Nat. Bank of St. Louis v. Mo. State Life Ins. Co.

• Decision Date: 03 March 1933
• Docket Number: No. 30361.,30361.
• Citation: 57 S.W.2d 1066
• Parties: THE NATIONAL CITY BANK OF ST. LOUIS, a Corporation, v. MISSOURI STATE LIFE INSURANCE COMPANY, a Corporation, Appellant.
• Court: Missouri Supreme Court

57 S.W.2d 1066

THE NATIONAL CITY BANK OF ST. LOUIS, a Corporation, v. MISSOURI STATE LIFE INSURANCE COMPANY, a Corporation, Appellant.

No. 30361.

Supreme Court of Missouri, Division 2.

March 3, 1933.

Appeal from Circuit Court of City of St. Louis. — Hon. H.A. Rosskopf, Judge.

REVERSED AND REMANDED (with directions).

Jourdon & English and Allen May for appellant.

(1) The contract on which plaintiff sued specifically (1) fixed the period of insurance and effective date thereof, (2) fixed the premium-paying dates, and (3) provided for automatic termination thereof in the event of failure to pay premiums. (a) A stipulation in a policy of life insurance that the policy when delivered shall be effective as of a date prior to the delivery of the policy is a valid and binding stipulation, and this is not inconsistent with a provision reciting that there is no insurance prior to delivery. Prange v. International Life Ins. Co., 329 Mo. 651; Inter-Southern Life Ins. Co. v. Ransom, 149 Ark. 517; Painter v. Mass. Life Ins. Co., 133 N.E. 20; Rushing v. Manhattan Life Ins. Co., 224 Fed. 74; Wolford, Admx. v. Natl. Life Ins. Co., 114 Kan. 411; Mutual Life Ins. Co. v. Stegall, 58 S.E. 79; Sellers v. Continental Ins. Co., 30 Fed. (2d) 42. (2) The court should, in requested instructions, have interpreted this life insurance policy contract so as to give effect to all the terms thereof, regardless of whether the courts believe the contract to be fair, because: (a) Courts are without authority to rewrite contracts, even insurance contracts. Prange v. International Life Ins. Co., 46 S.W. (2d) 523; State ex rel. N.Y. Life Ins. Co. v. Trimble, 306 Mo. 309; State ex rel. Automobile Ins. Co. v. Trimble, 297 Mo. 671; State ex rel. v. Ellison, 269 Mo. 419; State ex rel. v. Cox, 14 S.W. (2d) 603; Wendorff v. Mo. State Life Ins. Co., 1 S.W. (2d) 101. (b) When the terms of a policy of insurance are clear and unambiguous the courts cannot construe nor twist them so as to make ambiguities. State ex rel. N.Y. Life Ins. Co. v. Trimble, 306 Mo. 295, 267 S.W. 876; Alexander v. Insurance Co., 290 S.W. 453; Penn v. Travelers Ins. Co., 225 S.W. 1034; Hoover v. Mercantile Mut. Ins. Co., 69 S.W. 44; Cochran v. Standard Accident Ins. Co., 271 S.W. 1012; Maupin v. So. Surety Co., 220 S.W. 21; Mitchell v. German Commercial Standard Ins. Co., 161 S.W. 364. (3) A provision that effectiveness is conditioned on prepayment of the first premium is for the protection of the insurance company and may be waived. Bell v. Mo. State Life Ins. Co., 166 Mo. App. 390; Berryman v. So. Surety Co., 285 Mo. 379; New York Life Ins. Co. v. Stone, 42 Mo. App. 383; Pierce v. N.Y. Life Ins. Co., 174 Mo. App. 383. (a) If the year of protection begins on the delivery date the period may not be extended in future years beyond the same fiscal period. Prange v. International Life Ins. Co., 46 S.W. (2d) 523; Halsey v. Insurance Co., 258 Mo. 659; Landrigan v. Mo. State Life Ins. Co., 211 Mo. App. 89.

Leahy, Saunders & Walther and Jeffries, Simpson & Plummer for respondent.

(1) Courts arrive at the proper construction of life insurance policies by considering all the terms and provisions thereof, and give the same such liberal construction in favor of the insured as to allow, if possible, insurance coverage for such actual period of time as has been purchased by the payment of premiums. Halsey v. Insurance Co., 258 Mo. 669; Landrigan v. Mo. State Life Ins. Co., 234 S.W. 1046; State ex rel. Mo. State Life Ins. Co. v. Allen, 295 Mo. 317; Newman v. John Hancock Mut. Life Ins. Co., 7 S.W. (2d) 1017; Johnson v. Am. Cent. Life Ins. Co., 249 S.W. 119; Mo. State Life Ins. Co. v. Salisbury, 213 S.W. 791; Stout v. Mo. Fidelity & Casualty Co., 179 S.W. 994; McMaster v. N.Y. Life Ins. Co., 183 U.S. 25, 46 L. Ed. 73; Chestnut v. Security Mut. Life Ins. Co., 208 Mo. App. 138; Hampe, Admr., v. Met. Life Ins. Co., 21 S.W. (2d) 927; Prudential Ins. Co. v. Stewart, 237 Fed. 70; Stramburg v. Insurance Co., 94 Minn. 281; Silek v. Insurance Co., 97 Neb. 56; Stinchcombe v. Insurance Co., 46 Ore. 316; Brady v. Bankers Cas. Co., 114 Kan. 865; Parham v. Nat. Relief Assur. Co., 33 Ga. App. 59; Jeff. Standard Life v. Baker, 260 S.W. 223. (2) Insurance companies are prohibited from discriminating between insurants of the same class and equal expectations of life in the amount of premiums or rates charged for policies or dividends or benefits thereunder. Sec. 5729, R.S. 1929; 37 C.J. par. 70, p. 398; Laun v. Pac. Mut. Life Ins. Co., 131 Wisc. 555, 9 L.R.A. (N.S.) 1204; Emig v. Mutual Benefit Life Ins. Co., 127 Ky. 588; Security Life Ins. Co. v. Watkins, 189 Ky. 20. (3) The holding in this case that, premiums, payable under the policy of insurance subsequent to the first, became due on the anniversary of the effective date of the policy, did not do violence to the terms of the contract nor constitute a misconstruction of its terms and provisions. Cases cited under Point 1. (4) Prior applications by the insured for reinstatement of the policy on blanks furnished by the company, reciting March 19th as the premium due date, did not change the rights of the parties under the policy. Roberts v. American Natl. Assurance Co., 220 S.W. 999. (5) Appellant not having pleaded or relied upon its own waiver of terms and provisions in the policy as constituting a defense thereto, cannot now have such supposed defense considered. Kansas City ex rel. v. Walsh, 88 Mo. App. 277; State ex rel. v. Peterson, 142 Mo. 534; Alcorn v. C. & A. Railroad Co., 108 Mo. 95; Kersey v. Garton, 77 Mo. 647; Lanitz v. King, 93 Mo. 513; Thompson v. St. Charles County, 227 Mo. 231.

FITZSIMMONS, C.

Defendant, Missouri State Life Insurance Company, appeals from a judgment of the Circuit Court of the City of St. Louis in the sum of $20,000 and accrued interest, in favor of plaintiff as assignee of the beneficiary named in a policy of insurance written by appellant upon the life of Sim J. Riley.

The question presented for our determination is whether the policy was in effect when Riley died on November 19, 1926. The dates material to the controversy are:

March 19, 1923, insured made application to appellant through its agent, Lawton-Byrne-Bruner Insurance Company, for the policy.

March 30, 1923, appellant made delivery of the policy to insured through its agent, Lawton-Byrne-Bruner Insurance Company.

May 23, 1923, Lawton-Byrne-Bruner Insurance Company, appellant's agent, made payment out of its own funds to appellant of the first semi-annual premium.

January 2, 1924, insured Sim J. Riley paid to appellant's agent the amount of the first semi-annual premium.

November 19, 1926, the insured Sim J. Riley died.

The petition, which is in apt form, alleged the execution of the policy, a full performance of all its terms by Riley, his death and the refusal of appellant to furnish proofs of death or to pay the amount of the policy.

Appellant in its amended answer alleges that the premiums, payable on a semi-annual basis, were due on March 19 and September 19 of each year during the term of the policy as recited therein.

Respondent in its amended reply alleges that the premiums were payable on May 23 and November 23 of each year because the first semi-annual premium was not actually paid to appellant until May 23, 1923, upon which date the insurance first became effective, and the insurance years began to run.

The semi-annual premium which, according to appellant's theory was due September 19, 1926, was not paid when due nor within the grace period of thirty-one days thereafter, nor within the automatic continued insurance period of seven days after the grace period. If appellant is right in its theory of the premium payment dates, the policy by its terms was automatically forfeited before Riley's death on November 19, 1926. On the other hand, if the premium periods began May 23 and November 23, the policy was in effect at the time of Riley's death.

The trial court adopted to the full respondent's effective-on-delivery-and-payment theory of the fixation of the premium payment dates. It gave an instruction to the effect that, if no amount was paid to the appellant for the first semi-annual installment of premium on the policy in suit prior to May 23, 1923, and if thereafter six additional semi-annual premiums were paid to appellant, the verdict should be in favor of respondent. The court refused to give appellant's instructions in the nature of demurrers and other requested instructions to the effect that "the policy of insurance in suit required that all premiums after the year 1923 be paid on or before the dates mentioned in the policy," namely March 19 and September 19, of each year. The parties cite many authorities in support of their respective theories. But appellant leans most heavily upon Prange v. International Life Insurance Company, 329 Mo. 651, 46 S.W. (2d) 523, decided in Division One of this court December 21, 1931. Respondent, on the other hand, bases his principal argument upon McMaster v. New York Life Ins. Co., 183 U.S. 25, 46 L. Ed. 64; Halsey v. American Central Life Insurance Co., 258 Mo. 659, 167 S.W. 951, and cases subsequently decided, upon these authorities.

The policy sued upon was for term insurance. The company agreed to pay "to John J. Bailey, Business Partner of the Insured, and Beneficiary, immediately upon receipt of due proof of the death of Sim J. Riley, the insured, Twenty Thousand Dollars, which is the face amount of this policy, provided such death shall occur within the term of five years from March 19, 1923, and while this policy is in full force." The policy contained two options, usual in term policies. By the first, the policy at any time while it was in full force might be exchanged for a life or endowment policy on the annual premium plan on the lives of persons of the age of the insured at the time of the issuance of the original policy, and upon payment of the excess of premiums of the new...