan. [R. S. 1909, sec. 6959, last clause, and Sec. 7099; Masonic Aid Assn. v. Waddill, 138 Mo. 62; Westerman v. Knights of Pythias, [700] 196 Mo. 670; Bankers’ Life Co. v. Chorn, 186 S. W. 681; Mass. Bond & Ins. Co. v. Chorn, 201 S. W. 1122.] These statutes and their construction, meaning and effect are now and were the adjudged law of this State at the time of the issuance of the policy in suit. To the extent that the assessment against the policyholder was augmented by the inclusion therein of $1.25 as a tax due the State of Missouri, it was illegal and invalid. No such exaction was demandable then or theretofore of the policyholder. It is the law of this State that where an insurance company reserves the power in its policies as was done in the present case, to forfeit for non-payment of assessments and dues, it must, in order to avail itself of that drastic provision, allege and prove that the aggregate amount demanded of the policyholders was legal and correct and .that upon due notice he failed to make payment thereof. As was well stated by the Court of Appeals, “a certificate holder in an assessment company or association of whom an excessive assessment is demanded, is not required to tender a sum equivalent to a legal assessment in order to prevent a forfeiture, but may stand on his right to refuse to acknowledge any liability to respond to such illegal assessment. He cannot be put in wrong until he rejects or neglects a lawful demand.” [King v. Ins. Co., 133 Mo. App. 620 et cases cited; Pac. Mut. Ins. Co. v. Guse, 49 Mo. 329.] At the time the mortuary assessment and the Missouri tax were demanded of the policy holder, a demand was also made upon him for the payment of quarterly dues of $2.25,. creating a total demand of $63.72. As this amount is infected with an illegal demand as to the state tax (not to mention an overcharge of ten cents as a collection fee for the payment of a former assessment through a bank) the refusal to pay this aggregate amount was not a ground for forfeiture of the insurance of the father of the plaintiffs. The judgment of the trial court, however, should have been diminished by a deduction therefrom of [701] that portion of the demand which represented simply the assessment for. the Mortnary Fund, and it should have been further limited to the enforcement thereof out of the Mortuary Fund as provided in the contract of insurance. To the extent thus indicated, the judgment of the trial court was erroneous, and unless plaintiffs will consent to a modification thereof as herein directed within ten days, the judgment of the trial court will he reversed and the cause remanded. It is so ordered. All concur, except Woodson, J., not sitting.