194 S.W.2d 633 | Ky. Ct. App. | 1946
Affirming.
This is an action on a certificate of insurance in the sum of Two Thousand Dollars issued to Judge Henry R. Prewitt and payable upon his death to his three sons, the appellants herein. The lower court determined the issues adversely to the beneficiaries and they appeal.
The certificate on which the action is based was issued on the 19th day of December 1903, by the appellee, a fraternal order. At that time the beneficiaries named were Thomas G. Prewitt and Allen Prewitt, Jr., H. Reid Prewitt being born after the date the certificate was issued. After the birth of H. Reid Prewitt the insured requested that he be included as an additional beneficiary and surrendered the 1903 certificate for this purpose. In March 1909 the certificate was reissued similar in every respect to the original one except that the additional beneficiary was named.
The insured kept the policy in force until June 1933, but at that time the policy lapsed for non-payment of the premiums.
Judge Prewitt died February 15, 1939, and this suit was filed January 17, 1944. The learned judge of the lower court delivered a memorandum opinion which is as follows:
"On the 19th day of December, 1903, the Supreme Council of The Royal Arcanum, a fraternal order, issued to the late Judge Henry R. Prewitt, a certificate of insurance in the sum of Two Thousand ($2,000.00) Dollars payable upon his death to his sons, Thos. G. Prewitt and Allen Prewitt, Jr., and in March 1909, at the request of Judge Prewitt, this certificate was canceled and reissued similar in all respects to the original certificate except his son, H. Reid Prewitt, Jr., was also made a beneficiary. The premiums on this certificate were paid by Judge Prewitt until June, 1933, after which time he made no further payments on same and the certificate of *303 insurance was canceled by the Fraternal Order for that reason. After the death of Judge Prewitt, which occurred on February 15, 1939, his personal representative tendered to the local secretary of the Order a sufficient amount, as he contends, to reinstate the certificate. This tender was refused.
"On January 17, 1944, this suit was instituted by the three sons of Judge Prewitt, who are the beneficiaries in the last issued certificate aforesaid, against the defendant, The Supreme Council of the Royal Arcanum, to recover the amount named in the certificates aforesaid. The re-issued certificate in 1909 was lost after the death of Judge Prewitt but it is agreed that the reissued certificate is identical in terms with the first issued certificate except as to the additional beneficiary.
"In this litigation the plaintiffs take the position that the payments made by Judge Prewitt from the time of the issue of the original certificate to the time that he ceased making payments on same constituted a sufficient reserve to carry and keep in force this insurance until the date of his death.
"The defendant takes the position that the certificate was only a straight life insurance policy and that the payments as made were only sufficient to keep the policy in force and were not sufficient to, nor did they, create any reserve whatsoever, and that upon the failure of Judge Prewitt to pay the premiums the certificates lapsed.
"The defendant further pleads that both the original certificate and its re-issue contained in its face a provision that no suit could be instituted upon same unless such suit was brought within three years after the accrual of the cause of action on same, and which, of course, insofar as this action is concerned, was the date of the death of Judge Prewitt. This suit was brought nearly five years after the date of the death of Judge Prewitt, and the defendant has plead as a bar to this action the limitation period as set up in the face of the contract. As opposed to this position taken by the defendant the plaintiffs plead that prior to the execution of the certificate of insurance in question the Court of Appeals of Kentucky had held that any contract which undertook to alter or abridge periods of limitation as fixed by the Statutes of Kentucky, are void and especially *304
referred in the pleading to the case of Union Central Life Insurance Company v. Spinks,
"In the case of Kentucky Mutual Security Company v Turner, etc., (a suit upon a life insurance contract),
" 'It is well settled that parties may make a binding agreement as to the time in which an action shall be brought for a violation of their contract, which agreement will have the same effect as the statutory period of limitation in such cases.'
"In the case of Smith v. Herd (et al.),
" 'A provision in a policy of insurance limiting the time within which an action may be brought to a period less than that fixed by the statute of limitations is valid.'
"In this case the question of contractual limitation periods was fully discussed and three Judges of the Court of Appeals dissenting from the majority opinion filed a dissenting opinion.
"On December 9, 1904, the Spinks case, supra, was determined, and in that case (quoting from the syllabus) the Court said:
" 'A provision in a life policy to the effect that no suit shall be maintained thereon, unless begun within 1 year from the death of insured, is void, as in contravention *305 of public policy; the statute prescribing a period of 15 years for actions on such contracts.'
"In the case of Burlew v. Fidelity Casualty Co. of New York (et al.),
"In the case of Johnson v. Calvert Fire Insurance Company,
"As the Spinks case was not decided until nearly two years after the contract of insurance in question was entered into, it is obvious that the plaintiffs may not rely upon the rule of law as set forth in that case. It is unnecessary to determine, and I am not undertaking to determine by this Memorandum, that between the date of the rendition of the opinion in the Spinks case and the date of the overruling of same by the Burlew case that parties could not contract against the statutory periods of limitation. In view of the situation it is not necessary that this be done; but accepting the theory of the plaintiffs as correct, I am forced to the conclusion that this action is barred by the three year period fixed in the certificate of insurance. The conclusion that I have reached renders unnecessary a discussion of the other questions involved."
Appellants vigorously argue that the application of the three year limitation contained in the contract of insurance is erroneous because the certificate was reissued in 1909, after the decision in the case of Union Central Life Insurance Company v. Spinks,
The policy sued on was issued in 1903, prior to the *306
decision in the Spinks case which was decided December 9, 1904, and at the time such policy was issued the law in this state with reference to contractual limitations as to time in which suit may be brought was the same as it is today. Kentucky Mutual Security Fund Company v. Turner,
As pointed out in the opinion of the lower court, the Spinks case was overruled by the case of Burlew v. Fidelity Casualty Co. of New York,
It is now the well settled law in this state that parties, dealing at arm's length, may contract for a limitation shorter than that provided by statute, so long as the period provided for is a reasonable one.
We have considered each of the contentions of the appellants but find ourselves in accord with the views expressed in the opinion of the lower court.
It follows that the judgment must be and it is affirmed.