Johnson v. American Central Life Ins. Company

• Decision Date: 10 July 1922
• Citation: Johnson v. American Central Life Ins. Company, 249 S.W. 115, 212 Mo.App. 290 (Kan. App. 1922)
• Parties: EMMA J. JOHNSON, Appellant, v. AMERICAN CENTRAL LIFE INSURANCE COMPANY, respondent
• Court: Kansas Court of Appeals

249 S.W. 115

212 Mo.App. 290

EMMA J. JOHNSON, Appellant, v. AMERICAN CENTRAL LIFE INSURANCE COMPANY, respondent

Court of Appeals of Missouri, Kansas City

July 10, 1922

Rehearing Denied 212 Mo.App. 290 at 307.

Appeal from the Circuit Court of Chariton County.--Hon. Arch B Davis, Special Judge.

REVERSED AND REMANDED (with directions).

Judgment reversed and cause remanded.

Roy McKittrick for respondent.

Jones Hocker, Sullivan & Angert and Charles B. Welliver, of Counsel, for appellant.

OPINION

TRIMBLE, P. J.

.--This is an action upon a policy of insurance for $ 5000 on the life of plaintiff's husband, George T. Johnson. A jury was waived and the cause was tried by the court with the result that a judgment was rendered for defendant. The plaintiff appealed.

After the insured paid 5 annual premiums, he failed to pay any more. So that, at the expiration of the 5th premium year, the only right insured had under the policy was extended insurance for three years. The question is, did he die within the three years? The answer to this depends upon when the premium--or contract--insurance ended and the extended insurance began, and this last, in turn, fixes the date when the 3-year period of extended insurance ended. If insured died after that, the judgment for defendant is right.

It is insurance practice (recognized and approved by statute, sec 6161, R. S. 1919), to consider a person's insurance age as his age at his then nearest birthday. And, according to this method of fixing insurance age, the defendant did not insure persons above the age of 60. In other words, after one became more than 60 years and six months old, he was not insurable in the defendant company. The annual premium, on a policy of $ 5000, for one whose insurance age was 60, was $ 315.25; and in companies where persons over the insurance age of 60 are insured, the rate calls for a larger premium than the above amount.

The application for the insurance on Johnson's life was taken from insured by defendant's field-agent in Chariton County, Missouri, on November 16, 1911. On that date Johnson lacked eight days of arriving at the insurance age of 61. In other words, if he was to be insured in the defendant company at all, and obtain $ 5000 of insurance on the premium rate for a person 60 years old, the application for the insurance had to be made before he arrived at the insurance age of 61. Insured was so told, and he therefore concluded to make the application rather than postpone the matter as he was about to do. He thereupon signed the application, executed his note to Simons for $ 315.25 due in thirty days with interest at eight per cent from maturity, and delivered both application and note to Simons. Thereupon Simons executed and delivered to insured what the agent terms a "binding receipt" for the $ 315.25 and sent the application to the defendant at its Home Office in Indianapolis, Indiana, to which he attached the "Stub" of the Binding Receipt. On the back of the application, the Binding Receipt was also referred to and its number 63,227 was stated, being placed there, however, by the agent after it was signed by insured. The application provided that it would be completed by the applicant submitting to a medical examination, which was done on the next day, November 17, 1911, and the examining physician sent his medical report direct to the Company, the agent having nothing to do therewith. The application and the medical examiner's report were received at the Home Office on November 20, 1911. The application was approved by the defendant's Home Office Medical Director in Indianapolis on December 5, 1911. The policy, dated November 16, 1911, was issued December, 6, 1911, and was mailed to Simons, the agent, on the same day. The policy was received by Simons on December 8, 1911, and on December 18th of that year Simons delivered it in Chariton County, Missouri, to insured, who at the same time gave Simons a check for the $ 315.25 premium and took back the note he had given for that amount. Thereafter insured pair four other premiums of $ 315.25 each, as follows: November 18, 1912, November 17, 1913, November 6, 1914; and November 10, 1915, but no others. Insured died on December 15, 1919. There were, therefore, five years of primary--or contract--insurance, which ended on some date in the year of 1916 (according to when such primary insurance began), and three years of extended insurance, which ended on some date in the year 1919 (according to when the extended insurance began); and, therefore, whether insured died within or outside of the extended insurance period depends upon when the primary insurance began. The determination of this date solves the main question herein. If the primary insurance did not begin until the policy was delivered, to-wit, December 18, 1911, then the period of extended insurance did not expire until December 18, 1919, and, as insured died three days prior to that date, his death occurred within such period, and the insurance was in force. If, however, by reason of the terms of the application, policy and the so-called binding receipt considered as a part of the insurance contract, the primary insurance began on its date November 16, 1911, or began on December 5, 1911, the date insured's application was approved by the defendant's Medical Director, then the extended insurance period ended either on November 16, 1919, or on December 5, 1919, which, in either case, was prior to insured's death, and, in that event, the extended insurance was not in force. Plaintiff contends the primary--or premium--insurance began on December 18, 1911, when the policy was delivered to him, and ended on December 18, 1916, and the extended insurance began then, and, running for three years, ended on December 18, 1919. Defendant contends that the primary or premium contract insurance began on the date of the application, November 16, 1911, and that therefore the extended insurance ended November 16, 1919.

The application states that:

"I, George T. Johnson, apply to the American Central Life Insurance Company, of Indianapolis, Indiana, to insure my life in the amount of Five Thousand Dollars . . . the annual premium to be payable in advance and each insurance year to end on the 16th day of November, and as an inducement to said Company to make said insurance, and as a consideration therefor, I agree.

. . . .

"That there shall be no contract of insurance until a policy shall have been delivered to me and the premium paid to said Company, or its duly authorized agent, during my lifetime and good health.

. . . .

"That no statements, promises or information made or given by the person soliciting or taking this application shall be binding on the Company, unless such statements, promises or information be reduced to writing and presented to the officers of the Company, at the Home Office, in this application, and this application and the policy hereby applied for, taken, together, shall constitute the entire contract between the parties thereto."

The "binding receipt" was contained in and taken from a "stub-book" furnished the agent by the Company. The evidence as to the giving of this receipt was furnished by the agent Simons over plaintiff's objection that he was incompetent because the insured was dead. There is no evidence that the giving of the receipt was because of the peculiar circumstances that insured was in eight days of being beyond insurance age. On the contrary the evidence of the agent is that he gave the receipt to everyone of whom he collected the premium and the agent says he collected from all of them, i. e., those making application for insurance. The agent further testified that he told insured he could not insure him unless he insured him before the 24th of November; that he did not tell insured that for the policy to be effective it would have to be dated November 16th or that it would be delivered to him prior to November 24th, the day he would arrive at the insurance age of 61; that there was no special agreement with reference to insured's age being so near 61 except that insured wanted to defer buying life insurance, and he, the agent, told him he couldn't insure him unless he insured him before the 24th of November, that the policy "had to be written prior to the 24th day of November." But in the next breath the agent explained that what he meant was that the application had to be taken before the 24th. The agent said also that the rate he charged insured was the rate at the insurance age of 60.

The so-called binding receipt which the agent gave insured upon the execution of his note for the premium, reads as follows:

"No. 63227 $ 315.25 Shannondale, Mo., Nov. 16, 1911.

CENTRAL AMERICAN LIFE INSURANCE COMPANY.

of Indianapolis, Indiana.

The Agent Collecting on this Receipt Has no Authority

to Collect for More Than the First Years

Premium.

Received of George T. Johnson

Three hundred-fifteen 25-100 Dollars

in full for the first annual premium on $ 5000 thousand dollars insurance. The insurance will be in force from the date of approval of the application by the Medical Director. In case the policy shall not be issued within sixty days after the application, including the medical examination, shall have been completed, the money herein receipted for shall be returned; provided, that if the applicant refuse to complete the application, the company may retain the premium as liquidated damages.

Not Valid Unless Countersigned by

L. A. Simons, Agent.

H. M. WOOLLEN, Vice-President."

The stub heretofore mentioned as having been attached to the application and sent by the agent to the Company, contained memoranda, made thereon by the agent, in reference to this receipt, from...