Owen v. New York Life Ins. Co.

• Decision Date: 14 November 1921
• Docket Number: 21781
• Citation: 126 Miss. 878,89 So. 770
• Court: Mississippi Supreme Court
• Parties: OWEN v. NEW YORK LIFE INS. CO

89 So. 770

126 Miss. 878

OWEN v. NEW YORK LIFE INS. CO

No. 21781

Supreme Court of Mississippi

November 14, 1921

INSURANCE. Where contract provides insurer shall apportion dividends to premiums, insurer cannot declare forfeiture for nonpayment prior to notice of dividend.

Where a life insurance policy provides that the insured shall share in the profits of the company, to be ascertained annually and that at the end of the second insurance year, and on each anniversary thereafter, such dividend as shall have been apportioned by the company to the policy will, at the option of the insured, be applied toward the payment of premiums and where the application, which is made a part of the contract of insurance, contains express directions that all dividends shall be applied toward the payment of premiums, after the end of the second insurance year, the company cannot declare the policy forfeited for nonpayment of premiums until it has given notice to the insured of the amount of the dividend apportioned to the policy.

HON. W A. ALCORN, JR., Judge.

APPEAL from circuit court of Bolivar county, HON. W. A. ALCORN, JR. Judge.

Suit by Mrs. Miriam R. Owen against the New York Life Insurance Company. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Judgment reversed, and cause remanded.

Roberts & Hallam, for appellant.

The brief of appellee relies almost exclusively on the fact that because the full amount of the premium of four hundred and fourteen dollars and thirty cents was not paid by October 24, 1918, or within thirty days thereafter the policy became forfeited, and in reliance on this defense quotes as follows from New York Life Insurance Company v. Alexander, 83 So. 93: "When a life insurance policy provides for a forfeiture of the insurance, in case of a failure to pay premium, the policy is forfeited." In the same breath counsel argues: "The insurance automatically expired when the insured failed to pay the third premium within the time required by the contract." Citing Pope v. New York Life Insurance Co., 181 S.W. 1046, and New York Life Insurance Co. v. O'Don, 100 Miss. 219.

We submit that the argument is contradictory in itself. We have shown in our original brief that in a term policy such as that considered in the case of Cason v. Mutual Life Ins. Co. of New York, 184 P. 296, the contract automatically expires at the end of the term and in order that the policy may still have life, that at the end of each term it is necessary to make a new contract of insurance by paying the premium for a new term.

But in order that a contract may be forfeited, it is necessary that something should still exist, as distinguished from something that has automatically expired, that is subject to forfeiture; and if there is something which can be forfeited, it could not have automatically expired, and the ground of forfeiture is something which can be waived.

So that, even if the appellee had not contracted with the insured in the case at bar that the dividends accruing on this policy should be applied to the payment of premiums, still, by failing to notify the insured of the amount of the dividend accruing on October 24, 1918, the non-payment of premium promptly at maturity or within thirty days thereafter, the payment of the premium being a condition subsequent. Reed v. Bankers Reserve Life Ins. Co., 192 F. 408; Phoenix Ins. Co. v. Doster, 106 U.S. 30, 1 S.Ct. 19, 27 L.Ed. 65.

Counsel also confuses the right of an insured to demand that an insurance company accept only a partial payment of premium, and the right of an insured to have notice of the amount of a dividend and to have the dividend applied toward the payment of the premium. Of course the insured must be willing to pay the balance after he ascertains the amount of the dividend.

Counsel also in his brief casually observe that there is no proof in the record that the appellee did not give the insured notice of the amount and declaration of the dividend of sixty-seven dollars and fifty cents, but does not seriously stress the point. Even if the burden of proof as to the giving of this notice of the amount of the dividend was not on the defendant, as clearly intimated in the case of Cason v. Mutual Life Ins. Co., supra, yet all of the facts and circumstances in this record go to show that the notice was not given.

Certainly, if the appellee had given the insured notice of the amount of his dividend, it would have told Mr. Owen so, in this letter. But the letter is silent on the subject. It merely declares that the dividend was apportioned to the policy on that day. It says nothing about a notice of a dividend.

Add to this the fact that the notice which is attached to the agreement of counsel in this case filed in the supreme court, in which the appellant was notified to produce at the trial in the lower court certain documents mailed to the deceased in his lifetime, among them several notices of premium due, is silent as to a notice of the declaration of a dividend, and the case is conclusive. If such a notice had been mailed to the insured, the first thing the appellee would have done would have been to notify Mrs. Owen to produce that notice at the trial or that secondary evidence would be offered to show its contents. Counsel is right; we did charge in our original brief that the defendant did not give the notice in question. We now renew the charge. This being the state of the record, the peremptory instruction was improper. The rule as to the giving of a peremptory instruction is thus laid down: "It is only in cases free from doubt that the court will withdraw a case from the jury." R. R. Co. v. Doyle, 60 Miss. 977.

When the evidence is sufficient to warrant a verdict for a party in any view of it which may be legally taken, a peremptory instruction in favor of his opponent should not be given. R. R. Co. v. Boehms, 70 Miss. 11; Holmes v. Simon, 71 Miss. 212. If the evidence supports or tends to support the plaintiff's case, a peremptory instruction is improper. Swan v. Ins. Co., 52 Miss. 704; Whiting v. Cook, 53 Miss. 551; Carson v. Leathers, 57, Miss. 650; Lowenstein v. Powell, 68 Miss. 73; Richardson v. Toliver, 71 Miss. 966; Thrasher v. Gillespie, 52 Miss. 840; Vantrell v. R. R. Co., 69 Miss. 435; Timberlake v. Compress Co., 72 Miss. 323.

A peremptory instruction to find a certain way is improper unless the court, on the evidence, would set aside a contrary verdict: Bernheim v. Dibrell, 66 Miss. 199; Holmes v. Simon, supra. A verdict will not be disturbed though no member of the court would have found as the jury did. R. R. Co. v. Cantrell, 70 Miss. 329.

This court has said: "We are not authorized to exercise the difficult and delicate function of declaring the verdict of a jury manifestly wrong, except in those very rare cases where the evidence shows it to be so most convincingly and indubitably. King v. Rowan, 82 Miss. 18. See, also, Rhymes v. Electric Ry. Co., 85 Miss. 147; A. & V. Ry. Co. v. Dear, 87 Miss. 339; Carlton v. King, 40 So. 191; McCaughn v. Young, 37 So. 839; Bingham v. Davidson, 37 So. 738; I. C. R. R. Co. v. Schultz, 39 So. 1005.

Respectfully submitted.

A. H. Longino, for appellee.

The plaintiff's attorneys as appears from their brief, on file, seems to have abandoned all other points in the case except those raised by the second and fifth counts of the declaration, the effect of which being, first--that on the 24th day of October, 1918, the defendant had in its possession sixty-seven dollars and fifty cents, which had, on that date, accrued to the defendant as a divisable surplus and which the defendant was bound to apply as partial payment on said third premium; and that by making such application, the policy would have been maintained in force beyond the date of Mr. Owen's death.

It is manifest from the terms of the policy that it was never intended that the dividend in question should be applied toward the payment of said premium, unless the insured had paid within the time required, the balance thereof. On this point appellee directs the court's attention to the provision of section 1, of the policy under the head of application of dividends (B) applied "toward" payment of the premium:

"The plain meaning of the words, "toward payment of the premium" clearly negatives the idea contended for by appellant in this case, who never sought to ascertain, between the due date of premium and the expiration of the policy, the amount of said dividend nor made any tender, nor offered in any way to pay the balance of the premium until after the policy, by its expressed terms had expired.

For the sake of argument let it be supposed that the insured had given the company timely notice before default, in the balance of the premium in question, that he elected to apply this dividend "toward" the payment of that premium, and as happened in the case, he did not pay the balance of the premium, can it be insisted that the company would have been bound to carry the insurance as long as that dividend would buy continued insurance? I am unable to find any decision of any court holding that an option in a policy authorizing the dividend to be applied "toward" the payment of premium meant that the dividend must be so applied whether or not the insured paid the balance due on such premium during the life of the policy; unless the insurance company at the time had funds in its hands belonging to the insured in a sufficient sum to pay the whole amount due on said premium. I respectfully submit that the contention of appellant above is at variance with the case of the Mutual Life Ins. Co. of New York v. Breland, 117 Miss. 479.

The question of a partial payment of the premium was not technically involved nor was it...