184 S.W.2d 184 | Mo. Ct. App. | 1944
Lead Opinion
This is a suit on a life insurance contract by Laura P. Swift, plaintiff, beneficiary in a policy issued by Kansas City Life Insurance Company, defendant, on the life of James C. Swift, deceased. The court sustained a demurrer to the evidence and rendered judgment for defendant. Plaintiff appeals.
The facts are not in dispute. The policy was issued in 1910, in the face amount of $5000, containing a provision for automatic premium loans; and all premiums were paid until and including the quarterly premium of $35.15 March 3, 1934. The quarterly premium which fell due June 3, 1934, was not paid in cash by insured on its due date, nor during the grace period. Defendant lapsed the policy because of failure to pay this premium. On July 24, 1934, insured write defendant requesting reinstatement of the policy and tendering the quarterly premium but defendant declined to reinstate the policy, returned insured's premium check, and placed the policy on extended term insurance.
When the policy was lapsed it had a cash reserve value of $2250.05 with a loan indebtedness, including interest, of $1996.28, leaving a net value of $253.77 which, it is conceded, was insufficient to provide extended term insurance to the date of insured's death; but the reserve, above accumulated indebtedness, was sufficient to have provided an automatic premium loan so as to have prevented lapse of the policy at that time.
The question is: Was the policy kept in force by reason of the automatic premium loan provision contained therein? The answer *128 to that question must be found by reference to the provisions of the policy and of the loan agreement executed by insured on December 30, 1926, when the above indebtedness was consummated.
The policy contains the following pertinent paragraphs, which, for convenient reference, we have numbered:
The policy loan agreement signed by insured provided as follows:
"If this loan and interest be not paid when due, and the policy not renewed by the payment of the premium, I request that thebalance of the then surrender value, including any accrued dividends or coupons, if any, of policy No 49225 be applied topurchase extended insurance in accordance with the extendedinsurance provision of said policy; . . ."
In paragraph 1 the parties contracted for the automatic application of necessary amounts of the cash reserve of the policy to the payment of premiums when they are not otherwise paid, and that said provision could only be waived in writing. In paragraph 2 it was agreed that insured might, within a specified time, have the reserve value applied *129 to the purchase of term insurance, by waiving the automaticpremium loan provision. Under these provisions of the policy insured was granted a specific and definite right in regard to the application by defendant of reserves to the payment of premiums not otherwise paid; and of that right he could only be divested by his waiver thereof in writing. It is defendant's theory that the "Loan Agreement" contains language which constitutes such a waiver.
"A waiver is an intentional relinquishment of a known right." [Wall Investment Company v. Schumacher,
But that is not all. When the loan agreement is read in connection with the policy provision, as it must be, it does not appear to conflict therewith, nor to modify or cut down any of said provisions. Under the automatic premium loan provision defendant agreed to apply such portion of the policy reserves, over policy indebtedness, as was necessary, to the payment of any premium not otherwise paid. Nowhere in the "Loan Agreement" is it said that thenceforward such a course would not be pursued. In the loan agreement insured requested defendant to apply the policy reserve to the purchase of extended term insurance if thepolicy was not renewed by "payment of the premiums;" but such a request, couched in such language, is not at all inconsistent with defendant's agreement for the automatic application of reserve funds to payment of premiums so long as such fundsshould be available.
Where an insurance company agrees, in its policy, to apply portions of the cash reserve of the policy, over and above indebtedness, to the payment of premiums not otherwise paid, it is required so to do; payments so made are treated in the same manner as if said payments had been made from funds of insured under his own private control instead of from funds of insured under control of the company; and there is and can be no default, or failure to pay premiums, on a policy containing a valid, existing automatic premium loan provision so long as the company has in its possession funds belonging to insured. [Barthel v. Sovereign Camp, W.O.W.,
By the terms of the loan agreement insured requested that, when the time comes, if it should come, when the reserves of the policy had been exhausted by accumulation of indebtedness to such an extent as to leave a sum insufficient to pay a premium, under the automatic premium clause, and if such premium were not paid from any source, such sum should be used for the purchase of extended term insurance. Of a somewhat analagous situation this court said, speaking through BLAND, J., in Barthel v. Sovereign Camp, supra, l.c. 291: "In the clause under consideration the policy deals with the ultimate end of the insurance, that is, when it finally becomes wholly valueless by the failure of the insured to pay the assessments out of his private funds, followed by the exhaustion of the loan value of the policy by its total consumption in paying the assessments. There could have been no default, in this sense, until that situation was reached. To say the least, the clause in question is subject to construction. That being true, we will construe it in its most favorable light to the insured."
Such a construction as we have given the provisions of the policy and of the loan agreement gives force and effect to all of the provisions of the contract, which should be done, if possible; and it does not lead to a finding that the various provisions are conflicting or result in an ambiguity.
Defendant cites Tabler v. General American Life Insurance Co.,
After defendant wrongfully lapsed the policy and converted it to term insurance insured tendered a premium which was refused. It was, therefore, not necessary that further tender of premiums be made in order that the policy be kept in force. [Newman v. John Hancock Mutual Life Insurance Company, 7 S.W.2d 1015, l.c. 1017; Klinkhardt v. Crescent Insurance Company, 47 S.W.2d 210, l.c. 212; Hawkins v. Washington Fidelity National Insurance Company,
It is contended that insured, by his course of conduct, ratified and consented to the lapse of the policy and its conversion by defendant to extended term insurance. The record discloses that on October 12, 1931, October 14, 1932, April 18, 1933, July 7, 1933, and on July 24. *131
1934, insured acknowledged to defendant that the policy had lapsed for failure to pay premium and applied for reinstatement. It is unnecessary to consider the effect of any such applications for reinstatement excepting that dated July 21, 1943. Defendant rests its contion in this regard on the ruling in Scotten v. Metropolitan Life Insurance Company,
Defendant also contends that insured's acceptance and retention of his premium check, which was mailed to defendant on July 24, 1934, and returned to him with notice that defendant declined to accept same or to reinstate the policy, constituted an acquiescence in and ratification of defendant's action in lapsing the policy.
"Acquiescence is a branch of the law of estoppel, and is used to defeat a party's action on the principle of equitable estoppel; that is, it must appear that, because of something that was done, or because nothing was done, the party invoking the estoppel will sustain loss unless it is allowed. Mere silence or inaction short of the limitation period will not bar relief." [Purdy v. Bankers' Life Ass'n, 74 S.W. 486, 492; St. Louis Safe Deposit Savings Company v. Kenneth Estate, 74 S.W. 474, 483; Hamilton v. Northeast Mutual Insurance Association, 116 S.W.2d 159, 163.] It cannot be said that defendant was misled to its injury by insured's execution of the reinstatement application or by his retention of the returned premium check and silence thereafter. Defendant had already lapsed the policy before that instrument was executed, as was stated in the instrument itself.
In support of its position defendant cites and relies on Dougherty v. Mutual Life Insurance Company of N.Y.,
The Judgment should be reversed and the cause remanded. Boyer,C., concurs.
Addendum
The foregoing opinion of SPERRY, C., is adopted as the opinion of the court. The judgment is reversed and the cause remanded. All concur.