*1 ux, Respondents DUERKSEN et AND CASUALTY LIFE BROOKINGS INTERNATIONAL COMPANY, Appellant (166 567) N.W.2d 1969) (File Opinion March filed No. 10493. Rehearing May denied *2 Zimmer, Haar, Parker, plaintiffs H. of Zimmer & for John respondents. Martin, Brookings, appellant.
McCann & for defendant and BIEGELMEIER,Presiding Judge. policy
Plaintiffs are beneficiaries of a life insurance issued daughter by defendant on the life of their who died aas Jean August 6, result of an airline crash on 1966. The had been signed application by issued on an the insured's father Albert July dated Duerksen at which time he delivered his agent year's premium check to the for the first sum of $29.38, pay days' the correct amount to for 359 insurance on a premium $30.00 days annual rate discounted for the first of six July doctor, elapsed. July which had On 20th a authorized applicants, completed certifying insurability a form of Jean Duerksen, minor, C. then a and the form was then mailed de- fendant. upon On 1961 it issued the sued back- agent, dated to 1961and mаiled it to its who delivered it August 1, to insureds after 1961. The check mentioned was al- so cashed defendant on that date. College application was for a Student Life Plan which $5,000 Life,
permitted Pay automatic conversion to of 20 a choice applicant provision elected. It contained the insurance com- pany, obligation
"shall incur no аpplication because of this unless and until a applicant is delivered to the and the first thereon is in full while the affecting or other insurability health conditions applicant application." are as described in this policy provided: together copy application, policy, with the "This hereof, con- hereto and made a which is attaсhed entire contract between and constitutes tains parties hereto" clause, further
and a there- lor this "The consideration $29.38— for and the of — anniversary year to the dollars for the balance annual the further date above and *3 Anniversary on AND the 00.100 —dollars of—THIRTY above, Date, subsequent anni- on each shown during varsary the life-time of the Insured". grace рrovision as policy a follows: also contained paid or
"Any premium if not on before default due, grace thirty-one days without of but a date it is during interest, policy will this remain in force, every of allowed for the shall be full except premium the first." 1962, 1963, paid in 1964 and premiums were thereafter
Annual 22, 1965. one on the last June policy of contends insur- insurance
Defendаnt August grace, 2, including days lapsed ance, 1966 the 31 of urges August 6, Plaintiff de- in effect on so was insurance, days that as accepted for 359 a fendant policy, provided did not a it application, made first was delivered and the until it effective become 1961, August 1, subsequent or the four paid,.which was on after August 2, kept policy 1966 paid in force to premiums annual graсe, days and, in force on the date it was 31 with the her death.
23 Co., Lyke In v. First Nat. Life & Accident Ins. 41 S.D. 527, 603, notwithstanding pro 171 N.W. the court stated that paid annually vision that shall be in advance of a date, stated the doctrine announced in McMaster v. New York Co., 10, 64, Life Ins. 183 U.S. 22 46 S.Ct. L.Ed. was undoubt law, edly insured, having the correct rule of that an reason of premium, year's annual would be entitled a full effect, insurancе the time when the went into insurance and that a second or further would not be due until year expired. such entire had (as Haynes
The court held stated in v. Midland Nat. Life Co., 111) "that, Ins. S.D. N.W. notwithstand- ing provision payable should be an- nually day September year, in advance on the 12th of each premium period payments computed should be from the effect, day date whеn the went into which was the issued, 21st, although September dated ap- was plication approved September was 19th." Haynes Co.,
The facts Nat. Midland Life Ins. S.D. January 244 N.W. are more involved. On 24th a hus- signed separate joint applications band and wife for a life in- policy. provided surance Each there would be no approved company, contrаct until it is- *4 premium paid. sued and delivered and the first full medi- which, upgraded cal director the usual rate applica- under the tion, accepted made the effective when insureds and signed policies, purporting 24th, February the to be were de- livered to the insureds March 29th. This was their first notice upgrading policies of the of the insurance rate. The made rеf- being advance, premiums payable annually erence to in stated premiums body on the annual and the back each annual, semi-annual, quarterly monthly of the and the amounts premiums. applications, part policies,
In the made a of the the words "monthly printed with loan" were written after the words "an- premium". nual As of this transaction and when policies company delivered, for loan from the insureds made were assign- mortgage 'signed $6,500, an they and for a note provided company. policies The note for to the ment of the 1, day July month there- payment and the first of each on pol- "monthly premium" on the $107.18 which included after of identifying specifically their numbers. $33.73 them icies of 11, company enclosed its check In a letter dated 1928 the June insureds, monthly principal less the four for the of the loan 24, 1928, policies February premiums which were dated "March, due, May, explained, April, for four as it months each, July $134.92. $33.73" for a total of Thereafter on 7th June August 6, $107.18, payments two 1928 insureds made and thereby paying monthly premiums. No two made any policies paid September. "If in recitеd: be due, premiums all forfeited when this shall be void and company". died October 1928. to the The insured husband claiming refused the in- The insurance (of grace) effect, month surance was not then in the seventh having date, February policies' September ended necessity insurance com- 1928. Of this was based on the pany's deduction of the four months' stated claim its March, Februаry, April 11th were those due in its letter June "March, May April, May, 24th and cover the months of June" (to 24th). valid, Whether or not this contention was the writ- agreement pay monthly premiums ten of insureds was commencing day of each month advance on the policies stated both on the and the note. 1928 in the amounts August stated, only payments 1st 1st were made As agreement and, prevailed, policies were void if the written Plaintiffs' contention was effective date on October 29th, policies policies was March the date the were de- obligations they were valid for seven livered and months (six grace) plus months' one month from that date Hay- policies The court were in effect on October 7th. (cid:127)so the judgment allowing recovеry the trial court's nes affirmed prior Lyke opinion, policies, discussed its the McMaster Supreme States decisions of the United Court as well as other *5 reaching contrary a result. those
25 Haynes appeal Hay- The difference between and this is in agreed writing signed by they nes the insureds in them that commencing monthly payments would make of the agreement signed July present by 1st and in the action no was aрplicant payments any specific the for to insurance make ¡signed provided application company date. the Here the would obligation policy applicant incur no until the was delivered to 1961; August 1, in full. This after occurred issuing yet covering company, policy days the instead of its 359 accepted premium arbitrarily for pol- which it backdated the icy July July July 26th written to 6th and inserted 1st as the an- niversary placed position denying liability It date. itself in a of in the event a claimed loss from to after sometime August signed (cov- under the the clause in erage only days) for and also the under inserted 1st occurring anniversary date for loss after that date. apparent Haynes
It is in the court laid some stress on the рolicies fact monthly fixed no for premi- yet premiums appeared ums the amounts of those policies and the amounts and dates of the premi- insurance simultaneously ums certain in note were executed with and aas of the loan —life insurance transaction. The court said power it company, "was within the of the insurance if it meant policy аpproval to be in effect its date of company, present policy to have said so". The did state a date effect, is, when the was to be in when it was delivered. delivery Whether of the completion or is not essential was Haynes the contract one of reasons mentioned in for computing the date from computed. were to be questiоns Haynes Some of the or conditions mentioned in are apt: Was it also defendant's intention to collect for that prior delivery when the was not effect? Did it in- days tend for 359 when to insure it collected and did not refund or offer refund it the excess collected for 334 days it claims now was effective? As remarked Haynes, pro quid quo nearly there no whatever for the arbitrary month's if time was measured policy. clearly ap- backdate stated in the *6 26 policy, that not in effect until
plication, it was made period accepted of time it for a .be- and delivered arbitrarily anniversary in the yond date inserted the backdated inconsistency provisions policy. the resulted in an between This anniversary to date and the time with reference the it became effective. policies pro inconsistent of insurance contain
Where
possible,
adopted,
if
will
which
sus
should be
visions
the view
and
of a
the contract
construction
rather
than forfeit
tain
Haynes
adopted
most
to the insured.
is
favorable
be
which
will
Giving
Co., supra,
cases
cited.
Ins.
and
Midland Nat.
life
providing
was to
an
the time the
.be
to
clаuse
effect
the
obligation
to
company,
entitled insured
359
the
the
of
policy was in
days' protection on
basis
the
force
prior
to
our
conforms
the rationale
of
of
death. This
date
her
depart. The
are
inclined to
cases
which we
not
from
decisions
agreement.
in
See Lentin v. Continental As
not however
are
Company,
44 A.L.R.2d
412 Ill.
105 N.E.2d
surance
page
in
Appellant in if the plaintiffs accepting anniversary of conduct eliminated running premiums paying on dates 22nd June years premi- That and 1965. 2nd in generally 1st of before the backdated each were ums right grace ignores period pay under year of insured during grace any 31-day premiums time prompt payment penalize an reason insured would taking advantage due date before grace practice period. of in- It further overlooks well-known companies accept several surctnce similarly years and would in discounted amounts in advance availing privilege. penalize themselves of insureds concluding policy was The trial court did not err *7 judgment and the is af in on the date of insured's death effect firmed. HANSON, JJ„ RENTTOand concur.
ROBERTSand HOMEYER,J., dissents.
HOMEYER,Judge (dissenting). Lyke by majority I case referred to can dissent. The hardly precedent to affirm. This case decided be considered in merely "undoubtedly as the correct rule of law" a 1919 states payment respondent's in brief that of an annual concession coverage premium provides policy from the time the became year. computes policy year for an entire It then effective distinguished issue date of the as from the date of by company approval of the for insurance lapse. I do would have resulted not believe this case unambiguous interpreted hold that should be аn date fixed for agreed premiums the insurance contract and disregarded. parties can be In fact it indicates the con- Terminal, trary. D P Inc. Western See & v. Life Insurance Com- Or., 743, pany, 8 368 F.2d may
Likewise what have been believed to be a correct of law when that case was decided is not now even rule Annot., majority 44 472 and view. See A.L.R.2d Juster John 382, Co., 493, Life Ins. 194 Minn. 260 N.W. Hancock Mutual over- Co., 281, ruling Fidelity Stramback v. Mut. Life Ins. 94 Minn. 102 Co., 604, v. Bankers Life 148Neb. 28 N.W.2d N.W. 731. Also Reid Co., overruling 56, 542, York Life Ins. 97 Neb. 149 Cilek v. New 1071; York, 49, Life Ins. Co. of New Wall v. Mutual 228 N.W. Vela, 901; 119, Southland Life Ins. Co. v. 147 Iowa 289 N.W. 660; 478, Appleman, Insurance Law and Prac- 217 S.W.2d Tex. 28 1314, 165, 345,
tice, p. p. Insurance Am.Jur.2d § § C.J.S. following Insurance, seq. appears 544 et statement § case, supra: Southland Insurance Co. v. Ped in Great Southern Life
"As stated great weight dy, 162 S.W.2d Tex. rule that when a decisions sustains of current premiums, provides specifically for the specifies expressly the date from which the computed, day and makes that date the is to be recurring payable, are due and on which control, irrespective of the date on which date will such public policy delivered.' No is violated is insurance and an between an in- a contract whereby are to be from the effec- sured rather than the date of its de- tive though charge livery, the effect thereof even *8 period protec- premium when the insured has for a no cited, pointed out in the case last-above It was and tion. of Kurth v. National Life & Accident in the case Insur- Inc., 338, Co., Tex.Civ.App., 79 S.W.2d writ re- ance fused, parties that it is to interest both to have a only upon which to date calculate the due certain rate, premium premiums but the cash and dates of loan value, paid-up insurance benefits and the available cited, in the insured. As observed case last to fix obligation standard as between the in- an indefinite play insured would and the havoc with both." surer language majority quotes application July The dated giving 6, ambiguity to an between rise it and the 1961 as Immediately preceding proper. para- so read it. I do not following: quotation appears graph is taken from which "(14) application July first Premium Collect with Prorate to next 1. $30.00. $29.38 Annual Prem. thereafter Is First Prem. waiver of Yes., application premium Nо." desired? signed applicant and is of the contract. It is was premium year for less than one clear and July anniversary computed 6th to the date of the applicant payment and the issued his check in thereof at that ambiguity uncertainty applica- time. There is no or either in the pre- or in the as to covered tion issued payment mium and when the nеxt was due. The policy explicitly states: 1,
"THE DATE OF EXPIRY CONVERSION JULY PERIOD TO DATE OF EXPIRY. THE OF DATE ISSUE 1961. ANNIVERSARYDATE 1962 and JULY JULY Annually Thereafter. POLICY AND YEARS POLICY SHALL BE ANNIVERSARIES FROM COMPUTED THE * * * ANNIVERSARYDATE The consideration for this is the therefor and the premium $29.38 of the first for dollars the balance year anniversary to the above the further of annual of THIRTYAND dol- 00/100 Date, above, Anniversary lars on the shown and on each during subsequent anniversary date the lifetime of the Insured, until hereon have been to thе Expiry." Date of unambiguous my opinion
In the contract is clear and premium payment fixes the date after the initial as during year subsequent 1st of each policy. problem simple term of the here is one contract Co., Kampf It was law. so stated in Life Franklin Ins. 33 N.J. appears 161 A.2d what to be an identical factual sit uation. The court said: there *9 clear, of an
"When the terms insurance contract are it court to the function of a enforce it written as and not company [*] to make a better contract for [*] * has Absent right statutory prohibitions, to impose either whatever conditions it an insurance parties. assuming obligations prior pro- desires to its and such visions ‘should be construed in accordance with the ** * language applies equal used. This rule with of the force tо the selection dates on agree may upon parties payments made. The are to be speci- payment is thus time of and where the such dates policy, control and those terms terms of the fied binding parties." on both fixed is the date so support Haynes heavily case to majority relies The ambiguity which Haynes, an court found In an affirmance. Likewise, Haynes were material- present. the facts in is not here Haynes, the court said: ly In different. clearly express their intention parties did not
"Here the any policies when policies. silent as to are in the pol- monthly made. The payment is to be * * provide for an annual icies Later, day of a month- for the was no fixed "here there ** having clearly and dеfinite-
ly premium *. Not different from policies ly issued —however that stated deprival premium, applied for in increase of policies insurance, be in effect otherwise —should or of extended 24th, accept con- February must resulting failure state sequences from its own many clearly. definitely cases There are contract pay for a full has beеn held bound insured where though pre- period a considerable elapsed was the insurance had before mium force, monthly premium per- here at least an entire but effective. elapsed the insurance became before had iod quo month's quid pro for the first whatever no There was only date from the time was measured premium if the February policy, 24th." mentioned Judge P analyzed Gibson in D & Haynes case 1966) (Nov. supra, Terminal, in which Life Ins. Co. Inc. v. Western present applicable situa- I believe analysis concur. :also I case: statement the court's tion *10 us, "However, we if assume before even case ambiguity arguendo to initial some existed as coverage, pass years initial span this am- as delivery is unrecorded biguity The exact date fades. long forgotten; perhaps all that policy, re- is which calls for obvious date on mains is the surely payment. must insured In such a situation expected pay is these that he realize subject dates, lapse. fails so the is if he to do [*] [*] [*] We believe the policy is clear, the intention is ambiguity clear, any initial cured conсeivable quarterly passage of of five time and premiums. subject doubts that must be resolved plaintiff's South there favor. Under Dakota law was a ** lapse clearly pro- after of the initial
The record here shows premium subsequent paid respec- were annual rated tively at office of com- as noted records home pany as 1964 and follows: June June 22. 1965. June SYVERSON,
LARSON, Respondent Appellant (166 424) N.W.2d 1969) (File Opinion April filed No. 10528.