State Sec. Life Ins. Co. v. Kintner, 30325

• Decision Date: 18 October 1962
• Docket Number: No. 30325,30325
• Parties: STATE SECURITY LIFE INSURANCE COMPANY, Appellant, v. Ada G. (Vicars) KINTNER, Appellee.
• Court: Indiana Supreme Court

Page 527

185 N.E.2d 527

243 Ind. 331

STATE SECURITY LIFE INSURANCE COMPANY, Appellant, v. Ada G. (Vicars) KINTNER, Appellee.

No. 30325.

Supreme Court of Indiana.

Oct. 18, 1962.

John D. Staggenburg, John R. Walsh, Anderson, for appellant.

Rosenfeld, Wolfe & Allen, N. George Nasser, Terre Haute, for appellee.

JACKSON, Judge.

This case comes to us on petition to transfer from the Appellate Court under Acts 1933, ch. 151, § 1, p. 800, being § 4-215, Burns' 1946 Replacement. See: State Security Life Insurance Co. v. Kintner (1961), 175 N.E.2d 36.

This action was instituted by the appellee, Ada G. (Vicars) Kintner, on an insurance policy (No. 1241) issued by the appellant, State Security Life Insurance Company, on the life of her husband, Carl William Vicars, with the appellee being named as primary beneficiary thereunder. Judgment was rendered for appellee in the Vermillion Circuit Court. Most of the facts herein are undisputed in as much as the parties in the trial below stipulated and agreed to them.

The appellee's husband, Carl William Vicars, died at 12:22 o'clock a. m., Central Standard Time, on March 31, 1955. The cause of his death resulted from accidental means, i. e., from injuries sustained in a motor vehicle collision which occurred on March 30, 1955. If the insurance policy issued by appellant was in effect at the time, the death occurred under circumstances invoking the 'double indemnity' or Accidental Death Benefit provisions of the policy.

The appellee's husband had submitted on November 27, 1954, an application for life insurance to the appellant life insurance company through an agency of the company. The sum of $6.03 was paid by appellee's husband to the appellant's agent at the time the application was submitted. However, this amount was not sufficient to pay in full the initial premium on the policy of insurance applied for.

The life insurance policy was not delivered to Carl William Vicars until some time after December 10, 1954. The exact date of delivery is uncertain although the insurance agent testified that it was either on the 10th or within the next two days. Upon delivery, the insured paid an additional twenty-one cents to the insurance agent as part of the premium.

A statement of the insurance agency dated December 10, 1954, was admitted into evidence by stipulation of the parties, and it indicated that a monthly premium of $7.35 would be charged on the policy written on the life of appellee's husband, Carl William Vicars, beginning November 27, 1954.

Subsequent premium payments were made by the insured to the insurance agency acting for the appellant, as follows: February 5, 1955, $9.51, and February 18, 1955, $9.51. It appears that a portion of these payments ($2.16) were applied to a separate policy of insurance on the life of the appellee.

Payments made by the insured were remitted by the insurance agency to the appellant company, as follows: November 27, 1954, $9.30; December 13, 1954, 21 cents; February 5, 1955, $9.51; and February 21, 1955, $9.51.

The appellant refused to provide proof of loss papers to appellee on the death of her husband, contending that the insurance had lapsed prior to the time of the death of the husband due to a failure to make timely payment of the premiums.

The trial court found for the appellee in ruling upon motions for a directed verdict submitted by both appellant and appellee at the conclusion of all the evidence. Judgment was rendered accordingly upon the verdict returned by the jury under the mandatory instruction of the court.

Since both parties moved for a directed verdict at the conclusion of all the evidence, the cause was submitted to the court for determination, and it was proper for the court to render its decision on the issues presented. Combs and Broderick d/b/a v. Keller et al. (1957), 127 Ind.App. 531, 536, 142 N.E.2d 474. It must be presumed that the appellant waived its right to a trial by jury in failing to further request that the cause be submitted to a jury after the denial of its motion for a directed verdict. Michigan Cent. R. R. Co. v. Spindler, Adm'r (1937), 211 Ind. 94, 5 N.E.2d 632, 108 A.L.R. 1307.

The question presented here is: On what date were the premiums due and payable on the policy of insurance (No. 1241) issued by appellant on the life of Carl William Vicars? The answer to this question will determine whether or not the policy was in force at the time of the death of the insured.

The application for life insurance, together with the policy, constitute the contract between the insurance company and the insured. Acts 1935, ch. 162, § 151A as added by Acts 1943, ch. 189, § 2, p. 562; 1959, ch. 146, § 1, p. 355, being § 39-4206a(3), Burns' 1961 Cum.Supp.

The insurance policy states on its face that the date of issue is November 27, 1954. Contained in the application for insurance is the statement that the policy is to be dated November 27, 1954. However, the application also provides a condition precedent as to the policy taking effect, as follows:

'* * * that the insurance hereby applied for shall not take effect unless and until the full first premium * * * shall have been paid and the policy delivered to the applicant during the lifetime and sound health of the applicant * * *.'

Under the 'General Provisions' of the policy, the date of issue is referred to in the section providing for the payment of premiums:

'The annual premium shown on the first page hereof is payable on the date of issue and annually thereafter during the lifetime of the Insured, until premiums have been paid for the premium paying period. * * * In lieu of annual payments, premiums may be payable semi-annually or quarterly at the Company's published rates therefor in effect at the date of issue of this policy, with the premium due dates determined by the interval of payment selected. * * *' It is appellee's position that the section providing for the payment of premiums makes no mention of monthly payments. The section only makes provision for annual premiums, or in lieu thereof, premiums may be payable semi-annually or quarterly. Therefore, appellee argues that the date of issue to which the specified premiums are related under the terms of the policy cannot be applicable in the situation where monthly payments are made. The proper anniversary date, according to appellee, in such a situation where the time of payment is not expressly specified in the policy, is the date on which the policy became effective. In the case at bar, this would have been the date of delivery on December 10, 1954, or within the next two days.

If appellee's position is accepted, then the three monthly payments made in advance by Carl William Vicars on the insurance policy would have carried the paid up period to around the tenth of March, 1955, (or within the next two days), and coupled with the grace period, ¹ the policy would have been in full force and effect at the time of Mr. Vicars' death on March 31, 1955.

Appellant, on the other hand, cites a provision on the face of the policy which provides as follows:

'This insurance is granted in consideration of the application and the payment of premiums as herein provided. Policy years, policy months and policy anniversaries shall be computed from the date of issue unless otherwise provided by endorsement hereon.'

The appellant contends that the above quotation, together with dates shown on the application for insurance and on the policy itself, indicates that the effective date of said policy was November 27, 1954. That the monthly premiums were to be due and payable as computed from said date. There was no endorsement on the policy providing otherwise.

The insured made only three monthly payments. If we adopt appellant's position, the first payment was due on November 27, 1954, the second was due on December 27, 1954, and the third was due on January 27, 1955. Appellant argues that the next premium (if it had been paid) would have been due on February 27, 1955. Since it was not paid, the policy then went into a grace period which expired on March 27, 1955. Thus, according to appellant, the policy had already lapsed prior to the death of Carl William Vicars on March 31, 1955.

Viewing both the application for insurance and the policy itself in the case at bar, we cannot find anything which expressly refers to the payment date for monthly premiums. The section of the policy here which deals particularly with the payment of premiums makes no mention of a monthly premium. ² We are aware of the rule that where the policy provides an express date for the payment of premiums such date controls over the later date of delivery at which time the policy actually may become effective. Tibbits v. Mutual, etc., Ins. Co. (1903), 159 Ind. 671, 65 N.E. 1033. That where the date of payment of premiums is specifically fixed in the policy there is nothing further to construe. Painter v. Massachusetts etc., Ins. Co. (1921), 77 Ind.App. 34, 133 N.E. 20. However, in the instant case, to arrive at the result sought by appellant, we must resolve an ambiguity which exists by the lack of any definite provision regarding monthly premiums in the section of the policy which spells out how (either annually, semi-annually or quarterly) the premiums are to be paid. In order to do so, we must construe the contract.

In construing the insurance contract in the case at bar, we take cognizance of the following:

'It is elementary in the construction of insurance policies that where insurance contracts are so drawn as to be ambiguous or require interpretation or are fairly susceptible of two different...