Eyring v. Kansas City Life Ins. Co.

• Decision Date: 08 May 1939
• Citation: 129 S.W.2d 1086,234 Mo.App. 328
• Parties: HARRY V. EYRING AND MABEL EYRING, RESPONDENT, v. KANSAS CITY LIFE INSURANCE COMPANY, APPELLANT
• Court: Kansas Court of Appeals

129 S.W.2d 1086

234 Mo.App. 328

HARRY V. EYRING AND MABEL EYRING, RESPONDENT, v. KANSAS CITY LIFE INSURANCE COMPANY, APPELLANT

Court of Appeals of Missouri, Kansas City

May 8, 1939

Appeal from Circuit Court of Jackson County.--Hon. Marion D Waltner, Judge.

REVERSED.

Judgment reversed.

McAllister Humphrey, Pew & Broaddus for appellant.

(1) The court erred in refusing to sustain defendant's demurrer at the close of all of the evidence, for the reason that the application was accompanied by the first premium in cash, and under the terms of the application and policy, the insurance became effective on August 23, 1934, the date the application was approved by defendant and the policy issued. It being admitted that the second annual premium was never paid, and that insured died on September 28, 1935, five days after the thirty-one day grace period had expired, there was no liability under the policy. State ex rel. Equitable Life v. Robertson, 191 S.W. 989, l. c. 992; Rowland v Missouri State Life Ins. Co., 48 S.W.2d l. c. 33-34 (Mo. App.); Pickett v. Equitable Life Assur. Soc., 27 S.W.2d 452, l. c. 454 (Mo. App.); Edwards v. Business Men's Acc. Ass'n., 205 Mo.App. 102, 221 S.W. 422, l. c. 425; Reed v. Prudential Ins. Co., 229 Mo.App. 90, 73 S.W.2d 1027, l. c. 1031. (2) The court erred in submitting the issue of vexatious delay and attorneys' fees to the jury for the reason there was no evidence in the case tending to show that appellant's defense was not made in good faith. State ex rel. Continental Life Ins. Co. v. Allen, 303 Mo. 608, l. c. 621, 262 S.W. 43, l. c. 46; State ex rel. Metropolitan Life Ins. Co. v. Shain, 334 Mo. 385, 66 S.W.2d 871, l. c. 876; Medling v. Abraham Lincoln Life Ins. Co., 225 Mo.App. 1243, 41 S.W.2d 6, l. c. 8.

George D. McIlrath for respondents.

The term "issued" as applied to an insurance policy includes "delivered." 1 Cooley's Brief on Insurance (2 Ed.), p. 632; Crohn v. Commercial Travelers, 156 S.W. 472, l. c. 474. A policy of insurance, like other contracts, does not become effective until the company accepts the application (the offer) and also communicates the fact of such acceptance to the applicant for the insurance. Lumbaugh v. Monarch Life Insurance Company, 84 S.W. 208; Horton v. N. Y. Life Insurance Co., 151 Mo. 604, 52 S.W. 356; Bruner v. Wheaton, 46 Mo. 363; Lungstross v. Insurance Co., 48 Mo. 201; Kilcullen v. Metropolitan Life Insurance Co., 108 Mo.App. 61, 82 S.W. 966; Bowman v. Northern Acc. Co., 124 Mo.App. 477, 101 S.W. 691. By payment of an annual premium insured is entitled to a full year's insurance. Kennedy v. National Acc. & Health Insurance Co., 76 S.W.2d 748; Scotten v. Metropolitan Life Insurance Company, 68 S.W.2d 600; Halsey v. American Central Life Insurance Company, 258 Mo. 659, 167 S.W. 951; Chesnut v. Security Mutual Life Insurance Co., 208 Mo.App. 130, 232 S.W. 203; Newman v. John Hancock Mutual Life Insurance Co., 216 Mo.App. 180, 257 S.W. 190; Hampe v. Metropolitan Life Insurance Co. (Mo. App.), 21 S.W.2d 926; Bigalke v. Mutual Life Insurance Co. (Mo. App.), 34 S.W.2d 1019; Doty v. Western & Southern Life Insurance Co., 223 Mo.App. 360, 16 S.W.2d 712. The date the policy becomes effective determines the date when the next premium is payable and takes precedence over any other stipulation or date named in the policy in conflict therewith. Scotten v. Metropolitan Life Ins. Co., 68 S.W.2d 60; O'Malley v. Northwestern Mutual Life, 95 S.W.2d 852; Hampe v. Metropolitan Life Ins. Co., 21 S.W.2d 926; Landrigan v. Missouri State Life, 234 S.W. 1042; State ex rel. v. Allen, 295 Mo. 307, 243 S.W. 839; Landrigan v. Missouri State Life, 211 Mo.App. 89, 245 S.W. 382; Johnson v. American Central Life, 212 Mo.App. 290, 249 S.W. 115. The allowance of the penalty and attorney's fee was proper. Hampe v. Metropolitan Life Ins. Co., 21 S.W.2d 926.

OPINION

SHAIN, P. J.

An opinion in this cause was handed down by this court at our Octbober Term, 1938. A motion for rehearing was granted and cause re-submitted at March Term, 1939, of this court. The opinion handed down at our October Term, 1938, was written by Commissioner SPERRY of this court.

After a careful review of the record and briefs, we conclude that the result reached in the former opinion is correct. We, therefore, adopt the opinion of Judge SPERRY, and in explanation of conclusion reached we add one paragraph at the close.

"Plaintiffs were beneficiaries in policy issued by defendant on life of insured, and sued for proceeds thereof. From judgment for plaintiffs defendant prosecutes this appeal. The parties will be referred to herein as above stated, just as they were in the trial court.

"Insured's mother, one of plaintiffs herein, was agent of defendant and accepted insured's application for the policy in question, which was a 'twenty pay life.' No money was actually paid by insured at any time, but her father, the other plaintiff herein who also on occasion sold insurance for defendant company, paid defendant $ 6.02, the net amount due defendant after deducting the agent's commission from the full amount due as first premium. The application contained the following pertinent provisions, among others:

"1. The policy and the application together constitute the insurance contract.

"2. If this application is accompanied by the first premium in cash and shall be approved at the home office of the company, and a policy on the plan and for the amount applied for shall be issued while the applicant is alive and in good health, then the insurance shall be effective, subject to the terms and conditions of the policy, from twelve o'clock noon of the day this application shall be approved by the Medical Department at the home office of the company."

"3. If this application is not accompanied by the first premium in cash it is agreed that the company assumed no liability whatever until a policy of insurance is actually delivered to me during my lifetime and while I am in good health, and any money, check, note, obligation or other thing of value, given to the company or its agents, on account of the first premium on the policy applied for shall be held by the company merely as a deposit and not as payment until such time as the policy of insurance is issued and delivered to me during my lifetime and while I am in good health, after which the same shall be applied on such first premium charge; otherwise said deposit shall be returned to me or my heirs, executors or administrators."

The application was dated August 15, 1934. The policy sued on was fully executed by defendant on August 23, 1934, was registered in the office of the insurance commissioner on August 25, and delivered to insured August 29, 1934. Insured died on September 28, 1935. No premium other than the first, was ever paid. If the contract of insurance became effective on the date of execution of policy, then the grace period of thirty-one days had expired prior to death of insured and plaintiffs cannot recover; but if the insurance did not become effective until August 29, 1934, the date of delivery of the policy, then plaintiffs are entitled to recover, and the judgment should be affirmed.

This is true because the date the insurance goes into effect controls the date of the expiration of the first year and the beginning of the period of grace. [Johnson v. American Central Life Insurance Company, 212 Mo.App. 290, l. c. 303.]

Where the contract is ambiguous and uncertain as to the date the insurance becomes effective, and the language of the instrument or instruments constituting the contract is, susceptible of more than one interpretation, as sometimes occurs when the policy said one thing and the application states another; or if, for any reason, fair minded men may differ as to the effective date of insurance, that construction of the language sued will be adopted that is most favorable to insured in order to avoid a foreclosure. [Johnson v. American Central Life Insurance Company, supra, l. c. 306.] But unless such an ambiguity or uncertainty exists there is no more room for construction of an insurance contract, legally and fairly entered into by the parties, than there is for construction of any other contract. "The court cannot make contracts for the parties, and it is its duty to enforce them as the parties have made them." [Citizens' National Life Ins. Co. v. Morris, 104 Ark. 288, 148 S.W. 1019; Evans v. Equitable Life Assurance Society, 109 S.W.2d 380, l. c. 385.]

It was said in Prange v. International Life Insurance Co., 46 S.W.2d 523: "Courts are without authority to rewrite contracts, even insurance contracts, although it may appear that in some respects they operate harshly or inequitably as to one of the parties; they discharge their full duty when they ascertain and give effect to the intention of the parties, as disclosed by the contract which they have themselves made." [National City Bank of St. Louis v. Missouri State Life Company, 57 S.W.2d 1066, l. c. 1068.] This court, speaking through Judge BLAND, said: ". . . the parties were at liberty to enter into any sort of a contract they desired without interference by the courts, except for fraud, mistake, or the like, or lack of consideration." [Winters v. Reserve Loan Life Insurance Company, 221 Mo.App. 519, l. c. 524.] In the case at bar there is no claim made of fraud, mistake or failure of consideration. Consequently we must determine first, before we attempt to "construe" the policy, whether or not there is any uncertainty or ambiguity as to when the contract should become effective. If there is none then the contract speaks for itself.

We think the language quoted from the application supra, which we have designated as paragraph 2, clearly fixes the date when the...