Conlon v. Northern Life Ins. Co.

• Decision Date: 09 June 1939
• Docket Number: 7779.
• Parties: CONLON v. NORTHERN LIFE INS. CO. (HYLAND, Intervener).
• Court: Montana Supreme Court

92 P.2d 284

108 Mont. 473

CONLON v. NORTHERN LIFE INS. CO. (HYLAND, Intervener).

No. 7779.

Supreme Court of Montana

June 9, 1939

Rehearing Denied July 15, 1939.

Appeal from District Court, Fourth District, Missoula County; Albert Becancon, Judge.

Action by Anna Conlon, as administratrix of the estate of Bertel M Stokke, deceased, against the Northern Life Insurance Company on a life policy, wherein Sigurd Hyland intervened. From the judgment, defendant and intervener appeal.

Reversed and remanded for a new trial.

ANGSTMAN and ERICKSON, JJ., dissenting.

Murphy & Whitlock, J. C. Garlington, and Pope, Smith & Smith, all of Missoula, for appellants.

Fred W Schilling, E. C. Mulroney, J. M. Kurtz and E. C. Kurtz, all of Missoula, for respondent.

MORRIS Justice.

The plaintiff, as administratrix of the estate of Bertel M Stokke, deceased, commenced this action to recover on a policy issued by the defendant insuring the life of the deceased.

The policy was issued May 8, 1930, and quarterly premiums in the amount of $55.50 were made payable on the 7th of each third month after the month in which issued. Two full annual payments had been made on the policy and the quarterly payment that became due on May 7, 1932, was also paid. The quarterly payment which became due August 7, 1932, was not paid. A grace period of thirty-one days in the payment of any quarterly premium was allowed by the contract, which kept the policy in force to and including September 7, 1932.

Stokke appears to have been taken ill on or about the 10th of August, 1932, and died September 8, 1932. The cause of his death does not appear. The complaint alleges the appointment and qualification of the administratrix; the death of Stokke; outlines the general provisions of the policy of insurance; alleges the insured became totally and permanently physically disabled August 10, 1932; was entered as a patient at St. Patrick's Hospital at Missoula, under the care of Dr. Harry Smith and remained in that institution until his death.

Sigurd Hyland a nephew of the insured, is named as the beneficiary in the policy, but the plaintiff applied for and was granted letters of administration on the insured's estate on the ground, and brought this action alleging, that the beneficiary had been changed and by such change the policy became payable to the insured's estate. Hyland intervened in the action. Both the plaintiff and the intervener proceeded therein and in their pleadings on the theory that a waiver of premium provision of the policy had become operative, and substantially the only controversy between the plaintiff and the intervener is on the question as to who is the beneficiary under the policy.

The defendant's general demurrer to both complaints was overruled. The answer to intervener's complaint admits the issuance and delivery of the policy to the insured, but alleges the termination of the contract for failure to pay the premium due. First and second affirmative defenses were set up recounting, in substance, the terms of the policy relative to the payment of premiums, and the thirty-one days of grace allowed in the payment of premiums after the initial premium was paid, and quotes the ninety-day disability clause under which the "waiver of premiums" provision becomes operative. It is further alleged that by reason of failure on the part of insured to furnish any proof of such disability, the provisions in the policy relative to waiver of payment of premiums never became operative, and at the termination of the thirty-one days of grace prior to the death of the insured without the payment of the quarterly premium due August 7, the policy lapsed, was forfeited and all of the insured's right terminated thereunder.

The defendant's answer to the plaintiff's complaint was substantially along the same lines as the answer to the intervener's pleading, with the additional allegation that the provisions of the policy governing the change of beneficiary had not been complied with, and that, if there was any liability under the policy, such liability was in favor of Sigurd Hyland, the intervener, who was named in the policy as the original beneficiary. The affirmative matter pleaded by the defendant was denied by plaintiff's reply.

The matter came on for hearing before the court sitting without a jury, a jury having been specifically waived in open court by all parties. At the beginning of the hearing the defendant objected to the introduction of any evidence by either the plaintiff or the intervener, on the ground that neither of the complaints constituted a cause of action against the defendant. The motion was overruled.

The plaintiff's evidence consists of certain stipulations agreed to in open court, and the introduction of four exhibits, consisting of the insurance policy, a telegram and two letters. No verbal testimony was received on behalf of the plaintiff or intervener, and but one witness testified on behalf of the defendant.

On the policy of insurance being offered in evidence, counsel for intervener objected to its introduction for the reason that it showed on its face that Sigurd Hyland was the beneficiary thereof, and that the policy had not been endorsed by the president and secretary of defendant as required by its terms to show that the beneficiary had been changed. Defendant objected to the introduction of the policy under its general objections to the introduction of any evidence, contending that the policy itself did not tend to prove or disprove the case as against defendant, but stated that if plaintiff had not offered the policy in evidence the defendant would have done so. The court overruled the objections and the policy was admitted.

By stipulation it was agreed that insured died in Missoula county, Montana, on the 8th day of September, 1932; that he was confined in St. Patrick's Hospital, Missoula, for approximately twenty-eight days just prior to his death, but defendant made the reservation to this stipulation that it was not material or competent under the pleadings. The cause of death was not shown. It was further stipulated that defendant had not paid the amount of the policy to anyone; that at the time of the death of the insured the policy was in the hands of the defendant, having been received by it in the same enclosure as the letter which will hereafter be referred to as Plaintiff's Exhibit "C."

Plaintiff offered Exhibit "B" in evidence, to which the defendant objected, which objection was overruled. Exhibit "B" is as follows:

"Western Union

Received at Room 1005 Northern Life Tower, Seattle Wash.

1932 Sep 7 PM 155

E A 73 8--Missoula Mont 7 236P

Northern Life Insurance Co--

Seattle Wash--

Bertel M Stokke disabled in Hospital Letter Today--

(Stamped as follows:)

S G Skulason

Claim Dept

Received

Sep 8 1932

Northern Life."

S. G. Skulason, whose name appears on this exhibit, was at one time agent of the defendant and wrote the policy on the life of the insured, but, as will appear later, had ceased to be the agent of the defendant several months prior to the time this telegram and other exhibits were sent by him to the defendant.

Plaintiff then offered in evidence her Exhibit "C", which was admitted over objection. Exhibit "C" is as follows:

"S. G. Skulason Lawyer 50-51 Higgins Block Missoula, Montana

September 7th, 1932.

Northern Life Insurance Company, Seattle, Washington.

Gentlemen: Bertel M. Stokke, holder of policy No. 132-113 had for a number of days been confined to bed in St. Patrick's Hospital here under the care of a doctor. He notified me about two weeks ago when he first went in. I talked with his doctor to learn the cause of his sickness, but he was not then ready to say. Then I was called away from the city and just returned. I saw Stokke last night and wired you this morning. A premium is due on the policy. Stokke wants that amount deducted from the amount of his claim when that is determined. Please send the necessary blanks and I will have them filled.

Mr. Stokke wants to change the beneficiary so as to make the insurance payable to his estate and for that purpose I am herewith enclosing the policy.

Kindly reply promptly, as Stokke is sick and considerably worried. The reason he comes to me with this matter is that I wrote his policy while I was agent here.

Yours very truly,

S. G. Skulason.

(Stamped as follows:)

Received

(Time symbol:)

10:40

Sept 9, 1932

Northern Life Insurance Co."

Plaintiff then offered in evidence her Exhibit "D," which was admitted over objection of defendant. Such Exhibit is as follows:

"S. G. Skulason

Lawyer

50-51 Higgins Block

Missoula, Montana

Sept. 9th, 1932.

Northern Life Insurance Company, Seattle, Washington.

Gentlemen: On the 7th of this month I wired you and wrote a letter the same day for Bertel M. Stokke, holder of policy No. 132113, and with my letter I enclosed the policy for the purpose of changing the beneficiary. I now have to report that Stokke died after an operation at St. Patrick's Hospital here yesterday. Please write me at once advising what is necessary to do and send whatever blanks will be needed. If it is necessary to send the policy back, you may send it to me.

Thanking you for your usual prompt attention, I am,

Yours very truly,

S. G. Skulason.

(Stamped as follows:)

Received

Time symbol:

7:40

Sep 12 1932

Northern Life Insurance Co."

At this point the plaintiff and intervener stated that they had no further evidence to offer. Thereupon the defendant called John F. Bamford, legal counsel and assistant to the president of the defendant, as a witness in its behalf. The material part of the testimony of this witness is substantially as...