181 P.2d 520 | Kan. | 1947
The opinon of the court was delivered by
The appeal in this case concerns construction of the provisions of an endowment insurance policy. The question involved is whether the insurer was obligated to make a lump sum payment of the principal amount or required to make payments in periodical installments. The trial court held that the insurer was obligated to pay the proceeds of the policy in a lump sum. The insurance company contends that it was morally and legally obligated to pay the proceeds in periodical payments even though a lump sum payment would be to its financial advantage. The case was submitted to the trial court upon the pleadings and facts stipulated by'the parties in the opening statements of respective counsel therefor! The pleadings are short and clear. ' ,'
The answer of the defendant admitted the execution of the policy and a photostatic copy'of the policy was attached as a part of the answer. In addition the answer alleged -that the consideration for the policy was paid for' by the father of the plaintiff and that a rider attached to the policy, which stated that payment should not be made in a lump sum, was attached at his special instance and request. Attached to the answer, as another exhibit thereto, was a supplemental contract which consisted of a written acknowledgment by the defendant company that it was obligated to pay to the plaintiff $99.61 each month until the date of her death. The supplemental contract also contained a provision to the effect that should the death of the plaintiff occur before, she had received 120 installments, in the named amount, that the balance of the 120 installments would be computed at the rate of 3% percent per annum, compounded annually and paid in one lump sum to her estate. The supplemental contract set forth that it was offered in accordance with the terms and provisions of the designated, policy. The reply of the plaintiff denied all new matter set forth in the answer and alleged that the plaintiff had not accepted’ or agreed to the terms, of the supplemental contract.
The opening statements by counsel for the respective parties developed that no significant factual controversies existed between the litigants. Counsel for the plaintiff admitted that a certain pay
The foregoing develops’ the necessity for examination of the pertinent policy provisions. We observe that the written application for the policy, the typewritten rider attached thereto, and the printed policy, all were conceded to be the integral parts of the entire insurance contract. The application for the. policy contained a clause reading as follows:
*280 “How are proceeds to be paid? . . . —in the event the insured is living at maturity of endowment, the proceeds are to be paid under Option B, 10 years certain iirevocably and with the spend thrift clause.” (Emphasis supplied.)
Option (b) in the policy was entitled “Monthly Income for Life” and provided that the company would pay equal monthly installments for a definite number of years (admittedly ten years in this case) and as long thereafter as such payee (the plaintiff) might survive. In compliance with the application for the insurance the defendant issued the policy and attached on the face of the second page thereof a typewritten rider which read as follows:
“By this rider, attached to and made part of Policy No. 94354, and in accordance with the written request of the Insured, contained in the application for this Policy, a copy of which is hereto attached, it is hereby agreed that, should this Policy mature as an Endowment, the net proceeds of this Policy shall not be paid to the Insured in one lump sum but shall be paid as provided in Option (b) in the ‘Optional Settlements’ provisions, in equal monthly instalments for ten years certain and as long thereafter as the payee may survive.” (Emphasis supplied.)
The last page of the policy pertained to optional settlements and thereon under the heading, “General Provisions,” in small print appeared the following:
“The Insured may elect, revoke or change an option by written request filed in the Home Office of the Company, accompanied by the Policy for endorsement.”
1. Counsel for the defendant invoke the rule that a written clause must prevail over inconsistent printed provisions of an insurance policy. In support of such statement they cite 44 C. J. S. 1162, § 295, which reads as follows:
“A policy which is partly written and partly printed should, if possible, be so construed as to give effect to all its parts; but, if the different parts are irreconcilable, the written, as well as stamped or typewritten, parts will prevail over the printed.
“In accordance with the rules relating to the construction of an insurance contract as an entirety, discussed infra § 298, a policy which is partly written or typewritten and partly printed should be so construed, if possible, as to reconcile and give effect to all of its parts; but, if there is an irreconcilable conflict between the different parts, the written part will control and prevail over the printed, as will also stamped or typewritten parts.”
In support of the text defendant cites Hickey v. Dirks, 156 Kan. 326, 133 P. 2d 107; and Haynes Hardware Co. v. Western Casualty & Surety Co., 156 Kan. 356, 133 P. 2d 574, from which the following is quoted:
*281 “Where an irreconcilable conflict exists between general provisions of a contract and particular portions written into the contract preference is given to the latter for the purpose of ascertaining the intention of the parties.” (p. 362.)
The general rule to such effect is well established and has been repeatedly followed in construing conflicting provisions of insurance contracts. (See Fourth Decennial Digest, Insurance, Key No. 149, and Aetna Ins. Co. v. Houston Oil & Transport Co., 49 F. 2d 121, certiorari denied Houston Oil & Transport Co. v. Aetna Ins. Co., 284 U. S. 628, 52 S. Ct. 12, 76 L. Ed. 535.) Counsel for the plaintiff virtually concede the general rule but contend that it is not applicable because the problem in the present case is not that of an indefinite provision in a printed form which is clarified or defined by a written insertion. They contend that the policy provision reading, “The insured may elect, revoke or change an option by written request . . .” is unambiguous and that the printed and written portion should be construed to the end that the conflict between the two portions be resolved to the extent that one clause modifies the other (citing Cobb v. Insurance Co., 17 Kan. 492). We are unable to agree with counsel for the plaintiff in such respect. As we view the entire insurance contract, the printed clause last quoted is in direct conflict, not only with the typewritten application for the insurance, which was made a part of the cpntract and read “irrevocable,” but also with the typewritten rider which read, “the net proceeds of this Policy shall not be paid to the Insured in one lump sum but shall be paid as provided in Option (b) . . .” Counsel for the plaintiff, in effect, would have us strike from the application and the rider the significant language just quoted and hold that it was necessary for the defendant company to negative again the printed provision relative to the insured's right to revoke or change an option payment by deleting such provision from the contract or by specifically stating in the rider or the application that such provision should be considered null and void. In support of such a contention they rely upon the rule that when the entire policy is prepared by one party, any divergence of language therein is to be construed against the drawer of the instrument. We are of the opinion that in the present case it was unnecessary for the defendant company to curtail further or to negative the settlement option provision by inserting in the application or the rider more specific provisions to such effect. When two typewritten provisions of an in*surance contract conflict with one printed provision thereof, the rule
2. The principal contention of counsel for the plaintiff is that the “irrevocable” nature of the contract does not sustain the defendant company in the present case. We quote from plaintiff’s brief:
“We have therefore only one real issue — does the use of the word ‘irrevocable’ in connection with the appellee’s designation of payment under Option (b) in the ‘optional settlements’ provision bar a recovery?”
In support of a negative answer to such a question, the plaintiff contends that since no contractual relation was entered into between T. M. Deal and the defendant, even though the application did provide it was irrevocable, such provision had no effect whatever and that the plaintiff had the right to revoke the provision as between her and the company. It is contended the same rule applies that is applicable to the granting of an irrevocable power of attorney because the defendant was not prejudiced and had no interest which was affected by a change in the method of payment of the proceeds. In other words, the plaintiff contends that since the defendant conceded that it was not concerned with how the payment should be made, from a financial standpoint, .the plaintiff had a right to demand payment in a lump sum regardless of what restrictions may have been inserted in the insurance contract’relative to the method of payment. In such circumstances plaintiff’s counsel insists that the controlling rule or principle is the same as that which is applied in cases of irrevocable powers of attorney, irrevocable provisions in proxies and other irrevocable agency contracts wherein the power or authority granted is not coupled with an interest. In such cases it is frequently said that even though a power is designated as irrevocable it is in its very nature revocable when it concerns the interest of the principal alone. In support of the contention we are cited the case of Life Association v. Boyer, 62 Kan. 31, 61 Pac. 387, from which the following is quoted:
“. . . All powers of attorney are revocable by the donor of the power*283 except when coupled with an interest in the donee. Though they be by their terms irrevocable, they nevertheless may be revoked by the donor, except in cases where the donee has an interest in their continuance.” (p. 40.)
In addition to many cases from other states holding ,to such effect plaintiff’s counsel cite the general rule stated in 2 Am. Jur., Agency, 39, § 38, which reads as follows:
“Ordinarily the principal may revoke at any time a power of attorney constituting a mere agency. Such a power is in its very nature revocable when it concerns the interest of the principal alone. If it is a mere naked authority not coupled with an interest, it is revocable at the will or even caprice of the principal, though the instrument itself contains an express declaration of irrevocability.”
Counsel for the plaintiff, however, fail to cite any cases in which the rule has been applied to the construction of an insurance policy and the question arises whether the agency rule, applicable when the .agency is not coupled with an interest, applies to the construction of an insurance contract.
This court is of the opinion that the rule permitting an irrevocable agency relationship to be revoked should not be applied for the purpose of altering the provisions of an insurance contract. An insurance contract is not created by one party only executing a declaration of delegated authority to another party. The consideration for an insurance policy is not paid solely for the purpose of compensating an agent. There is a distinction between a mere revocation of representative authority and an attempted cancellation of contractual obligations. .When one party simply designates another as his representative, as between the parties, the principal does not part with all power to direct and control subsequently the acts of the agent. When such a status exists, the principal can direct his designated representative to do nothing and therefore, even when the power of the agent is made irrevocable, it in effect can be revoked unless the agent has acquired an interest which he has a right to protect. Ordinarily, when only a representative relationship exists, not coupled with any interest, the relationship can be terminated without further obligation on the part of either party. But when the relationship of insured and insurer is created the relationship can be terminated only in compliance with the provisions and obligations of the policy. The nature and extent of such obligations depend upon the provisions of the insurance contract. Thus, in the present case the defendant company was obligated to pay
The judgment of the district court is reversed.