Opinion
No. 31096 I/2.
March 5, 1934. Suggestion of Error Overruled April 16, 1934.
1. INSURANCE. Insurer, under clauses in accident and health policy, held authorized to terminate policy by declining to accept premium on any premium date.
Accident and health insurance policy contained clauses providing that the acceptance of any premium on the policy shall be optional with the association, and that the association cannot cancel the policy during any period for which the policy has been paid.
2. INSURANCE.
Insured, under accident and health policy, had burden of showing authority of insurer's adjusting agent to act in adjusting loss so as to bind insurer.
APPEAL from Circuit Court of Prentiss County.
Watkins Eager, of Jackson, for appellant.
Where a contract ends at a definite time no renewal thereof can be had without consent of both parties thereto.
37 C.J. 408; 1 C.J. 409; Fidelity Casualty Company v. Gorman, 38 F.2d 590; Ericks v. Fidelity Casualty Company, 253 S.W. 1029; Matthew v. Cont. Cas. Co., 93 S.W. 55; Upton v. Travelers' Insurance Company, 178 P. 851; MacArthur v. U.S. Health Accident Insurance Company, 151 Ill. App. 507; United States Fidelity Guaranty Company v. Williams, 49 So. 742, 96 Miss. 10; Penn Mutual Life Ins. Co. v. Mrs. Daisy Keeton, 49 So. 736; Danvers Savings Bank v. National Surety Company, 166 Fed. 671.
It is not the province of a court of equity to make contracts for the parties nor to modify such as may have been voluntarily entered into merely because the carrying out of their terms may ultimately result in grave injustice to one or the other of the parties thereto.
Phillips v. McIlrath et al., 217 N.W. 420; Amick v. Huky, 235 N.W. 847; Fairey v. Strange, 98 S.E. 135.
There is no law restricting the right of all persons to make contracts to suit themselves, when the contract violates no law.
Butterfield Lbr. Co. v. Guy, 92 Miss. 361, 45 So. 78, 15 L.R.A. (N.S.) 1121.
From a careful examination of the record in this case the facts show conclusively that the contract of insurance had been completely consummated on and prior to May 21, 1929.
On the broad proposition of whether or not the contract in the case at bar had been accepted by the appellee in this case on May 21, 1929, we respectfully submit that the letter which he wrote to the company is within itself sufficient evidence to show clearly that the appellee himself considered the contract fully consummated.
The courts have universally held that an acceptance even though coupled with a request for modification is nevertheless an absolute and unconditional acceptance.
Turner v. McCormick, 67 L.R.A. 853; 9 Cyc. 269; Culton v. Gilchrist, 92 Iowa, 718, 61 N.W. 384; Phillips v. Moor, 71 Me. 78; J.B. Davis v. Home Insurance Company, 155 S.W. 131.
Throughout all the years that the statute, section 5196, Code of 1930, has been in force in Mississippi, it has never been construed in a manner so as to enlarge the powers of any agent.
Moses v. State, 65 Miss. 56; Cain v. State, 60 So. 731, 103 Miss. 701; London, Liverpool Globe Ins. Co. et al. v. Sorsby, 60 Miss. 302; New York Life Insurance Co. v. Odom, 100 Miss. 219, 56 So. 379; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Interstate Fire Ins. Co. v. Nelson, 62 So. 425, 105 Miss. 437; Miss. Electric Co. v. Hartford Fire Ins. Co., 63 Fed. 231, 105 Miss. 767; Continental Casualty Co. v. Hall, 118 Miss. 871, 80 So. 335; New York Life Ins. Co. v. Smith, 129 Miss. 544, 91 So. 456; Mutual Life Ins. Co. v. Hebron, 146 So. 445, 166 Miss. 145; American Bankers Ins. Co. v. Lee, 134 So. 836, 161 Miss. 85.
E.C. Sharp, of Jackson, for appellee.
The policy contained no provision whatever for a cancellation of the policy at any time during which the premiums were paid, and could not be cancelled under the terms thereof at any time for which the premium had been paid in advance.
As a general rule, a rider or slip attached to a policy or certificate of insurance is, prima facie at least, a part of the contract to the same extent, and with like effect, as if actually embodied therein.
1 Couch's Cyc. of Insurance Law 310, sec. 159; Corporation of Roman Catholic Church v. Royal Ins. Co., 158 La. 601, 104 So. 383; 1 Couch on Insurance, secs. 188 and 188a.
In the construction of any statute, constitutional provision, or contract, it is the duty of the court to so construe it that each and every part of the contract, statute, or constitutional provision shall be given effect, and to apply this rule to the case at bar is to sustain the contention of appellee.
If the rider had not been attached under the general provisions of the policy the contract could have been cancelled at the expiration of any premium-paying period, and the court would have doubtless so construed, but, when the rider in question was attached to and became a part of this policy, it superseded the policy provisions providing for the cancellation thereof at the expiration of any period for which the premium has been paid, for it superseded those provisions of the policy, and it was the obvious intention of the parties that the provisions of the rider should be substituted for the other conditions, exceptions and provisos of the policy for the reason that they were inconsistent and irreconcilable with the terms of the policy, and to apply the rule stated in Couch's Cyc. of Insurance Law, supra, to this rider, is to sustain the contention of the appellee.
A contract of insurance couched in language chosen by the insurer is, if open to the construction contended for by the insured, to be construed most strongly, or strictly against the insurer, and liberally in favor of the contention of the insured, which means in accordance with the rule contra perferentem.
1 Couch's Cyc. of Insurance Law, sec. 188.
A tender does not have to be made where it is made clear beforehand that if made it would be rejected.
Union Central Life Ins. Co. v. Caldwell, 68 Ark. 505; Manhattan Life Ins. Co. v. Smith, 44 Ohio St. 170; 3 Couch Cyc. of Insurance Law, sec. 637, page 2052; Newton v. National Life Ins. Co., 108 So. 769; Sanders v. Independent National Life, 133 So. 451; American National Ins. Co. v. Mooney, 111 Ark. 514; 6 Couch Cyc. of Insurance Law, sec. 1429.
It is contended by appellant that it had a right to cancel this policy on June first, or rather, to refuse to renew, although there were considerable benefits due to appellee under the terms of the policy. This contention is in direct conflict with the decision in the case of Benefit Association of Railway Employees v. Bray, 147 So. 640.
There is a general rule that an insurance policy cannot be cancelled by the insurance carrier for nonpayment of premium when it has a credit to the insured of an amount equal to such premium otherwise unappropriated by the insured.
Equitable Life Insurance Society v. Roberts, 145 So. 157; National Life Ins. Co. v. Sparrow, 151 Miss. 387, 118 So. 195; Mutual Life Ins. Co. v. Breland, 117 Miss. 429, 78 So. 362, L.R.A. 1918D 1009; 33 C.J. 309, sec. 548.
In this case, at the time the premium became due on June 1, 1932, the appellant had in its possession more than enough to pay the premiums on this policy for two full years, and although it was indebted to appellee for more than two years' premiums, appellee tendered to it the premium due June 1, 1932.
Insurance Company v. Breland, 117 Miss. 479, 78 So. 362; Girard Life Ins. Co. v. Mutual Life Ins. Co., 97 Pa. 15; North American Accident Ins. Co. v. Bowen, 102 S.W. 163; Smith v. St. Louis Mutual Life Ins. Co., 2 Tenn. Ch. 727; Union Central Life Ins. Co. v. Caldwell, 68 Ark. 505, 68 S.W. 355.
Assuming that the statutory provision controls, it necessarily follows that any act done by the statutory agent, or knowledge obtained by him while doing such an act, which is necessary or proper to the fulfilling of the agency, is the act or knowledge of the company, and binding upon it, so that it cannot disclaim his agency in the doing of anything necessarily implied in the carrying out of the specific acts authorized. Likewise, such an agent's declarations, as such, are admissible evidence against the company, provided the statute does not also provide that the company shall not be bound by any statement or declaration of such an agent not contained in the application, for, if it does so provide, the company is exempt from any obligations arising from any oral statements made by the agent, and not incorporated in the application itself.
2 Couch's Cyc. of Insurance Law, sec. 492, sec. 509-g, "General Managers;" St. Paul Fire Marine Ins. Co. v. Loving, 163 Miss. 114, 140 So. 727; Cain v. State, 103 Miss. 701, 60 So. 731; Fidelity Casualty Co. v. Cross, 131 Miss. 632, 95 So. 631.
Argued orally by W.H. Watkins, Jr., for appellant, and by E.C. Sharp, for appellee.
Caver brought suit on an accident and health insurance policy issued by the appellant, providing, among other things, that: "If such injuries as described in the Insuring clause do not result in any of the above mentioned specific losses, but shall wholly and continuously disable the insured for one day or more, and so long as the insured lives and suffers loss of time, the Association will pay a monthly indemnity at the rate of one hundred fifty ($150) dollars."
The policy further provided for partial disability, paying therefor sixty dollars per month, and that no statements by the applicant for insurance not included therein should void the policy or be used in any legal proceeding, and provided that no change in the policy should be valid unless approved by an executive officer of the association endorsed on the policy. It was also provided in the policy that: "The copy of the application endorsed hereon is hereby made a part of this contract, and this policy is issued in consideration of the statements made by the insured in the application and the payment in advance of twenty-three dollars as first payment, and the payment in advance of premiums of thirteen dollars quarterly or fifty-two dollars annually thereafter beginning with September 1, 1929, is required to keep this policy in continuous effect. If any such dues be unpaid at the office of the association in Omaha, Nebraska, this policy shall terminate on the day such payment is due. The acceptance of any premium on this policy shall be optional with the association." It further provided that: "The term of this policy begins at twelve o'clock Noon, Standard Time, on date of delivery to and acceptance by the Insured against accident and on the 31st day thereafter against disease and ends at twelve o'clock Noon on date any renewal is due, unless premium is paid on or before date due."
The policy was issued and became effective in September, 1929, and quarterly premiums were paid thereon until July 1, 1932, when the insurance company refused to accept premiums offered by check on June 28th, for that quarter, since it desired to terminate the policy.
The policy had a rider attached reading as follows: "The association cannot cancel this policy during any period for which the policy has been paid." And: "When claim for permanent total disability of the insured, due to bodily injuries or sickness covered by this policy, has been filed and approved while this policy is in force, there will be no further premium payable, but the insured will draw benefits as provided in the policy."
Prior to July, 1932, Caver was injured, and filed claim for one hundred six dollars and some cents, which the insurance company declined to pay. In December, 1932, Caver was again injured, and for this latter injury this suit was filed. Suit was brought for the first injury in a justice of the peace court, resulting in a judgment for Caver in the amount claimed, and the insurance company paid this judgment.
After the rider was attached to the policy, he wrote a letter to the insurance company, and he received a letter from some individual who had represented the company in some respect in some office in Memphis, Tennessee. Caver testified that he addressed a letter of inquiry to the insurance company in Memphis, and his letter was answered, but the letters were not copied in the record, and we have no means of knowing exactly what they contained. The attorney representing Caver offered to testify that Caver's letter of inquiry was answered by a person whose name is A.W. Huertz; that he had considerable dealings and conferences with this person covering several years, and that this person was in charge of the company's business in Mississippi; that he frequently visited in Jackson, Mississippi, and made adjustments of losses for and on behalf of the company.
The court excluded this testimony, and denied a peremptory instruction for the defendant, and submitted the case to the jury which found for the plaintiff, from which judgment this appeal is prosecuted.
It will be noted from the quoted clauses from the policy that the insurance company reserved the right to decline to accept any premium on any premium date. The rider merely provides that the insurance policy could not be canceled for any period for which the premium was paid. Its language does not purport to compel the insurance company to receive premiums at the due date. It is not entirely inconsistent with the terms of the policy to give the insurance company the option to receive any premium. We do not know what interpretation was placed upon this rider by Huertz, nor what his authority was with regard to the company.
We have recently held, in the case of Travelers' Insurance Co. v. Dwight L. Price (Miss.), 152 So. 889, that after a policy has been delivered, our statute, section 5196, Code 1930, does not apply, that the common-law applies, and that the company can limit the powers of its agent after the delivery of the policy so as to permit no variation in the terms of the policy other than by adjusters.
It was, of course, the duty of the plaintiff, appellee here, to have the letter introduced in evidence, and also to show the authority of Huertz to act in the matter so as to bind the insurance company. Under the policy as written, without the interpretation placed upon it by the parties, we are bound to construe the provisions thereof so as to give effect to such provisions. This view requires a reversal of the judgment and a dismissal of the cause.
Reversed and dismissed.