MacDonald v. Metropolitan Life Insurance Co.

• Decision Date: 25 May 1931
• Docket Number: 235
• Citation: 155 A. 491,304 Pa. 213
• Parties: MacDonald v. Metropolitan Life Insurance Co., Appellant
• Court: Pennsylvania Supreme Court

155 A. 491

304 Pa. 213

MacDonald v. Metropolitan Life Insurance Co., Appellant

No. 235

Supreme Court of Pennsylvania

May 25, 1931

Argued April 24, 1931

Appeal, No. 235, Jan. T., 1931, by defendant, from order of C.P. No. 5, Phila. Co., Dec. T., 1930, No. 5113, making absolute rule for judgment for want of sufficient affidavit of defense, in case of Elizabeth M. MacDonald v. Metropolitan Life Insurance Company. Affirmed.

Assumpsit on policy of accident insurance.

Rule for judgment for want of sufficient affidavit of defense. Before LAMBERTON, J.

The opinion of the Supreme Court states the facts.

Rule absolute. Defendant appealed.

Error assigned was order, quoting record.

The judgment is affirmed.

A. G Dickson, for appellant. -- The term of the reinstated contract was fixed.

Loss of coverage for part of term is not ground for change of policy terms: Sydnor v. Ins. Co., 26 Pa.Super. 521; Northern Cent. Trust Co. v. Ins. Co., 53 Pa.Super 425.

Reinstated contract was not a new contract: Mut. L. Ins. Co. v. Dreeben, 20 F.2d 394.

The term of the reinstated contract was same as those of the original policy.

Algernon R. Clapp, with him White, Parry, Schnader & Maris, for appellee. -- The reinstatement of the policy constituted a new contract between the parties: New York L. Ins. Co. v. Seymour, 45 F.2d 47; Schmitt v. Protective Assn., 32 F.2d 61; Equitable Assurance Society v. McElroy, 83 F. 631.

Ambiguities in insurance policies must be construed in favor of the insured and against the insurer: Northern Central Trust Co. v. Ins. Co., 53 Pa.Super. 425; Francis v. Ins. Co., 243 Pa. 380; Brams v. Ins. Co., 299 Pa. 11; McMaster v. Ins. Co., 183 U.S. 25; Anthony v. Grier, 57 Pa.Super. 320.

Appellant's acceptance of a premium for six months' coverage, coupled with its failure to specify a term of less than six months, necessarily implies an intention to cover the insured for the full period of six months: McGuire v. Ins. Co., 94 Pa.Super. 457; McDonough v. Ins. Co., 85 Pa.Super. 63; Mills v. Ins. Co., 57 Pa.Super. 483.

Before FRAZER, C.J., WALLING, SIMPSON, KEPHART, SCHAFFER and MAXEY, JJ.

OPINION

MR. JUSTICE WALLING:

On July 18, 1929, Thomas W. MacDonald, husband of Elizabeth MacDonald, the plaintiff, took out a $5,000 accident policy in her favor with the Metropolitan Life Insurance Company, defendant, for the term of six months, for which he paid $9.90 as premium. This term expired January 18, 1930. The policy contained, inter alia, a clause that "This policy may, with the consent of the Company and subject to all of the terms, conditions and provisions of this policy, be periodically renewed upon each successive expiration, for a further period of equal number of months, upon the payment of the premium herein stated, as the premium for each such successive renewal. . . . Upon each such renewal a grace of thirty-one days, without interest charge, shall be granted for the payment of the premium, during which period the insurance shall continue in force provided such payment is made within such period of grace"; also that, "If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of a premium by the Company or by any of its duly authorized agents shall reinstate the policy, but only to cover loss resulting from accidental injury thereafter sustained." The policy also provided that: "Failure of the insured or beneficiary to comply with any of the provisions or requirements of this policy shall invalidate all claims." The insured did not ask for or receive a renewal of the policy prior to its expiration or within the thirty-one days thereafter; but on February 25, 1930, he paid the defendant's agent $9.90, being six months' premium, for which on March 1, 1930, he received a receipt, inter alia, as follows: "Receipt of the premium for the policy as numbered below is hereby acknowledged and such policy is continued in force, subject to all its terms and conditions, from noon of the 'date due' and for the 'period' stated below, provided this payment is made on or before the 'date due' or within 31 days thereafter. Otherwise no insurance shall be in force subsequent to the 'date due' unless and until such payment shall be made. This receipt is not valid unless countersigned by a duly authorized representative of the Company." This was properly countersigned and thereafter, on August 24, 1930, Thomas W. MacDonald, the insured, met his death in an automobile accident. The question here is whether the reinstatement of the policy was from the expiration of the first six months (January 18, 1930), or from the countersigning of the receipt (March 1, 1930). The trial court, taking the latter view, entered judgment for plaintiff, from which the defendant brought this appeal.

We find no reason to differ from this conclusion. While so far as appears there is no similar case in Pennsylvania, the weight of authority elsewhere sustains the conclusion of the trial court. MacDonald paid for the first six months' period and had his protection during that time; then by failing to renew it during that period, or within the thirty-one days of grace, he forfeited all rights under the policy. It was dead in effect, and had given him no protection except during the first six months. With its expiration the company's liability ceased, and again arose only on approval of the receipt for the payment of February 25th. The payment of $9.90 for reinstatement not having been made within the...