Scotten v. Metropolitan Life Ins. Co.

• Citation: 81 S.W.2d 313,336 Mo. 724
• Parties: Winnie Lee Scotten v. The Metropolitan Life Insurance Company, Incorporated, Appellant
• Decision Date: 30 March 1935
• Court: Missouri Supreme Court

81 S.W.2d 313

336 Mo. 724

Winnie Lee Scotten v. The Metropolitan Life Insurance Company, Incorporated, Appellant

Supreme Court of Missouri

March 30, 1935

Rehearing Overruled March 30, 1935.

Appeal from Howard Circuit Court; Hon. A. W. Walker, Judge.

Reversed and remanded (with directions).

Hunter & Chamier for appellants.

(1) April 15th was the premium due date. It was fixed as such by the contract and the conduct of the parties. The insured and insurer, over a course of years, recognized and treated April 15th, as the due date, and interpreted the contract as requiring the premium to be paid on that date or within the grace period; therefore, the court is bound to follow such understanding and interpretation, and consider April 15th as the premium due date. Hazeltine v. Farmers', etc Ins. Co., 263 S.W. 813; Porterfield v. Am. Surety Co., 201 Mo.App. 19, 210 S.W. 124; Winters v Reserve, etc., Ins. Co., 221 Mo.App. 525, 290 S.W. 113; Lee v. Mo. State Life Ins. Co., 303 Mo. 503, 261 S.W. 86; State v. Christopher, 318 Mo. 225, 2 S.W.2d 621; Hoppock v. Gaines, 284 S.W. 191; 13 C. J. 514, sec. 517. (2) The question of forfeiture is not involved, whether April 15th (the date of the policy), or April 23rd (the date the policy was approved), or May 15th (the date respondent claims the policy was delivered), is taken as the due date of the premium. There was a default in the payment of the 1927 premium, and the policy lapsed, under its own terms, under any theory, not later, than June 15th, 1927. Therefore, appellant's act on November 11, 1927, in continuing the policy for paid-up insurance was strictly in accordance with the terms of the policy, and did not amount to a wrongful lapse or forfeiture, such act of the company being more than four months after said default and the insured not having, during said time, elected to take under any of the policy options, provided for his benefit in case of a lapse. Payne v. Mutual Life Ins. Co., 195 Mo.App. 516, 191 S.W. 695; Capp v. Security Mut. Life Ins. Co., 117 Mo.App. 532, 94 S.W. 734; Security Life Ins. Co. v. Seeber, 41 F.2d 602; 4 Cooley on Insurance (2 Ed.) 3579; Ashbrook v. Phoenix Mut., 94 Mo. 72, 6 S.W. 462. (a) The letter of June 7, 1927, was not a refusal to recognize the contract, nor inconsistent with its existence, and did not constitute a breach or repudiation. Lavin v. Grand Lodge, A. O. U. W., 112 Mo.App. 15; Wavland v. Indemnity Co., 166 Mo.App. 233; Capp v. Life Ins. Co., 117 Mo.App. 535; Authorities under Points 1 and 2. (3) The insured by his acts agreed to the policy terms and consented to or acquiesced in the lapse of the policy, and in appellant's action in continuing it for a reduced amount of paid-up insurance; and respondent cannot now complain. Dougherty v. Mut. Life Ins. Co., 44 S.W.2d 206; Cooper v. N. Y. Life Ins. Co., 211 S.W. 549; Christensen v. Ins. Co., 160 Mo.App. 500; N. Y. Life Ins. Co. v. Fletcher, 117 U.S. 519; Mut. Life Ins. Co. v. Hill, 178 U.S. 347; Lee v. Mo. State Life Ins. Co., 303 Mo. 504; Lavin v. A. O. U. W., 112 Mo.App. 20; Bange v. Supreme Council Legion of Honor, 128 Mo.App. 475; Miller v. Grand Lodge O. B. A., 72 Mo.App. 505; McCall v. International Life Ins. Co., 196 Mo.App. 335; Glardon v. K. of P., 50 Mo.App. 45; Capp v. Security Mutual, 117 Mo.App. 532; McGeehan v. Mut. Life Ins. Co., 131 Mo.App. 417.

Daniel C. Rogers for respondent.

The delivery date of the policy of insurance to Mr. Scotten in 1927 determined the date the contract of insurance went into effect. The date written on the policy does not determine the effective date. The insured was not compelled to pay the 1927 premium until 31 days after the effective-on-delivery date. The wrongful lapse or breach of the policy of insurance before the effective date or the end of the 31-day grace period thereafter, in 1927, relieved the insured of any obligation to tender the annual premium due in 1927, or thereafter, as long as the wrongful act had not been withdrawn by the defendant: Kirk v. Woodmen of the World, 169 Mo.App. 449; Halsey v. Ins. Co., 258 Mo. 659; Chestnut v. Security Mut. Life Ins. Co., 232 S.W. 203; Landrigan v. Mo. State Life, 234 S.W. 1042; State ex rel. v. Allen, 243 S.W. 839; Landrigan v. Mo. State Life, 245 S.W. 382; Johnson v. Am. Cent. Life Ins. Co., 249 S.W. 115; Newman v. John Hancock Mut. Life, 257 S.W. 191; Newman v. John Hancock Mut. Life, 7 S.W.2d 1015; Hampe v. Metropolitan Life, 21 S.W.2d 926; Bigalke v. Mut. Life Ins. Co., 34 S.W.2d 1109; Dougherty v. Mut. Life Ins. Co., 44 S.W.2d 206; Spencer v. Security Ben. Assn., 297 S.W. 991; Doty v. Western & Sou. Life Ins. Co., 16 S.W.2d 715; Lale v. Business Men's Assur. Co., 275 S.W. 962.

OPINION

Tipton, P. J.

This case comes to the writer on reassignment. This case was tried in the Circuit Court of Howard County and on appeal was taken to the Kansas City Court of Appeals, where the judgment of the circuit court was affirmed. A rehearing was granted and on the rehearing the judgment was again affirmed in an opinion written by Campbell, Commissioner, but by a divided court. Trimble, J., dissented, and upon his request the cause was certified to this court. These opinions will be found reported in 68 S.W.2d 60 et seq.

The pertinent facts are as follows: Scotten, the insured, signed an application for insurance April 15, 1919, for $ 5,000. The policy was later delivered, but the exact date is left uncertain by the record. The premium on the policy was to be paid quarterly, the first being paid with the application. The policy itself contained a clause that the company would not be liable until the policy had been delivered. In August, 1919, Scotten requested that the premiums be paid annually in place of quarterly "beginning with April 15, 1920." April 20, 1921, Scotten paid the premium by check. Upon the face of this check he wrote, "For insurance premium due 4/15/21." Yearly premiums were paid for the years 1922, 1923, 1924, 1925 and 1926, on the basis that April 15 was the due date, May 20, 1925, Scotten, on the theory that he had not paid his premium within the thirty-one-day grace period, signed an application for restoration of the policy, in which application it was stated that the "policy lapsed for the non-payment of the premium due April 15, 1925." This same procedure was followed in the year 1926. The application for restoration was signed July 9, 1926. The policy was restored and a loan of $ 614.10 was obtained by Scotten. On June 7, 1927, the company wrote Scotten a letter stating that he was permitting his policy to lapse and advising him that if he desired he could again be reinstated by paying the premium and signing health certificate. Scotten failed to sign the application for restoration as he had done in the years 1925 and 1926 and so far as the record disclosed paid no further attention to the matter. In November, 1927, he was notified that the company had lapsed his policy, and that it had placed it on a paid-up basis for $ 334. Thereafter Scotten at no time made any demand upon the company to reinstate his policy nor offered to pay the premium due. After his death, and three years after the policy had lapsed, the beneficiary claimed that the correct premium paying date was not April 15, but it was on the date of the delivery of the policy. She seeks to recover the full amount of the policy from the defendant upon the theory that the letter of June 7, 1927, breached the contract of insurance and thereby relieve Scotten of making any tender of premium after that date.

The defendant insists that, at the time the insured made his application, he paid the full first quarterly payment and the defendant issued to him a "binding receipt" which provided that upon the approval of the application (which meant the acceptance of the risk and that a policy would be issued) the risk would be in effect as of April 15, 1919. The stub of this receipt was attached to plaintiff's Exhibit 2. This exhibit was the application. Other pertinent facts will be stated in the course of this opinion.

The defendant assigns as error the refusal of the trial court to give its instruction in the nature of a demurrer offered at the close of the case.

Plaintiff's theory of her case, as shown by the only instruction that directed a verdict in her favor, is that the letter of June 7, 1927, was an unlawful lapse of the policy. It was, therefore, incumbent upon the plaintiff to show that the policy was delivered at some time later than May 7, 1919. Assuming, without deciding, that the plaintiff's theory of the case is correct, we do not believe there was any substantial evidence that the policy was delivered at a date later than May 7, 1919.

Her evidence as to the date of delivery of the policy was as follows:

"Q. Do you know when the policy was delivered to Mr. Scotten? A. No, I don't.

"Q. Do you have any recollection as to how the policy came into his hands or into your home for the first time after it was issued in 1919? A. No, I don't.

"Q. Do you know that he took out the policy? A. Yes, sir, I know that. . . .

"Q. Do you know whether the policy came through the mail? A. No I don't. . . .

"Q. Do you know on what date with reference to April 15th, your husband took the medical examination? A. No, I don't.

"Q. Do you know whether it was before or after the 15th of April? A. After. . . .

"The Court: Q. Mr. Rogers is asking if you know anything about the delivery of this policy -- how and when? A. I don't know how and when, but I know that it was not immediately after it was written. . . . A. It was delivered after the application quite a while.

"The Court: You may state when the policy was delivered, according to your best knowledge. (Here objection was made.)

"Q. Go ahead and tell to the best of your...