Newman v. John Hancock Mut. Life Ins. Co.

• Decision Date: 24 May 1928
• Docket Number: No. 3858.,3858.
• Citation: 7 S.W.2d 1015
• Parties: NEWMAN v. JOHN HANCOCK MUT. LIFE INS. CO.
• Court: Missouri Court of Appeals

7 S.W.2d 1015

NEWMAN v. JOHN HANCOCK MUT. LIFE INS. CO.

No. 3858.

Springfield Court of Appeals. Missouri.

May 24, 1928.

Rehearing Denied July 6, 1928.

Appeal from Circuit Court, Dunklin County; W. S. C. Walker, Judge.

Action by Vera Newman against the John Hancock Mutual Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

See, also, 316 Mo. 454, 290 S. W. 133.

Leahy, Saunders & Walther, of St. Louis, and Ward Reeves & Oliver, of Caruthersville, for appellant.

Shepard & Hawkins, of Caruthersville, for respondent.

COX, P. J.

Action upon a life insurance policy for $2,000. Plaintiff recovered judgment for $2,350. Defendant appealed.

This is the second appeal in this case. The first is reported in 216 Mo. App. 180, 257 S. W. 190. It is also the second hearing on this appeal. At the first hearing we held that the defendant was within its rights under the terms of the policy when it had converted the policy into a policy of paid-up insurance for $124 after deducting the amount due on a loan to the assured. A motion for rehearing was sustained and the case reargued and submitted.

The policy contained provisions by which, after premiums had been paid for a certain length of time and there should then be a failure to pay further, the company could convert the policy into a paid-up policy for an amount to be determined as therein provided. The company contended that the right to convert had accrued to it, and so made the order under the terms of the policy after the insured had failed to furnish required evidence of insurability at that time so the policy could be reinstated, and refused to accept a tendered premium. No other premiums were tendered thereafter by the insured. The insured, Joplin W. Moad, died August 20, 1918. This plaintiff, the beneficiary in the policy, later demanded payment of the policy in full. The defendant denied liability for the full amount of the policy, but admitted liability for $124 and some accrued earnings, being the amount due under the policy after it had been converted into a paid-up policy.

The merits of this case depend on whether, under the facts, the insured had defaulted in the payment of premium and had thereby given the company the right to convert the policy into a paid-up policy. Plaintiff contended at the trial that the recitals of the policy and the application which was made a part of the policy, together with the delivery of the policy, made a prima facie showing that one full year's premium was paid when the policy was delivered, and if that were true, then the subsequent payments kept the policy alive beyond the date that defendant held that the policy had lapsed, and the case went to the jury on that question. We held in the first opinion written on this appeal that the evidence did not warrant submitting to the jury the question of the payment of premiums for one year at the time of the delivery of the policy. We do not now deem it necessary to review the evidence on that question, as we do not now regard that question as vital in the case. We are still of the opinion that the question of a full year's payment of premium at the time the policy was delivered should not have been submitted to the jury.

As we construe the policy, premiums could be paid quarterly, and as we view the evidence it shows that all premiums paid were paid quarterly. The policy was dated September 5, 1911, but was not delivered and the first payment of premium made until about November 20, 1911. Premiums paid amounted in all to 16 quarterly payments, and if we count those from September 5, 1911, the date of the policy, premiums were only paid to September 5, 1915, and the company contends that the policy lapsed for a failure to pay the premium which it claimed was due on that date. The real question at issue is whether the payments of premiums shall be counted as beginning on September 5, 1911, the date of the policy, or on November 20, 1911, the date of the delivery of the policy and payment of the first premium. There were 16 quarterly payments of premiums made, and, as said, if we count from September 5, 1911, these payments would only keep the policy alive until September 5, 1915, and the company was right in its holding that failure to pay additional premium on that date or within 31 days thereafter as provided by the policy caused it to lapse. If we count from November 20, 1911, the date of the delivery of the policy, then the payments made kept the policy alive until November 20, 1915, and the company was not warranted in holding that the policy had lapsed prior to that time. The policy provided that the application which was copied thereon was made a part of the policy. This application which was signed by the insured, contained the following provision:

"I agree that any policy which may be issued hereon shall take effect only in case it shall be delivered and the first payment or installments thereof actually paid during my life time."

The policy contained the following:

"This policy shall not take effect until the first premium or regular installment as herein provided shall be actually paid during the life time of the insured."

From these provisions of the application and the policy, it is clear to us that the policy did not take effect until it was delivered and an installment of premium paid, and hence in computing the time that the policy was kept alive by the payment of premiums we must begin with the date of the delivery of the policy and payment of the first premium. We are not authorized to include any time prior to the time at which the policy became a binding contract between the parties. Halsey v. Insurance Co., 258 Mo. 659, 167 S. W. 951; Stout v. Mo....