Clark v. Mut. Life Ins. Co.

• Decision Date: 04 April 1933
• Docket Number: No. 22229.,22229.
• Citation: 58 S.W.2d 484
• Parties: DOROTHY CLARK, RESPONDENT, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, A CORPORATION, APPELLANT.
• Court: Missouri Court of Appeals

58 S.W.2d 484

DOROTHY CLARK, RESPONDENT, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, A CORPORATION, APPELLANT.

No. 22229.

St. Louis Court of Appeals. Missouri.

Opinion filed April 4, 1933.

Appeal from the Circuit Court, City of St. Louis. — Hon. Granville Hogan, Judge.

REVERSED AND REMANDED.

Lyon Anderson and Leahy, Saunders & Walther for appellant.

(1) Plaintiff must either seek to recover extended insurance under the statute (Sec. 5741) on the theory that the policy fails to provide for an unconditional commutation of the policy for nonforfeitable paid-up insurance or base a recovery on the policy on the theory that it does so provide such unconditional insurance. Under neither theory was plaintiff entitled to a verdict in excess of the amount tendered by defendant. Wilhelm v. Prudential Ins. Co. (St. L. Ct. of App.), 227 S.W. 897. (2) The provision of the policy conditioning the application of extended insurance upon requesting the same within ninety days of the lapse is a condition precedent. Inloe v. Prudential Insurance Co. (Mo. App.), 82 S.W. 1089; Cravens v. N.Y. Life Ins. Co., 186 Mo. 586. (3) The policy in suit by its terms provides for unconditional commutation of the policy for nonforfeitable paid-up insurance in the event of lapse for nonpayment of premium. Stark v. John Hancock Mut. Life Ins. Co., 159 S.W. 758, 176 Mo. App. 574; Dempsey v. John Hancock Mut. Life Ins. Co., 248 S.W. 17. (4) The ninety-day notice necessary to bring into operation the extended insurance under the terms of the policy was not waived by defendant. Cooley's Briefs, vol. 5, pages 3986, 3982.

John P. Griffin, John B. Sullivan and Francis P. Sullivan for respondent.

(1) The appellant took the position immediately after being notified of the death of the insured that the plaintiff was only entitled to the paid-up feature of the policy and not to extended insurance for the full amount of the policy, and by taking this position it waived all other defenses. Carrol v. Ins. Co., 249 S.W. (Mo. App.) 691. (2) The provision in the policy does not comply with the statute requiring the policy to provide for "the unconditional commutation of the policy for nonforfeitable paid-up insurance" because the courts have held that a simple provision for paid-up insurance does not comply with the statute, and furthermore there are conditions in the policy in suit which take it out of the pale of the statute. Ross v. Capitol Life Ins. Co., 205 Mo. App. 243, 288 S.W. 889 (Aff. 260 U.S. 699, 43 Sup. Ct. 91, 67 Lawyers' Ed. 470); State ex rel. Met. Life Ins. Co. v. Dawes et al., 297 S.W. (Sup. Ct. in banc) 951 Bothmann v. Met. Life Ins. Co., 299 Mo. 269, 252 S.W. 653; Hickey v. Met. Life Ins. Co., 270 S.W. (Mo. App.) 389; Milburn v. Ins. Co., 209 Mo. App. 232, 234 S.W. 380. (3) The provision in the policy referred to as Option A is not in compliance with the statute and any provision in the policy contrary to the statute is void and, therefore, the policy is to be considered as if it did not contain such provision. Cravens v. Ins. Co., 148 Mo. 583, 50 S.W. 519; Head v. Ins. Co., 241 Mo. 403; Burridge v. Ins. Co., 211 Mo. 158, l.c. 172-3; Ampleman v. Citizens Ins. Co., 35 Mo. App. 308, l.c. 314. (a) So as the provision of the policy to come within the statute it must strictly comply with the terms thereof. Fahle v. Ins. Co., 155 Mo. App. 15, l.c. 24-25, 134 S.W. 60; Paschedag v. Ins. Co., 155 Mo. App. 185, l.c. 195, 134 S.W. 102. (4) The appellant must allow the respondent the period of extended insurance provided in its policy as the respondent has the right to select the most favorable provision between the term or extended insurance provided by the statute and that of the policy. Mathews v. Mod. Woodmen, 236 Mo. l.c. 342; Stark v. John Hancock Mut. Life Ins. Co., 176 Mo. App. 574, l.c. 576; Wilhelm v. Prudential Ins. Co., 227 S.W. (Mo. App.), 897, l.c. 899. (5) Even though the provision in the policy did come within the terms of the statute referred to, the appellant is not entitled to it, and waive it by its agent advising the respondent that she did not have to do anything and that she could put the policy away and that it would be carried as extended insurance. Bohannon v. Ill. Bankers Life Ass'n., 20 S.W. (2d) (Mo. App.) 950, l.c. 951; Jones v. Prudential Ins. Co., 173 Mo. App. 1, l.c. 12, 155 S.W. 1106. (6) The question of law in this case was well settled in many decisions cited herein and, therefore, the question of damages and attorney fee was properly submitted to the jury. State ex rel. Ins. Co. v. Allen, 295 Mo. 307, 243 S.W. 839.

BECKER, P.J.

Plaintiff, the named beneficiary in a policy of life insurance issued by defendant on the life of her husband, Edward L. Clark, recovered judgment on the policy, together with a ten per cent. penalty and an attorney's fee under the vexatious refusal to pay statute. The defendant appeals.

It is conceded that defendant company issued a policy on the life of plaintiff's husband on October 29, 1921, and that plaintiff was the named beneficiary therein, and that the necessary premiums thereon were paid up to January 29, 1925, but that no further premiums were thereafter paid; that the insured died on February 9, 1930; that the policy contained the following nonforfeiture options:

"Nonforfeiture Options. — After three full annual premiums shall have been paid hereon, then in case of default in the payment of any subsequent premium or installment contained after the days of grace,

"Option A — Without action on the part of the holder, the policy will be continued for its value in participating paid-up life insurance (without disability or double indemnity benefits) which will have a yearly increasing surrender value in no event less than that required by law; or

"Option B — If the holder so elect, the policy will be terminated and the surrender value paid in cash; or

"Option C — Upon written request by the holder filed at the home office of the company within ninety days from the date of the premium in default, the policy will be continued at its face amount including any outstanding additions and less any indebtedness to the Company hereon or secured hereby, for its value in participating extended term insurance (without loan privilege or disability or double indemnity benefits) dating from said due date. Such insurance will have a decreasing surrender value expiring with the extension term."

It is further conceded that no request had been made by the holder of the policy, when failure to pay premium occurred, for extended term insurance under option "C" of the policy, within ninety days, or at any time after January 29, 1925; and that after the death of the insured, when the beneficiary requested payment of the policy, the insurer refused payment thereof, excepting the sum of $145 as paid-up insurance, on the ground that the insured had not made written request for extended insurance as provided for in the policy.

Plaintiff's theory, upon the trial of the case below, was that since more than three annual premiums had been paid upon the policy in question, under the provisions of section 5741, Revised Statutes of Missouri, 1929, the policy was not forfeited for the nonpayment of premiums, but had to be carried as temporary or extended insurance, and that though the period of this extended insurance, computed in accordance with the provisions set out in section 5743, Revised Statutes of Missouri, 1929, would not have carried the policy to the date of the death of the insured, yet under the terms of option "C" of the policy (which provided for extended insurance in the event of failure to pay premiums) the policy remained in force as extended insurance for six years and one hundred twenty-four days, which carried it beyond the date of the death of the insured. Plaintiff contended that she was entitled to benefit of the longer period of extended insurance provided for by option "C" in the policy as against the period set up by statute, even though option "C" in the policy is conditioned upon the insured requesting such extended insurance within ninety days from the date of the default in premiums; and plaintiff further contended that even though it be held that the said requirement for "request of extended insurance" was an essential prerequisite to the insured's right to the benefits of said option "C", that the defendant waived such "request" on the part of the insured, and should therefore be held liable for the payment of the policy.

At the close of the case defendant requested an instruction to the effect that "under the pleadings, the law, and the evidence plaintiff is entitled to recover only the sum of one hundred forty-nine dollars ($149), the amount tendered by defendant into court, and your verdict must be for plaintiff in said amount," which was refused, but the trial court, evidently adopting plaintiff's theory of the case, at the request of plaintiff, directed a verdict for plaintiff for the full amount of the policy less the premiums (plus interest thereon) that had become due on the policy from the time of the failure to pay the premiums on January 29, 1925, to the date of the death of the insured. To this sum the jury added ten per cent. damages and an attorney's fee for vexatious refusal to pay. From the resulting judgment the defendant in due course appealed.

Defendant, appellant here, assigns as error the action of the trial court in refusing its instruction and giving instead plaintiff's instruction for a directed verdict. The point is well taken.

Were it to be conceded, arguendo, that the policy herein sued on contained no provision for an unconditional an nonforfeitable paid-up policy of insurance, as provided for under section 5744, Revised Statutes of Missouri, 1929, and, therefore, under the nonforfeiture section 5741, Revised Statutes of Missouri, 1929, the policy was continued as extended insurance, plaintiff could not prevail, in that under the...