NOTE: Opinion filed at October Term, 1931, March 15, 1932; motion for rehearing filed; motion overruled at April Term, April 12, 1932.
1. CONTRACTS: Consideration Imported. The common law rule that certain written contracts import a consideration is modified by the Missouri Statute, Section 2958, Revised Statutes 1929, providing that all written contracts for the payment of money or property shall import a consideration.
2. ____: ____: Burden of Proof. The burden of proving failure of consideration for such contracts is on the party who denies it, and that applies to fire insurance policies as well as life insurance policies.
3. INSURANCE: Premium: Pleadings. In an action on a fire insurance policy, an allegation in the petition that the plaintiff paid the premium was surplusage; without such allegation the petition stated a cause of action.
4. ____: ____: Defense. And in such action where the answer pleaded failure of payment of the premium it was an affirmative defense and the burden was on the defendant to prove nonpayment.
5. ____: ____: Reply. In an action on a fire insurance policy where the answer denied payment of the premium and the reply alleged payment to a person as the agent of defendant or as an independent contractor, plaintiff did not thus seek recovery on the allegations of the reply; such allegations being denials of the affirmative defense of nonpayment.
6. ____: ____: Instruction. An instruction authorizing a verdict for plaintiff without taking account of an affirmative defense pleaded by defendant, where instructions were given at the request of defendant upon the affirmative defense, was not error.
7. ____: Definitions: Dual Agency: Independent Contractor. A conflict between instructions for plaintiff in the definition of "dual agency" was neutralized by a correct definition of dual agency given for defendant, where the challenged instructions referred to other instructions defining the term. Failure to define "independent contractor" was not error where the complaining party requested no instruction defining it.
8. TRIAL: Reading Depositions: Omissions. Where defendant read a deposition to the jury, plaintiff's counsel complained that in reading it certain questions and answers had been omitted and the court directed defendant's counsel to read the omitted part, there was no error although the part so read was not material.
9. ____: Statement to the Jury: Argument. Statements to the jury not, excepted to at the time, and argument based upon facts which the evidence tended to show, cannot be considered as error.
WHITE. J., concurring but differing as to construction of Section 2958, Revised Statutes 1929, with whom HENWOOD, J., concurs.
CONTRACTS: Imported Consideration. A written contract which has an expressed consideration cannot import one. Where the consideration of an insurance policy is not payment but a promise to pay, it could not import payment because payment was performance.
Appeal from Cape Girardeau Circuit Court. — Hon. Frank Kelly. Judge.
Samuel A. Harper, Chas. M. Howell, Dearmont Russell, Gallivan Finch, N.C. Hawkins and Daniel V. Howell for appellant.
(1) The respondents failed to make a submissible case as to the payment of premium and the court should have sustained defendant's demurrer at the close of the case and given defendant's peremptory instruction. (a) There was no proof that the premium of $342 was paid "by plaintiffs to defendant" as alleged in plaintiffs' petition. "The probata must correspond with the allegata." Peetz Bros. v. Vahlkamp (Mo.), 11 S.W.2d 26; Cluck v. Abe (Mo.), 40 S.W.2d 558. (b) Plaintiffs' own uncontradicted evidence showed that the premium, if paid by plaintiffs, was paid in part by plaintiffs taking credit for rent owed plaintiffs by Auber Smith individually. This would not constitute payment. Hoffman v. Mut. Life. Co., 92 U.S. 161, 23 L.Ed. 539; Sullivan v. Life Ins. Co., 15 Mont. 522; Briggs v. Collins, 167 S.W. (Ark.) 1114, L.R.A. 1915a, 686; Folb v. Fireman's Ins. Co., 133 N.C. 179; Lycoming Fire Ins. Co. v. Storrs, 97 Pa. 354, par. 4 of Syl.; Kerr on Ins., sec. 294; Greenwood v. Burns, 50 Mo. 52; Wheeler and Wilson v. Givan, 65 Mo. 89; Gowling v. Express Co. (Mo. App.); 76 S.W. 712; Publishing Co. v. Corbett, 165 Mo. App. 7; Cannon v. Gibson, 162 Mo. App. 386; Robertson v. Davis (Mo. App.), 15 S.W.2d 882; Peetz Bros. v. Vahlkamp (Mo.), 11 S.W.2d 29; 2 C.J. p. 631, sec. 271; 2 C.J. p. 438, sec. 33. It must be conclusively presumed that the defendant intended the collection of the premium to be made in cash. Peetz Bros. v. Vahlkamp (Mo.), 11 S.W.2d 26; Realty Co. v. Davis (Mo. App.), 251 S.W. 419. (c) Plaintiffs cannot recover on the theory that defendant sold the policies in question to Auber Smith on credit (or that he was an independent contractor) for the reason that plaintiffs' petition alleged a payment of the premium to defendant and only by their reply did respondents plead the theory of a credit sale or independent contractor. This was a departure from the petition and no recovery could be had thereon. Wolfersberger v. Miller (Mo.), 39 S.W.2d 758; Hammons v. Hammons (Mo.), 253 S.W. 1056; Mathieson v. Ry., 219 Mo. 542; Swissman v. Wells (Mo. App.), 255 S.W. 937; Quigley v. Bartlett (Mo. App.), 260 S.W. 494. (d) Plaintiffs' petition having alleged the payment of the premium "by plaintiffs to defendant" could not abandon that theory and recover on the theory that defendant was paid by credit extended to Auber Smith and payment "by plaintiffs to defendant" was unnecessary. Behen v. St. Louis Transit Co., 186 Mo. 430. (e) Moreover, plaintiffs could not recover on the independent contractor theory, or any other theory, if Auber Smith was their own agent, and a broker has been held to be the agent of the insured under facts similar to those shown in the present record. Edwards v. Ins. Co., 100 Mo. App. 709; Pringle v. Ins. Co., 123 Mo. App. 714; Buck v. Stuyvesant (Mo. App.), 327 S.W. 842; Park v. Casualty Co. (Mo. App.), 279 S.W. 246; Harris v. Security Co., 25 S.W.2d 484; Security Co. v. Ins. Co., 243 P. 1043. (f) There is no evidence of substance tending to show that Auber Smith was an independent contractor. The entire transaction was handled in the usual and ordinary way and according to the general, uniform and established customs and usages of the insurance business. (2) Auber Smith was employed by plaintiffs and had charge of and looked after all their insurance matters. These facts were not disclosed to defendant who dealt with him as a disinterested broker. Therefore, if Auber Smith assumed to act as agent for defendant in any capacity respecting said insurance, including the purported collection of said premium, his acts were void and not binding upon the defendant because of the fraudulent undisclosed dual agency. Windsor v. Ins. Co. (Mo.), 29 S.W.2d 1117; Cummings v. Parker, 250 Mo. 437; Corder v. O'Neill, 207 Mo. 632; Connor v. Black, 119 Mo. 126; McElroy v. Maxwell, 101 Mo. 294; Lee v. Smith, 84 Mo. 304; Murdock v. Milner, 84 Mo. 96; Atlee v. Fink, 75 Mo. 104; Crumley v. Webb, 44 Mo. 451; Thornton v. Irwin, 43 Mo. 594; Jacques v. Edgwell, 40 Mo. 77; Boardman v. Florez, 37 Mo. 560; Johnson v. Glasscock, 29 Mo. 191; Newman v. Friedman, 156 Mo. App. 148; Winter v. Carey, 127 Mo. App. 601; Atterbury v. Hopkins, 122 Mo. App. 172; Harper v. Fidler, 105 Mo. App. 680; McClure v. Ullman, 102 Mo. App. 697; Rosenthal v. Drake, 82 Mo. App. 358; Norman v. Roseman, 59 Mo. App. 682; Reese v. Jarvis, 36 Mo. App. 641; DeSteiger v. Hollinton, 17 Mo. App. 382; Ins. Co. v. Ins. Co., 8 Mo. App. 408; Huggins Candy Co. v. Ins. Co., 41 Mo. App. 530. (3) Fraud, in the concealment of Auber Smith's relation to plaintiffs and with reference to the alleged payment of the premium and dual agency and the concealment of the dual agency of Auber Smith constituted such fraud as to relieve the defendant of liability and preclude recovery under the fraud clause of the policy and also under the general law. Decker v. Deimer, 229 Mo. 334; Wolfersberger v. Miller, 39 S.W.2d 964; Denny v. Guyton (Mo.), 40 S.W.2d 590; Leimkuhler v. Wessendorf (Mo.), 18 S.W.2d 445; Ins. Co. v. Carson, 186 Mo. App. 230; Bank v. Saw Co., 104 Mo. 425; Adv. Co. v. Wannamaker, etc., 115 Mo. App. 287; Klebba v. Streumph (Mo. App.), 23 S.W.2d 205; Bank v. Kellems (Mo.), 9 S.W.2d 967; Hornblower v. Crandall, 7 Mo. App. 220; Judd v. Walker, 215 Mo. 312; Paving Co. v. Inv. Co. (Mo.), 274 S.W. 823; 27 C.J. p. 11, sec. 121 B; sec. 122. (4) The theory that the premium was paid defendant by extended credit to Auber Smith as an independent contractor and the theory that it was paid "by plaintiffs to defendant" through Auber Smith as agent, are inconsistent. Defendant was not liable on the independent contractor theory because that theory was not set up in the petition (and for other reasons), and was not liable on the agency theory because of the rent transaction. Therefore the court should have directed a verdict for defendant. State ex rel. v. Shelton, 249 Mo. 660; Crews v. Wilson (Mo.), 281 S.W. 44; Green v. Mo. Pacific, 192 Mo. 132; Rutledge v. Ry., 110 Mo. 312; O'Dell v. Lead Co (Mo. App.), 253 S.W. 397; Hinkle v. Lovelace, 204 Mo. 208; Kuhn v, Lusk, 281 Mo. 324, 219 S.W. 638. (5) Notice of cancellation for nonpayment of premium was given, effective March 16, 1921, and was received by plaintiffs. Thereafter plaintiffs made no protest against the cancellation and no claim of payment of premium but by their conduct waived their rights, if any, abandoned the policy and acquiesced in and consented to the cancellation until after the fire. Therefore, the policy was cancelled and plaintiffs were estopped to claim it was in force at the time of the fire. Berry v. Cobb (Mo. App.), 20 S.W.2d 298; Mitchell v. Bank (Mo. App.), 282 S.W. 731; Derby v. Donahoe, 208 Mo. 684; Norman v. Construction Co. (Mo. App.), 18 S.W.2d 560; Randolph v. Club (Mo.), 15 S.W.2d 839; Adv. Co. v. Wannamaker, 115 Mo. App. 281; Palmer v. Welch, 171 Mo. App. 597; Lawson v. Edwards (Mo. App.), 293 S.W. 794; Englehardt v. Cravens (Mo.), 281 S.W. 715; Delashmot v. Teeter, 261 Mo. 441; 10 R.C.L. 668, 690, 692, 693; 3 Boyce on Ins., sec. 1640; Bishop on Contracts, sec. 792; 40 Cyc. pp. 267-68, sec. 1; Decker v. Deimer, 229 Mo. 334; Denny v. Guyton (Mo.), 40 S.W. 590. (6) On plaintiffs' theory that plaintiffs and defendant each dealt with Auber Smith as an independent contractor and that he was not the agent of either party, and that he obtained the policy from defendant on his own credit and plaintiffs did not owe defendant but owed him for the premium on the policy, defendant was not required to tender or refund anything to the plaintiffs at any time in order to cancel the policy and the notice of cancellation effectively cancelled the policy. Berry v. Equitable (Mo.), 298 S.W. 67; Thomas v. Agency (Mo. App.), 5 S.W.2d 660; Gruen v. Ins. Co., 169 Mo. App. 161. (7) The court committed reversible error in overruling defendant's special demurrers 3-A, 5-A and 7-A, and in refusing defendant's withdrawal Instructions 4-A, 6-A and 8-A, and Instruction 10-A. Special demurrer 3-A, and withdrawal Instruction 4-A, relating to independent contractor, were erroneously refused for the reason that the independent contractor doctrine was not set up in the petition, and was not supported by substantial evidence. Special demurrer 5-A and withdrawal Instruction 6-A, relating to the theory of payment of premiums by credit extended to Auber Smith, were erroneously refused for the reason that there was no pleading upon which to base the credit theory and no evidence to support the same. Special demurrer 7-A and withdrawal Instruction 8-A, and Instruction 10-A were erroneously refused for the reason that there was no evidence tending to show that Auber Smith was the agent of the defendant only, or if so that the payment was made to him in a way that was binding on the defendant. (8) The court erred in giving Instructions 3, 4, 5 and 6 for the reasons: (a) That each of said instructions confuse the jury and the issue by substituting dual action for dual agency. (b) Each of said instructions is in conflict with Instruction H, in this that under Instructions 3, 4, 5, and 6, the jury was required to find that Auber Smith acted for both parties and Instruction H only required the jury to find that it was his duty to act. Giving conflicting instruction constitutes reversible error. Seithel v. St. Louis Dairy Co. (Mo.), 300 S.W. 280. (c) Said instructions are erroneous because they are confusing and misleading as to dual capacity and dual agency and define dual agency in impossible terms in this that in Instructions 3 and 6 dual agency is defined as acting for both in the payment of premiums and in 4 and 5 dual agency is defined as acting for both as to the collection. (d) The giving of Instruction 3 was error. Plaintiffs could not recover on the agency theory in any event, on account of the alleged paying the rent. This instruction did not properly declare the law and served no purpose but to multiply the issues and confuse the jury and furnish a basis for improper argument. (9) The court erred in giving Instructions 3, 4, 5 and 6 for the reasons: (a) That each of said instructions confuse the jury and the issue by substituting dual action for dual agency. (10) Plaintiff's Instruction 6 was erroneous and constituted reversible error. (a) It was inconsistent with plaintiff's instructions 3, 4 and 5, defendant's Instruction H. (b) It was erroneous because it gave the jury two different doctrines to guide them as to dual agency: "You must find and believe that Auber Smith assumed to represent both the plaintiffs and the defendant in the matter of the payment of the premium on the policy in question." "You must find and believe that he had authority and did act in the matter of payment of the premium in question and where the interest of plaintiffs and defendant conflicted." (c) This instruction was erroneous because it improperly limited the dual agency defense to action — ignoring duty to act. (d) The plaintiffs were required to prove that Auber Smith was agent for defendant as to the premium and that they paid the premium to Auber Smith in cash before they could recover and Instruction No. 6 was erroneous because it placed the burden on defendant to prove this essential element of plaintiff's case. Ry. Co. v. Lumber Co., 140 Mo. App. 52: Gen. Motors v. Holland (Mo. App.), 30 S.W.2d 1087; Kaden v. Motor Co. (Mo. App.), 26 S.W.2d 812; Johnson v. Hurley, 115 Mo. 513. This instruction was erroneous because a comment on the evidence and argumentative.
A.M. Spradling and Ward Reeves for respondents.
(1) We believe that every question raised by appellant on the present appeal has been determined adversely to its contention on the two previous appeals of this case. Rulings on the two former appeals are the law of this case, and questions then adjudicated are not open for re-examination on this appeal. Coleman v. Ins. Co., 233 S.W. (Mo.) 187; State of Kansas v. U.S.F. G. Co. (Mo.), 40 S.W.2d 1050; Gracey v. St. Louis, 221 Mo. 1; Mullins v. Cemetery Assn., 259 Mo. 150; Bradley v. Becker (Mo.), 11 S.W.2d 8; State ex rel. v. Railroad (Mo.), 10 S.W.2d 918. (2) The main contention of appellant on the present appeal is that the petition pleads that the policy was issued in consideration of a premium paid by plaintiffs to the defendant in the sum of $342 and that therefore the plaintiffs could not recover upon the theory that the premium was paid to Auber Smith who stood in the relation to the defendant of an independent contractor. In other words, that the probata did not conform to the allegata. This point is urged in varying forms in several divisions and subdivisions of the appellant's brief. (a) We contend that the probata does correspond with the allegata. The gravamen of the petition is that the defendant insured plaintiffs' property against loss by fire; or, to state the matter another way, the defendant by the contract pleaded, agreed to pay plaintiffs a named sum of money upon a contingency, and whether the premium (the consideration for the contract), was paid to the defendant, or to its agent, or to an independent contractor, is an immaterial matter, and whether paid by plaintiffs to one or to the other, the cause of action would be the same. Realty Co. v. Markham, 163 Mo. App. 326; Smith v. Ins. Co. (Mo.), 6 S.W.2d 928; Smith v. Ins. Co. (Mo.), 26 S.W.2d 962. Since this court on the two previous appeals has already held that these very matters were properly in the case and directed that these matters should be determined by a jury, we believe the point now raised by appellant is res adjudicata in so far as this is concerned. Authorities, supra. (b) But if this proposition can now be urged at this late day in this case by appellant, we say that there was not a total failure of proof as contemplated by Sec. 1001, R.S. 1929; but at most there was only a variance within the meaning of Secs. 817 and 818, R.S. 1929, and since defendant did not object to the proof tending to establish Auber Smith's relationship as one of independent contractor, nor file an affidavit of surprise, the alleged variance becomes immaterial and cannot be made the ground of reversal. Bennett v. McCanse, 65 Mo. 194; Ingwersen v. Railroad, 116 Mo. App. 139; Schneider v. St. Joseph, etc., 238 S.W. (Mo.) 468; Bammert v. Kenefick, 261 S.W. (Mo.) 78; Chouquette v. Southern Elec. Railroad Co., 152 Mo. 257; Fisher Co., etc., v. Realty Co., 159 Mo. 562; Harrison v. Lakenan, 189 Mo. 581; White v. Fire Ins. Co., 97 Mo. App. 590; Hayes v. Continental Cas. Co., 98 Mo. App. 410; Randell v. Railroad, 102 Mo. App. 342; Bank v. Phillips, 179 Mo. App. 488; Tanner v. Railroad, 186 Mo. App. 264; Ford v. Stephens Motor Car Co., 203 Mo. App. 669; Detchemendy v. Wells, 253 S.W. (Mo. App.) 150; Tynes v. Terrill (Mo. App.), 19 S.W.2d 505; Maxine Realty Co. v. McMinn (Mo. App.), 23 S.W.2d 214. (c) As the defendant made no objection to the introduction of evidence tending to prove that Auber Smith was an independent contractor and at no time raised any objection to the evidence along this line, and since both sides tried the case and submitted it to the jury on this, as one of the theories or issues in the case, then, in aid of the verdict of the jury, the petition will be considered as amended and such questions now raised by appellant will be considered as waived and out of the case. Ford v. Railroad, 318 Mo. 723; Ford v. Railroad, 266 S.W. (Mo. App.) 1032; Hilz v. Railroad, 101 Mo. 36; Parker v. Railroad (Mo.), 41 S.W.2d 386. (d) If the reply is a departure, as contended by appellant, then the proper way to take advantage of it is either to file a special demurrer or a motion to strike out the reply and as defendant did not do this the alleged departure is waived. No objection was made by defendant to the introduction of evidence to support the allegation in the reply that Auber Smith was an independent contractor; and in fact, the greater portion of the evidence to support this theory of this case was offered by defendant and came from its witness. Clark, who was president of defendant. For this additional reason the alleged departure or change of cause of action by the reply was waived by appellant. Sec. 779, R.S. 1929; Mortland v. Holton, 44 Mo. 58; Philibert v. Burch, 4 Mo. App. 470; Chemical Co. v. Lackawanna Line, 70 Mo. App. 274; Ricketts v. Hart, 73 Mo. App. 653; Herf, etc., Chemical Co. v. Lackawanna Line, 100 Mo. App. 178; Bowles v. Railroad, 187 S.W. (Mo. App.) 136; Columbia Taxi-cab Co. v. Mercurio, 236 S.W. (Mo. App.) 1096; Spurlock v. Railroad, 104 Mo. 658; Spurlock v. Railroad, 93 Mo. 530; Scovill v. Glasner, 79 Mo. 449. (3) By Division 5 under Point 1 of appellant's brief, appellant, in effect, urges that the evidence as a matter of law shows that Auber Smith was the agent of the plaintiffs in the collection of the premium and for that reason plaintiffs cannot recover on any theory of the case. Again, appellant raises this same question under Point 2 of its brief. This same question was raised in this court on the two former appeals and as the testimony is essentially the same on the present appeal, the decisions on the point on the former appeals are the law of this case. Besides, on the facts of this case, the jury was warranted in a finding thereon that Auber Smith, the broker, was the agent of the defendant and not the agent of the plaintiffs in the collection of the premium and on the point we cite the same authorities as we did on the last appeal of this case. Farber v. Ins. Co., 191 Mo. App. 307; Realty Co. v. Markham, 163 Mo. App. 314; Park v. Fidelity Casualty Co., 279 S.W. (Mo. App.) 249; Pringle v. Ins. Co., 123 Mo. App. 714; Buck v. Ins. Co., 231 S.W. (Mo. App.) 840; Leahmann v. Ins. Co., 183 Mo. App. 696; Southern Surety Co. v. Ins. Agency, 288 S.W. (Mo. App.) 965; Edwards v. Ins. Co., 100 Mo. App. 708; Buck v. Ins. Co., 209 Mo. App. 302; Grace v. Ins. Co., 109 U.S. 278. (4) There was ample evidence to prove, and the jury found, that the premiums had been paid. Plaintiffs never by act, word or conduct, held out to the defendant that the premiums had not been paid. Defendant had never asked or demanded of plaintiffs the premiums, and never asked plaintiffs if they had paid the premiums to the party (Auber Smith), whom defendant authorized to collect same. Under these circumstances there could be no estoppel based upon mere silence of the plaintiffs. 26 C.J. 141-144, secs. 166-169; 32 C.J. 1254-1256, secs. 443-447; Payne v. Ins. Co., 170 Mo. App. 85; Purdy v. Bankers Life Assn., 101 Mo. App. 91.
Action on a fire insurance policy. The case originated in the Circuit Court of Pemiscot County. On motion of defendant, it was referred by the court. Among other things, the referee found that plaintiffs paid the premium to Auber Smith, an employee of plaintiffs at the time and when the policy was issued; that Auber Smith did not pay the premium to defendant; that after the fire he tendered same, which was refused by defendant; that defendant had no notice that Auber Smith was an employee of plaintiffs, and acting in a dual capacity in the matter of the insurance, and for that reason the judgment should be for defendant. Accordingly, judgment was rendered for defendant and plaintiffs appealed.
On appeal, plaintiffs contended (1) that the case was not a proper one for reference; and (2) that they made a prima-facie case and defendant showed no defense.
Defendant contended (1) that the case was properly referred; and (2) that if a reference was improper it was harmless because defendant showed a complete defense as a matter of law on one or more of its defenses.
We reversed and remanded the cause, holding that the case should not have been referred, and that the evidence made a case for a jury. [Smith v. Fire Ins. Co., 320 Mo. 146, 6 S.W.2d 920.] On retrial, judgment was for plaintiffs and defendant appealed. On appeal it again contended that plaintiffs were not entitled to recover as a matter of law. We again held that the evidence made a case for a jury. However, we reversed and remanded the cause, holding that plaintiffs' instruction placing the burden on defendant to prove non-payment of the premium was erroneous. [Smith v. Fire Ins. Co., 325 Mo. 51, 26 S.W.2d 962.]
Thereafter the venue was changed to Cape Girardeau County. On retrial plaintiffs assumed the burden of proving payment of the premium. Judgment was for plaintiffs in the sum of $39,604.16 and defendant appealed.
The petition is conventional. Among other things it alleged that in consideration of the payment of $342 by plaintiffs to defendant, the policy was issued and thereby defendant insured plaintiffs against loss of certain property by fire.
The answer alleged: (1) that the policy was void for the reason plaintiffs did not pay the premium; (2) that before the fire defendant cancelled the policy because plaintiffs had not paid the premium; (3) that plaintiffs did not protest cancellation and for that reason are estopped to deny cancellation; (4) that under the provision of the policy against false swearing, plaintiffs are not entitled to recover; (5) and that Auber Smith, with whom defendant dealt in the matter of the insurance was an employee of plaintiffs; that he acted in said matter as the agent of both plaintiffs and defendant without the knowledge and consent of defendant, and for that reason the policy was void.
The reply alleged that Auber Smith was either the agent of defendant in collecting the premium, or an independent contractor and broker; that defendant credited Auber Smith for the premium and did not credit plaintiffs, and for that reason payment of the premium to Auber Smith was payment to defendant.
During all the proceedings there has been no material change in the pleadings, and the evidence was substantially the same on each trial of the case.
As stated in the opinion ( 325 Mo. 51, 26 S.W.2d 964), "no question is raised as to the issuance of the policy, the value of the property, the destruction by fire and the proofs of loss." The controversy is over the payment of the premium and the cancellation of the policy. Plaintiffs claim payment in that they paid the premium to Auber Smith, who was acting either as agent of defendant with authority to collect the premium, or was an independent contractor and broker with whom defendant dealt in the matter of insurance.
Defendant denies that Auber Smith was either its agent or an independent contractor. It further claims that if he was its agent he acted in the matter in a dual capacity without its knowledge or consent.
For a full statement of the facts, reference should be made to the opinions on the former appeals.
On the trial under review the court directed the jury that if Auber Smith did not act in a dual capacity, and if plaintiffs requested him to purchase insurance for them and he placed an order with defendant for the policy and defendant dealt with him as a broker and issued the policy on credit extended by defendant to him and not on credit extended to plaintiffs, and if the premium was billed by defendant to him (Auber Smith) and not to plaintiffs, and he (Auber Smith) billed same to plaintiffs, who paid him therefor, then such payment was a payment of the premium to defendant and it could not defeat the suit on the ground of failure to pay the premium, and defendant could not thereafter cancel the policy without paying to plaintiffs the unearned premium.
I. Defendant contends that plaintiffs are not entitled to recover on the theory of payment of the premium to an independent contractor and broker for the reason the petition only alleged payment to defendant and that recovery should not be permitted on the allegation in the reply that Auber Smith was an independent contractor and broker and that as such the premium was paid to him. In other words, defendant contends that the proof did not correspond with the allegations of the petition.
In this connection plaintiffs direct attention to our ruling in Smith v. Fire Ins. Co., 325 Mo. 51, 26 S.W.2d l.c. 964, that the burden was on plaintiffs to prove payment of the premium. They ask a reconsideration of the question. In ruling the question we applied the common-law rule.
This rule as modified by statute is stated by a standard text as follows:
"If the contract in suit is under seal it imports a consideration and none need be alleged, and the same is true if the instrument sued on is negotiable according to the law merchant. And by statute in some jurisdictions every written contract is made to import a consideration, and where this is so, it is not necessary for plaintiff to allege the consideration. But the consideration is an essential part of a contract, and, in the absence of statutory relief from the rule, a party declaring on a contract which at common law does not import a consideration must fully and truly state the consideration as well as the promise founded on it, and must prove it as laid. If no consideration is stated, it is a fatal defect which may be taken advantage of by demurrer, motion in arrest of judgment, or writ of error." [13 C.J. 722.]
In this State the common-law rule was modified by statute which follows:
"All instruments of writing made and signed by any person or his agent, whereby he shall promise to pay to any other, or his order, or unto bearer, any sum of money or property therein mentioned, shall import a consideration, and be due and payable as therein specified." [Sec. 2958, R.S. 1929.]
On consideration of this statute in Taylor v. Newman, 77 Mo. 257, l.c. 263, we said: "If the instrument sued on was a promise of the defendant to pay money or property, although a non-negotiable instrument, the petition would not be defective by reason of the failure to set out a consideration."
If plaintiffs are not required to plead the consideration, they are not required to prove it. If they are not required to prove it, the defense is affirmative and the burden is on defendant to prove failure of consideration.
And the phrase "import a consideration" has been defined as follows:
"'At common law, negotiable instruments are said to import a consideration; that is, in the absence of evidence on the point, it will be presumed that there was a sufficient consideration; and it is for the party denying the existence of a consideration to show that there was none. This is true even if no consideration is recited on the face of the instrument, and words such as "value received," are wanting.'" [McGuffin v. Coyle, 86 P. 962, 964, 16 Okla. 648, 6 L.R.A. (N.S.) 524 (quoting and adopting definition in 1 Page, Cont. sec. 279.]
An exception to the common-law rule places the burden on defendant of proving nonpayment of the premium for life insurance because the insured is dead and information as to payment is peculiarly within the knowledge of the insurer.
In life insurance cases this exception was cited as authority for placing the burden of proving non-payment of premium on defendant. [State ex rel. Life Ins. Co. v. Reynolds, 277 Mo. 14, 208 S.W. 618; Harris v. Ins. Co., 248 Mo. 304, l.c. 318, 154 S.W. 68.] From this it does not follow that the statute does not cover fire insurance policies. It covers both life and fire insurance policies. In those life insurance cases the statute also was authority for placing the burden of proving non-payment on defendant. In an action on a life insurance policy (Johnson v. Woodmen of the World, 119 Mo. App. 98, 95 S.W. 951), the statute was cited as authority for holding that the defense of nonpayment of the premium was an affirmative defense, and the burden as to that issue was on defendant.
Under the statute, all written contracts for the payment of money or property "import a consideration," and the burden of proving failure of consideration for such contracts is on defendant. [Swift v. Fire Ins. Co., 279 Mo. 606, l.c. 610, 216 S.W. 935; County of Montgomery v. Auchley, 92 Mo. 126, 4 S.W. 425; Maxwell v. Harroun, 180 S.W. 993; Swift v. Fire Insurance Co., 202 Mo. App. 419, l.c. 429, 217 S.W. 1003; Fleming v. Mulloy, 143 Mo. App. 309, 127 S.W. 105; Montgomery v. Montgomery, 142 Mo. App. 481, 127 S.W. 118.]
The execution of the policy under consideration was admitted. It is an instrument of writing signed by the president of defendant, whereby it promised to pay money. Under the statute it "imports a consideration." The allegation in the petition that plaintiffs paid the premium was unnecessary. It was surplusage, for without such allegation the petition stated a cause of action. [Johnson v. Woodmen of the World, supra, l.c. 101.] In its answer defendant pleaded failure of consideration in that plaintiffs did not pay the premium.  It was proper to do so for the defense was affirmative and the burden was not on plaintiffs to prove payment of the premium, but on defendant to prove non-payment. [Johnson v. Woodmen of the World, supra, l.c. 102.] It follows that the contention that the proof did not correspond with the allegations of the petition is ruled against defendant. In Stephens v. Fire Assn., 139 Mo. App. 369, l.c. 374, 123 S.W. 63, it was stated that in actions on fire insurance policies the burden was on plaintiffs to allege and prove payment of the premium. The record in that case did not present the question and the statement was obiter. Moreover, the statute was not called to the attention of the court.
The other questions presented on the demurrer were ruled against defendant on the former appeals. We have considered said questions as presented on the record for review on this appeal and adhere to the rulings made on the former appeals. In the instant case the court ruled correctly in refusing the withdrawal instructions and the instructions in the nature of general and special demurrers.
II. Defendant next contends that the allegation in the reply that Auber Smith was either agent or independent contractor was inconsistent pleading. We do not think so. The policy imports payment of the premium. The answer denied payment. The reply alleged payment to Auber Smith; that he was either the agent of defendant or an independent contractor, and that if he was either, payment to him was payment of the premium. Plaintiffs did not seek recovery on the allegations of the reply, and they did not allege in the reply that Auber Smith was both agent and independent contractor. They alleged that if he was either, the premium had been paid before notice from defendant of cancellation. The allegations in the reply were denials of the affirmative defense that plaintiffs had not paid the premium. It was not inconsistent pleading. [Realty Co. v. Markham, 163 Mo. App. 314, l.c. 326, 143 S.W. 1104.]
III. Defendant next contends that plaintiffs' instruction authorizing a verdict ignored its affirmative defenses. It requested no instruction on the defenses of false swearing and estoppel to deny cancellation. Those defenses were abandoned. At the request of defendant, the court well directed the jury on the other affirmative defenses. In ruling this question in State ex rel. Ins. Co. v. Cox, 307 Mo. 194. l.c. 197, 270 S.W. 113, we said:
"This question may have been open to argument prior to the recent case of State ex rel. Jenkins v. Trimble, 291 Mo. 227, 236 S.W. 651. Under that authority the instruction of plaintiff, in omitting the defense, it being an affirmative defense and not being an element that entered into plaintiff's case, was not error. The defense having been covered in a proper instruction given at defendant's instance, it is unnecessary to discuss a long line of cases cited by appellant on this question, because it is settled so far as this court is concerned by the authority above cited."
Other cases so ruling follow: State ex rel. Jenkins v. Trimble, 291 Mo. 227, 236 S.W. 651; Rawie v. Railroad Co., 310 Mo. 72, l.c. 96, 274 S.W. 1031; Heigold v. Ry. Co., 308 Mo. 142, l.c. 154, 271 S.W. 773.
IV. Defendant next contends that there was conflict in certain instructions on dual agency. It claims that another instruction given at its request correctly defined such agency. If so, there was no conflict, for the challenged instructions referred to other instructions defining such agency.
It also contended that in certain instructions dual agency was erroneously defined "as acting for both plaintiffs and defendant in the payment of the premium," whereas, it was defined in other instructions "as acting for both plaintiffs and defendant in the collection of the premium."
Of course, Auber Smith was not a dual agent by merely paying the premium. But the word "payment" as used in the directions to the jury that if "Auber Smith did not act in a dual capacity in the matter of the premium and payment thereof," included both payment and collection of the premium. The instructions are not technically worded. However, the word "payment" as used could not have been understood by the jury as only referring to the act of payment.
V. Defendant next contends that the failure of the court to define the term "independent contractor" was error. We do not think so. The instructions given at the request of both plaintiffs and defendant dealt with the question. If defendant was not satisfied, it should have requested an instruction defining the term.
VI. Defendant next charges the court with error in that it required defendant's counsel to read from a deposition two questions and answers in the cross-examination of a witness for plaintiff.
After the reading of the deposition, plaintiffs' counsel discovered that counsel for defendant had not read said questions and answers. Thereupon plaintiffs' counsel requested the court to require defendant's counsel to read said questions and answers. The court directed defendant's counsel to do so. Defendant objected and saved its exceptions, but its counsel read the questions and answers as directed by the court. The questions and answers tended to show that plaintiff, A.B. Smith, was not in good health. The condition of his health was not material, but we do not think the admission of the testimony was prejudicial. In this connection defendant complains of a reference to the occurrence by plaintiffs' counsel in his argument. Defendant did not object to the reference and is not in position to complain.
VII. Defendant next charges error on plaintiffs' statement of the case to the jury. It did not except to the statement or any part thereof, and for that reason the questions are not for review.
It also charges error on the argument to the jury. The only assignment in the motion for a new trial was that the court erred in overruling an objection of defendant to the argument that defendant had employed Auber Smith.
There was evidence tending to show that Auber Smith was the agent of defendant in collecting the premium. We think the argument was proper.
Other assignments are either without merit or they have been ruled on former appeals.
The judgment should be affirmed. It is so ordered.
Ragland, Ellison, Frank and Atwood, JJ., concur; White, J., concurs in result in separate concurring opinion in which Henwood, J., concurs.
I concur in the result reached in the majority opinion, but do not concur in the construction of Section 2958, Revised Statutes 1929:
"All instruments of writing made and signed by any person or his agent, whereby he shall promise to pay to any other, or his order, or unto bearer, any sum of money or property therein mentioned, shall import a consideration, and be due and payable as therein specified."
All instruments in writing of a certain character "shall import a consideration." The purpose of that section is to give validity to such undertakings so that in a suit to enforce one it is not necessary to prove a consideration in order to make out a case. A failure of a consideration would be a defense. If a contract stipulates a consideration, as it does in this case, it is not necessary to import one.
If a consideration is imported, is it different from the one specified in the contract? If so it would vary the terms of the contract. Does it import the consideration provided for in the contract? Certainly not. That which is expressed cannot be implied. The statute applies only to contracts which express no specific consideration. It applies where it is necessary, not where it would be superfluous.
The statute cannot mean that such contract "imports" any specific consideration. It imports some consideration, which would give the contract validity. It is entirely general, and in effect states a rule of evidence, so that a valid contract is prima-facie proven without proof of a specific consideration. When a contract provides for a consideration prima-facie proof is complete without importing a consideration.
The writer of the opinion, apparently conscious of the necessity of importing something not expressed in the contract, goes further and says on page 7:
"The policy imports payment of the premium."
There we have it. It imports performance of the contract. It might as well have been said that it imports performance of all the other conditions of the contract. It is not the payment of the premium that constitutes the consideration, but the agreement to pay it. In this case it was not paid, nor intended to be paid, until nearly two months after the policy was delivered.
The insurer promises to pay any loss on the property. The insured promises to pay the premium stipulated. One promise was a consideration for the other.
"Where a promise affords a consideration for a contract, it is the promise and not the performance thereof, that constitutes the consideration." [13 C.J. 327.]
The promise here was to pay the premium. The performance was the payment. It was a valid contract and enforceable before payment because the consideration was ample.
If the opinion means that payment of the premium was the consideration, then in the interval of more than a month after the delivery of the policy and before the payment there was no consideration, and consequently no binding contract until the payment was made. If a loss had occurred during the interval the defense of no consideration would have been complete on the theory that payment is the consideration which the law imports. If the plaintiff in such case should rely upon the express agreement that the payment was not due, what becomes of the notion that payment was the consideration imported?
No case can be cited where the payment of the premium is held to be the consideration for a policy unless the payment was at or before the delivery of the policy. Even in life policies where yearly assessments are provided for, a failure to pay is not called a failure of consideration but a forfeiture for nonperformance.
The case was tried without error and could have been affirmed without giving the statute a meaning not expressed or implied in it; a meaning entirely foreign to its purpose. Henwood, J., concurs in these views.