Smith v. Equitable Life Assur. Soc. of U.S.

• Citation: 107 S.W.2d 191,232 Mo.App. 935
• Parties: ALBERTA E. SMITH AND GALENA SMITH, APPELLANTS, v. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, A CORPORATION, RESPONDENT
• Decision Date: 29 June 1937
• Court: Missouri Court of Appeals

107 S.W.2d 191

232 Mo.App. 935

ALBERTA E. SMITH AND GALENA SMITH, APPELLANTS, v. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, A CORPORATION, RESPONDENT

Court of Appeals of Missouri, St. Louis

June 29, 1937

Appeal from Circuit Court of Jefferson County.--Hon. E. M. Dearing Judge.

AFFIRMED.

Judgment affirmed.

Arthur Kreisman, Edgar & Matthes and Robert L. Aronson for appellants.

(1) The parties are bound to comply with the laws of Missouri in writing their Missouri contracts, and any clauses which conflict with statutory provisions are illegal, void and ineffective. Cravens v. New York Life Ins. Co., 148 Mo. 583, 50 S.W. 519; Smith v. Mutual Benefit Life Ins Co., 173 Mo. 529, 72 S.W. 935; Christensen v. New York Life Ins. Co., 160 Mo.App. 486, 141 S.W. 6; Chandler v. John Hancock Mutual Life Ins. Co., 180 Mo.App. 394, 167 S.W. 1162. (2) The inclusion in a policy of life insurance of a clause granting double indemnity for accidental death does not constitute it a separate policy of accident insurance; the entire contract is one policy of insurance on life. Logan v. Fidelity & Casualty Co., 146 Mo. 114, 47 S.W. 948; Lamport v. General Acc., F. & L. A. Corp., 272 Mo. 19, 197 S.W. 95; Moore v Northwestern National Life Ins. Co., 112 Mo.App. 696, 87 S.W. 988; Salamone v. Prudential Insurance Co. (Mo. App.), 103 S.W.2d 506; Pacific Mutual Life Ins. Co. v. Parker, 71 F.2d 872. (3) Both the $ 1000 and the $ 2000 provisions of this policy for payment upon proof of death according to the cause thereof, are "face amounts" of this policy, within the meaning of the statutes. Julius v. Metropolitan Life Ins. Co., 299 Ill. 343, 132 N.E. 435, 17 A. L. R. 956; Southern Mutual Life Ins. Co. v. Turnley, 100 Ga. 296, 27 S.E. 975; Supreme Council, A. L. H. v. Storey (Tex.), 75 S.W. 901; Cunningham v. Great Southern Life Ins. Co. (Tex.), 66 S.W.2d 765; Salamone v. Prudential Insurance Co. (Mo. App.), 103 S.W.2d 506. (4) All ambiguities should be resolved against the insurer, especially in matters of forfeiture. Howell v. Security Mutual Life Ins. Co., 215 Mo.App. 698, 253 S.W. 411; State ex rel. Security Mutual Life Ins. Co. v. Allen, 305 Mo. 613, 267 S.W. 379; Watson v. Commonwealth Life & Acc. Ins. Co., 17 S.W.2d 570; Wendorff v. Missouri State Life Ins. Co., 318 Mo. 363, 1 S.W.2d 99. (5) Under our statutes the double indemnity death benefit contained on the face of the policy must be included within the extended insurance, and a policy provision to the contrary is invalid. Sections 5741 and 5743, R. S. Mo. 1929; New York Life Ins. Co. v. Rositzky, 45 F.2d 758 (cert. den. 51 S.Ct. 353); Henricks v. Metropolitan Life Ins. Co. (Calif. App.), 53 P.2d 991; Cunningham v. Great Southern Life Ins. Co. (Tex. Civ. App.), 66 S.W.2d 765; All other cases, supra.

Rassieur & Rassieur and Alfred C. Wilson for respondent.

(1) Unequivocal and unambiguous language in an insurance policy must be given its plain meaning. In such case there is no room for construction. State ex rel. Security Mutual Life Insurance Co. v. Allen, 305 Mo. 607, 267 S.W. 379; Wendorff v. Mo. State Life Ins. Co., 318 Mo. 363, l. c. 370, 1 S.W.2d 99; Ransford v. National Protective Assur. Assoc. (Mo. App.), 16 S.W.2d 663; 14 R. C. L., p. 931, sec. 103. (2) Statutes restraining freedom of contract are strictly construed. Price v. Connecticut Mutual Life Ins. Co., 48 Mo.App. 281, l. c. 295; Johnson v. Central Life Assur. Soc., 187 Minn. 611, 246 N.W. 354, l. c. 357; Valenti v. Prudential Ins. Co. (8 C. C. A.), 71 F.2d 229, l. c. 233; same case below, 1 F.Supp. 993. (3) It is presumed that the Legislature by amending a statute intended to change its meaning. Holt v. Rea, 330 Mo. 1237, 52 S.W.2d 877, l. c. 878; U. S. v. Southern P. Co. (D. C. Calif.), 230 F. 270, l. c. 275; 59 Corpus Juris 1097. (4) Sec. 5741, R. S. Mo. 1929; Valenti v. Prudential Ins. Co. (8 C. C. A.), 71 F.2d 229; same case below, 1 F.Supp. 993; Great Southern Life Ins. Co. v. Jones (8 C. C. A.), 35 F.2d 122. (5) The phrase "face amount insured by the policy," as used in Sec. 5741, R. S. Mo. 1929, means the regular or straight life insurance provided for by the policy without additional features such as accident or disability insurance. Secs. 5741, 5743, R. S. Mo. 1929; Valenti v. Prudential Ins. Co. (8 C. C. A.), 71 F.2d 229; same case below, 1 F.Supp. 993; Great Southern Life Ins. Co. v. Jones (8 C. C. A.), 35 F.2d 122; Johnson v. Central Life Assur. Soc., 187 Minn. 611, 246 N.W. 354; Orr v. Prudential Ins. Co., 274 Mass. 212, 174 N.E. 204; Inter-Southern Life Ins. Co. v. Omer, 238 Ky. 790, 38 S.W.2d 931, l. c. 937; Hendricks v. Metropolitan Life Ins. Co. (Cal. Sup. 1936), 61 P. 1162, l. c. 1169, Advance Sheets, Dec. 4, 1936; Burns v. Corn Exchange Nat'l Bank of Omaha, 33 Wyo. 474, 240 P. 683, l. c. 687. (6) The Missouri statutes permit a life insurance policy, upon lapse of the policy for nonpayment of premiums, to exclude the double liability feature for accidental death during the period insurance is required to continue thereafter as temporary extended term insurance. Sec. 5741, R. S. Mo. 1929; Valenti v. Prudential Ins. Co. (8 C. C. A.), 71 F.2d 229; same case below, 1 F.Supp. 993; Great Southern Life Ins. Co. v. Jones (8 C. C. A.), 35 F.2d 122; Johnson v. Central Life Assur. Soc., 187 Minn. 611, 246 N.W. 354; Orr v. Prudential Ins. Co., 274 Mass. 212, 174 N.E. 204; Inter-Southern Life Ins. Co. v. Omer, 238 Ky. 790, 38 S.W.2d 931, l. c. 937; Hendricks v. Metropolitan Life Ins. Co. (Cal. Sup.), 61 P.2d 1162, l. c. 1169, advance sheets, Dec. 4, 1936; Great Southern Life Insurance Co. v. Cunningham, 97 S.W.2d 692, advance sheets, Dec. 8, 1936).

BENNICK, C. Hostetter, P. J., and McCullen, J., concur; Becker, J., absent.

OPINION

BENNICK, C.--

This case, which comes to the writer on reassignment, is an action for the sum of $ 1000 which is alleged to be due as double indemnity under a certain policy of life insurance issued by defendant, The Equitable Life Assurance Society of the United States, upon the life of one Percy P. Smith. Plaintiffs sue in the capacity of the beneficiaries under the policy.

The case was heard by the court alone upon an agreed statement of facts; and from a judgment rendered in defendant's favor, plaintiffs have duly prosecuted their appeal to this court.

The case involves the question of whether, after the lapse of the policy for nonpayment of premium, the double indemnity coverage was included within the "face amount" of the policy which was thereafter continued in force as paid-up extended term insurance for a period extending beyond the date of the death of the insured.

In the upper right-hand corner of the policy the "face amount" of the same was stated to be the sum of $ 1000.

By the insuring clause, defendant agreed to pay the beneficiaries the said sum of $ 1000, the "face" of the policy, upon due proof of the death of the insured, provided premiums had been duly paid and the policy was then in force; and in the event of death from accident, defendant agreed "to increase the amount so payable" to the sum of $ 2000.

Provision was made for the payment of premiums in advance in quarterly installments; and included in each of such quarterly installments was a definitely fixed premium for the double indemnity coverage provided by the policy.

Elsewhere in the policy appeared the following provision relative to the options available to the insured in the event of the surrender or lapse of his policy:

"After three full years' premiums have been paid hereon, upon any subsequent default in the payment of any premium or installment thereof, and within three months after such default, this policy may be surrendered by the Insured (or assignee if any) who may elect one of the following options:"

Options (a) and (b), providing, respectively, for the payment to the insured of the cash surrender value of his policy, or the purchase by him of non-participating paid-up life insurance payable at same time and on the same conditions as the policy, are not pertinent to the case at hand, unless, upon the question of the meaning of the contract, it might be of importance to note that in the event of the insurer's exercise of Option (b), it was provided that the amount of the non-participating paid-up life insurance which might be purchased would be "without double indemnity."

Then followed Option (c), which was as follows:

"To continue the insurance for its face amount (and any outstanding dividend additions) as paid-up extended term insurance for the period shown in the opposite Table, or for such further period as the dividend additions (if any) will purchase, but without future participation, or right to loans, or double indemnity or total and permanent disability benefits. (Emphasis ours.)

"In the event of default in the payment of any premium or installment thereof after this policy has been in force three full years, if the Insured (or assignee if any) does not select one of said options within three months of such default, the insurance shall be continued as provided under Option (c)."

Opposite Option (c) appeared the table referred to therein, which was so prepared as to show, among other things, the number of years and months the policy should be continued as paid-up extended term insurance "without double indemnity" after the policy had been in force for any given period of years short of maturity.

The policy was issued by defendant on April 17, 1926. Thereafter the insured paid all the quarterly premiums as they fell due until the time of the accrual of the premium of January 17 1930, when he allowed his policy to lapse. The same was never reinstated, and neither of the options having been exercised by the insured, at the expiration of the three...