File No. 4396 | S.D. | Apr 1, 1919
Lead Opinion
This action was brought to recover on a life insurance policy. Plaintiff is the beneficiary named therein. The. policy was issued pursuant to a written application therefor made through an agent of the defendant company. At the time of making the application, the insured gave the agent his promissory note for $50.36 in payment of the first -year’s premium., and the company’s agent gave the insured the following receipt:
“Received of Frank Lyke fifty and 36-100 dollars, being the first annual premium on a policy of insurance of $1,000 upon his life for which application is made this day. It is agreed and-understood that if said application is received and is approved by said company at its home office, the said applicant will Ibe insured from the date of such approval, subject to the terms and conditions of the policy contract of said company. * * *”
The note and application were dated September 11, 1914. The application -was approved on the 19th -day of September, and the policy was issued and dated on the 21st day of that month. When it was delivered to the insured does not appear, nor is it material. On the nth day of iSeptember, 1915, the insured- gave the company his note for $50.36, payable one year from date, which by its terms was to continúe the policy in force -until .default should be made in the payment thereof, and provided that, in case of default in the payment of the note when due, the policy should--becomé void and all rights of the beneficiary should at once terminate without further notice. On or about the' 1st day of September, 1916, and before there was any default in the payment of said note, the insured renewed the same by giving a renewal note for the amount of the old note, plus the interest that hack
“This policy is issued in consideration of the application therefor, a copy of which is indorsed hereon, and the ■ sum of fifty and 36-100 dollars, the receipt of which is hereby acknowledged, and the payment of a like sum on or before the eleventh day of September, in every year until twenty full year’s premiums shall have been paid or until the prior death of the insured. * * *
“Failure to pay any premium-, or any note given for any premium, when due, will void this policy without further notice, and forfeit all payments to the company except as herein provided.”
The policy also contained the provision that, after it had been in force one year, the insured could have a grace of one month in which to pay the premiums as they came due.
Upon these facts the trial court held that the policy had lapsed prior to the death of dhe insured — which occurred on the 20th day of October, 1916 — because of the failure to pay the third annual premium. Judgment was entered for the defendant, and plaintiff appeals to this court.
*531 “The -policy contained á provision to the effect that premiums shall be payable annually in advance on the 12th day of 'September of each year. Notwithstanding such- provision, it is probably the rule of law that the insured, by reason of having paid the first annual premium, would be entitled to a full year’s insurance from the time the insurance went into effect, and that a second or further premium would- not be due until such entire year had expired. This is the doctrine announced in McMaster v. New York Life Insurance Co., 183 U.S. 25" court="SCOTUS" date_filed="1901-10-28" href="https://app.midpage.ai/document/mcmaster-v-new-york-life-insurance-95527?utm_source=webapp" opinion_id="95527">183 U. S. 25, 22 Sup. Ct. 10, 46 L. Ed. 64" court="SCOTUS" date_filed="1901-10-28" href="https://app.midpage.ai/document/mcmaster-v-new-york-life-insurance-95527?utm_source=webapp" opinion_id="95527">46 L. Ed. 64; Halsey v. American Central Life Ins. Co., 258 Mo. 659" court="Mo." date_filed="1914-06-02" href="https://app.midpage.ai/document/halsey-v-american-central-life-insurance-8018858?utm_source=webapp" opinion_id="8018858">258 Mo. 659, 167 S. W. 951; Stinchcombe v. New York Life Ins. Co., 46 Or. 316" court="Or." date_filed="1905-04-03" href="https://app.midpage.ai/document/stinchcombe-v-new-york-life-ins-6899843?utm_source=webapp" opinion_id="6899843">46 Or. 316, 80 Pac. 213.”
This much being conceded — and it is undoubtedly the correct rule of law — there was but one other date in the entire contract to show when the policy went into effect. This was September 21, 1914, the day the policy was issued. It is not claimed that the insured was notified of the date on which his application -was approved by the company, nor that he ever had any knowledge of such fact. The policy showed) on its face that it had been issued on the 21st day of the month, and the insured' would very naturally assume, and, in the absence of knowledge to the contrary, he had a right to assume, that the policy was issued and dated on the day the application was approved. To hold otherwise would be to hold the insured bound -by a fact of which he had no knowledge.
Tested by these rules, the policy had not lapsed at the time of the insured’s -death, and the judgment should have been for the plaintiff. ' - - -
The judgment appealed from is- reversed, with directions to
Dissenting Opinion
(dissenting)'. I cannot concur in the conclusion reached by my asociates and deem it my duty to state the grounds of my dissent.
The ¡binding receipt given the insured states that, if the application for insurance is approved 'by the company, “the said applicant will be insured from the date of such approval.” The application was approved at the home office on /September 19, 1914, and therefore liability .on the policy attached on that date, with one year’s premium paid in advance, by note. The policy was thereby put in force until September 19, 1915. At that date the right accrued to 30 days’ grace within which to pay succeeding premiums. McMaster v. N. Y. Life Ins. Co., 183 U.S. 25" court="SCOTUS" date_filed="1901-10-28" href="https://app.midpage.ai/document/mcmaster-v-new-york-life-insurance-95527?utm_source=webapp" opinion_id="95527">183 U. S. 25, 22 Sup. Ct. 10, 46 L. Ed. 64" court="SCOTUS" date_filed="1901-10-28" href="https://app.midpage.ai/document/mcmaster-v-new-york-life-insurance-95527?utm_source=webapp" opinion_id="95527">46 L. Ed. 64. But the due date of succeeding premiums remained unchanged and, by the terms of the policy, was fixed on September nth, each year in advance. The second year’s premium therefore became due on September 11, 1915, with the right already accrued at that date, to 30 days’ grace, which would extend the time for payment of the second premium from September 11, 1915, to October 11, 1915. The insured would not be in default for nonpayment of the second year’s premium until after that date. The default date therefore, for all years after the first, would be October nth in each year. The insurance company, however, 'by agreement, could extend the due date of the premiums, and upon such extension no default would occur until 30 days of grace had elapsed, after the date to which the payment was extended. No further attention need be paid to the matter of nonpayment of the first year’s premium. We come now to the second year’s premium. On 'September 11, 1915, the insured gave, and the company accepted, a note for the second year’s premium, which note became due on or before September 1, 1916, and contained an express agreement that the policy should remain in force until default was made in payment of the note, and that, upon such default, “all rights and benefits under said policy shall cease and determine without notice and said policy shall be ipso facto null and void.” Whether this express agreement nullified the provision in the policy for days of grace
There is no contention that this premium was ever paid or time of payment extended. If. the insured be given the benefit of the month’s grace for payment of this third premium, ■ default occurred on October ia, 1916. But it is urged that paid-up insurance may not be forfeited for nonpayment, in advance, of premium covering a future year, and that in this case the paid-up insurance extended to September 21st, the date of. the issuance of the policy. The date from which the life of applicant was insured-was fixed in express terms in the application signed by him, which is made a part of the policy itself. The original binding receipt and the application signed by the insured and approved by the company, both declare that “the said applicant will be insured from the date of such approval.”
It is undisputed that the application was approved on September 19, 1914.. This provision in the application fixes the date when the insurance took effect and is controlling. The policy was dated (September 21, 1914; but there is no provision in. the policy which fixes any date, other than September 19th, at which the insurance became effective. This provision in no manner controls the due date for payment of premiums. But if it be assumed that default in payment of the third year premium could not take effect within the period during which paid-up insurance was in force, it is clear that, allowing the 30 days’ grace default in payment of the third year’s premium, accrued on October 19, 1916, the day on which the paid insurance expired, and the policy by reason of nonpayment of the third year’s premium, lapsed and became void on that date.
Can a policy, in force by reason of an extension of the time
In McMaster v. N. Y. Life Ins. Co., 183 U. S. 25, 22 Sup. Ct. 10, 46 L. Ed. 64, relied upon 'by my Associates, the -first year’s premium had been paid in full, and the material question was whether such payment entitled the insured to the benefit of the 30 days’ grace, where the insured) -died; after a full year had expired, but within the grace period. The date at which the policy took effect was material in that case, in that it was decisive as to whether the insured died within the grace period. The insured requested in his application that the policy, when issued, should bg made to take effect at the date of the application, December 12th; but this request was ignored by the company, in that no date was fixed other than the date of the policy, at which it became effective. The court, under the ordinary rule, held that the policy became effective on the day it was -dated, which was December 18th, although not delivered until D-ecemiber' 26th. On. October 18th th-e insured- died. It was held that the grace period included the latter date, and that the policy was in force at the date of death. The court held that payment of the first year’s premium gave the insured protection for 13 months. There was no question as to a forfeiture for nonpayment of premium. That case is not authority for the proposition that an insurance policy becomes effective on the day on which it is dated.-or delivered, where the application, which is signed by the insured and expressly made a part of the contract, fixes a certain and different date at which the policy becomes effective, as in this -case. 'Certainly no reason exists, either in law or in public policy, which forbids the making of a contract which itself fixes the date at which it becomes effective, and it is the plain duty of courts to enforce contracts lawfully entered into by the parties thereto. In this case it was expressly agreed that the policy should 'become effective on September 19th, and therefore the payment of any year’s premium made the insurance effective for one year from that date, and the grace period extended the date of default one month more each year after the first. It follows in this-case that the period of effective
I concur fully in the view that the furnishing of a copy of the policy after such default and after the death of the insured was not a waiver of the default.
The judgment should be affirmed.