Suggs v. Life Ins. Co. of Va.

• Decision Date: 25 April 1966
• Citation: 147 S.E.2d 707,207 Va. 7
• Court: Virginia Supreme Court
• Parties: Grace L. SUGGS v. The LIFE INSURANCE COMPANY OF VIRGINIA.

Page 707

147 S.E.2d 707

207 Va. 7

Grace L. SUGGS v. The LIFE INSURANCE COMPANY OF VIRGINIA.

Supreme Court of Appeals of Virginia.

April 25, 1966.

John F. Kay, Jr., Richmond (Charles S. Valentine, Denny, Valentine & Davenport, Richmond, on brief), for plaintiff in error.

Walter J. McGraw, Richmond, for defendant in error.

Before EGGLESTON, C.J., and SPRATLEY, BUCHANAN, SNEAD, I'ANSON, CARRICO and GORDON, JJ.

EGGLESTON, Chief Justice.

Grace L. Suggs filed a motion for judgment against The Life Insurance Company of Virginia, hereinafter called the Company, to recover the sum of $15,000 which she claimed was due to her as the beneficiary under a policy issued by the Company insuring the life of her son, William Durwood Suggs, III. The Company filed its answer and grounds of defense in which it admitted the issuance of the policy, the payment of the premiums and the death of the insured, but claimed that under the terms of the policy the Company was obligated to pay the plaintiff the sum of $3,000 which it had offered to her and which she had refused to accept.

Since there were no material facts genuinely in dispute and the only issue was whether under the proper interpretation of the policy the plaintiff was due the sum of $15,000 or $3,000, the plaintiff and the Company filed separate motions for summary judgment in support of their respective contentions. In an order, supported by a written memorandum, the lower court sustained the Company's motion for summary judgment, holding that it was obligated to pay the plaintiff the sum of $3,000, and entered judgment therefore in her behalf. The plaintiff has appealed claiming that under the proper interpretation of the terms of the policy she is entitled to recover the sum of $15,000 of the Company.

These are the material facts: On July 1, 1955 the Company issued its policy insuring the life of William Durwood Suggs, III, who was born on February 16, 1942, became twenty-one years of age on February 16, 1963, and died on April 16, 1963. The plaintiff was named as beneficiary in the policy and at the time of the death of the insured all of the premiums had been paid.

Under the terms of the policy the Company contracted to pay $3,000 as 'Initial Insurance' 'in the event of the death of the Insured during the initial insurance period,' or to pay $15,000 as 'Ultimate Insurance' 'in the event of the death of the Insured after the initial insurance period.' The policy defined the 'Initial Insurance Period' as 'the period between the policy date and the policy anniversary nearest the Insured's 21st birthday excluding such policy anniversary.'

On the back of the policy and at the bottom of the first page the following was printed:

'JUNIOR ESTATE BUILDER

'Insurance Payable at Death of Insured--Increased After Age 21

'Premiums Payable to Age 65 or Until Prior Death

'--NON-PARTICIPATING--'

It is agreed that these notations are printed on the policy pursuant to Code, § 38.1--403 (Repl. Vol. 1953), which provides: 'On the face and on the back of each such policy there shall be placed a title which entered judgment therefor in her behalf. nature and form of the policy.'

The question presented is whether the plaintiff is entitled to the initial insurance of $3,000, payable during the initial insurance period as defined in the policy, or the ultimate insurance of $15,000 payable after the initial insurance period.

The plaintiff does not question that under the policy definition of the initial insurance period, standing alone, she is entitled to recover only $3,000. It is clear that the death of the insured on April 16, 1963 occurred within the initial insurance period which is defined as 'the period between the policy date (July 1, 1955) and the policy anniversary nearest the Insured's 21st birthday (February 16, 1963).' But she contends that the Junior Estate Builder endorsement is a part of the insurance contract; that since the death of the insured occurred after he had reached 21 years of age, under the provision in the endorsement--'Insurance Payable at Death of Insured--Increased After Age 21'--she became entitled to the increased amount of insurance, or $15,000. She further contends that there is an inconsistency as to when the ultimate insurance is payable under this language in the endorsement and that in the body of the policy, and that this inconsistency creates an ambiguity which under familiar principles should be resolved against the Company and in her favor.

The lower court held that the Junior Estate Builder endorsement, which it characterized as a 'Title' description, is not a part of the insurance contract, nor is it the purpose and intent of the statute (Code, § 38.1--403, supra) to make it a part of the contract. It further held that if such endorsement be deemed a part of the insurance contract, the language therein is not inconsistent with the provisions in the policy fixing the time for the payment of the initial insurance and the ultimate insurance, respectively, and that the plaintiff was entitled to recover the initial insurance of $3,000.

There is a conflict of authority as to whether an endorsement on an insurance policy, designating its kind and type, is a part of the insurance contract. See Couch on Insurance, 2d Ed., Vol. 1, § 4:38, p. 196; Appleman Insurance Law and Practice, Vol. 13, § 7526, pp. 257--259; 29 Am.Jur., Insurance, § 267, p. 654; Anno.: 168 A.L.R. 567.

Among the cases holding that such an endorsement is a part...