One seeking to avail himself of a statutory right must abide the conditions upon which the right was granted. In Knapp v. Homeopathic Mutual Life Ins. Co., 117 U.S. 411, 6 S. Ct. 807, 29 L. Ed. 960, failure to demand a paid-up policy within the 90 days after default provided in the policy, was held to be fatal to recovery. The great weight of authority is in accord.
Mays Featherstone, for appellant, cite: Extendedinsurance: 132 S.C. 10; 129 S.E., 84; 31 Fed. 2d 862; 5 F.2d 481; 257 Fed., 265; 183 U.S. 25; 46 L.Ed., 64; 263 U.S. 167; 68 L.Ed., 235; 31 A. L.R., 101; 93 U.S. 24; 23 L.Ed., 789; 172 S.C. 165; 173 S.E., 307; 90 S.C. 1; 72 S.E., 498. As to provisionsin policy being void as against public policy: 23 L.R.A. (N.S.), 828; 73 So., 409; 73 S.W. 1020; 96 S.W. 598; 99 S.W. 228; 61 L.R.A., 268; 103 A.S.R., 297; 72 S.W., 736; 89 S.E., 178; 74 S.W. 1066; 70 S.W. 175; 111 A.S.R., 269; 62 F.2d 341; 284 U.S. 489; 76 L.Ed., 416; 44 F.2d 540; 117 U.S. 411; 29 L.Ed., 960; 162 N.W., 786; 51 So., 191. Construction of contracts: 182 S.C. 162; 188 S.E., 784; 284 U.S. 489; 151 U.S. 452; 38 L.Ed., 231; 104 U.S. 88; 26 L.Ed., 662; 93 U.S. 24; 23 L.Ed., 789. Failure to pay premiums: 4 S.C. 321; 93 S.C. 88; 76 S.E., 29; 107 S.C. 536; 93 S.E., 197; 166 S.C. 181; 164 S.E., 609; 173 S.C. 87; 174 S.E., 900; 61 L.R.A., 269; 103 A.S.R., 297. Messrs.
Many cases are collected in a note in 8 L.R.A. (N.S.) p. 194. The same rule has been applied where the policy provided that upon failure to pay premiums the insured should be entitled, at his option exercised within a specified time, to have either extended insurance or a paid-up policy, otherwise the policy should be void. Knapp v. Homeopathic Mutual Life Ins. Co., 117 U.S. 411, 6 Sup. Ct. 807, 29 L.Ed. 960. However, while there is a decided conflict in the decisions, the weight of authority is to the effect that under policies requiring notice of the facts constituting a loss thereunder to be given within a specified period, failure to give the notice within that time is excused if the failure is due to insanity or other disabling cause, provided such notice is given within a reasonable time, or within the time stipulated, after termination of the disabling circumstances.
Action by Mrs. Docia Stukes against Life Insurance Company of Virginia. From a judgment for the plaintiff in Magistrate's Court, affirmed by the Circuit Court defendant appeals. Messrs. Rufus Fant and Francis R. Fant, for appellant, cite: Where contract is free from ambiguity Court shouldconstrue: 56 S.C. 411; 117 S.C. 60; 108 S.E., 295; 114 S.C. 107; 89 S.E., 558. Equity case treated as lawcase must be construed as such: 117 S.C. 108; 108 S.E., 295. Custom binding: 147 S.C. 333; 145 S.E., 196. Option not effective unless in policy: 132 S.C. 10; 129 S.E., 86; 117 U.S. 411. Time is essential in surrender provisions: 8 L.R.A. (N.S.), 195 and Note. Period of limitation: 110 N.W., 444. Mr. Frank P. Cave, for respondent.
But what good will that do the policyholder, in this case, when it does not appear that he ever made such election, until after the death of the insured, if then? In Knapp v. Homeopathic Mutual Life Ins. Co., 117 U.S. 411, 6 S.Ct., 807, 29 L.Ed., 960, it was held that where the insured was entitled to an option, upon lapse of policy, to have the cash surrender value applied to extended insurance, or to such insurance paid up as the amount would pay for, and which contains the proviso that unless the policy should be surrendered and the option indicated within a certain time after lapse, the policy should be void, required the insured to exercise an election within the limited time, and in default of the exercise of such election the law afforded no remedy upon the policy in favor of the holder. In Lichtenhan v. Prudential Ins. Co., 191 Ill. App., 412, it was held that where a policy provided that if it shall lapse it may be surrendered for a nonparticipating paid-up endowment, or for a cash surrender value, as indicated in a table, the language created an option, requiring the exercise of the privilege of the beneficiary or insured within a certain time, so that a failure to exercise the option withi
The statute, it was, which gave to the insured or the plaintiff the insurance after the lapse of the policy, and that it gave only through and upon a compliance with its provisions. ( Knapp v. Homeopathic Mut. Life Ins. Co., 117 U.S. 411.) The six months' limitation of time is a material provision of the statute and, therefore, must be complied with. The certitude as to the financial condition and liabilities, at any time, of life insurance corporations, which is important if not essential to their safety and perpetuity, could not exist if, through periods varied and uncertain in duration, lapsed policies could be enforced by their owners.
No demand or surrender of the policy having been made, the plaintiff's right of recovery is barred. (Knapp v. HomoeopathicIns. Co., 117 U.S. 411; Northwestern Ins. Co. v. Barbour, 92 Ky. 427; Stayner v. Equitable Life Assur. Soc., 22 Misc. Rep. 53; 49 N Y Supp. 380; Thorensen v. Massachusetts Benefit Assn., 68 Minn. 477.
In those cases where a recovery has been permitted by the beneficiary, notwithstanding a surrender and release such as appears in this case, the party seeking to recover was able in some way to connect the company with the fraud, or to show some fault or negligent act on its part that excused the payment of the premium. ( Whitehead v. N.Y.L. Ins. Co., 102 N.Y. 143; Frank v. M.L. Ins. Co., Id. 266; Knapp v. H.M.L. Ins. Co., 117 U.S. 411.) The husband had the possession of the policy, and in dealing with the defendant in regard to it was treated as plaintiff's agent, and the rule that when one of two innocent parties must sustain a loss from the fraud of a third, such loss shall fall upon the one whose act enabled the fraud to be committed, applies to this case.
This view is supported by the decided weight of authority outside of this state. Knapp v. Homeopathic Life Ins. Co., 117 U. S. 411, 6 S. Ct. 807, 29 L. Ed. 960; Bonner v. Mutual Life Ins. Co. (Miss.) 36 So. 538; Cravens v. N. Y. Life Ins. Co., 148 Mo. 583, 50 S. W. 519, 53 L.R.A. 305, 71 Am. St. Rep. 628; McLaughlin v. Equitable Life Ass. Society, 38 Neb. 725, 57 N. W. 557; Attorney Gen. v. Continental Life Ins. Co., 93 N. Y. 70; Equitable Life Ass.
Ashbrook v. Insurance Co., 94 Mo. 72; Smoot v. Insurance Co., 138 Mo. App. 438; Barnes v. Insurance Co., 30 Mo. App. 539; Mooney v. Insurance Co., 92 Mo. App. 92. (3) Where the policy by its terms makes the right to paid-up insurance conditional upon a demand being made therefor by the insured within a specified period, it is a condition precedent to the right to such paid-up insurance that a demand be made therefor within the prescribed period. Knapp v. Insurance Co., 117 U.S. 411; Cravens v. New York Life Ins. Co., 148 Mo. 583; Inloes v. Prudential Life Ins. Co., 109 Mo. App. 104. (4) In the absence of some provision of the policy or some statute giving the insured the benefit of the reserve of the policy upon its lapse, such reserve belongs to the company and not to the insured.