Reynolds v. The Metropolitan Life Insurance Company

• Decision Date: 06 December 1919
• Docket Number: 22,325
• Citation: 105 Kan. 669,185 P. 1051
• Parties: SAM E. REYNOLDS, as Administrator of the Estate of ALICE M. MCCOLLUM, deceased, Appellee, v. THE METROPOLITAN LIFE INSURANCE COMPANY, Appellant
• Court: Kansas Supreme Court

185 P. 1051

105 Kan. 669

SAM E. REYNOLDS, as Administrator of the Estate of ALICE M. MCCOLLUM, deceased, Appellee, v. THE METROPOLITAN LIFE INSURANCE COMPANY, Appellant

No. 22,325

Supreme Court of Kansas

December 6, 1919

Decided July, 1919.

Appeal from Clay district court; FRED R. SMITH, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. INDUSTRIAL INSURANCE--Default in Payment of Premium--Thirty Days' Written Notice Required to Forfeit or Cancel Policy. The provision of section 1 of chapter 212 of the Laws of 1913 (Gen. Stat. 1915, § 5292), making it unlawful for any life insurance company, other than fraternal, doing business in the state, to forfeit or cancel a policy on account of the nonpayment of premiums, without first giving notice in writing to the holder of any such policy of its intention to forfeit or cancel the same, is held to include industrial policies issued upon the payment of monthly or weekly premiums.

2. SAME--Provision in Policy Waiving Statutory Written Notice Void. The policy of insurance sued on was an industrial policy, which made it the duty of the company's agent to call upon the insured on Monday of each week to collect a weekly premium of 25 cents. Printed upon the policy with a rubber stamp was a provision as follows:

"The insured under this policy, by the acceptance thereof expressly waives, both for himself and for any other person who has now, or who may subsequently acquire any interest herein, the giving of any notice provided for by chapter 212 of the Laws of 1913 of the state of Kansas, and consents that said policy may be lapsed or forfeited for nonpayment of premium as herein provided."

Held, that this provision of the policy was void.

3. SAME--No Mutual Agreement to Cancel or Abandon Policy. On the facts stated in the opinion, it is held that the insured and the insurance company had not by mutual agreement abandoned and canceled the policy, and that it was in full force and effect at the time of the death of the insured.

George T. McDermott, Robert L. Webb, both of Topeka, Robert Stone, and E. H. Gamble, both of Kansas City, Mo., for the appellant; William J. Tully, of New York, N. Y., and H. O. Caster, of Bartlesville, Okla., of counsel.

C. Vincent Jones, of Clay Center, for the appellee.

OPINION

PORTER, J.:

The action is upon a policy of life insurance. From a judgment sustaining a demurrer to its answer, the insurance company appeals.

In May, 1915, the appellant issued an industrial policy upon the life of Alice M. McCollum, and agreed in case of her death to pay to her executor or administrator the sum of $ 200. The particular kind of policy made it the duty of the company's agent to call upon the insured on Monday of each week and collect a weekly premium of 25 cents. It was provided in the policy that, "If any premium shall not be paid when due, this policy shall be void." After the first premium, a grace of four weeks was granted for the payment of premiums, "during which time the insurance shall continue in force." In the same clause there was a provision that,

"If death occur within the days of grace, the overdue premiums shall be deducted from the amount payable hereunder, but neither this concession nor the acceptance of any overdue premiums shall create an obligation on the part of the company to receive premiums which are in arrears over four weeks."

The insured died on May 22, 1917. The last payment of premiums was made March 19, 1917, and the next payment was due on the 26th of that month. At the time the policy was written, chapter 212 of the Laws of 1913 was in force, with this provision:

"It shall be unlawful for any life insurance company other than fraternal doing business in the state of Kansas to forfeit or cancel any life insurance policy on account of the nonpayment of any premium thereon, without first giving notice in writing to the holder of any such policy of its intention to forfeit or cancel the same." (Gen. Stat. 1915, § 5292.)

In the petition it was alleged that for the purpose of avoiding the effect of this statute the appellant, in violation of the laws of the state and against the public policy of the state, had stamped upon the insurance policy, with a rubber stamp, the following:

"The insured under this policy, by the acceptance hereof, expressly waives, both for himself and for any other person who has now, or who may subsequently acquire any interest herein, the giving of any notice provided for by chapter 212 of the Laws of 1913 of the state of Kansas, and consents that said policy may be lapsed or forfeited for nonpayment of premium as herein provided."

The petition was drawn upon the theory that this provision of the policy was void. The appellee, therefore, contended that the four weeks of grace carried the policy to and including April 23, and that the earliest date the appellant could have mailed a written notice was April 24, and that, under the statute, the earliest date it could have forfeited the policy was 30 days thereafter, which was May 25, 1917, and that, the death of the insured having occurred three days before May 25, the policy was still in force.

The appellant makes the following contentions:

"I. That chapter 212, Session Laws of 1913, being sections 5292 and 5293 of the General Statutes of 1915 for the state of Kansas, does not apply to industrial policies--the class of policy upon which this suit is based.

"II. That if chapter 212, Session Laws of 1913, ever had any application to this class of policy, the force and effect of that statute has been waived and set aside by the original contract of the parties.

"III. The parties by their own acts and by mutual agreement have abandoned and canceled the policy."

The principal contention is that the statute of 1913 does not apply to industrial policies. The argument is that the ordinary life insurance policy provides for a premium payable annually, semiannually, or quarterly, and that under any one of these three methods it often happens that the exact date when payment is due escapes the memory of a policyholder, the notice being often laid aside and forgotten and the time allowed to slip by without making the payment; that the holder has a vested interest in an ordinary policy, and because of the great importance to him that it should not lapse, the statute was enacted requiring 30 days' notice after the payment...