Kelly v. A. Lincoln Life Ins. Co.

• Decision Date: 03 November 1930
• Docket Number: No. 16860.,16860.
• Citation: 33 S.W.2d 992
• Parties: ALEXANDER P. KELLY, RESPONDENT, v. ABRAHAM LINCOLN LIFE INSURANCE COMPANY, APPELLANT.
• Court: Missouri Court of Appeals

33 S.W.2d 992

ALEXANDER P. KELLY, RESPONDENT, v. ABRAHAM LINCOLN LIFE INSURANCE COMPANY, APPELLANT.

No. 16860.

Kansas City Court of Appeals. Missouri.

November 3, 1930.

Appeal from Circuit Court of Mercer County. — Hon. L.B. Woods, Judge.

AFFIRMED.

John E. Powell and Lesley R. Robinson for respondent.

L.M. Hyde and J. Hubert Fuller for appellant.

CAMPBELL, C.

This is an action on a policy of health insurance to recover a monthly indemnity for two months sickness alleged to have begun on February 1, 1928, and for the recovery of penalties and attorneys fees for vexatious refusal to pay.

Defendant (the Mutual Life of Illinois of Springfield, Illinois, but since changed to the Abraham Lincoln Life Insurance Company) issued a policy of insurance to respondent on the 24th day of July, 1926, in consideration of a policy fee of $3 and of a premium of $12.75, by which insurance against sickness was granted to noon of November 1, 1926, and which provides insurance could be renewed for successive terms of three months by payment in advance of renewal premiums of the same amount.

The evidence on the part of plaintiff is to the effect that quarterly premiums were regularly paid after the first of November, 1926, but were ordinarily paid some five to fifteen days after the first day of the quarter and that sometimes the premium was paid as late as the 20th. The exact day when premiums were paid is not in evidence except that the premium for the quarter beginning May 1, 1927, was paid the 19th or 20th of May, and the premium for the quarter beginning February 1, 1928, was paid by check written on the 2nd day of February, 1928, and accepted by the defendant on the 11th of February, 1928. There is no evidence showing the exact day when the premium was paid for the quarter beginning August 1, 1927, nor for the quarter beginning November 1, 1927. It is shown that upon receipt of the quarterly premium paid in February, 1928, the defendant issued its receipt stating therein that the due date of the premium is February 1, 1928, and that the policy is reinstated subject to its terms and conditions.

The policy, by its terms, provides a monthly indemnity of $80 against loss resulting from illness; provided that such illness shall independently and exclusively of all other causes, totally and continuously disable and prevent the insured from the performance of any and every kind of duties pertaining to his business or occupation, and shall continuously confine him within the house. A further provision (paragraph 3, part 13) is that if default be made in the payment of the agreed premium, then subsequent acceptance of the premium by the company shall reinstate the policy, but only to cover such sickness as may begin more than ten days after the date of such acceptance.

If the foregoing were the only provisions of the policy relating to the payment of belated premiums, then the construction of the policy would fall within the rule announced in Wiser v. Business Men's Association, 219 S.W. 102. But there are other provisions of the policy, one of which provides that if the insurance should lapse and be reinstated as provided in paragraph 3, more than twenty days after the due date of the unpaid premium, then the insurance shall extend from date of reinstatement to the end of the term which begins on the first day of the calendar month succeeding the date of reinstatement which is covered by the premium then paid. There is also a provision that the policy covers loss resulting from illness contracted fifteen days from the date thereof.

Construing these provisions together, as we must, and according to the rules applicable to insurance contracts, we hold it was intended by the insurer that upon acceptance of a quarterly premium, insurance was granted for a quarter: that is, three months premium, three months insurance.

In the case Fallis et al. v. Massachusetts Bonding & Insurance Company, 210 Mo. App. 579, l.c. 583, 243 S.W. 217, the court in construing a similar provision said:

"It also provided that after lapse a payment of premium should reinstate it from date of payment only. To give these provisions a literal construction and enforce them strictly against the insured would mean that if the monthly payment was not paid on the first of the month or within ten days of grace allowed, the policy would lapse and remain without force until another payment and if that payment was not made until the last day of the month, the insured would then pay the full month's premium for insurance for one day. This construction is so reasonable that it condemns itself."

The same doctrine is announced by this court in Chestnut v. Security Mutual Insurance Company, 208 Mo. App. 130, 232 S.W. 203.

According to appellant's contention if the policy had been reinstated on February 20, 1928, under the provisions of said paragraph 3, then the policy would not cover sickness that begun earlier than March 2 following, and the policy would thereafter...