Wolford v. The National Life Insurance Company

• Decision Date: 06 October 1923
• Docket Number: 24,734
• Citation: 114 Kan. 411,219 P. 263
• Parties: TILLIE K. WOLFORD, as Administratrix of the Estate of JOHN C. WOLFORD, Deceased, Appellant, v. THE NATIONAL LIFE INSURANCE COMPANY, of the United States of America, Appellee
• Court: Kansas Supreme Court

219 P. 263

114 Kan. 411

TILLIE K. WOLFORD, as Administratrix of the Estate of JOHN C. WOLFORD, Deceased, Appellant, v. THE NATIONAL LIFE INSURANCE COMPANY, of the United States of America, Appellee

No. 24,734

Supreme Court of Kansas

October 6, 1923

Decided July, 1923.

Appeal from Lincoln district court; DALLAS GROVER, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. LIFE INSURANCE -- Time for Payment of Annual Premiums Definitely Fixed in Policy Governs--Forfeiture of Policy for Nonpayment of Annual Premiums. A policy of life insurance specifically provided for the annual payment of premiums after the first on the anniversaries of the date of the policy, with a grace period of one month, and that a failure to pay any premium when due should forfeit the rights of the insured and terminate the obligations of the insurance company under the policy. The policy was not delivered to the insured until 22 days after its date. Held, that the fact that the policy was not delivered on its date or a date corresponding with the times specifically fixed for the payments of subsequent premiums did not postpone the time for such payments to the anniversary of the date of delivery.

2. SAME--Notice of Intention to Cancel Policy for Nonpayment of Premiums Given 32 Days After Time Fixed for Payment of Premiums Valid. Under the provisions of chapter 212, of the Laws 1913, which forbids the cancellation of life insurance policies without notice, it is held that such a notice given 32 days after the time fixed for payment of a premium of an intention to cancel the policy for nonpayment of a premium was a valid notice and that as payment was not made within 30 days after such notice, a forfeiture resulted.

3. SAME--Notice Deposited in Mail Sufficient. Proof that a notice of cancellation was addressed to the insured and duly deposited in the mail is sufficient to show compliance with the statutory requirement.

E. A McFarland, of Lincoln, R. A. Lovitt, of Salina, and James A. O'Donohoe, of St. Louis, Mo., for the appellant.

M. J. Healy, John J. McCurdy, both of Lincoln, James C. Jones, and James C. Jones, Jr., both of St. Louis, Mo., for the appellee; Burton P. Sears, of Chicago, Ill., of counsel.

Robert Stone, George T. Mc Dermott, Robert L. Webb, and Beryl Johnson, all of Topeka, as amici curiae.

OPINION

JOHNSTON, C. J.:

This action was brought by Tillie K. Wolford, as administratrix, against the National Life Insurance Company, upon a policy of insurance issued upon the life of John C. Wolford. The defendant prevailed and the plaintiff appeals.

Upon an application by John C. Wolford, a policy on his life for $ 5,000 was issued of the date of November 14, 1917, and the policy was delivered to him on December 6, 1917. Afterwards and on May 25, 1918, he applied to the defendant to exchange the policy which had been issued to him the previous year, viz., an ordinary life endowment at the age of 85 plan, to another kind of policy called the Golden Anniversary form, which provided for a payment of 20 premiums, the policy to mature as an endowment at the age of 85 and the payment of a higher premium rate. The application was accepted, the first policy issued was surrendered and canceled, and the new policy issued and delivered, which is the one upon which the present action is brought. The parties agreed and the application recited that the insurance was to date from November 14, 1917, the date of the first policy issued, and it was expressly stated that the insurance was granted in consideration of an advance payment of $ 227.70, one year's insurance, terminating on November 14, 1918, and of the payment of annual renewals of $ 227.70 on or before the 14th of each November thereafter. The policy provided that the failure to make any payment when due should forfeit and cancel the contract of insurance and terminate the obligations of the company under the policy. It further provided that a grace of not less than 30 days would be allowed on the payment of each premium after the first during which month the policy would continue in force, and if the insurer should die within that period, the unpaid premium for the current policy year would be deducted from the amount payable under the policy.

The first premium was paid but no payment was made on November 14, 1918, nor was any payment made before the death of the insured which occurred on August 25, 1919. On December 16, 1918, more than a month after the grace period, a notice was sent to the insured by the company that as the premium on the policy had not been paid, it was its intention to forfeit and cancel the policy unless the premium was paid within 30 days from the date of the notice. This notice was given as was stated therein in compliance with the provisions of chapter 212 of the Laws of 1913, relating to the forfeiture of life insurance policies.

There is no dispute as to the controlling facts. As we have seen the terms of the policy provided that November 14, 1917, was fixed by the parties as the time from which the insurance was to date, and November 14 of each year thereafter the time when it would terminate. It was not then paid nor had payment been made for more than nine months thereafter when the insured died. The contention of plaintiff is that the policy not being delivered until December 6, 1917, the insurance was not in force until that time and there being 30 days of grace given, within which to pay premiums, the insured was not in default until January 6, 1919, and the notice of intention to forfeit given on December 16, 1918, was premature and therefore a nullity.

It has been determined that the statute mentioned to the effect that a cancellation notice given before the time in which payment may rightfully be made is not a valid statutory notice, and that forfeiture or termination of liability on the policy does not result from it. (Priest v. Life Association, 99 Kan. 295, 161 P. 631; Reynolds v. Insurance Co., 105 Kan. 669, 185 P. 1051; Cunningham v. Insurance Co., 106 Kan. 631, 189 P. 158.)

The insurance company contends that the second premium became due at the time expressly fixed by the parties in the policy, to wit, November 14, 1918, and allowing the stipulated 30 days of grace a default occurred on December 14, 1918, and that the notice mailed to the insured on December 16, 1918, was a compliance with the statute which effectually terminated its liability under the policy. It was competent for the parties to agree upon the date for the payment of premiums and the time when the insurance would terminate. It was definitely stipulated in the contract that the date was November 14 1918, with the added grace period. The insured was not in default until the end of that period, but when the period expired there was a default which would have automatically caused a forfeiture, but for the statute relating to cancellation. It provides for notice of an intention to forfeit the policy for nonpayment of a premium, after which the policy holder has a right to pay the premium at any time within 30 days from the mailing of the notice. The turning point in the case is whether the notice given, which was otherwise sufficient, was prematurely given. If the date of the delivery of the original policy is the contract time for payment of premiums the result would be that the notice was given before the time for payment of the premiums had expired and cause for forfeiture arose. That interpretation, however, would conflict with the plain terms of the insurance contract and would in effect be a modification by the court of the contract the parties chose to make. The time for the payment of premiums and when the insurance would terminate was definitely stated and coupled with it was a provision that a failure to pay any premium when due should operate as a forfeiture and terminate the obligations of the company. There is no ambiguity in the contract in respect to the time of payment which opens the way for interpretation by the court and permits it to say that one of several dates mentioned was the time for which insurance was to run and measure the date of expiration. Decisions upon contracts of that character are cited, wherein the provisions were liberally interpreted in favor of the insured and among them are Halsey v. Insurance Co., 258 Mo. 659, 167 S.W. 951; Stramback v. Fidelity Mutual Life Ins. Co., 94 Minn. 281, 102 N.W. 731; Prudential Ins. Co. of America v. Stewart, 237 F. 70; McMaster v. New York Life Ins. Co., 183 U.S. 25, 46 L.Ed. 64, 22 S.Ct. 10. But these are mainly cases where there were ambiguous provisions in the contract and where the times of payment were not definitely prescribed. Here, the times of payment were unequivocally fixed in the contract. The...