author: PER CURIAM. BOND, C.

text:
    MARY E. HEAD v. NEW YORK LIFE INSURANCE COMPANY, Appellant.
    In Banc,
    March 28, 1912.
    1. INSURANCE: Contract: Foreign Company: Compliance with Local Statutes. Foreign insurance companies admitted to do business in this State can only contract within the limits prescribed by the statutes of Missouri. Under the license granted by the State they “shall be subjected to all the liabilities', restrictions and duties which are or may be imposed upon corporations of like character organized under the general laws of this State, and shall have no other or. greater powers.” The statutes of this State governing the conduct of business by such foreign companies are declaratory of the public policy of the State, and inhibit the doing of the business of insurance in this State by any corporation contrary to their regulations, by annulling all the stipulations which offend the provisions of the statutes.
    2. -: -: Place of Making: Law Governing: Conflict of Laws. Where the initial and consummate stages of the formation of a contract of insurance were begun and ended in Missouri; the application for insurance made there; the contract delivered there, and the premium there paid upon which the obligation of the contract depended, then the contract is a Missouri contract and must be construed by the laws of this State.
    3. -: -: Statutes Applicable to Non-Residents. The statutes of Missouri regulating the business of insurance were. intended for the benefit and protection of all persons lawfully ' in the State and who obtained contracts of insurance there from a company licensed to make such contracts only in accordance with the laws of this State. These statutes are available for the protection of any such persons, though not citizens of Missouri, so contracting in this State.
    4. -: -: Subsidiary Contracts. All subsidiary contracts made by the parties to ‘ an insurance contract are within the contemplation and purview of the original contract, and are not to be treated as independent agreements. Therefore, where a contract of insurance was originally made in Missouri and governed by its laws, and where the present beneficiary in 1904 entered into a loan agreement whereby she borrowed from the defendant insurance company $2270, and wherein she agreed that the policy in question should be governed and controlled by the laws of the State of New York, such loan agreement does not constitute a new and valid contract which precludes the present beneficiary from any other redress under the policy than she would be entitled to if it had been settled in accordance with the laws of New York.
    5. -: -: Tender or Payment of Part of Unquestioned Sum Due: Accord and Satisfaction. The payment or tender, under a policy of insurance, of a sum less than the full amount of the unquestioned sum due, does not deprive the beneficiary of a right to prosecute a suit for the entire amount due.
    6. -: Payment: Waiver by Beneficiary. The return to a beneficiary of a policy of insurance upon which a loan had been made, with an indorsement upon the policy that it should be taken for a certain amount of paid up insurance, and the retention of the policy for some time by the beneficiary,' does not constitute a waiver of the beneficiary’s right to demand a further sum due her under the policy, when she had no knowledge of her legal rights thereunder, never accepted the sum tendered her, transacted none of the business relating to the insurance, and had done nothing, in fact, except to place the policy, when returned, among the papers of the insured.
    7. -: Forfeiture: Extended Insurance. Under Sec. 6946, E. S. 1909, which provides for the application of a certain portion of the value of a policy to the purchase of extended insurance upon a failure to pay premiums, where a policy on which there had been a default had a sufficient value to extend it for its full amount beyond the death of the insured, and there was no waiver by the beneficiary of rights thereunder; a recovery of the full amount of the policy, less a loan made thereon, was warranted.
    Appeal from Jackson Circuit Court. — Hon. J. H. Blover, Judge.
    Affirmed.

      Lathrop, Morrow, Fox S Moore for appellant.
    (1) The contract of insurance involved in this controversy is a contract under and to be construed and settled in accordance with law of the State of New York. The Missouri statute has nothing to do with the case. London Assurance v. Companhia de Moagens, 167 U. S. 149; Gibson v. Insurance Co., 77 Fed. Rep. 561; Indemnity Co. v.Mfg. Co., 95 Fed. Rep. Ill; Insurance Co. v. Dingley, 100 Fed. Rep. 408; Life Ass’n v. Harris, 94 Tex. 35; Story on Conflict of Laws, sec. 279a; Schwartz v. Insurance Co., 18 Minn. 448; Insurance Co. v. Phillips, 102 Fed. Rep. 9; Insurance Co. v. Babcock, 30 S. E. 273; Tounge v. Society, 30 Fed. Rep. 902; Perry v. “Wright, 41 Atl. 970'; 16 Am. & Eng. Eney. Law, 855; Harrington v. Insurance Co., 58 Pac. 182; Insurance Co. v. Brinkley, 29 L. R. A. 712; Insurance Co. v. Hallock, 72 Am. Dec. 379. (2) The settlement of the policy after the default in 1905 was made in strict accordance with the contract.of insurance as it existed under the policy loan agreement, and the policy loan agreement was not a contract entered into in Missouri or in any way affected by the Missouri statutes relating to insurance. (3) The acceptance of the policy endorsed for paid up insurance, resulting in the cancellation of the loan made in 1904, and the retention of the policy by the respondent for a period of some nine or ten months without complaint, was an accord and satisfaction as to the payment of the loan and the adjustment of the beneficiary’s rights under the policy. 1 Page on Contracts, sec. 50’; O’Bryan v. Kinney, 74 Mo. 125; Snider v. Express Co., 63 Mo. 376. (4) The action of the trial court in refusing to give effect to the contract between the parties, evidenced both by the contract of insurance and the policy loan agreement, was a denial of the rights of appellant as guaranteed by article 1, section 10 of the Constitution of the Hnited States and of the Fourteenth Amendment thereto and of sections 15 and 30 of article. 2 of the Constitution of Missouri. Insurance Co. v. Debolt, 16 How. 416; Los Angeles v. Water Co., 177 U. S. 575; Railroad v. Texas,H77 U. S. 66; McCullough v. Virginia, 172 IJ. S. 109; Havemeyer v. County, 3 Wall. 292 ; Chicago v. Weldon, 9 Wall. 50; Olcott v. Supervisors, 16 Wall. 678; Bank v. Board, 90 Fed. Rep. 7.

      Botsford, Deatherage & Greets on for respondent,
    (1) The question of the situs of contracts in cases where the question of their validity depends upon the Jaws of the State wliere they a.re made does not depend upon the residence of the parties. If two citizens of Iowa and Illinois come into Missouri and buy a parcel of real estate or personal property, or make any other-contract in Missouri, the contract rights of the parties are governed upon the question of the validity of the contract and its construction by the laws of Missouri, the same as if either or both lived in Missouri. Napier v. Insurance Co., 1(30 N. Y. Supp. 1072. (2) The contention of appellant’s counsel that its offer to pay eighty-nine dollars to satisfy a liquidated indebtedness for which the judgment was given below for about $7500, and that that offer of eighty-nine dollars extinguishes plaintiff’s liquidated demands, is not supported by anything in the law. 1 Cyc. 319; Wetmore v. Crouch, 150 Mo. 671. (3) The propositions of this case that the policies in suit were and are Missouri contracts and that the loan contracts of 1904 made pursuant to the provisions of the policy were not separate contracts from the policies, are amply supported. Cravens v. Insurance Co., 148 Mo. 583; Insurance Co. v. Cravens, 178 U. S. 389; Insurance Co. v. Clements, 140 U. S. 226; Whitfield v. Insurance Co., 205 U. S. 489; Smith v. Insurance Co., 173 Mo. 329; Moore v. Insurance- Co., 112 Mo. App1. 696; Insurance Co. v. Russell, 77 Fed. Rep. 94; Insurance Co. v. Twyman, 92 S. W. 335; Capp v. Insurance Co., 94 S. W. 734; Horton v. Insurance Co., 151 Mo. 604; Joyce on Ins., sec. 194; Napier v. Insurance Co., 100 N. Y. Supp. 1072; Bur-ridge v. Insurance Co., 211 Mo. 158-178. Milliken v. Pratt, 125 Mass. 374; Golden v. Ebert, 52 Mo. 260; Richardson v, DeGiverville, 107 Mo. 422; Ruhe v. Buck, 124 Mo. 178; Reed v. Tel. Co., 135 Mo. 661; Elliott v. Life Assn., 163 Mo. 132; Thompson v. Insurance Co., 169 Mo. 12; Park v. Insurance Co., 2G Mo. App. 511; Clothing Co. v. Sharpe, 83 Mo. App. 385; Pietri v. Sequenot, 96 Mo. 258. (4) The claim that the endorsement of said eighty-nine dollars by appellant on said Mary E. Head policy was the same as a paid-up policy issued under section 5857, Revised Statutes 1889; cannot be sustained. Said eighty-nine dollars was not the amount due as a paid-up policy on said Mary E. Head policy, by virtue of said section 5857, but under the evidence adduced by the appellant "was the amount claimed by appellant to be the entire amount due as a paid-up policy under the laws of New York. There was no new policy issued by appellant under section 5857. Appellant cannot claim under both the statutes of New York and Missouri. ' (5) Equally erroneous is appellant’s proposition that the loan contracts of 1904 had the effect of wiping out the policy in each one of these cases. Smith v. Insurance Co., 173 Mo. 329; Burridge v. Insurance Co., 211 Mo. 158; Christensen v. Insurance Co., 152 Mo. App. 551; Bloom v. Insurance Co., 197 Mo. 513; State v. Mer. Co., 184 Mo. 185, (6) In this case, the policies having contained provisions and stipulations for the making of loans and loan contracts, the loans and loan contracts made in these cases in 1904 cannot be considered as separate loans and loan contracts. Burridge v. Insurance Co., 211 Mo. 158; Christensen v. Insurance Co., 152 Mo. App. 551. (7) Respecting the suggestion and argument of appellant’s counsel, that appellant had the right to come into Missouri and make contracts in defiance of law, we submit that the right of contract is not an unlimited, unqualified one, but is always subject to the law in force at the time of making the contract. Wilson v. Drumrite, 216 Mo. 325; Villa v. Bodrigues, 12 Wall. 339; State ex rel. v. Insurance Co.,, 152 Mo. 1; State v. Cantwell, 179 Mo. 245; Holden v. Hardy, 169 U. S. 366; Harness v. Insurance Co., 144 Mo. 413; Havens v. Insurance Co., 123 Mo. 403; Henry v. Evans, 97 Mo. 47.
   PER CURIAM.

— The following opinion by Bond, C., delivered in Division No. 1, is adopted as the opinion of the Court in Banc.

All concur except' Graves and Férriss, JJ., who dissent.

BOND, C.

— Defendant is an insurance company incorporated in New York and duly licensed to do business in the State of Missouri, and for that purpose has established á branch office in Kansas City, Missouri.

Richard G. Head made an application at the Kansas City office of the defendant for two policies of ten thousand dollars each upon his life, payable to his infant son, Richard G. Head, Jr. At the time he made this application, the assured, though born in Missouri, lived on his ranch in Watrous, New Mexico, and was a citizen of that territory. He maintained business interests in Kansas City, Missouri, and was often there attending to the same. He gave the soliciting agent of the defendant a thirty day note, payable to him personally, for an amount equal to the premiums of the two policies. Thereafter the defendant transmitted from, its home office to its branch office in Kansas City a policy made out in accordance with this application, dated April 3, 1894, for a twenty year accumulation period and containing the usual stipulations, which, as far as necessary, will be specially adverted to in the opinion.

After these policies had been received at its Kansas City office, they were handed over to the soliciting agent of defendant, who delivered them to Mr. Deatherage, the attorney of the assured, who placed them in his safe, where they remained until the assured returned at the date of the maturity of the note, and took up the note by drawing a draft upon the commission company in which he was a stockholder, in Kansas City, Missouri, which draft he gave to the soliciting agent in exchange for his note, and the soliciting agent turned it over to the cashier of the defendant in charge of its branch office at Kansas City. At this time the assured received his. policies from Mr. Deatherage, who subsequently arranged with the company that the future premiums payable thereon might be sent by the assured from his place of residence in New Mexico. This was done in most instances, though some of the subsequent premiums were paid at Kansas City.

A few years thereafter the assured was appointed guardian of his infant son, and as such guardian and under proper authority from the court he assigned one of these policies, No. 599590, to his daughter, Mary E. Head. Thereafter, to-wit, April 3, 1904, upon application of Mary E. Head, in which the assured joined, the defendant made a loan of '$2270', on said policy under the terms of a loan agreement, which, as far as .material, will be adverted to in the opinion. The assured defaulted in the payment of premiums on said policies due April 3, 1905, whereupon certain correspondence between himself and the beneficiary, Mary E. Head, and the defendant took place with reference to the issuance of a paid up policy computed as provided by the statutes of New York. This as far as essential will be referred to in the opinion. Thereupon, the policy in suit was returned to Mary E. Head in the summer of 1905, with an endorsement thereon, that it stood as a paid up policy for eighty-nine dollars. Her father, the assured, died April 8, 1906, and she brought this present action the 20th of September, 1906, in two counts. In the first count she prayed judgment for the face value of the policy less the loan indebtedness of $2270 and five per cent interest thereon, claiming that she was entitled to that sum under the laws of Missouri. In the second count she” prayed judgment on the same policy for the sum of $1430, which she alleged was its paid up value computed according to the statutes of Missouri after deducting the amount of the aforesaid note and interest.

The defendant answered, denying the payment of any premiums on the policies after April 3, 1905; admitting- its incorporation and its license to do business under the laws of Missouri, and its establishment of an office in Kansas City, Missouri, for that purpose, and that it issued the two policies on the life of the assured ; but averring that at the time he applied for the same, he was and up until his death continued to be a citizen of 'Watrous, New Mexico; that his application was accepted in consideration of the agreement, statement and warranties therein contained, which became a part of the contract embodied in the policies issued to him and which provided that the contract made by said policies and said application should be construed according to the laws of the State of New York. The answer set out the provisions of the policies as to the payment of premiums, as to the making of loans, and quoted sections of the New York statutes providing the' rule and method for computing the paid up value of policies which had lapsed after being in full force three full years, and it then set out the making of a loan to the beneficiary in the policy in suit, on the 3d of April, 1904, and the deposit of the policy in suit as collateral security for that loan, and the making' of a written loan agreement by the beneficiary, and its provisions, that upon default of payment of the interest on said loan or a premium on the policy, the defendant should have the right to continue the said policy without further notice as paid up insurance in accordance with the section quoted from the statutes of the State of New York; and averring that said policy did lapse for the non-payment of a premium, and that defendant exercised its option and continued it as paid up- insurance for the sum of eighty-nine dollars, and endorsed it to that effect, and returned it to the plaintiff, and tendered that amount before the institution of this suit, and continued a tender therefor in its answer. The defendant made a similar defense to the second .count.

Plaintiff adduced evidence tending to show, that when Mary E. Head, the beneficiary of this policy, received it with the endorsement placed thereon by defendant, she had no knowledge whatever of her rights utoder said policy, either under the statutes of New York or the statutes of Missouri; that she never accepted the amount tendered her by the defendant. Plaintiff adduced evidence tending to show, that at the time defendant undertook to settle the policies, as hereinbefore stated, there was, according to the rule fixed by the statutes of Missouri (R. S. 1889, sec. 5856), a balance due on said policy sufficient to furnish a single premium for temporary insurance for the full face value of the policy for several years after the death of the assured. Plaintiff also adduced evidence tending to show, that, if the policy had been settled up and a paid up policy reissued therefor according to the method and standard fixed by the statutes of Missouri (R. S. 1889, sec. 5857), the new policy would have been for a much larger sum than eighty-nine dollars.

The case was tried by the court without the intervention of a jury. At the request of plaintiff and over the objection and exception of defendant, the court gave the following declarations of law:

‘‘1. The court instructs the court sitting as a jury that on the uncontradicted facts of the ca’se as they appear from the evidence, "the policy of insurance in this action was and is a Missouri contract governable by the laws of Missouri in force at the time of-the issuance of said polic3q and not governable by the laws of the State of New York.
“2. ' The court instructs the court sitting as a jury that on the facts shown in the evidence in this case the plaintiff is entitled to recover and that the issues should be found in favor of the plaintiff.
“3. The court instructs the court sitting as a jury that the policy sued on was kept alive by the laws of Missouri to a time subsequent to the death of Richard Gr. Head, Sr., by the net value of said policy at the time of bis default in 1905, and that plaintiff is entitled to a finding and judgment ag-ainst defendant for tbe amount of said policy, or $10,000' less tbe sum of $2270, with interest thereon at five per cent per annum from April 3, 1905, to July 6, 1906-, and less also the further sum of $425- with interest thereon compounded at six per cent from April 3, 1906, to July 6, 1906, and after so .computing interest on said three last sums and the principal and interest of said sums are added together, then deduct the total amount of said three sums from said $10,000 and then the court sitting as a jury should compute interest at six per cent per annum on such balance of $10,000 so obtained from July 6> 1906, to the day of this finding and judgment, and the sum stated in the finding and judgment should be the amount of the principal and interest of such balance.”

And thereupon rendered judgment in favor of the plaintiff for $7476.21.

After the overruling of bis motion for a new trial and in arrest, defendant appealed to this court, and assigns for error the giving of the foregoing instruction and the refusal of a declaration of law requested by it, that plaintiff was only entitled to recover the tender made in the answer, and that the contract contained in the loan agreement fixed the amount of plaintiff ’s recovery.

OPINION.

I. It is insisted for appellant that the status ot the parties and the transactions between them culminating in the contract of insurance make it the duty of this court to apply to it that interpretation and effect which it would have under the statutes of New York, pleaded in the answer of the defendant. As a basis for this position, defendant alleges, first, that the contract of insurance was not executed at defendant’s business office in Kansas City, Missouri, but was completed at its home office in New York City; second, that even if the contract had been made in Missouri, it would not be available to plaintiff since the assured was not a citizen of that State when the contract was entered into. Unless one or the other of these reasons can be sustained, the contention of appellant resting on them must be denied. It has been repeatedly ruled in this State since the enactment of sections 5856 et seq. of the revision of 1889 (now R'. S’. 1909, sec. 6946) and the Act of 1891 (Laws 1891, p. 75), Revised Statutes 1899, sections 1024 and 1026 (now R. S. 1909, secs. 3037, 3040), that foreign insurance companies admitted to carry on their business in this State, can only contract within the limits prescribed by our statutes, and that in the conduct of the business under the license granted by this State, they “shall be subjected to all the liabilities1, restrictions and duties which are or may be imposed upon corporations of like character organized under the general laws of this State, and shall have no other or greater powers. ’ ’ The effect of these decisions is to write into every insurance contract made by a foreign insurance company, so licensed, in this State all of the provisions of the statutes of this State appurtenant to the making of such contract, and which define and measure the reciprocal rights and duties of the parties thereto. These statutes are declaratory of the public policy of this State, and inhibit the doing of the business of insurance in this State by any corporation contrary to their regulations, by annulling all the stipulations which offend the provisions of the statutes. [Horton v. Ins. Co., 151 Mo. 604; Smith v. Ins. Co., 173 Mo. 329 ; Burridge v. Ins. Co., 211 Mo. 158; Cravens v. Ins. Co., 148 Mo. 583; Ins. Co. v. Cravens, 178 U. S. 389; Whitfield v. Ins. Co., 205 U. S. 489, affirming Keller v. Ins. Co., 58 Mo. App. 557.]

II. The first inquiry is, where was the contract expressed by this policy made? The only thing done by the assured when he applied for this policy was to fill out a blank form of application and deliver it to tlie branch office of defendant at Kansas City, Missouri, and to hand a note or due bill at thirty days, payable to the soliciting agent individually for an amount equal to the premiums to be charged for the policies. This application was sent to New York, and a policy in accordance therewith, based on the agreements therein contained, was returned to defendant’s Kansas City office, and by one of its officers in charge handed over to the soliciting agent, who 'delivered it to the lawyer of the assured (whose office was in the building occupied by defendant).

When the assured returned to Kansas City, at the maturity of his note, he gave a draft on a commission firm.engaged in business there, in which he was a stockholder, for the amount of the note, took up the note, and the draft was turned over to the cashier of the defendant. On this trip the assured received his policy from his attorney. It will be perceived that the defendant did not mail its policy to the assured from its home office in New York, but transferred the policy to its branch office in Kansas City, Missouri, where it was as much in the possession of the defendant as it would have been if it had been retained in New York. The defendant’s representatives at Kansas City were necessarily invested with full power to deal with the policy as general agents of defendants in this State. Under that authority they delivered the policy to the soliciting agent, who turned it over to the attorney for the assured at that place. This act completed the contract, and rendered defendant liable according to the terms and provisions of the policy.

Under the facts of the present record, the right of the assured to the indemnity provided in the policy resulted wholly from the transactions between the parties in this State. Every step essential to the creation of a contract between them was taken in Kansas City, Missouri — there the application was made; there, the note was given; and, there, the policy itself was delivered. The obligation thus created was in all respects a Missouri contract, and must be construed by the laws of this State unless the residence of the assured in New Mexico precludes him from the benefit of the law of the State in which his contract was executed.

III. In its regulatory statutes affecting the business of life insurance within its borders, the State of Missouri designed to illustrate and enforce its policy of wholesome control over the conduct of a calling which might otherwise be carried on in an unjust and oppressive manner. The need of insurance facilities is widespread if not universal. So important is this to! the welfare and protection of the public that advanced thinkers are asking for governmental action in the matter of affording insurance for life and insurance for aged working men of the community, and governmental action in that respect has been taken in England, Germany, Austria and Switzerland. The importance of this subject has deeply impressed the Legislature and tire courts of this State, and is aptly shown by the utterances of this court in Smith v. Ins. Co., supra, p. 340, where Vajxjant, O. J., said: “Our law deems the subject of life insurance one that requires especial protection. . . .” Adding further, “There is a great deal of technical learning in the subject of life insurance and our lawmakers have proceeded on the theory that the average man who takes out a policy on his life is not equal in skill and learning in the technicality of that subject to the experienced officers of the insurance company, and for that reason have written into such contracts some provisions which the parties to them cannot avoid.” These motives have induced the Legislature to enact and make it the duty of the courts to enforce the statutes of this State which prescribe, in some measure, the terms of any contracts and the defense thereto which a corporate insurer of lives can make in the transaction of its business in this State under a license granted and containing’' the limitations prescribed by our laws. There is nothing .in the words of the statutes on these topics which tends to show that they were to be operative only in case of contracts made with citizens of this State, and that they were intended to be inoperative on contracts made here with any other persons properly in this State who are capable of contracting and do enter into contracts in this State. This .contention of counsel for appellant loses sight of the fact that it was the purpose of the Legislature by these restrictions to prevent the making of contracts in this State in violation of its laws and to the injury of the general public. The laws of a State are made for the benefit and protection of all persons whether citizens, inhabitants, transients, visitors or sojourners who are properly within its borders, unless otherwise declared. • The prime object of these statutes was to compel insurance companies to enter into fair and equitable contracts The power to impose these restrictions as a condition for doing business in this State is too well established to be questioned at this late day. [Whitfield v. Ins. Co., 205 U S. 489, affirming Keller v. Ins. Co., 58 Mo. App. 557.] It was not intended that these checks upon insurance contracts should be released if the assured wbo entered into a contract in this State in violation of these statutes was not at the time a citizen of the State. If that intention could be supplied by construction, then it would happen that much of the business of a licensed insurance company would be conducted in this State in utter defiance of the very statutory restrictions imposed as a condition of its entrance. In the case at bar the defendant has a branch office in a great city on the western limits of this State, which is frequented by throngs of visitors and traders from the surrounding States. If the defendant might make contracts in Kansas City with all persons not shown to be citizens of Missouri in vioation of the law under which it was ádmitted to do business in this State, then it would necessarily result that the chief end of the regulating statutes would be thwarted, and defendant would be permitted to use a situs secured in this State for the purpose of making contracts in accordance with its laws, for the wrongful purpose of making contracts in violation of its laws.

We do not think we should inject into these statutes words (not inserted by the Legislature) showing that they are applicable only when citizens of this State are affected. It is not a proper judicial function to import language into the body of a legislative enactment not necessarily required in order to accomplish the purpose of the act. To do this in this case would defeat the objects of the act and open the door to many of the evils which the statute sought to correct. We, therefore, rule that these acts were intended for the benefit and protection of all persons lawfully in Missouri and who obtained contracts of insurance there from a company licensed to make such contracts only in accordance with the laws of this State, and that these statutes are available for the protection of any such persons, though not citizens of Missouri, so contracting in this State. We, • therefore, overrule the contention that the Legislature had an unexpressed purpose to exclude strangers within our gates from the protection of our laws.

IV. It is next insisted by counsel for appellant, that, conceding the contract expressed in the policy in suit is construed and governed by the laws of Missouri in vogue at the time it was formed:, and that it was formed originally in Missouri, yet inasmuch as the present beneficiary in 1904 entered into a loan agreement whereby she borrowed from the defendant $2270, and wherein she agreed that the policy in question should be governed and controlled by the laws of the State of New York, that such loan agreement .constituted a new and valid contract which precluded the present beneficiary from any other redress under the policy in suit than she would be entitled to if it had been settled in accordance with the laws of New York. We cannot concur in this view. It is not an open ques-. tion in this State, that all subsidiary contracts made by the parties to an insurance contract are within the contemplation and purview of the original contract, and are not to be treated as'independent agreements. This being so, they are inefficacious to alter, change or modify the rights and obligations as they existed under the original contract of insurance. [Burridge v. Ins. Co., supra; Smith v. Ins. Co., supra.]

V. It is next contended by counsel for appellant that the eightv-nine dollars which the evidence tended to show was the amount of a paid up policy after deducting from the value of the policy in suit all the indebtedness for loans or premiums, is all plaintiff is entitled to receive, for the reason that she requested, in conjunction with her father, that this policy might be settled out on that basis. We have held that this policy by original legal intendment was a Missouri contract and to be wholly governed, construed and controlled by the laws of this State, and that it was neither modified nor-altered by the written agreement entered into at the time of the loan made in 1904. It necessarily follows that neither the tender nor payment (if it had been received) of the eighty-nine dollars would preclude the beneficiary from enforcing her rights under this contract according to the laws of Missouri if tho eighty-nine dollars was not all of the sum unquestionably due her at the time. In other words, no tender nor payment of any sum less than the full amount of an unquestioned indebtedness .will bar the party from prosecuting a suit for the entire amount due. [Wetmore v. Crouch, 150 Mo. 671, 672, 682, 683; Riley v. Kershan, 52 Mo. 224; Swofford Dry Goods Co. v. Goss, 65 Mo. App. 55.]

Neither can it be urged that the eighty-nine dollars tendered to plaintiff before and by this suit as the full amount of a paid up policy under the New York law, and the fact that the policy was returned to her with that endorsement and retained for some months until after the death of her father, be held to operate as a waiver of any rights to which she was otherwise entitled. Waiver is always a question of intention and rests upon a full knowledge of all the material facts upon the part of the person agaiust whom the defense is interposed. In the case at bar there is no evidence that the present beneficiary had any knowledge or information whatever of her rights under the contract in suit as fixed by the statutes and laws of Missouri; and, hence, there is no evidence that she should have intended to abandon the enforcement of such rights. She never accepted the amount tendered her nor did any act other than to place the policy when it was returned with the aforesaid endorsement among her father’s papers, where it remained until he died, some months afterwards. The evidence clearly shows that the whole business relating, to this insurance had been done by him, and that she had left the matter entirely in his hands without knowledge or inquiry or the ascertainment of her rights until after his death, when she brought the present action to enforce them.

There was ample evidence adduced on the trial tending to show that., under the section of the statutes providing for the application of a certain proportion of its value to the purchase of extended insurance, this policy had a value sufficient to extend it for the full amount beyond the death of the assured. The declaration of law, therefore, given by the learned trial judge predicating plaintiff’s right to recover the full amount of the policy under the statutes of Missouri, after making the proper deductions, was correct; and the judgment herein is affirmed.

Brown, C., concurs.


source: Caselaw Access Project

license: Public Domain

text:
    RICHARD G. HEAD v. NEW YORK LIFE INSURANCE COMPANY, Appellant.
    In Banc,
    March 28, 1912.
    Appeal from Jackson Circuit Court. — Eon. J. E. Slover, Judge.
    Affirmed.

      Lathrop, Morrovj, Fox £ Moore for appellant.

      Botsford, Deatherage £ Greason for respondent.
   PER CURIAM.

— The following opinion by Bond,, G., in Division No. 1, is adopted as the opinion of the Court in Banc.

All the judges concur except Graves, and Ferriss, JJ., who dissent.

BOND, C.

— The facts in this case are substantially the same as the facts in Head v. New York Life Insurance Company, ante, p. 403, with this exception, that the plaintiff in this case was the direct beneficiary under the policy as it was originally drawn.

For the reasons given in extenso in the former case, the judgment in this case is affirmed.

Brown, G., concurs.


author: KENNISH, J.

text:
    SUSAN E. CAMPBELL et al. v. JOHN A. BOYERS et al., Appellants.
    In Banc,
    March 28, 1912.
    1. APPEAL: Affidavit. Recitals in the abstract of the record that in due time an affidavit for an appeal was filed, praying an appeal to the Supreme Court, which appeal was granted and allowed, are sufficient to entitle appellant to a hearing of his appeal in the Supreme Court, although neither the affidavit itself nor more of its substance is set out in the abstract.
    2. DEPARTURE: Amended Petition: Original Abandoned: Matter of Exception. When an amended petition is filed by leave of court, the original petition is abandoned and thereafter can be made a part of the record only as a matter of exception, and if not made a part of the record by exception only the amended petition is before the court on appeal, and the question of whether the amended petition was a departure from the original cause of action is not for consideration.
    S. AMENDED PETITION: Motion to Strike Out: Overruled: No Exception. If plaintiff files an amended petition and thereupon defendant files a motion to strike it out, and that motion _ is overruled, to which no exception is saved, and thereafter defendant appears and testifies before the referee, his answer to the original petition, which remained on file and was not withdrawn, must be considered a pleading on file and responsive to the amended petition.
    4. REFEREE'S REPORT: Exceptions: Equity. Alleged errors growing out of a reference are matters of exception and can only be reviewed when incorporated in a hill of exceptions. Besides, in an equity case a referee’s report, like the verdict of a jury, is only advisory, and not binding upon the court.
    5. -: Not Made a Ground for New Trial. The disposition made of the referee’s report is not for consideration on appeal unless the court’s action in reference thereto is made a ground in the motion for a new trial.
    6. -: Ruling Excepted to Set Aside. An appellant cannot be heard in the appellate court to complain of a ruling of the trial court against him which was afterwards set aside. Where the decree and ruling of the trial court upon the referee’s report, to which appellant objected and filed his term bill of exceptions, was at the same term of court set aside and for naught held, appellant cannot be heard to urge his objection to that report.

      7. ACCOUNTING: Fraud: Interest: Payments Voluntary: Reimbursement. Where the entire transaction by which defendant built a house on plaintiff’s lot and obtained and foreclosed a deed of trust thereon, was fraudulent and void, defendant is a mere volunteer as to the payment of repairs, insurance, taxes, water taxes and rents collected, and without standing in a court of equity to claim that he be reimbursed for the sums so paid or to interest on the sum named in the deed of trust.
    Appeal from St. Louis City Circuit Court. — Hon D. G. Taylor, Judge.
    Affirmed.

      Charles P. Williams, H. A. Loevy and W. A. Kinnerk for appellant.
    (1) The judgment in this cause is irregular and unsupported by the record proper in at least two particulars. The record shows that the second amended petition filed after the case had been tried, contained for the first time, a number of allegations that are not contained in the two preceding petitions. No opportunity was ever given to the defendant Boyers to plead to this second amended petition or to offer evidence with respect to these new charges. No answer of the defendant Boyers was ever filed or considered by the court with respect to this second amended petition. The court shut off all debate by the interlocutory decree entered on the same day that the defendant Boyers’s motion to strike out was overruled. 2nd: The record shows that the final decree was entered in this case without the court ever having passed upon the report of the referee, which had 'been filed in the cause. The judgment below, having been improvidently entered without disposing’ of the foregoing matters, ought to be reversed and remanded. No final judgment can be rendered while issues either of fact or of law remain undisposed of, or before the cause is at issue. B>. S. 1909, sec. 1859; Black on Judgments (2 Ed.), sec. 184; ■ 11 Ency. PI. & Pr., 864. (2) The court erred in refusing to allow to Boyers any credit for the interest notes that he paid as the holder of the second deed of trust, and in possession thereof. Nothing is better settled than that he who comes into equity must do equity. The only way Boyers could have gotten any rent or profit out of the property at all was to pay these sup-* erior charges accruing under the first deed of trust. If the plaintiffs themselves had kept possession of the property they would have been obliged to pay these charges. They ought not only by the decree be put in a better position than if they had occupied the property and collected the rents and profits. Their loss arising out of the failure to properly construct the building was fixed by the decree, by finding against Boyers in the sum of $1000. That disposed of the issue of failure of consideration. The decree by reason of the failure to allow for the payment of these several * charges, while at the same time allowing for water rates and taxes, is unjust and inequitable. Rutherford' v. Williams, 42 Mo. 18; Land Co. v. Jefferson, 30 Am. St. Rep. 587; Ruppel v. Bldg. Ass ’n, 158 Mo. 122; Reed v. Taylor, 56 111. 288; Albert v. Sanford, 201 Mo. 132; Elder v. Bank, 12 Kan. 238; Pomeroy’s Eq. Jur. (3 Ed.), sec. 386, 910. (3) There is not sufficient evidence in this case to show that the contract itself to erect the buildings, was entered into or induced by the fraud of Boyers. Under these circumstances, Boyers was entitled as a matter of law, to the profit that he would have made- if he had completed the buildings according to plans and specifications. The measure of the plaintiff’s damages and the extent of the failure of consideration ought to be arrived at by subtracting from the reasonable value of the building if it had been erected in full compliance with the plans and specifications, the reasonable value of the building as it was actually erected. To the extent of this difference only would there be a failure of consideration entitling the plaintiffs to the cancelation of the mortgage or to a personal judgment against the defendant. There is absolutely no evidence in this record upon which to compute or found such difference. Therefore, the decree ought to be reversed and the cause remanded. The measure of damages above is correct. Moulter *v. McOwen, 103 Mass. 587; Morton v. Harrison, 20 Jones & S. 305; Kidd v. McCormack, 83 N. T. 391. (4) Under the second deed of trust Boyers was not a volunteer in making the payments of interest accruing under the first deed of trust. The parties making this second deed knew and understood that Boyers was the beneficiary. This was part of the consideration for his building the house. While a sale by an interested trustee may doubtless in proper cases be set aside, yet the fact that the trustee is the real owner of the loan ought not to absolutely destroy the mortgage. It would still stand as an equitable lien upon the land and the holder of that lien in paying off prior liens for his own protection under authority of the second mortgage would not be a volunteer. Jones on Mortgages (Rev. Ed), sec. 1772; Long v. Long, 79 Mo. 644; Darst v. Bates, 95 111. 573; Lantron v. Barr, 63 Mo. 48; McQuies v. Peay, 58 Mo. 56; Blackburn v. Tweedie, 60' Mo. 505; Morton v. Nixon, 92 Mo. 26'.

      Robert é Robert for respondents.
    (1) No objection was made and no exception was saved tc the filing of the second amended petition. Nor to the court’s order in overruling defendant Boyers ’s motion to strike it from the files. Under these circumstances this court will not consider the question. Grymes v. Lumber Co., Ill Mo. App. 358; Allen v. Railroad, 126 S. W. 254; Lewis v. Mining Co., 199 Mo. 463; Carter v. O’Neil, 102 Mo. App. 391; Casler v. Chase, 160 Mo. 418; Hoffman v. Trust Co., 151 Mo. 520; Ross v. Railroad, 141 Mo. 390; Tobacco Co. v. Walker, 123 Mo. 662; Jackson v. Railroad, 80 Mo. 147; Wilson v. Haxley, 76 Mo. 345; Parsons v. Clark, 98 Mo. App. 28; Lith. Co. v. Fennimore, 84 Mo. App. 228. Nor is any complaint made in the motion for a new trial or in the assignment of errors that the court erred in this particular. Atkinson v. Dixon, 96 Mo. 582. Defendant Boyers had from July 8, 1907, to December 2, 1907, within which to file any pleading to the second amended petition but defaulted. The other defendants filed theirs December 21 and 24, 1906-. The plaintiff, with the court’s permission, had the right to file the second amended petition and insert in it “other allegations material to the case” at any time before final judgment. R. S. 19091, sec. 1848 (R. S. 1899, sec. 657); Russell v. Sharp, 192 Mo. 270'. (2) Boyers was entitled to no setoffs. His answer to the first amended petition was simply a general denial and he filed no answer to the second amended petition. As a matter of fact he should have been allowed nothing under this state of the pleadings. Water Co. vNeosho, 136 Mo. 498. (3) No credit shordd have been allowed Boyers for his payments of interest on the $4200 deed of trust. In the first place he did not plead a setoff or counterclaim. He was at best a mere volunteer. He had no right to “any rent or profit out of the property.” The deed of trust which he held was fraudulent and void, as was the whole transaction. He paid the interest (if he did so) to protect his fraudulent deed and to further his scheme to become possessed of the land. There is absolutely no evidence for what reason Boyers paid this interest. The only testimony is that be did pay it. Shumate v. Snyder, 140 Mo. 86; Horrigan v. Wellmuth, 77 Mo. 545; Napton v. Leaton, 71 Mo. 369'; Rhodes v. Dickerson, 95 Mo. App. 395; State ex rel. v. Stonestreet, 92 Mo. App. 214. (4) There was an abundance of evidence of fraud upon Boyers’s part. To establish fraud it is not necessary to prove it by direct and positive • evidence. Circumstantial evidence is not onlv sufficient, but in most cases it is the only proof that can be adduced. Martin v. Estes, 132 Mo. 402; Funkhauser v. Lay, 78 Mo. 458; Baldwin v. Whitcomb, 71 Mo. 651; Hopkins v. Sivert, 58 Mo. 201; Massey v. Young, 73 Mo. 260. (5) A trustee cannot purchase, at his own sale. Boyers knew this, hence had defendant McCarthy take the title in her name and delivered to him a quitclaim deed, which he concealed and did not record. This, too, was a part of the whole fraudulent scheme. Lass v. Sternberg, 50 Mo. 124; 1 Perry on Trusts & Trustees (6 Ed.), secs. 194-5; 2 Perry on Trusts & Trustees (6 Ed.), sec. 602v.
   KENNISH, J.

— This is an appeal from a judgment of the circuit court of the city of St. Louis, in favor of plaintiffs, in an equity case. Defendants appealed.

The pleadings are of too gr,eat length to be set out in this opinion. Tn the second amended petition, on which the final decree was entered, it is alleged, in brief: That the plaintiffs are two women, unaccustomed to the transaction of business, and that the defendant Boyers, an architect and builder, was regarded as an old and trusted friend of the family; that plaintiffs owned and resided upon a lot in said city and, with a view of improving the same, conferred with said Boyers and wholly relied upon his advice as to making the proposed improvements; that a written contract was entered into between plaintiffs and said Boyers, by the terms of which, in consideration of the sum of $4770, Boyers was to remove the old building to the back part of the lot and erect a new brick structure to be used and occupied as flats, on the former site of the building removed; that plaintiffs agreed to execute two trust deeds to said Boyers in payment for' said improvement, one for $4000, to be executed at the date of said agreement, and the other, for $770; when the work was done; that the old house was removed and the new building erected. That the said Boyers fraudulently induced plaintiffs to execute the first trust deed for $4200; and the second trust deed for the balance of the amount to be paid, before the completion of the work, and that plaintiffs, relying upon and having confidence in said Boyers, did -as he directed; that an interest note matured at intervals of six months on the first trust deed, and of three months on the second; that plaintiffs thereafter learned that said trust deeds were for borrowed money, of which fact they were ignorant, as they were of all other provisions of the trust deeds at the time of their execution. That said building was so fraudulently constructed by said Boyers and the work so fraudulently done that it was not worth more than one-half of what plaintiffs agreed to pay therefor; that said Boyers as trustee in the second trust deed, caused said property to be advertised and sold, and through his attorney purchased the same, and. as such trustee executed a deed therefor to the defendant Mary A. McCarty, who held title as agent for said Boyers; that said Mary A. McCarty had instituted unlawful detain-er proceedings against the plaintiffs to recover possession of the property; that none of the other defendants havé any interest in the property, except as trustees for said Boyers. Plaintiffs prayed that said second trust deed, the deed from Boyers to defendant McCarty, and an unrecorded quitclaim deed from said McCarty to Boyers, be cancelled and for naught held; that the defendant Freihaut, holder of the first trust deed, be required to credit the sum of $1815 upon the principal note secured thereby, and for an accounting of rents and profits as to defendant Boyers, and for genera! relief.

Answers were filed to each of the first and second petitions by all of the defendants, and to the second amended petition by all except defendant Boyers.

The caffe was tried in December, 1906. At the close of all the evidence the court announced that on the evidence introduced relief could not be granted upon the pleadings as they stood, and suggested to counsel for plaintiffs that the petition be amended to conform to the proof, whereupon plaintiffs filed a second amended petition which petition defendant Boyers, without having withdrawn his answer, filed a motion to strike out. This motion does not appear in the record. The court took the ease under advisement, and on the 8th day of July, 1907, overruled defendant’s motion to strike out and rendered an interlocutory decree for plaintiffs. No exception was saved by defendant Boyers to the action of the court in granting leave to file the second amended petition, or to the court’s action in overruling the defendant’s motion to strike out the same, nor. was the court asked for time to file an amended answer thereto. The interlocutory decree ordered, inter alia, that defendant Boyers make an accounting of the rents and profits of the property while in his possession, and at the October term, 1907, the court appointed a referee to take such accounting and report his finding to the court. The referee heard the evidence and filed his report, whereupon the court, at the said October term, entered a judgment and decree confirming the report in part and disapproving it in part. During the said October term the defendant Boyers filed his term bill of exceptions to the action of the court in sustaining plaintiffs’ oral exceptions to the report of the referee. This bill was duly allowed, signed and filed. Thereafter, and during said October term, the court set aside its judgment and decree based upon the report of the referee, and on December 2, 1907, iat the December term of court, entered its final judgment and decree in favor of plaintiffs. The defendants in due time filed their motions for new trial and in arrest, which were overruled, exceptions saved, and a bill of exceptions regularly allowed, signed and filed.

The term hill was not included in the final hill of exceptions, nor was the ruling which had been excepted to and saved in the term bill included as a ground of the motion for a new trial. Each of said bills of exceptions were separately signed and filed and so appear in the abstract of the record.

A third bill of exceptions appears in appellants’ abstract, purporting to preserve certain rulings of the court duly excepted to, on a motion to retax costs and to quash executions, hut as this alleged bill is unsigned it will not be further noticed.

Other facts will be stated in the course of the opinion in connection with the points discussed.

I. Respondents challenge this court’s jurisdiction of this appeal, on the ground that “appellants’ abstract does not set forth the affidavits for appeal nor the substance of them,” and ask that the appeal be dismissed.

It appears from the recitals in the abstract of the record that in due time an affidavit for an appeal was filed, praying for an appeal to the Supreme Court, which appeal was granted and allowed. Under the decisions of this court that recital is sufficient. [Coleman v. Roberts, 214 Mo. 635; State ex rel. v. Broaddus, 216 Mo. 336; Ray County Bank v. Hutton, 224 Mo. 42; Griffin v. Franklin, 224 Mo. 667; State ex rel. Caulfield v. Broaddus, 234 Mo. 331.] To sustain their contention, respondents cite the ease of Shemwall v. McKinney, 214 Mo. 692, in which, referring to the affidavit for appeal, it is said: “The abstract of the record proper does not show an affidavit for an appeal in this cause, nor does it state the substance of any such an affidavit.” That case was correctly decided upon the facts then before the court, and the language quoted was used as applying to such facts and not as stating a general rule of law. In the Caulfield case, supra, the Shemwell case is discussed and former decisions of this court are reviewed, from which the rule is deduced that “it is not necessary to set forth either the affidavit in haec verba, or its contents, in order to entitle appellant to a hearing of his appeal in the higher coffirt.”

II. Appellants complain that the judgment is not supported by the record, for the reasons (a) that the second amended petition was a departure from • the original cause of action, (b) that no opportunity was given defendant Boyers to plead thereto, and (c) that a final decree was entered without the court having passed upon the report of the referee theretofore filed in the cause.

(a) The second amended petition being filed by leave of court, the two former petitions became abandoned pleadings and could only be made a part of the record and have a place therein as matters of exception. [Missouri Pacific Ry. Co. v. Bank, 212 Mo. l. c. 517; Forrister v. Sullivan, 231 Mo. 345; Rule 9, Buies of this Court.] As' the two first petitions were not made a part of the record by exception, only the second amended petition can be considered, and therefore the question of departure is not before us.

(b) When the court overruled defendant Boyers’s motion to strike out the second amended petition, no exception was saved, nor was a request made for time to file answer thereto. Defendant Boyers thereafter appeared and testified as a witness before the referee. His answer to the first amended petition, which contained a general denial, had not been withdrawn, but remained on file, and under these facts it must be considered as a pleading on file and responsive to the-second amended petition. [Robards v. Munson, 20 Mo. 65; James v. Railroad, 69 Mo. App. l. c. 437; Bank v. Umrath, 55 Mo. App. l. c. 50; Wright v. Lessees of Hollingsworth, 1 Pet. 165; Bank of Havelock v. Western Union Tel. Co., 72 C. C. A. 580; Clarke v. Ohio River R. R. Co., 39 W. Va. 732; 31 Cyc. 460.]

(e) Alleged errors growing out of a reference are matters of exception and can only be reviewed when incorporated in a bill of exceptions. [Rotchford v. Creamer, 65 Mo. 48; Turley v. Barnes, 131 Mo. 548; Meissner v. Ry. Equipment Co., 211 Mo. 112; Bosley v. Cook, 85 Mo. App. 422; Maloney v. Railroad, 122 Mo. l. c. 115.] Besides, it is well settled law that in an equity case a report of a referee, like the verdict of a jury, is merely advisory and not binding upon the court. [Mack v. Wurmser, 135 Mo. 58; Bigham v. Tinsley, 149 Mo. App. l. c. 477; Beard v. Sack, 81 Mo. 610.]

The action of the court as to the referee’s report cannot now be reviewed, for two reasons.

First: It was not made a ground of the motion for a new trial, and the rule is that, “No action of the trial court is reviewable on appeal unless it was presented to the trial court in -the motion for a new trial, or in the motion in arrest, or unless it appears on the face of the record proper.” [St. Louis v. Lawton, 189 Mo 474; Coffey v. City of Carthage, 200 Mo. 616; Vineyard v. Matney, 68 Mo. 105; Hulett v. Nugent, 71 Mo. 131; Arkansas Land Co. v. Ladd, 103 Mo. App. 83.]

Second: The decree and ruling of the court upon the referee’s report, to which defendant Boyers objected and filed his term bill of exceptions, was, at the same term of court, set aside and for naught held, and it is clear that defendant cannot be heard to complain in this court of a ruling against him which was afterwards set aside.

LEI. The other errors assigned go to the sufficiency of the evidence to support the judgment' and decree.

It was shown by the testimony before the referee that defendant Boyers had collected rents in the total sum of $961, and that plaintiffs had given him, to apply on taxes, the sum of $70, in all, $1031. That lie bad paid for repairs $63.34; for water license, $51; for insurance, $36.80; for taxes, $62; and as interest on the $4200 trust deed the total sum of $630. In the interlocutory decree the court found that the building had been fraudulently constructed by the defendant Boyers, and adjudged that the latter pay the plaintiffs the sum of $430, in addition to the rents and profits found due on.the accounting ordered. In the final decree the court allowed the defendant Boyers credit for the total sum of $150' upon the items above set out, and, adding the said sum of $430 to the sum of $1031 received by Boyers, less the credit allowed, rendered final judgment against him for the sum of $1311. Complaint is made that the decree as to the amount - so adjudged against defendant Boyers is not supported by the evidence.

As the court had found the entire transaction on the part of Boyers fraudulent and void, he was a mere volunteer as to payment of the items for which credit was refused and without standing in a court of equity to claim that he be reimbursed for the sums so paid. [Shumate v. Snyder, 140 Mo. l. c. 86; Horrigan v. Wellmuth, 77 Mo. 545; Napton v. Leaton, 71 Mo. 369; Rhodes v. Dickerson, 95 Mo. App. 395; State ex rel. v. Stonestreet, 92 Mo. App. 214.]

While the record is much complicated by reason of the numerous amendments of pleadings, motions and bills of exceptions, we think the decree is responsive to the pleadings, is supported by the evidence, and that the record fails to show error against the appellants. Accordingly the judgment is affirmed.

All concur, except Graves, J., who dissents.