Porto v. Metropolitan Life Ins. Co.

• Citation: 180 A. 289,120 Conn. 196
• Court: Supreme Court of Connecticut
• Decision Date: 27 June 1935
• Parties: PORTO v. METROPOLITAN LIFE INS. CO.

180 A. 289

120 Conn. 196

PORTO v. METROPOLITAN LIFE INS. CO.

Supreme Court of Errors of Connecticut.

June 27, 1935

Appeal from Court of Common Pleas, New Haven County; Robert L Munger, Judge.

Action upon an insurance policy by Joseph Porto against the Metropolitan Life Insurance Company. Demurrer to the complaint was sustained and judgment rendered for defendant and plaintiff appeals.

No error.

Argued before MALTBIE, C.J., and HAINES, HINMAN, AVERY, and FOSTER JJ.

Where policy provides for issuance of paid-up policy for such amount as reserve on policy will purchase, if application is made within specified time after default in payment of premium, time is to be regarded as of the essence of the contract, and paid-up policy must be demanded within time limited.

Thomas R. FitzSimmons, of New Haven, for appellant.

Stanley Daggett and David L. Daggett, both of New Haven, for appellee.

HINMAN, Judge.

The complaint alleged that on November 1, 1928, the defendant entered into a contract of life insurance in the amount of $1,000 with Marion Porto, in which the plaintiff is named as beneficiary. The premiums were paid up to and including August, 1932. About August 1, 1932, the insured became ill and wholly incapacitated, subsequently became mentally incompetent, and died February 5, 1933, without having regained her heath or sanity. The policy provided that, after premiums had been paid for two years, the owner or assignee, upon written request filed with the company and surrender of the policy within three months after the due date of any premium in default, should be entitled to one of three options: (a) Cash surrender value; (b) paid-up whole life insurance (a continuance of the policy in force for such reduced amount of insurance as the cash surrender value will purchase); (c) paidup term insurance (a continuance of the policy in force for such term as the cash surrender value will purchase). It further provided that, if one of these options was not so availed of within the three months, the policy would be continued as paid-up whole life insurance as per option (b). By reason of her insanity, the insured was unable to exercise the options, and the plaintiff did not know of the existence of the policy until after her death. Within three months after her death, the plaintiff tendered the policy and demanded $1,000 as paid-up term insurance, option (c), which amount the defendant refused to pay.

The defendant demurred to the complaint on the ground that it does not appear therefrom that written request for paid-up term insurance was filed within three months after the due date of the premium in default, September 1, 1932, as required by the policy.

The policy here involved plainly provides that, in order to entitle the insured to exercise his choice of one of the three options specified, he or his assignee must make written request therefor and present the policy for surrender or indorsement within three months after the due date of the premium in default. Confessedly this was not done. The premium remained in default for more than five months before the death of the insured, and the allegation upon which the plaintiff beneficiary depends in respect to compliance with this requirement is that he attempted to exercise the option, by request and tender of the policy, within three months of the date of insured's death. It is conceded that, if recovery may be had under such circumstances, it must be because of the disability caused by the insanity of the insured during the period of default preceding her decease, and the issue determinative of the demurrer is whether that disability so suspended or otherwise affected the time limitation as to permit an exercise of the options as and at the time alleged.

If the terms of an insurance policy are of doubtful meaning, that permissible construction which is most favorable to the insured is to be adopted; but, if they are plain and unambiguous, the established rules for the construction of contracts apply, the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning, and courts cannot indulge in a forced construction ignoring provisions or so distorting them as to accord a meaning other than that evidently intended by the parties. Komroff v. Maryland Casualty Co., 105 Conn. 402, 405, 135 A. 388, 54 A.L.R. 463; 14 R.C.L. p. 925. The canon of construction favoring the insured which is applicable to doubtful provisions " furnishes no warrant for avoiding hard consequences by importing into a contract an ambiguity which otherwise would not exist. *** To discharge the insured from the legal consequences of a failure to comply with an explicitly stipulated requirement of the policy *** would be to vary the plain terms of a contract in utter disregard of long-settled principles." Bergholm v. Peoria Life Ins. Co., 284 U.S. 489, 492, 52 S.Ct. 230, 231, 76 L.Ed. 416. Under the usual policy provision that it shall become void or forfeited upon failure to pay a premium or assessment at the time stipulated, such nonpayment works a forfeiture because the terms of the contract so prescribe and a court has no power to vary the stipulations of the parties, although payment was prevented by poverty, illness, mental impairment, or accident. Pitts v. Hartford Life & Annuity Ins. Co., 66 Conn. 376, 385, 34 A. 95, 50 Am.St.Rep. 96; Worthington v. Charter Oak Life Ins. Co., 41 Conn. 372, 400, 19 Am. Rep. 495; 14 R.C.L. p. 976. Conditions of a policy, performance of which at the time agreed upon " is necessary to the continued liability of the insurer to perform in case of loss, such as payment of premiums, and notice of change of interest or of other insurance *** are so essentially parts of the contract that noncompliance by the insured amounts to a breach of the agreement, which discharges the insurer from further liability *** even though the insanity or other disability of the insured made performance [by him] wholly impossible." Vance, Insurance (2d Ed.) p. 116; Wheeler v. Connecticut Mutual Life Ins. Co., 82 N.Y. 543, 37 Am. Rep. 594; Pitts v. Hartford Life & Annuity Ins. Co., supra; New York Life Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93, 15 A.L.R. 314, and cases in note, page 318; 4 Cooley, Insurance, p. 3671.

The overwhelming weight of authority is that if, in a policy providing for issuance of a paid-up policy for such amount as the reserve on the policy will purchase, or the like, it is expressly stipulated that application therefor shall be made within a specified time after default in payment of premium, time is to be regarded as of the essence of the contract and the paid-up policy must be demanded within the time limited. In addition to the principle that the contract must be construed according to its unambiguous terms, considerations supporting this view include that it is important that insurers should know the extent and nature of their liabilities, and should not be left indefinitely in uncertainty pertaining thereto and perhaps exposed to disadvantages due to lapse of time. Many cases are collected in a note in 8 L.R.A. (N. S.) p. 194. The same rule has been applied where the policy provided that, upon failure to pay premiums, the insured should be entitled, at his option exercised within a specified time, to have either extended insurance or a paid-up policy, otherwise the policy should be void. Knapp v. Homeopathic Mutual Life Ins. Co., 117 U.S. 411, 6 S.Ct. 807, 29 L.Ed. 960.

However, while there is a decided conflict in the decisions, the weight of authority is to the effect that, under policies requiring notice of the facts constituting a loss thereunder to be given within a specified period, failure to give the notice within that time is excused if the failure is due to insanity or other disabling cause, provided such notice is given within a reasonable time, or within the time stipulated, after termination of the...