Hampe v. Metropolitan Life Ins. Co.

• Decision Date: 08 October 1929
• Docket Number: No. 20645.,20645.
• Citation: 21 S.W.2d 926
• Parties: HAMPE, Public Administrator, v. METROPOLITAN LIFE INS. CO.
• Court: Missouri Court of Appeals

21 S.W.2d 926

HAMPE, Public Administrator, v. METROPOLITAN LIFE INS. CO.

No. 20645.

St. Louis Court of Appeals. Missouri.

October 8, 1929.

As Modified, on Denial of Rehearing, December 10, 1929.

Appeal from St. Louis Circuit Court; Robert W. Hall, Judge.

"Not to be officially published."

Action by Ellen Hogberg against the Metropolitan Life Insurance Company, which on plaintiff's death was revived in the name of Otto A. Hampe, Public Administrator, and administrator in charge of the estate of said deceased plaintiff. Judgment for plaintiff, and defendant appeals. Affirmed.

Fordyce, Holliday & White and Walter R. Mayne, all of St. Louis (Leroy A. Lincoln and Harry Cole Bates, both of New York City, of counsel), for appellant.

Victor W. Lund and James J. O'Donohoe, both of St. Louis, for respondent.

James C. Jones, Jeffries, Simpson & Plummer, and Leahy, Saunders & Walther, all of St. Louis, amici curiæ.

BENNICK, C.

This is an action upon a policy of life insurance. The suit was instituted by the beneficiary, Ellen Hogberg, in the circuit court of the city of St. Louis, whereupon defendant waived the issuance and service of summons, entered its appearance to the current term of court, and joined with plaintiff in waiving a jury. Thereafter, upon the suggestion of plaintiff's death, the cause was revived in the name of the public administrator, and the case was brought to trial upon amended pleadings, resulting in the entry of a judgment in favor of plaintiff, and against defendant, in the total sum of $2,865, the items of which were $2,000 as the face value of the policy, $165 as interest, $200 as damages for vexatious refusal to pay, and $500 for attorney's fees. A motion for a new trial was filed and overruled, and defendant's appeal has been duly perfected to this court.

The pleadings of the parties may be put aside, in view of the fact that no point is made as to their form or sufficiency. The case was submitted upon an agreed statement of facts, which disclosed that the insured, Andrew Hogberg, made application for his policy on August 8, 1924; that the policy was issued by defendant on August 15, 1924; and that it was delivered to the insured, and the first premium paid, on August 30, 1924.

In the course of his application, and in paragraph 4 of part A thereof, the applicant agreed as follows:

"That the company shall incur no liability under this application until it has been received, approved and a policy issued and delivered, and the full first premium stipulated in the policy has actually been paid to and accepted by the company during the lifetime of the applicant, in which case such policy shall be deemed to have taken effect as of the date of issue as recited on the first page thereof."

The terms of the policy, appearing on the first page thereof, and as referred to in the portion of the application quoted above, were as follows:

"Metropolitan Life Insurance Company hereby insures the life of Andrew Hogberg, herein called the insured, in accordance with the terms of this policy, No. 4039187-A, and promises to pay at its home office, in the city of New York, two thousand dollars to Ielien (Ellen) Hogberg, wife, beneficiary, upon receipt of due proof of the death of the insured and upon the surrender of this policy. * * *

"This policy is issued in consideration of the application therefor, copy of which application is attached hereto and made part hereof, and of the payment for said insurance on the life of the above named insured, of twenty dollars and twenty cents (which maintains this policy in force for a period of 3 months from its date of issue, as set forth below) and of the payment hereafter of a like quarter annual premium on each 15th day of August, November, February and May (hereinafter called the due date), until twenty full years' premiums shall have been paid, or until the prior death of the insured.

"The provisions and benefits printed or written by the company on the following pages are a part of this policy as fully as if recited over the signatures hereto affixed.

"In witness whereof the Metropolitan Life Insurance Company has caused this policy to be executed this 15th day of August, 1924, which is the date of issue of this policy."

The policy contained the usual provision that it and the application therefor should constitute the entire contract between the parties, as well as a further provision for option on surrender or lapse, by which it was agreed that, after the premiums for 2 full years had been paid, the owner or assignee of the policy, upon written request filed with defendant's home office within 3 months after the due date of any premium in default, should be entitled to exercise his option either for a cash surrender value, or for paid-up whole life insurance, or for paid-up term insurance. It was then further provided that, if the owner of the policy failed to avail himself of any one of such options within 3 months after the due date of the premium in default, the policy would be continued by the company for a reduced amount of nonparticipating paid-up whole life insurance. Premiums for two full years were concededly paid, the last of which was for the quarter beginning in May, and ending in August, 1926.

On November 17, 1926, the insured died, and on November 20, 1926, the beneficiary demanded payment by defendant of the full face value of the policy. No exercise of option on surrender or lapse, and no demand for payment, had been made prior to such date. Meanwhile, however, and on November 15, 1926, defendant had written the insured, advising him that his policy had been allowed to lapse, and that it was to be continued thereafter as a nonparticipating paid-up policy for the sum of $172. At the close of the case the court gave a peremptory declaration of law finding for plaintiff, and refused the one requested by defendant, and it is the propriety of the court's ruling on such requests that is now assailed on this appeal.

The ultimate decision in the case depends entirely upon the determination of what was the due date of the premium in default at the time of the death of the insured. Defendant argues that it was August 15, 1926, the date fixed in the policy; that the premium was in default for 3 months on November 15, 1926, when notice was given the insured of the automatic commutation of the contract into a nonparticipating paid-up policy for $172; that inasmuch as no option on surrender or lapse had been exercised by the insured within 3 months after August 15, 1926, the action taken by defendant in converting the policy into a paid-up policy for $172 was proper under its terms; and that plaintiff should have judgment for only such amount, and not for the face value of the policy.

Plaintiff insists, to the contrary, that the due date of the premium in default was August 30, 1926, upon the theory that it had been agreed between the parties in the application for the policy that it would not go into effect until its delivery, which was 15 days after its date of issue, or on August 30, 1924; that the policy was yet a live contract until 3 months after the due date of the premium in default, or until November 30, 1926; and that the insured's death occurred, and demand for payment was made, within the period of the life of the policy, so as to entitle the beneficiary to recover the full face value thereof.

For many years the Missouri courts, standing somewhat alone upon the question, have held that, where an insurance contract provides that it shall not become effective until the happening of certain contingencies such as the delivery of the policy during the lifetime or good health of the applicant and the payment of the first premium, but elsewhere recites a prior date of issue or due date, it is the date of delivery and payment which marks the beginning of the effectiveness of the policy, and determines the time when each succeeding premium shall be paid. Halsey v. American Central Life Insurance Co., 258 Mo. 659, 167 S. W. 951; State ex rel. v. Allen, 295 Mo. 307, 243 S. W. 839; Landrigan v. Missouri State Life Insurance Co., 211 Mo. App. 89, 245 S. W. 382; Chestnut v. Security Mutual Life Insurance Co., 208 Mo. App. 130, 232 S. W. 203; Johnson v. American...