Richardson v. American Natl. Ins. Co

• Decision Date: 03 November 1931
• Docket Number: 13,802
• Citation: 137 So. 370,18 La.App. 468
• Court: Court of Appeal of Louisiana — District of US
• Parties: RICHARDSON v. AMERICAN NATL. INS. CO

137 So. 370

18 La.App. 468

RICHARDSON v. AMERICAN NATL. INS. CO

No. 13,802

Court of Appeals of Louisiana, Orleans

November 3, 1931

Rehearing Refused November 30, 1931.

Appeal from Civil District Court, Parish of Orleans, Division "A". Hon. Hugh C. Cage, Judge.

Action by Mary Richardson against the American National Insurance Company.

There was judgment for defendant, and plaintiff appealed.

Judgment affirmed.

Weiss Yarrut & Stich, of New Orleans, attorneys for plaintiff appellant.

Normann McMahon & Breckwoldt, of New Orleans, attorneys for defendant, appellee.

OPINION

HIGGINS, J.

The beneficiary of an accident and health insurance policy brings this action to recover its face value, certain accruals, attorney's fees, and penalties.

Defendant filed exceptions of no right or cause of action on the ground that from the face of the record it appeared that the accidental injury and death of the insured occurred at 4:45 p. m. on February 20, 1929, and, therefore, after the policy had lapsed and the liability of the defendant had been suspended at 12 o'clock noon, standard time, February 15, 1929, under the express terms and conditions of the contract, for non-payment of the premiums due at that time, and also after the expiration of the five-day grace period, which ended at 12 o'clock noon, standard time on February 20, 1929, as also expressly provided in the policy.

In a supplemental petition the plaintiff then filed a plea of estoppel on the ground that the defendant's conduct and custom, in accepting delinquent premiums as late as fifteen days after they were due for a period of four years, precluded defendant from asserting the suspension and forfeiture clauses of the policy. The plaintiff further urged that the five-day grace period did not expire until sunset, or 6 p. m. February 20, 1929, under the provisions of article 2057 of the Revised Civil Code; that the deceased, having died at 4:45 p. m. February 20, 1929, his death took place while the policy was in full force and effect.

The learned judge a quo sustained the exceptions and the plaintiff has appealed.

From the allegations of the original and supplemental petitions the policy, premium receipt books, and certain admissions which were made for the purpose of trying the exceptions, we find the following facts:

The defendant is in the industrial life insurance business issuing policies for sums of $ 500 and less, in consideration of weekly and monthly premiums. These policies provide weekly cash dividends for disability caused by sickness, or accident, and for death benefits. On January 13, 1925, the defendant insured Thomas Richardson, the deceased, under one of its policies in consideration of the payment of $ 2 cash as a policy fee and a monthly premium of $ 1.95, payable in advance. Plaintiff, the mother of the insured, was designated as beneficiary. The policy provided that in the event of accidental death of the insured the beneficiary would be entitled to the principal sum of $ 500, plus an accrual of 10 per cent added to the principal for each consecutive year's renewal. The petitioner alleged that the policy was renewed and all of the premiums paid for five consecutive years, and claimed that the face value of and accruals, under the policy together with double indemnity and attorney's fees were due her as beneficiary.

The premium was due on or before the 15th of each month, but for practically four years it was paid tardily from three to fifteen days each month, without protest or objection by the company. These payments were accepted by the company and the premium receipt books show under each amount that they were "accepted only subject to the conditions of the policy." The deceased was fatally shot at 4:45 p. m., February 20, 1929, and died immediately. The premium due at 12 o'clock noon, February 15, 1929, was not paid until February 22, 1929, or two days after the assured's death. Upon learning that the assured had died previous to the payment of the last premium, the company tendered the return of the money, which the plaintiff refused to accept, and it was deposited in the registry of the court.

The pertinent parts of the clauses of the policy over which this controversy arose, and which we are called upon to interpret and construe, are as follows:

"In consideration of the . . . . . . payment in advance of a policy fee of Two Dollars and a premium of $ 1.95 does hereby insure Thomas Richardson, subject to all the conditions herein contained and endorsed hereon, from 12:00 o'clock noon, standard time, of the day this contract is dated, until 12:00 o'clock noon, standard time, of the 15th day of February, 1925, and for such further periods, stated in the renewal receipts, as the payment of the premium specified in said application will maintain this policy and insurance in force, against death or disability. * * *"

(2) "A period of five (5) days of grace is allowed for the payment of any renewal premium, during which the policy shall be maintained in full force and effect in accordance with its terms, but if the payment of any renewal premium is made after the grace period of the policy has expired neither the Insured nor the Beneficiary shall be entitled to recover for any accidental injury sustained between the date of such expiration and 12:00 o'clock noon, standard time, of the day following the date of such renewal payment; or for any illness originating or death occurring before the expiration of ten (10) days after the date of such renewal payment."

(3) "If default be made in the payment of the agreed premium for this Policy, the subsequent acceptance of a premium by the Company or by any of its duly authorized agents shall reinstate the Policy, but only to cover accidental injury thereafter sustained and such sickness as may begin more than ten days after the date of such acceptance."

We shall first discuss the issue with reference to the five-day grace period. Learned counsel for the plaintiff argues that since this clause of the policy does not specifically provide that the five-day grace period shall expire at 12 o'clock noon, standard time, February 20, 1929, that, under the provisions of article 2057 of the Revised Civil Code, the plaintiff had until sunset, or 6 o'clock, February 20, 1929, to pay the premium, and, therefore, the deceased having been accidentally killed at 4:45 p. m. of that evening, the policy was still in full force and effect. Counsel further says that this clause of the contract is susceptible of two constructions--that is, that the five-day grace period ended at 12 o'clock noon standard time on February 20, 1929, or at sunset, 6 o'clock p. m. February 20, 1929,--and, therefore, the clause is ambiguous, and that the ambiguity must be resolved against the insurance company, which wrote and furnished the policy under the well established rule of interpretation and construction.

Defendant's able counsel replied that the provision cannot be isolated from the other clauses in the policy and must be construed in connection with and in the light of them, and that expiration of the grace period is definitely fixed at 12 o'clock noon, standard time, February 20, 1929, by the provisions of the policy.

Article 2057 of the Revised Civil Code of Louisiana reads as follows:

"Where a term is given or limited for the performance of an obligation, the obligor has until sunset of the last day limited for its performance, to comply with his obligations, unless the object of the contract can not be done after certain hours of that day."

It appears that there was no corresponding article in either the Code Napoleon or the later Code Civil. A research of the French commentators failed to reveal any statement or doctrine which might have been responsible for the article's origin. Unless the research has been faulty, this article was not derived from the Civil Law. Investigation of the common-law authorities was more fruitful, revealing a doctrine similar to that announced by the article of the Code; the essential difference between the common-law rule and the codal provision being that the article of the Code allows performance until sunset, while the common-law permits performance until midnight. It may be, as was suggested by counsel for defendant, that the theory of this article of the Code was taken from the common law and introduced into our Civil Code through the medium of Edward Livingston, who blended the features of the common-law contracts with the civil law of conventional obligations.

The common-law doctrine is stated in 26 Ruling Case Law, at page 734, as follows:

"So where one is given a stated number of days in which to perform an act, he may perform at any time up to the midnight of the last day."

But this seems to be only the general rule, for we also find the statement (26 Ruling Case Law, p. 736) that:

"The general rule that the law knows no fractions of a day is true only sub modo, and in a limited sense, where it will promote the right and justice of the case. It is a mere legal fiction, and therefore, like all other fictions, is never allowed to operate against right and justice, and there are many decisions which hold that fractions of a day will be taken into account in the computation of time, when, from the nature of the case, justice demands that that be done."

Continuing on the subject, it is further stated (26 Ruling Case Law, p. 737) that:

"And where the parties to a contract stipulate for the performance of the contract by an agreed hour on a certain day the law in such case will take cognizance of the fractions of the day."

Bearing in mind that the common-law general rule is identical with article 2057, except that under the common law the obligor has...