Topinka v. Minnesota Mut. Life Ins. Co.

Citation248 N.W. 660,189 Minn. 75
Decision Date12 May 1933
Docket NumberNo. 29351.,29351.
PartiesTOPINKA v. MINNESOTA MUT. LIFE INS. CO.
CourtSupreme Court of Minnesota (US)

Appeal from District Court, Ramsey County; Hugo O. Hanft, Judge.

Action by Anna Topinka against the Minnesota Mutual Life Insurance Company. From a judgment granting defendant's motion for judgment notwithstanding verdict for plaintiff, plaintiff appeals.

Affirmed.

John P. J. Dolan, of St. Paul, and Raymond N. Klass, of Cedar Rapids, Iowa, for appellant.

Doherty, Rumble, Bunn & Butler and Robert O. Sullivan, all of St. Paul, for respondent.

STONE, Justice.

In this action on a policy of life insurance plaintiff had a verdict. Thereupon defendant moved for judgment notwithstanding the verdict or a new trial. The motion for judgment notwithstanding was granted, and plaintiff appeals.

Defendant is, as its name indicates, a Minnesota mutual life insurance company, doing business on the old line plan. Plaintiff sues as beneficiary of the policy in suit, issued by defendant on the life of her son, Rudolph Topinka. He made application for the insurance at Cedar Rapids, Iowa, September 28, 1923. The policy was issued and dated October 5, and delivered to the insured at Cedar Rapids October 8, 1923. It was an ordinary $1,000 life policy on the 20-payment plan. The application, made part of the policy, provided "that in determining the due dates of any premium the reckoning shall be from the date of the policy." The latter stated that it was issued "in consideration of the payment in advance of the annual premium of $33.33 and of the further payment of a like sum on or before the 5th day of October in every year until premiums have been paid for a period of 20 years or until the prior death of the insured." All premiums were made payable in advance at the home office of the company at St. Paul or to an agent upon delivery of a receipt signed by the president or secretary and countersigned by said agent. Subject to a grace of one month, it was provided that "the payment of any premium or installment thereof shall not maintain the policy in force beyond the date when the next premium or installment thereof is payable." The first premium was paid to defendant's soliciting agent at Cedar Rapids. There was premium default on the first anniversary of the policy, October 5, 1924. On the insured's application, the policy was reinstated November 21, 1924, but on the payment of a six months', rather than a one year's, premium. So another semiannual premium installment of $17.33 became due April 5, 1925. If that payment was not made, the policy was not in force June 22, 1925, when the insured died. The insurance had not been in force long enough to make effective its standard provisions for automatic extension upon premium default.

The complaint alleged the execution and delivery of the policy, and that the insured, "beginning with the payment of the first premium at or about November 17, 1923, did and performed all the terms and conditions of the said contract to be done and performed by him." The defense is that the policy lapsed for nonpayment of the premium due April 5, 1925. At the trial, death of the insured, and date thereof admitted, plaintiff introduced the policy and rested. For defendant, the evidence consisted of the home office records hereinafter mentioned. By those records, and not otherwise, was it proved that the premium due April 5, 1925, was not paid and that in consequence the policy had lapsed before the insured's death.

1. Death of the insured admitted, production of the policy made a prima facie case for plaintiff. That is established by a long line of decisions. Hinchcliffe v. Minn. Commercial Men's Ass'n, 142 Minn. 204, 171 N. W. 776. The rule is especially appropriate where the insurer is a mutual company, whereof issue of the policy makes the insured a member. Such a status, once established, may be presumed to continue for what, under the circumstances, is a reasonable time.

2, 3. But the rule is a general one, its application varying in accommodation to facts. It is urged for plaintiff, with some authority in support (to be considered later), that it not only made a prima facie case for her, but also shifted the whole burden of proof to defendant. That impossible extension of the rule can be achieved only by ignoring controlling factors.

Such cases as Lafferty v. Kansas City Casualty Co., 287 Mo. 555, 229 S. W. 750, to the contrary notwithstanding, nonpayment of the premium was not an affirmative defense. Plaintiff undertook to establish contract liability. The burden of establishing it was on her at the beginning and remained so to the end. Hers was the burden of establishing every essential of liability. Issue of the policy was but the initial element. Proof of that had to be followed, in order to sustain plaintiff's case, by evidence that the insured had performed the obligations necessary to continue the insurance beyond the time of his death. Upon plaintiff, then, was the burden to prove that the premium due April 5, 1925, had been paid.

Many of the cases (for collections of which see 4 Cooley's Briefs on Ins. [2d Ed.] p. 3863 et seq.; 8 Couch on Ins. § 2223) correctly say that, by production of certificate or policy, a distinct burden is shifted to the insurer if some affirmative action by the company was prerequisite to obligation to pay premium or assessment. Where the insurer must make an assessment and give notice before the insured is obliged to pay, the burden is upon it to prove the assessment, notice, and nonpayment. In such cases, there is a condition to be performed by the insurer precedent to liability of the insured to pay. That condition is normally present in fraternal and other assessment insurance.

But a very different situation is inherent in, and characteristic of, old line life insurance. Nothing affirmative is required of insurer after delivery of the policy. Not even is notice of premium maturity required. The standard provisions for automatic extension out of the case, as they are here, lapse is automatic upon expiration of the period of grace after nonpayment of a premium. New York Life Ins. Co. v. Statham, 93 U. S. 24, 23 L. Ed. 789. In that connection, the idea of forfeiture and all its harsh implications are much overworked. There is no forfeiture in any proper sense. The insurance has no existence from year to year except for the premium payments essential to its continuance. Mutual Life Ins. Co. of New York v. Girard Life Ins. Co., 100 Pa. 172, 180. The insured's omission to pay a premium forfeits nothing. He but fails to exercise his option to purchase an extension. That is no more forfeiture than is the failure of a lessee to renew a lease which he has the option to renew merely by prepayment of a stipulated rent.

Plaintiff having the affirmative, it was incumbent upon her to sustain the burden of proof, not only of the issue of the policy, but also that it was in force at the insured's death. Payment of the first premium, unless credit was extended or payment otherwise waived, was condition precedent to the going into effect of the policy. In similar fashion, payment of each additional premium during the period here in question was condition precedent to renewal and consequent continuation of defendant's liability. New York Life Ins. Co. v. Statham, supra. Such conditions differ broadly from those others, the nonperformance of which may defeat a right already accrued, and are therefore in the nature of defeasances. Compare Chambers v. N. W. Mutual Life Ins. Co., 64 Minn. 495, 497, 67 N. W. 367, 58 Am. St. Rep. 549.

Without attempting their review here, it will be found that many of the numerous cases frequently cited, in support of the idea that the production of a policy shifts the burden of proving nonpayment to the insurer, mean only that a prima facie case is made for the plaintiff, and that, while the burden of proving all essentials of the cause of action remains with plaintiff, the burden of going forward with evidence is shifted to the defendant insurer.

Possession of the policy "is merely prima facie, and is subject to be rebutted." Bostick v. New York Life Ins. Co. (C. C. A.) 284 F. 256, 258; O'Connell v. F. & C. Co., 87 App. Div. 306, 84 N. Y. S. 315. "Accurately speaking, the burden of proof never shifts in the trial of a lawsuit." Lebens v. Wolf, 138 Minn. 435, 165 N. W. 276, 277, L. R. A. 1918C, 868. "We do not adopt the doctrine that the burden of proof shifts from time to time in the trial." Piepho v. M. Sigbert-Awes Co., 152 Minn. 315, 188 N. W. 998. See, also, Ertsgaard v. Bowen, 183 Minn. 339, 237 N. W. 1, where there was the same dual error that now permeates the argument for plaintiff. There was first failure to distinguish between the burden of proof resting on the affirmative and that different thing, the necessity of going on with the evidence. Then there was, as here, a mistaken attempt to take from the plaintiff's case one element and to shift to the defendant the burden of negative proof, whereas the load was on the plaintiff to establish the positive. This court has long been committed to the proposition that "the burden in every case rests on the litigant who has the affirmative of an issue to prove it; otherwise, his opponent wins." McEleney v. Donovan, 119 Minn. 294, 138 N. W. 306, 308.

That the burden of proof of nonpayment of the premium was shifted to defendant by plaintiff's production of the policy is the rule in Missouri. Harris v. Security Life Ins. Co., 248 Mo. 304, 154 S. W. 68, Ann. Cas. 1914C, 648. It seems to have had its beginning in Gannon v. Laclede Gaslight Co., 145 Mo. 502, 46 S. W. 968, 47 S. W. 907, 43 L. R. A. 505, a res ipsa case. Three judges dissented observing that the rule would permit juries to decide causes "according to their discretion, and not according to the evidence." Page 548 of 145 Mo., 47 S. W. 907, 917. The Gannon Case was followed in one on an insurance...

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