Halsey v. American Central Life Ins. Company

• Decision Date: 02 June 1914
• Citation: 167 S.W. 951,258 Mo. 659
• Parties: O. L. HALSEY, Administrator of Estate of AUGUSTUS C. HALSEY, v. AMERICAN CENTRAL LIFE INSURANCE COMPANY, Appellant
• Court: Missouri Supreme Court

167 S.W. 951

258 Mo. 659

O. L. HALSEY, Administrator of Estate of AUGUSTUS C. HALSEY, v. AMERICAN CENTRAL LIFE INSURANCE COMPANY, Appellant

Supreme Court of Missouri, First Division

June 2, 1914

Appeal from St. Louis City Circuit Court. -- Hon. William M. Kinsey Judge.

Affirmed.

Judson Green & Henry for appellant.

(1) Insurance contracts, when unambiguous, are construed and enforced as other contracts, and courts cannot make a new contract for the parties. Ins. Co. v. Fletcher, 117 U.S. 519; Merriwether v. Ins. Co., 127 Mo.App. 100; Steinberg v. Ins. Co., 49 Mo.App. 264; Jewett v Life Ins. Co., 112 N.W. 734; Assurance Co. v. Association, 182 U.S. 308; Methvin v. Ins. Co., 129 Cal. 251; McConnell v. Life Ins. Co., 92 F. 769; Johnson v. Life Ins. Co., 143 F. 950; Joyce's Ins., sec. 219. (2) Courts must give effect to the clearly expressed intention of the parties to this contract, so long as the terms agreed upon violate no provisions of our State statutes. Ashbrook v. Ins. Co., 94 Mo. 72; Rose v. Ins. Co., 240 Ill. 45; Frech v. Annuity Co., 157 Ill.App. 254; Gaterman v. Ins. Co., 1 Mo.App. 300; Ins. Co. v. Fletcher, 117 U.S. 519; Ins. Co. v. Buchanon, 141 F. 877; Armstrong v. Provident Society, 2 Ontario L. R. 771. (3) This policy clearly provides for the payment of the second premium on May 24, 1907, and stipulates an immediate lapse in case of nonpayment on that day. It was not unlawful to provide an immediate lapse, or even a forfeiture, of all rights under this policy for a failure to pay the second premium on May 24, 1907, the day stipulated. Gaterman v. Ins. Co., 1 Mo.App. 300; Ashbrook v. Ins. Co., 94 Mo. 77; Bacon on Benefit Societies, sec. 354; Rose v. Ins. Co., 240 Ill. 45; Frech v. Annuity Co., 157 Ill.App. 254; Armstrong v. Provident Soc., 2 Ontario L. R. 771. (4) Having held the policy in his possession for one year without objection to any of its terms Halsey must be held to have consented to and approved its provisions respecting the time for payment of the annual premiums and those relating to the effect of a failure to pay any premium on the day stipulated. Ins. Co. v. Neiberger, 74 Mo. 167; Christensen v. Ins. Co., 160 Mo.App. 486; Ins. Co. v. Fletcher, 117 U.S. 519. (5) Even if the policy had not lapsed on May 24, 1907, for failure to pay the premium due that day, yet the facts set out in the agreed statement do not show any lawful tender of the premium at any time prior to the death of the insured. The transaction of May 31, 1907, referred to in paragraph "6" of the agreed statement, did not constitute a legal tender. That transaction lacked the following essential elements of a valid tender: (a) It was not made within the time stipulated in the policy, which was essential to its validity as a tender to prevent a lapse. A tender of a premium made out of time is of no effect to prevent a lapse. Time is of the essence of such contracts. Gaterman v. Ins. Co., 1 Mo.App. 300; Howell v. Ins. Co., 44 N.Y. 276; Ashbrook v. Ins. Co., 94 Mo. 73; Bacon on Benefit Societies, sec. 354. (b) An uncertified check is not a valid tender. Lionberger v. Kinealy, 13 Mo.App. 4. (c) It was not made to any authorized officer or agent of the defendant company and the burden of proof was upon plaintiff to show that said Leonard was authorized by the company to receive and accept payment. Furniture & Carpet Co. v. Davis, 86 Mo.App. 296; Garnett v. Meyers, 65 Neb. 280; Smith v. Kidd, 68 N.Y. 130. Not only did plaintiff fail to make such affirmative proof, but the agreed statement shows affirmatively that said Leonard did not have authority to receive or accept payment of this premium, because he did not have the company's signed receipt therefor. (6) But even if there had been a valid legal tender of the second annual premium on May 31, 1907, it would be unavailing, because the policy had already lapsed and become void on May 24, and there was no waiver of the lapse by the defendant. It was lawful for Halsey and the Insurance Company to contract that the policy should bear date May 24, 1906, and that the second premium must be paid May 24, 1907, to prevent a lapse of the policy, and that is what they have done here in language so plain that it cannot be misunderstood; and it is immaterial when the policy was in fact issued by the company, so long as there was no fraud practiced. Rose v. Ins. Co., 240 Ill. 45; Frech v. Indemnity Co., 157 Ill.App. 244; Armstrong v. Provident Society, 2 Ontario L. R. 771; Jewett v. Northwestern Mutual, 112 N.W. 734; Sydnor v. Ins. Co., 26 S.Ct. 521 (Pa.) ; McConnell v. Provident Life, 92 F. 769; Johnson v. Ins. Co., 143 F. 950; Methvin v. Ins. Co., 129 Cal. 251; Ins. Co. v. Buchannon, 141 F. 877; Gaterman v. Ins. Co., 1 Mo.App. 300; Ashbrook v. Ins. Co., 94 Mo. 77; Ins. Co. v. Fletcher, 117 U.S. 519.

Harry Baer and F. H. Bacon for respondent.

(1) Insurance contracts will be liberally construed in favor of the insured and against the insurer. Forfeitures are not favored and the contract, if possible, will be given an interpretation so as to avoid forfeiture. Smith v. Benefit Ass'n, 173 Mo. 329; Mathews v. Modern Woodmen, 236 Mo. 326; Dezell v. Fidelity & Casualty Co., 176 Mo. 265; Stark v. Life Ins. Co., 159 S.W. 758; LaForce v. Insurance Co., 43 Mo.App. 530. (2) The entire contract must be considered and every part of it given due consideration. The contract is uncertain in its terms for the time is variously to be reckoned by different parts of it as: "Date of the policy"; "Issue of the policy"; "Time during which policy has been in force"; "Full year's premiums"; "Number of years for which complete annual premiums have been paid"; "Date of application"; "Anniversary of its date"; "Original issuance of this contract"; "Within two years from date"; "During first year succeeding date." (3) Under the terms of the contract, taking into consideration every part of it, it must be considered that the intent of the parties was clearly that the insurance should begin on that future indeterminate date when the policy should be delivered and the premium paid. Noyes v. Ins. Co., 1 Mo.App. 584. (4) Under a fair construction of the contract in question it must be deemed the intention of the parties that for the annual premium paid by the insured he should receive its full equivalent, namely, one year's insurance. McMaster v. Ins. Co., 183 U.S. 25; McMaster v. Ins. Co., 78 F. 33; Insurance Co. v. McMaster, 87 F. 63; McMaster v. Ins. Co., 90 F. 40; Stinchcombe v. Ins. Co., 46 Ore. 316; Ins. Co. v. Ison, 65 S. E. (Va.) 463. (5) If the second premium could not be demanded, or was not payable, until on or before the 5th day of June, 1907, and said second premium was tendered on the 31st day of May, 1907, it was tendered in due time and the company can take no advantage from its refusal to accept the premium so tendered, but on that ground alone is estopped from claiming a forfeiture. McMaster v. Ins. Co., 183 U.S. 25.

OPINION

WOODSON, P. J.

This was a suit on a policy of life insurance issued, for the sum of $ 10,000, by the defendant upon the life of Augustus C. Halsey, deceased. A trial was had in the circuit court of the city of St. Louis, which resulted in a judgment in favor of the plaintiff for the full amount sued for and interest. In due time and in proper form the defendant appealed the cause to this court.

The pleadings are put aside, as there is no point made in that regard.

The cause was submitted to the court upon the following agreed statement of facts, viz.:

"It is agreed that this cause shall be submitted to the court upon the pleadings, the policy sued on, the application therefor, a certain loan agreement hereinafter referred to copies of all which are hereto attached and made part hereof, and marked respectively Exhibits A, B, and C, and the following agreed statement of facts: All exhibits are identified by the signatures of the attorneys of the parties hereto.

"1. Augustus C. Halsey, by a writing called part one of the application, dated, signed and delivered at St. Louis, Missouri, on the 24th day of May, 1906, applied to American Central Life Insurance Company, defendant herein, for a policy on his life in the sum of ten thousand dollars. It was agreed that the annual premium on the policy applied for should be three hundred and sixty-eight and forty-hundredths dollars, of which three hundred and seven dollars should be paid in cash, and sixty-one and forty-hundredths dollars might be at the option of the applicant paid by a loan agreement which, with interest thereon, should be a lien upon the policy applied for. The loan agreement was executed and delivered with the application.

"2. Part one of the application and the loan agreement were received by the agent company in St. Louis, Missouri, on the 24th day of May, 1906, and on the next day forwarded by him to the home office of the company, Indianapolis, Indiana, where they were received on the 26th day of May, 1906. The same day the defendant company mailed a written request to the Kansas City, Missouri, office of Retail Credit Company for an inspection report upon Augustus C. Halsey.

"3. On the 25th day of May, 1906, the applicant, consistent with the terms of part one of the application, submitted himself to a medical examination, and such examination, being parts two and three of the application, was in due course forwarded to the home office of the company, where it was received on the 29th day of May, 1906.

"4. On May 31, 1906, a favorable inspection report upon the applicant was received at the home office of the company from the Retail Credit Company and a policy issued on that day the same being number 10701. The policy was delivered by defendant's agent to the applicant in St. Louis, Missouri, on the 5th day of June,...