De Land v. Fid. Health & Accident Mut. Ins. Co.
| Decision Date | 18 May 1949 |
| Docket Number | No. 12.,12. |
| Citation | 325 Mich. 9,37 N.W.2d 693 |
| Court | Michigan Supreme Court |
| Parties | DE LAND v. FIDELITY HEALTH & ACCIDENT MUT. INS. CO. |
OPINION TEXT STARTS HERE Appeal from Circuit Court, Kalamazoo County; George V. Weimer, judge.
Suit by Roy De Land against Fidelity Health & Accident Mutual Insurance Company to restrain the defendant from cancelling or discontinuing a policy issued to plaintiff. From a decree for plaintiff, the defendant appeals.
Decree entered in conformity with opinion.
Before the Entire Bench.
Howard & Howard, Kalamazoo, for plaintiff-appellee.
Gray & Gray, Benton Harbor, Frost & Ford by Henry Ford, Jr., Kalamazoo, of counsel, for defendant-appellant.
Plaintiff in this suit in equity, commenced in June, 1947, sought to have the defendant company restrained from cancelling or discontinuing a policy issued by defendant to plaintiff in June, 1930. Hearing was had and plaintiff was decreed the relief sought. Defendant has appealed.
The policy in the principal sum of $1,000 provided for a monthly accident and monthly sickness indemnity, and also life insurance in event of death resulting from accident which in the instant case had accumulated from the initial amount of $1,000 to $1,500. The reason that defendant attempted to cancel plaintiff's policy appears from two letters written by defendant to plaintiff, from which we quote:
‘February 26, 1947 * * *
‘Dear Mr. DeLand:
‘In order that the Company may complete plans for a change of charter to include Life Insurance in the near future, it will be necessary to discontinue by March 1 certain types of Policies that were issued years ago. We do sincerely regret to inform you that your Policy No. C14186 is one of those. Since you have paid beyond the above date, we are enclosing our check for $52.00 representing full return of your premium to the renewal date, July 1, 1946.
‘The non-renewal action is taken in accordance with the following sentence which you will find under Additional Provisions on Page 3 of your Policy. ‘The acceptance of any renewal premium shall be optional with the Company.’'
‘Dear Mr. DeLand:
‘I have been advised by our Home Office cashier that the Company's check for $52.00 which was sent to you with our letter of February 26, 1947, has not been cashed.
The trial judge, the late George V. Weimer, in a filed memorandum so succinctly stated additional facts and the grounds for his conclusion that we quote from it quite at length:
‘Plaintiff asks this Court to restrain Defendant from cancelling policy, Exhibit A, sold and delivered to him June 11, 1930. On that day Plaintiff signed an application for insurance, obviously prepared and presented by E. L. Huntington, as Defendant's agent. Therein appears: ‘Kind of Policy desired life income disability, Class A.’ * * *
‘On the exterior face of the policy in heavy type appears: ‘Non cancellable life income disability policy.’
‘At the top of first page appears in large bold type: ‘Non cancellable life income disability policy.’
‘Part 5, at the top of page 2, under the heading ‘Fifty percent accumulation’ provides ‘Each consecutive annual renewal of this policy shall add ten percent to the amount payable for loss of life, but in no case shall the increased indemnity exceed fifty percent of the original sum for loss of life.’ Under this provision the death benefit has now increased from $1000 to $1500.
‘The last paragraph of the policy reads: ‘This policy is issued in consideration of a policy fee of $4 and the premium of $52 for the period herein stated, taking effect at 12 o'clock noon standard time * * * and terminates at noon on the 1st day of July, 1931, but may be renewed for a like term or terms subject to all the conditions and provisions of this policy from term to term by the payment of annual premiums of $52 each, etc.’ ‘Nowhere in the policy appears anything in conflict with the foregoing, unless it can be found, as claimed by Defendant Company, in the short sentence (on page 3 of the policy): ‘The acceptance of any renewal premium shall be optional with the company’, which is contained in the center of the second of three paragraphs * * * under the heading ‘Additional provisions.’ This one sentence upon which Defendant relies for its claimed right to cancel the policy, must be considered together with the other numerous provisions in these three paragraphs, and must be held to have been included therein in its relation to the context of those provisions. If there is any ambiguity or uncertainty, it must be resolved against the Defendant Company.
‘On February 26, 1947 J. F. Hinkley, on behalf of Defendant Company, wrote Plaintiff the letter, Exhibit B. In that letter he expressed the real reason for seeking to cancel the policy as follows: ‘In order that the Company may complete plans for a change of charter to include life insurance in the near future,’ and then he apparently recognized that Plaintiff would be baffled by such action and added: ‘The non-renewal action is taken in accordance with the following sentence which you will find under ‘Additional provisions' on page 3 of your policy.’ He realized, of course, that Plaintiff probably never during the seventeen years had discovered that sentence, almost hidden as it was in that long paragraph.
* * *
Since they are closely interrelated we consider together the first two questions presented in appellant's brief:
‘2. Is the sentence contained in the policy of insurance issued by defendant to plaintiff under the heading of ‘Additional Provisions' on page 3 of said policy, reading as follows: ‘The acceptance of any renewal premium shall be optional with the Company’, inconsistent with the words on said policy reading: ‘Non-Cancellable Life Income Disability Policy’?'
The policy here in suit is one for health and accident insurance. The issuance of such insurance is governed in Michigan by provisions of the insurance code. Comp.Laws 1929, § 12388, as amended, Stat.Ann.1947 Cum.Supp. § 24.211. Section 15, chapter II of part 3 of the code, Comp.Laws 1929, § 12442, Stat.Ann. § 24.278, provides that if done in the manner specified in the statute, the insurer may include in its policies of this type a provision for ‘cancellation * * * at the instance of the insurer.’ But in its brief appellant says:
‘The above cancellation provision if inserted in the policy issued the plaintiff would have given the defendant company the right to cancel the policy at any time. The defendant company did not choose to put this optional clause of cancellation in its policy. It therefore designated this policy ‘non-cancellable’ and as far as the right of termination of the policy is concerned, the defendant company relied on the provision in the paragraph called ‘Additional Provisions' which provided that the acceptance of any renewal premium was optional with the company.
‘The policy does not contain any provision, standard or otherwise, as to cancellation, but does contain a clause relative to non-renewal.’
Incident to decision herein it may be conceded, as appellant contends, that there is a distinction between the words ‘cancellation’ and ‘renewal’ in ‘year to year’ policies. But the very pertinent query in the instant case is this: In view of the character of this policy both as to the manner in which it is printed and its provisions, can appellant be permitted to say either that it should be held to be a ‘year to year’ policy, or one the insurer could terminate by refusing payment of an annual premium? We think not, because, as noted by the circuit judge, plaintiff's application accepted by the insurance company was for a policy which provided ‘Life Income Disability’ insurance; and on the exterior face of the policy when folded there appears in large type: ‘Non-Cancellable Life Income Disability Policy’, and this same designation of the policy appears again in like large type at the top of page 1 of the policy. And the last sentence in the policy in smaller type provides: ‘This policy * * * terminates at noon on the 1st day of July, 1931 but may be renewed for a like term or terms, subject to all the conditions and provisions of this policy from term to term by the payment of annual premiums of $52.00 * * *.’
Notwithstanding its conspicuous label as being ‘Life’ insurance, this contract is not a life policy. Also notwithstanding it is prominently labeled ‘Non-Cancellable’, the claimed right of defendant to refuse renewals would render the policy annually cancellable-i. e., non-renewable. We are not impressed with defendant's contention that the conspicuous use of the word ‘noncancellable’, as embodied in this policy, was justifiable as meaning only that the policy was non-cancellable during a period for which a premium had...
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