Mo. State Life Ins. Co. v. Jensen

• Citation: 281 P. 561,1929 OK 244,139 Okla. 130
• Decision Date: 11 June 1929
• Docket Number: Case Number: 18748
• Parties: MISSOURI STATE LIFE INS. CO. v. JENSEN et al.
• Court: Supreme Court of Oklahoma

1929 OK 244

281 P. 561

139 Okla. 130

MISSOURI STATE LIFE INS. CO. v. JENSEN et al.

Case Number: 18748

Supreme Court of Oklahoma

Decided: June 11, 1929

Syllabus

¶0 1. Insurance--Life Policy--Original Policy Continued in Force by Reinstatement.

A reinstatement of a life insurance policy, after default in the payment of premiums, by performance of conditions specified in the policy, continues in force the original policy and does not create a new one.

2. Same--Application for Reinstatement of Lapsed Policy not Admissible in Evidence Unless Copy Attached to Policy--Statute Construed.

Section 6728, C. O. S. 1921, providing that "* * * Provided, further, that every policy which contains a reference to the application of the insured, either as a part of the policy or as having any bearing thereon, must have attached thereto a correct copy of the application, and unless so attached the same shall not be considered a part of the policy or received in evidence," applies to an application for the reinstatement of a lapsed policy as well as to one for the original policy; and there is no error in excluding from the evidence an application for reinstatement, a copy of which is not attached to the policy.

3. Same--Action by Insurance Company to Cancel Policy for Fraud in Application for Reinstatement.

Where it appears that a life insurance company brings suit to cancel the policy of the insured, who has been reinstated under the terms of the policy, on account of fraudulent statements made in the application for reinstatement, held: said application for reinstatement or a true copy thereof must be attached to the policy and made a part thereof, and if the company fails so to do, it shall not be allowed to allege or prove said application or any false statements therein made.

Error from District Court, Garvin County; W. G. Long, Judge.

Action by the Missouri State Life Insurance Company to cancel an insurance policy given to John G. Jensen, who, after the filing of the case, died, and it was revived in the name of Jennie E. Jensen as executrix; she also filing a cross-petition claiming the amount of the policy as beneficiary. Judgment was for Jennie E. Jensen on her cross-petition, from which judgment plaintiff appeals. Affirmed.

Keaton, Wells & Johnston, Bowling & Farmer, Allen May, and F. H. Maughmer, for plaintiff in error.

Blanton, Osborn & Curtis, for defendants in error.

CULLISON, J.

¶1 This is an action to cancel a life insurance policy issued by the Missouri State Life Insurance Company, plaintiff in error and plaintiff in the court below, to John G. Jensen, who allowed the same to expire for nonpayment of premiums, and upon written application said policy was reinstated.

¶2 John Jensen died before the trial, and his beneficiary filed a cross-petition asking for the amount of the policy. The case was also revived in her name as executrix. The only grounds for cancellation alleged in the plaintiff's petition was a fraudulent statement in the application for reinstatement, which application was not attached to or made a part of the policy.

¶3 A jury was duly impaneled and sworn, and thereupon the defendant, Jennie Jensen, objected to the introduction of any testimony by the plaintiff under the pleadings herein, on the ground that an application for reinstatement must be attached to a policy in order to introduce it in evidence for the purpose of showing fraud by the statements made therein, and the court, being fully advised, sustained said objection, to which the plaintiff then and there duly excepted, from which ruling of the court the plaintiff appeals.

¶4 The policy upon which this action is predicated is the same and identical policy issued to defendant, intervener's deceased husband. The intervening defendant in error is the wife of deceased insured and is named in said policy as the beneficiary. The husband during his lifetime permitted the policy to lapse. Later on, the husband applied to be reinstated under the terms of the policy contract. It is evident that the husband complied with all the terms of the policy contract and was on the 2nd day of June, 1925, reinstated and thereby entitled to all the rights and benefits arising therefrom.

¶5 The only question in this case for judicial determination is whether or not an application for reinstatement must be attached to a policy in order to introduce it in evidence for the purpose of showing fraud by the statements made therein.

¶6 Webster in his New International Dictionary defines "reinstate": "(1) To instate again; (2) to place again in position or in a former state; (3) to reinstall (4) to reestablish." All of which relates to and means: To reinstate to a state from which one had been removed. Second meaning: "(1) to reinstate to a whole or unity; (2) to renew."

¶7 To reinstate a policy holder or one who has allowed his policy to lapse does not mean new insurance or taking out a new policy, but does mean that the insured has been restored to all the benefits accruing to him under the policy contract, the original policy.

¶8 In this case the defendant made application to be reinstated; to renew the mutual and contractual obligations which existed under the policy contract sued on.

"A reinstatement of the policy, after default in the payment of premiums, by performance of conditions specified in the policy, continues in force the original policy and does not create a new one," Mutual Life Ins. Co. v. Lovejoy, 203 Ala. 452, 83 So. 591.

¶9 In Ruling Caso Law, vol. 14. sec. 163, p. 990, the validity and effect of reinstatement is discussed in the following language:

"Where a revival of a forfeited life policy is assented to, the original contract is reinstated, with all its terms and the new terms expressed in the application for revival, and a provision in a life insurance policy that it shall be incontestable after one year applies to proceedings taken to secure reinstatement after default in payment of premiums, so that after the lapse of a year from reinstatement the policy cannot be avoided for fraud in securing it, although insured agrees in his application for reinstatement that the policy shall be void if any statement is untrue. Ordinarily, however, a reinstatement procured by fraudulent misrepresentations may be avoided. A representation by insured, in regard to the state of his health, in order to procure a renewal of his policy which had lapsed for nonpayment of premiums is not a continuing representation until the time that the renewal receipt is delivered. A person is 'killed' by an accident at the time his death occurs and not at the time of the accident, within the meaning of the constitution of an accident insurance society which provides that if a member is injured while in default in the payment of his dues, 'the delinquent member shall receive no indemnity therefor, nor shall his beneficiaries receive anything should he be killed during such period of delinquency,' so that liability exists for death after reinstatement from an injury during delinquency."

¶10 That part of section 6728, C. O. S. 1921, which affects a proper determination of this case and upon which the trial court based its ruling in sustaining the demurrer to the petition, reads:

"* * * Provided, further, that every policy which contains a reference to the application of the insured, either as a part of the policy or as having any bearing thereon, must have attached thereto, a correct copy of the application, and unless so attached the same shall not be considered a part of the policy or received in evidence."

¶11 Plaintiff in error contends the above provision of our statute has no application to the issue raised in this case, for the reason the statute does not require the application to be attached in cases wherein the applicant applies to be reinstated.

¶12 The policy in question in this case contains, the following provision:

"Reinstatement: If any premium is not paid on the date when due, or within the period of grace, and this policy has not been surrendered, the company will reinstate the policy as of

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