Landrigan v. Missouri State Life Ins. Co.

• Decision Date: 19 September 1921
• Docket Number: No. 16678.,16678.
• Citation: 234 S.W. 1042
• Parties: LANDRIGAN v. MISSOURI STATE LIFE INS. CO.
• Court: Missouri Court of Appeals

234 S.W. 1042

LANDRIGAN v. MISSOURI STATE LIFE INS. CO.

No. 16678.

St. Louis Court of Appeals. Missouri.

September 19, 1921.

Appeal from St. Louis Circuit Court; Moses Hartmann, Judge.

"Not to be officially published."

Action by Ellen M. Landrigan against the Missouri State Life Insurance Company. Judgment for the plaintiff, and defendant appeals. Reversed and remanded, with directions to enter a judgment for plaintiff for a lesser amount.

Jones, Locker, Sullivan & Angert, of St. Louis, for appellant.

Douglas W. Robert, of St. Louis, for respondent.

DALES, J.

Plaintiff, the widow of John A. Landrigan, brings this suit to recover as beneficiary in a life insurance policy taken out by the husband from the defendant company. The judgment of the trial court was for the plaintiff. Defendant appeals.

The facts are undisputed. The decision of the case rests upon the construction of the policy. The court below gave a peremptory instruction to the jury to find for the plaintiff for the full amount of the policy, $2,000, with interest from October 24, 1918, and authorized the jury to allow attorney fees and damages for vexatious delay. The verdict was for $2,755, made up as follows: Amount due under policy, $2,000; interest, $55; damages, $200; attorney fees, $500.

It is agreed that Landrigan, on the 12th day of September, 1917, applied to the defendant company for a policy of insurance. He gave the date of his birth as February 15, 1876. The agent, James F. Halley, who secured the application, testified that he told the insured at the time that by dating back the application to August 14, 1917, which was a date nearer to Landrigan's forty-first birthday, he could save something on the annual premium. The exact testimony on this point we will later set out.

The application was dated August 14, 1917. On September 12, 1917, the company issued the policy whereby the life of Landrigan was insured for $2,000, applying the rate on the age of 41 years. The policy was delivered September 17, 1917, and the insured at that time signed the usual form receipt for same.

The policy contained the following provisions:

"This insurance is granted in consideration of the application herefor, a copy of which is attached hereto and made a part hereof, and of the payment in advance of sixty-eight and 20/100 dollars, being the premium for the first year's insurance under this policy ending on the fourteenth day of August, 1918, which is term insurance. The insurance will be continued thereafter as whole life insurance upon the payment of the annual premium of sixty-eight and 20/100 dollars, on or before the fourteenth day of August, in every year during the continuance of this policy.

"* * * If any premium is not paid when due, this policy shall cease and determine, except as hereinafter provided.

"If any premium after the first is not paid on the date when due, this policy will continue in full force from said due date for the term of thirty-one days, which is the period of grace allowed hereunder, without interest charge, in the payment of any such premium."

The application contained the provision "that the insurance hereby applied for shall not take effect until the first premium is paid and the policy delivered to and accepted by me during my life time and good health," also, that the premiums shall be " payable annually "after the first year." There is a provision in the policy that the application and the policy together shall constitute the entire contract.

The insured died on September 26, 1918, without paying anything after the first annual payment. The annual premium for the policy at the age of 42 years on a $2,000 policy would have been $70.64, and by dating the application back to August 14th, the premium was $68.20. It was shown at the trial that demand had been made for the payment of the policy on October 24, 1918. The company insisted that the policy had lapsed because the second premium was not paid on the due date (August 14, 1918), nor within the 31 days after such date, and that notice had been sent to the insured to pay the premium.

It is necessary that we have clearly before us the dates which are important: August 14, 1917, application was dated. September 12, 1917, policy was issued. September 17, 1917, policy was delivered. August 14, 1918, due date, as stated in the policy. September 14, 1918, 31 days from due date (as stated in the policy). September 15, 1918, when year's term insurance expired. October 16, 1918, 31 days from end of one year's term insurance. September 26, 1918, insured died.

The solution of this case rests in the answer to the question: When did the period of 31 days of grace begin under this policy? If the term of grace began from and after the due date as written in the policy, that is, the date denominated "due date" in the policy, then, of course, it ended on the 14th day of September, 1918. If, on the other hand, it runs from the anniversary of the delivery date, then it ended October 17, 1918. The death having occurred on September 26, 1918, if the first hypothesis is correct, the insurance lapsed; if the latter is true, then the insured died within the days of grace and the policy was in force.

It is apodeictical that if the premium was not paid when "due," then the policy lapsed. It was due either at the time denominated as the due date on the face of the policy, or on the anniversary of its delivery to the insured with 31 days' grace from such accepted date.

The plaintiff asserts that the application for the insurance, made a part of the policy, provided that the policy should not take effect until delivery, and since the policy was not delivered until September 17, 1917, the insurance continued until September 17, 1918, and for 31 days thereafter. Landrigan having died on September 26, 1918, that therefore such death was within the reach of the policy, and relies upon the Missouri cases of Halsey v. Insurance Co., 258 Mo. 659, 167 S. W. 951, and Stout v. Mo. Fidelity & Casualty Co., 179 S. W. 993, and upon other authorities which we will later discuss.

The Halsey Case: In that case the application was dated May 24, 1906. The policy was dated May 31, 1906, and delivered June 5, 1906. There was a tender of the second premium by a brother of the insured on May 31, 1907. The insured died on June 5, 1907. The policy provided that the annual premium was "payable in advance on the 24th day of May." The company had notified Halsey in writing that the second annual premium would be due on May 24, 1907. Pertinent excerpts from that policy are as follows:

"The annual premium to be made payable in advance on the 24th day of May.

"That if any premium on said insurance shall not be paid when due all prior payments shall be forfeited to the company except as provided for in its policy.

"That all premiums on any policy issued on this application shall be annual premiums.

"That failure to pay any premium * * * at the time same becomes due * * * shall render any policy issued upon this application void.

"* * * Hereby insures the life of Augustus C. Halsey * * * for a period of one year from the 24th, day of May, 1906, and in consideration of the further payment in cash of $307.00, on or before the 24th day of May and every year thereafter. * * *"

There was a clause in the policy that same should take effect upon its delivery and payment of the first premium. It was held, although the policy on its face provided that the annual premium was payable in advance on the 24th of May, that the insurance began on the date of the delivery of the policy, to wit, July 5th, and on which date the first annual premium was paid, and that such policy ran and was in force for a full year thereafter, or until the 4th day of the next June, and that the tender made on the 31st of May was timely. Said Judge Woodson for the court in this case:

"While this record discloses the fact that the application for the insurance of the deceased was dated May 24, 1906, and that the premiums were payable upon that date, yet that was not all of the con tract between the parties. The policy itself was just as important a factor in the agreement as was the application for the insurance. The policy was dated May 31, 1906, but it was not delivered until June 5th of that year, which by its express terms was not to become effective until delivered, and the first annual premium paid, which was done on June 5, 1906.

"Under the terms of this contract, which consisted of the, application and the policy issued in pursuance thereto, the deceased was clearly insured for one full year from June 5, 1906, to the last minute of June 4, 1907. That being unquestionably true, and the tender made of the second premium by the brother of the deceased on May 31, 1907, while the policy was still in full force and effect, was clearly made within the time agreed to by the parties, if the entire contract is to be considered as a whole.

"If this is not true, then by parity of reasoning advanced by counsel for appellant, the policy was never in force, for the simple reason that the first premium was not paid on May 24, 1906, but was paid on the 5th of June, 1906, the date the policy, by its terms, went into effect. This very act of the parties, under the facts and circumstances in the case, puts a practical construction upon the contract made and entered into between them, namely, that each succeeding annual premium should be paid during the life of the policy, and thereby keep it in full force and effect for the period of time stated therein.

"If this is not the true meaning of the parties then the appellant is driven to the conclusion that the deceased paid for full year's insurance, but under the terms of the policy he was only entitled to about eleven and one-half months of insurance.

"This, nor any other court, should allow an insurance company to thus stultify itself after taking the premium for a full year, and then escape...