Prange v. International Life Ins. Co. of St. Louis

• Decision Date: 11 February 1932
• Citation: 46 S.W.2d 523,329 Mo. 651
• Parties: August Prange and Bankers Trust Company of Little Rock, Arkansas, Executors of Estate of George Henry Prange, Appellants, v. International Life Insurance Company of St. Louis, Missouri
• Court: Missouri Supreme Court

46 S.W.2d 523

329 Mo. 651

August Prange and Bankers Trust Company of Little Rock, Arkansas, Executors of Estate of George Henry Prange, Appellants, v. International Life Insurance Company of St. Louis, Missouri

Supreme Court of Missouri

February 11, 1932

Appeal from Circuit Court of City of St. Louis; Hon. M Hartmann, Judge.

Affirmed.

Frauenthal & Johnson, Meehan & Moncrief and James J O'Donohoe for appellants.

(1) Deducting from the gross annual premiums the sums necessary to purchase term insurance for ten months and seventeen days left in the hands of defendant more than enough to carry the policies beyond the death of insured, and defendant was bound, without any specific order from insured, to apply the same to payment of premiums to avoid forfeitures. North v. Nat. Life & Acc. Ins. Co. (Mo. App.), 231 S.W. 665; Missouri State Life Ins. Co. v. Le Fevre (Tex. Civ App.), 10 S.W.2d 267; Pfeiffer v. Mo. State Life Ins. Co., 174 Ark. 783; Reliance Life Ins. Co. v. Hardy, 144 Ark. 190; Girard Life Ins. A. & T. Co. v. Mut. Life Ins. Co., 97 Pa. 15; State Mut. Life Ins. Co. v. Forrest, 19 Ga.App. 296. (2) Stipulation either in a policy or application to the effect that the contract of insurance shall not go into effect until the first premium is paid and the policy delivered is a valid and binding stipulation. Missouri State Life Ins. Co. v. Salisbury, 279 Mo. 40; Kilcullen v. Met. Life Ins. Co., 108 Mo.App. 61; Missouri State Life Ins. Co. v. Burton, 129 Ark. 137. (3) The application for the policies sued on in the first to fourth counts, both inclusive, is dated April 28, 1922, predate of policies is April 4, 1922, date of policies is May 16, 1922, and delivery date is May 18, 1922. The application for policy sued on in the fifth count is dated May 24, 1922, policy predated April 4, 1922, date of policy in May 19, 1922, and delivery date is May 24, 1922. The dates are inconsistent, ambiguous and doubtful, and same should be resolved in favor of plaintiffs and against defendant. State ex rel. Security Mut. Life Ins. Co. v. Allen, 305 Mo. 607; Hampe v. Met. Life Ins. Co. (Mo. App.), 21 S.W.2d 926; Hope Spoke Co. v. Maryland Cas. Co., 102 Ark. 1; Maloney v. Maryland Cas. Co., 113 Ark. 181; U.S. Cas. Co. v. Johnston Drilling Co., 161 Ark. 158. (4) Where the application or policy provides that the latter shall not take effect until the first premium is paid and the policy delivered, premiums are computed from the time the first premium is paid and the policy actually delivered. Halsey v. Ins. Co., 258 Mo. 659; State ex rel. Mo. State Life Ins. Co. v. Allen, 295 Mo. 307, same case 211 Mo.App. 89, same case 234 S.W. 1042; Hampe v. Met. Life Ins. Co. (Mo. App.), 21 S.W.2d 926; Johnson v. Life Ins. Co., 212 Mo.App. 290; Burner v. Ins. Co., 221 Mo.App. 1193; Stout v. Fidelity & Cas. Co., 179 S.W. (Mo. App.) 993; Fallis v. Ins. Co., 210 Mo.App. 583; Chestnut v. Security Mut. Life Ins. Co., 208 Mo.App. 130; Lale v. Business Men's Assur. Co., 275 S.W. (Mo. App.) 962; Doty v. Ins. Co. (Mo. App.), 16 S.W.2d 712; McMaster v. New York Life Ins. Co., 183 U.S. 25; Prudential Ins. Co. v. Stewart, 237 F. 70; Stramback v. Ins. Co., 94 Minn. 281; Cilek v. Ins. 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; Jefferson Standard Life v. Baker (Tex. Civ. App.), 260 S.W. 223. (5) "A provision of a contract of insurance which attempts to bind the insured to the payment of premiums and to exonerate the insurer from a corresponding liability, is unilateral and unenforceable." Kirk v. Woodmen of the World, 169 Mo.App. 459; Gaugh v. Southern Life Ins. Co. (Ark.), 19 S.W.2d 1013; Hampe v. Met. Life Ins. Co. (Mo. App.), 21 S.W.2d 926. (6) The common law of England is made, by statute, the rule of decision in Arkansas, unless in conflict with certain named exceptions, and both are in accord with the rule in Missouri. Stevenson v. Snow, 3 Burr. 1237; Gaugh v. Southern Life Ins. Co. (Ark.), 19 S.W.2d 1013; Kirk v. W. of W., 169 Mo.App. 449. (7) Defendant breached the insurance contracts and prematurely lapsed, forfeited and canceled the same and thereby excused tender of premiums. Spencer v. Security Benefit Assn., 297 S.W. (Mo. App.) 991; Newman v. John Hancock Mut. Life Ins. Co., 216 Mo.App. 193; Dickinson v. Atkins, 132 Ark. 84; Read's Drug Store v. Hessig-Ellis Drug Co., 93 Ark. 497; Union Central Life Ins. Co. v. Caldwell, 68 Ark. 520; Fourche River Lumber Co. v. Bryant Lumber Co., 97 Ark. 633; Heinlein v. Ins. Co., 101 Mich. 250; May on Insurance, sec. 358, pp. 778, 779; Bauman v. Pickney, 118 N.Y. 604; New York Life Ins. Co. v. Lahr, 192 Ind. 613; Newman v. John Hancock Mut. Life Ins. Co. (Mo. App.), 7 S.W.2d 1015; Baumann v. Met. Life Ins. Co., 144 Wis. 206; Security Life Ins. Co. v. Gottman, 87 Ind.App. 388.

Jourdan & English for respondent.

The court should have directed a verdict for defendant and the judgment is for the right party for the following reasons (1) An insurer may make with the insured whatever contract may be agreed upon between the parties, and the courts will give effect to such contract and to all the terms of such contract, regardless of whether the courts believe the contract to be fair. State ex rel. N. Y. Life Ins. Co. v. Trimble, 306 Mo. 295; State ex rel. Automobile Ins. Co. v. Trimble, 297 Mo. 659; State ex rel. v. Ellison, 269 Mo. 410; State ex rel. v. Cox, 14 S.W.2d 602; Wendorff v. Mo. State Life Ins. Co., 1 S.W.2d 101; Missouri State Life Ins. Co. v. Carey, 276 S.W. 228; Southern Surety Co. v. Penzel, 261 S.W. 922; German-Amer. Ins. Co. v. Humphrey, 62 Ark. 348; Standard Life & Accident Ins. Co. v. Ward, 65 Ark. 298; Interstate Business Men's Accident Assn. v. Nichols, 143 Ark. 374; Jenkins v. International Life Ins. Co., 149 Ark. 257; Home Life & Accident Co. v. Haskins, 156 Ark. 77; Winters v. Reserve Loan Life Ins. Co., 290 S.W. 109; Heiran v. Standard Life Ins. Co., 8 F.2d 203. (2) Where the terms of a policy of insurance are clear and unambiguous the court cannot construe those terms nor twist them so as to make them ambiguous. State ex rel. New York Life Ins. Co. v. Trimble (Mo. Sup.), 267 S.W. 880; Alexander v. Ins. Co., 290 S.W. 453; Penn v. Travelers Ins. (Mo. App.), 225 S.W. 1034; Cochran v. Standard Accident Ins. Co. (Mo. App.), (1925), 271 S.W. 1012; Maupin v. Southern Surety Co., 220 S.W. 20; Southern Surety Co. v. Penzel, 261 S.W. 920; National Life Ins. Co. v. Jackson, 256 S.W. 379; Importers & Exporters Ins. Co. v. Jones, 266 S.W. 286; Heiran v. Standard Life Ins. Co., 8 F.2d 202; Pilot Life Ins. Co. v. Owen, 31 F.2d 866; Robnett v. Cotton States Ins. Co., 148 Ark. 199. (3) 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. Winters v. Reserve Loan Life Ins. Co., 290 S.W. 109. Inter-Southern Life Ins. Co. v. Ransom, 149 Ark. 517; Painter v. Mass. Life Ins. Co., 133 N. E. (Ind.) 20; Rushing v. Manhattan Life Ins. Co., 224 F. 74; Wolford v. Natl. Life Ins. Co., 114 Kan. 411; Mutual Life Ins. Co. v. Stegall, 58 S.E. 79; Sellers v. Continental Ins. Co., 30 F.2d 42. (4) A provision in a policy of life insurance expressly declaring a forfeiture or that the policy shall lapse or be null or void in case of the nonpayment of premiums at their due date is a valid and binding provision and unless the premium is paid on the date specified in the policy the insurance ceases. Robnett v. Cotton States Life Ins. Co., 148 Ark. 199; Home Life & Accident Co. v. Haskins, 156 Ark. 77; Bondurant v. Mo. State Life Ins. Co., 198 S.W. 74; Smoot v. Bankers Life Assn., 138 Mo.App. 438, 468; Marshall v. Life Ins. Co., 148 Mo.App. 669. (5) Where a date is specifically set in the policy for the payment of premiums the premiums will become due on that date and no other. Methvin v. Fidelity Mut. Life Ins. Co., 61 P. 1112; Bryan v. Association, 42 A. (R. I.) 513; Thomas v. Northwestern Mutual Life Ins. Co., 75 P. 665; Jewett v. Northwestern Life Ins. Co., 112 N.W. 734; Talbot v. Union Central Life Ins. Co., 241 F. 669; Glover v. Kansas City L. Ins. Co., 218 S.W. 907; Pladwell v. Travelers Ins. Co., 234 N.Y.S. 287 (affirmed 231 N.Y.S. 856); Rolerson v. Standard Life Ins. Co., 244 S.W. 845; Rushing v. Manhattan Life Ins. Co., 224 F. 74; Wolford v. Nat. Life Ins. Co., 114 Kan. 411. (a) Cases holding that the payment of the first premium entitles the insured to one year's protection from the date of delivery are to be distinguished from a case where the insured died after the expiration of the first year. Wilkinson v. Commonwealth Life Ins. Co., 176 Ky. 833, 197 S.W. 557; Tigg v. Register Life & Annuity Co., 152 Iowa 720, 133 N.W. 322; Swayze v. Mut. L. Ins. Co., 32 F.2d 787. (b) Cases which hold otherwise are distinguished from those where there was an agreement to antedate the delivery date of the policy to give an earlier age. Winters v. Reserve Loan Life Ins. Co., 290 S.W. 109; State ex rel. v. Trimble, 290 S.W. 115; McCampbell v. New York Life Ins. Co., 288 F. 465; Forch v. Indemnity Co., 157 Ill.App. 248; Johnson v. Mut. Benefit Life Ins. Co., 143 F. 950. (6) An insurance policy may by agreement between the insurance company and the insured provide for an effective date earlier than the date of issuance or delivery where it is desired to give the insured the benefit of an earlier insurance age, and the courts are without power to set aside such a stipulation. Winters v. Reserve Loan Life Ins. Co., 290 S.W. 109; State ex rel. v. Trimble, 290 S.W. 115; Lyke v. Amer. Nat. Assur. Co., 187 S.W. 267; Johnson v. Mut. Benefit Life...