Martin v. Illinois Bankers Life Assur. Co.

• Citation: 91 S.W.2d 646
• Decision Date: 03 March 1936
• Docket Number: No. 23714.,23714.
• Parties: MARTIN v. ILLINOIS BANKERS LIFE ASSUR. CO. et al.
• Court: Court of Appeal of Missouri (US)

91 S.W.2d 646

MARTIN v. ILLINOIS BANKERS LIFE ASSUR. CO. et al.

No. 23714.

St. Louis Court of Appeals. Missouri.

March 3, 1936.

Rehearing Denied March 20, 1936.

Appeal from St. Louis Circuit Court; H. A. Hamilton, Judge.

"Not to be published in State Reports."

Action by Chalmer Martin against the Illinois Bankers Life Assurance Company, and another. Judgment for plaintiff, and defendants appeal.

Reversed.

Lashly, Lashly & Miller and Oliver J. Miller, all of St. Louis, for appellants.

Hall & Dame, of St. Louis, for respondent.

BENNICK, Commissioner.

This is an action upon a policy of life insurance which is defended against upon the theory that prior to the death of the insured the policy had lapsed for the nonpayment of the last premium due. Tried to the court upon an agreed statement of facts and with a jury waived, a judgment was rendered for plaintiff, the beneficiary, for the aggregate sum of $2,588.93; and defendants' appeal to this court has followed in the usual course.

On October 30, 1913, the insured, Thomas E. Martin, then residing at De Queen, Ark., made application for the insurance in question to the Illinois Bankers Life Association, an Illinois corporation, with its home office at Monmouth, Ill. On November 8, 1913, the application was accepted and a policy issued by the company, the same being for the face amount of $2,000, which sum was made payable, in the event of the death of the insured, to plaintiff, Chalmer Martin, a son of the insured, who was designated as the beneficiary in the policy.

A further clause of the policy, which figures somewhat in the issues raised on this appeal, provided that if the insured should become permanently and totally disabled as a result of accident or disease, one-half of the face amount of the policy should be paid "on due proof thereof," and the remainder should be paid at his death.

The company was an assessment company, the significance of which is that there was no provision made in the policy for the payment of an agreed premium at any designated times or intervals, but rather it was left to the board of directors of the company to provide from time to time for assessments or premium calls to be made upon its policyholders presumably commensurate with whatever amount was necessary to pay pending claims and expenses. As a matter of fact, however, both the times for premium calls and the amounts of assessments had been fairly uniform for a number of years, the assessment upon the policy in suit having been fixed at the sum of $8.51, made payable at three-month intervals or due dates, which, by the terms of the calls, were designated as the first of each January, April, July, and October.

So far as concerns the obligation of a policyholder to make timely payment of an assessment thus levied against him, the contract between him and the company provided that a failure to pay any such call within thirty days from the date of the mailing of notice thereof should render the policy absolutely null and void; that the same should be forfeited without further notice or action of the directors of the company; and that not only should the policy cease and determine, but unless reinstated, all payments made thereon should thereafter remain the property of the company.

Incidentally, it is upon such provision of the contract that the defense in this case is based, it being a conceded fact not only that the last premium call made upon the policy in suit was not paid within the period of time allotted by the company for payment, that is, assuming that premium notice was actually sent the insured, but in fact that it was never paid, the check tendered in payment by the insured having been returned, shortly following his death, because of insufficient funds to his account in the bank upon which the check was drawn. Plaintiff counters, however, with a plea of waiver on the part of the company to the effect that the act of the company in taking the check for collection stayed off the lapsing of the policy while collection was being attempted and until after the death of the insured; and so upon the question of waiver the issue was made up determinative of plaintiff's right to recover under the policy.

It is agreed that on June 1, 1929, at a meeting of the board of directors of the company, the amount of the next call against the insured was fixed at $8.51 and the secretary of the company was directed to issue a call to the insured not later than July 1, 1929; and the company's evidence was that on June 25, 1929, a letter properly addressed to the insured, and containing his notice of assessment, was placed in the mail at Monmouth, Ill., which letter, in due course of the mails, should have been received at the home of the insured on June 26th or June 27th. As opposed to the presumption that notice was received by the insured, the evidence for plaintiff was to the effect that he and his brother were constantly about the home of the insured during the months of June and July, 1929; that each of them was accustomed to see the mail that came to the insured's home during such period; and that neither of them had observed the receipt of any such letter, although plaintiff was aware of his interest as beneficiary in the policy and of the necessity of having attention given to premium matters in relation thereto.

A copy of the premium notice alleged to have been sent to the insured appears in the record of the cause, such notice disclosing a premium call of $8.51, due July 1, 1929, and on the reverse side of the notice was an admonition that such premium would be accepted if paid within thirty days after the due date, the policy meanwhile continuing in force, and that unless the premium should be paid on or before its due date or within the period of grace allowed thereafter, the policy and all payments made thereon would become forfeited to the company.

Despite what little present controversy there is regarding the question of whether the insured received his notice of premium call, the admitted fact is that on July 29, 1929, he sent the company his check for the sum of $8.51 in payment of his premium, which check was received by the company at Monmouth, Ill., on August 1, 1929. On the same day the company deposited the check to its account in the local bank at Monmouth with which it did business, and therewith issued to the insured its customary form of receipt, reciting, among other things, that all premiums were payable in cash; that in the case of a purported payment by check, the check was received, not in payment, but conditionally and for collection only; that such receipt was understood to operate as a receipt only in the event the check was paid when presented; and that if it was not so paid, the receipt was void and of no effect.

In the usual course of bank clearings the check reached the bank upon which it was drawn, having been presumably presented for payment at about 10 o'clock a. m. on August 5, 1929; and such bank, because of the insufficiency of the insured's deposit to cover the check, immediately so marked the check and started it on its return through regular banking channels to the company, by which it was received unpaid on August 7 or 8, 1929.

The insured died at 12:15 p. m. on August 5, 1929, which was some two hours after his check had been presumably presented to the bank for payment and payment had been refused, and thereafter notice of his death was given the company by one of the members of his family. It is admitted that the insured had become sick and bedridden on July 30, 1929, and had so remained until the time of his death, all of which is of importance only upon the question of the accrual of the company's liability, if any, under the total and permanent disability provision of the policy. It is further admitted that it was solely because of the fact that he had become sick and bedridden as indicated that he had failed to make a deposit in his bank to cover the check which he had theretofore drawn in favor of the company.

After being informed of the death of the insured, the company, on August 20, 1929, replied to its informant, advising that the policy had lapsed for the failure of the insured to have paid the July premium, and inclosing the insured's check which the company had meanwhile retained in its possession following its return unpaid by the drawee bank.

It also appears from the agreed statement of facts that at some time prior to the institution of suit the Illinois Bankers Life Assurance Company assumed all the obligations of the Illinois Bankers Life Association which had issued the policy to the insured, and that such assumption by the former included whatever liability, if any, would otherwise exist on the part of the latter under and by virtue of such policy.

The precise theory upon which the court found for plaintiff and against the defendants does not appear from the record, but whatever the theory may have been, defendants are now strenuously insisting that plaintiff was not entitled to recover in any event, and that the court was consequently in error in refusing their requested declaration of law to that effect.

Now as we have already pointed out, it is a conceded fact that the last assessment made against the policy in suit was not paid prior to the death of the insured, nor did his death occur within the regular grace period allotted for the payment of such premium, and therefore it would necessarily seem to follow that the policy had lapsed prior to his death for the nonpayment of premium unless it might be that by some act of waiver on its part the company may be said to have extended the life of the policy up to and including the time of the death of the insured. It is true that certain other reasons are also advanced why, in plaintiff's opinion, no forfeiture of the policy could have resulted without regard to any question of waiver in the case, but it is nevertheless upon a claim of waiver...