Headley v. Central Life Ins. Co.

• Decision Date: 08 February 1921
• Docket Number: No. 16311.,16311.
• Citation: 227 S.W. 920
• Parties: HEADLEY et al. v. CENTRAL LIFE INS. CO. OF ILLINOIS.
• Court: Missouri Court of Appeals

227 S.W. 920

HEADLEY et al. v. CENTRAL LIFE INS. CO. OF ILLINOIS.

No. 16311.

St. Louis Court of Appeals. Missouri.

February 8, 1921.

Rehearing Denied. February 24, 1921.

Appeal from St. Louis Circuit Court; Wilson A. Taylor, Judge.

"Not to be officially published."

Action by Ella B. Headley and another against the Central Life Insurance Company of Illinois. Judgment for plaintiffs, and defendant appeals. Affirmed.

This is an action on a policy of life insurance in the sum of $1,000 issued on June 16, 1914, to John L. Ayres by the defendant insurance company, an Illinois corporation, and delivered to the insured in the state of Illinois. Plaintiffs, a sister and a brother of the insured, are named as beneficiaries therein. The insured died on February 24, 1917, at Lindenwood Station, near the city of St. Louis, while on his way from the Mexican border to his home in Saunemin, Ill.

The petition is in the usual form, alleging that at the date of the insured's death the policy was in full force and effect, averring full performance of all the conditions thereof by the insured, and praying judgment for $1,000 with interest from March 3, 1917, the date when proofs of death were offered.

The answer, admitting the issuance and delivery of the policy, contains a general denial coupled with a plea that the insurance was not in force and effect at the date of the death of the insured, owing to the nonpayment of the annual premium due June 16, 1916. The answer also pleads certain provisions of the policy with which we are not concerned on appeal, and which, therefore, need not be noticed.

Plaintiffs' amended reply admits that the third annual payment, due June 16, 1916, or within the 30 days grace allowed by the policy for payment of premiums, had not been paid, but avers that the provisions of the policy as to the payment of premiums when due, or within 30 days thereafter, were waived by defendant. The facts upon which said alleged waiver is predicated are fully pleaded in the reply. They will appear from the agreed statement of facts which will be noticed later. The reply also avers that the policy is an Illinois contract, and pleads certain decisions of the Supreme and Appellate Courts of the state of Illinois, by pleading the title of the cases so adjudicated, together with the volume and page where each is found reported.

The cause was tried before the court without a jury, upon an agreed statement of facts, resulting in a judgment in plaintiffs' favor, from which the defendant prosecutes this appeal.

The substance of the agreed statement of facts may be stated as follows:

On June 16, 1914, defendant, an Illinois corporation, issued the policy in suit and delivered the same to the insured at Ottawa, Ill.; these plaintiffs being named as beneficiaries therein. The policy provided for the payment of an annual premium of $30.33. The policy is set out in full in the agreed statement of facts, but we need notice only the following provisions thereof, viz.:

"A grace of one month, subject to an interest charge at the rate of 6 per cent. per annum, will be allowed on any premium except the first, and if payment be not then made, this policy shall become null and void, except as hereinafter provided in the nonforfeiture clause. * * *

"The policy may be reinstated at any time after the said month of grace, upon evidence of insurability satisfactory to the company and payment of all arrears thereon, with interest at 6 per cent. per annum, provided, in any case, the policy has not been surrendered to the company."

For the first annual premium the insured gave defendant his note for $30.35, payable October 1, 1914. In accepting such note defendant gave the insured a receipt, acknowledging the receipt of $30.35, "being the first annual premium," etc., but containing the following recital:

"This payment, if made when overdue, will not be valid in continuing the policy, unless the party insured is in good health at the time, and, if paid by note, the nonpayment of the note will void the policy."

This note was not paid when due, but was paid thereafter in installments.

For the second annual premium, due June 16, 1915, the insured, on July 12, 1915, gave his note to defendant for the said sum of $30.35, payable April 1, 1916. Nothing appears as to the character of the receipt, if any, given to the insured upon that occasion. This last-mentioned note was not paid when it became due on April 1, 1916, and was never paid by the insured or by any one in his behalf.

The third annual premium became due on June 16, 1916, and was never paid by the insured, in any manner, or by any one in his behalf.

Under date of February 16, 1917, defendant, through its secretary, wrote a letter to the insured, addressed to the latter at Saunemin, Ill., and which was mailed at Ottawa, Ill., on the following day. This letter was as follows:

"Your note of $30.35 given to cover a renewal premium on your policy No. 12622 has been past due in this office since April 1, 1916. We are writing you calling your attention to the fact that it is absolutely essential for the validity of your policy that this matter be adjusted at the earliest possible moment.

"Our aim is to give the best insurance service and afford every facility to our policy holders, and if there is any assistance we can render you in caring for your policy we would be glad to be at your service.

"Kindly forward us a remittance to cover the above note, or, if you are unable to make payment at this time, advise us when you can do so, and we will, if possible, allow you the needed extension."

No reply to this letter was ever received by the defendant. No request was ever made by the insured for an extension of the note therein referred to; nor, as said, was the note ever paid. One week after the mailing of said letter, to wit, on February 24, 1917, the insured was killed at Lindenwood Station, in this state, as stated above. Thereafter demand was made upon defendant for the payment of the policy, to which defendant replied by letter that the note given by the insured "which continued the policy in force to June 16, 1916," was never paid; that the premium due June 16, 1916, was never paid; and that therefore the policy was not in force at the time of the death of the insured.

By the terms of the stipulation embodying the agreed statement of facts the only question which was submitted to the trial court was that pertaining to the alleged waiver. And this stipulation provided that

"If the court shall find that said acts and conduct (of defendant) constituted a waiver of the prompt payment of premiums, and that there was no forfeiture of said policy prior to the death of John L. Ayres, the insured, under the decisions and law of the state of Illinois, then the plaintiffs shall be entitled to judgment," etc. (Italics ours.)

Jones, Hocker, Sullivan & Angert and Vincent L. Boisaubin, all of St. Louis, for appellant.

E. E. Rudolph, Milton Lauenstein, and Claude O. Pearcy, all of St. Louis, for respondents.

ALLEN, J. (after stating the facts as above).

Though this is an Illinois contract, and consequently matters pertaining to the construction and validity thereof are to be determined by the law of that state, what will constitute a waiver of the forfeiture in question, or evidence of such waiver, would be a matter to be determined by the law of the forum were it not for the terms of the stipulation italicized above. See Thompson v. Traders' Ins. Co., 169 Mo. 12, 68 S. W. 889; Rosenthal-Sloan Millinery Co. v. Hanover Fire Ins. Co., 219 S. W. 669; 19 Cyc. p. 858n. But, since the parties have stipulated that this question shall be determined in accordance with the law of Illinois, and the cause was tried upon that theory below, we shall so treat the case here.

It cannot be doubted, we think, that by the terms of the policy in suit the insurance automatically lapsed and became forfeited by reason of the insured's failure to pay the third annual premium due June 16, 1916. The contract of insurance required that this premium be paid within 30 days from June 16, 1916. It was not paid during that period, nor was it paid at any time during the subsequent period of more than 7 months elapsing prior to the death of the insured. And the question before us is whether the letter written by defendant's secretary on February 16, 1917, constituted a waiver, or evidence of a waiver, of the forfeiture by reason of the failure to pay the said third annual premium. Waiver, in law, has often been defined to be an intentional relinquishment of a known right. Is this letter evidence of an intention on the part of defendant to continue the insurance in force, notwithstanding the right of forfeiture, whereby defendant has relinquished its right to insist upon such forfeiture?

In Illinois Life Ass'n v. Wells, 200 Ill. 445 65 N. E. 1072, a decision which was pleaded by plaintiff below and put in evidence, the policy involved contained a provision to the effect that, if the premium installments were not paid on or before the day when due, the insurance would lapse, and the policy become null and void. The policy was issued January 27, 1898, providing for the payment of quarterly premium installments of $9.76 in advance. The insured died November 14, 1898. For the premium installment due duly 27, 1898, he had given the company his note payable in 30 days, with a provision attached that, if the note were not paid at maturity, the policy should become void. This note was never paid. On October 27, 1898, another premium...