Opinion
No. 32228.
June 8, 1936.
1. INSURANCE.
Under substitute fraternal certificate of life insurance providing that insured could select nonforfeiture option if he defaulted after thirty-six monthly payments had been made, thirty-six months began on date fixed in substitute certificate for computation of its nonforfeiture values and not on later date of issue of substitute certificate.
2. EVIDENCE.
In beneficiary's suit on fraternal certificate of life insurance, beneficiary's testimony that insured told beneficiary that he desired to tender premiums after default and would have done so but for fact that fraternal society misled him to believe that tender would be useless without warranty of his good health, held properly excluded as hearsay.
3. TENDER.
Failure to make formal tender may be excused if it appears that tenderee would not have accepted tender if made, but to avail himself thereof, tenderer must show that he was able and desired to make tender.
4. INSURANCE.
Fraternal certificate of life insurance held not continued in force after expiration of period during which certificate was automatically continued in force by application of cash value to payment of premium on ground that society would not have accepted premiums if they had been tendered, where it was not shown that insured was able and desired to tender premiums.
ON SUGGESTION OF ERROR. (Division A. Nov. 2, 1936.) [ 170 So. 293. No. 32228.]APPEAL AND ERROR.
In action on fraternal certificate, whether exclusion of beneficiary's testimony that insured told her he desired to resume payments on certificate and would have done so had insurer's letters not indicated that it would not receive such payments without warranty that insured was in good health was proper held harmless, where only evidence that insured was financially able to pay premiums offered was excluded as hearsay.
APPEAL from chancery court, of Choctaw county. HON. T.P. GUYTON, Chancellor.
Augustin Magruder and B.M. Walker, Jr., both of Starkville, for appellant.
It is to be noted that appellee here contends that the certificate issued to her deceased husband was continued in force under section 3, "Automatic Premium Loan," there being in the Thomas policy no other means of continuing the policy in force, without the specific exercise of certain options. The insured did not elect to avail himself of the extended insurance provision. Therefore, under the case of Sovereign Camp, W.O.W., v. Thomas, 157 So. 83, the only question now to be determined is whether or not there was a sufficient amount of cash reserve to continue the certificate in force (by virtue of the "back-dating") for thirty-eight months.
Clearly there was no such amount available. Had there been, then under the Thomas case the automatic premium loan provision would have operated to keep the policy in force until such amount was consumed, and the date when it would have been consumed would necessarily have been later than the date of death in order for the certificate to have continued in force.
Since, therefore, Mr. McClure's certificate, giving full consideration to the Thomas case, had a cash surrender value of one hundred and thirty-nine dollars and eighty-eight cents on the date of default, yet that amount was insufficient by fifty-seven dollars and two cents to have maintained the certificate in force to the date of his death, May 3, 1933. The certificate, under any possible construction, cannot be held to have been effective for more than twenty-seven months from the date of default. By that time the automatic loan provision would have exhausted the cash surrender value which was available for automatic application on future premiums. And Mr. McClure lived for thirty-eight months after the date of default.
His certificate had therefore been null and void for ten months, giving to him the full benefit of the Thomas case.
Once the cash surrender value was exhausted there was no possible benefit inuring to the insured or his beneficiary.
The law cannot bring a dead contract back to life.
Sovereign Camp, W.O.W., v. Miller, 164 So. 742; Sovereign Camp, W.O.W., v. Alston, 82 S.W.2d 710; Sovereign Camp, W.O.W., v. Batty, 227 Ala. 50, 148 So. 811.
The Thomas case having been demonstrated to afford no benefit to appellee, her hope of recovery must rest, if on anything, on some vague consideration with respect to tender — that no tender was necessary because it would have been a vain thing for the insured to have made tender.
Appellant's reasons for permitting his policy to lapse died with him. No word of evidence bears out the contention now being made, as evidenced by the final decree in the court below, that the lapse of the certificate was because of any acts of the appellant.
Did the appellant, in the two letters written by its president to the insured, deceive and mislead the insured? Appellee so asserts, vigorously, in her amended bill, to which appellant as vigorously interposes denial in its answer.
If there be proof of such deceit, it must, then, consist in the contents of the two letters themselves. Nothing in any of them waives the provisions of the constitution and by-laws.
A warrant of good health was, under the constitution, made an absolute condition precedent for reinstatement, and hence in the application for reinstatement it was properly incorporated, and appellee cannot be heard to object thereto, or to urge it as an unjust and inequitable condition.
W.A. Strong, Jr., of Louisville, and D.E. J.T. Crawley, of Kosciusko, for appellee.
In November, 1933 there was tried in vacation before the chancery court of Winston county, Mississippi, the case of Mrs. Leona Thomas, complainant, versus Sovereign Camp of the Woodmen of the World, defendant, which was decided in favor of the complainant and appealed to the Supreme Court of Mississippi and there by Division B on October 22, 1934, was affirmed. ( 157 So. 83.)
That case is similar to this case in two respects. First, because in that case the court definitely decided that under a substitute fraternal certificate of life insurance, providing that nonforfeiture valuation should be computed as if the certificate had been issued on June 1, 1927, valuation would be so calculated, notwithstanding the provision that extended insurance valuation should not become available until three years from June 13, 1929, so that where premiums were paid until March 31, 1931, insured was entitled to nearly three years additional insurance, and insurer was liable to the beneficiary for insured's death on October 18, 1932. Second, because the facts in that case disclosed that the insured in February, 1932, offered to pay to the W.O.W. the sum of three dollars and ten cents which was refused by the W.O.W. and returned to Mrs. Leona Thomas. Thereafter, in October, 1932 the insured died. At the time of his death if the automatic loan insurance had been given full force and effect and had the Woodmen of the World rightfully refused the tender, the policy would have expired and there would have been of necessity premiums paid in cash for the months of March, April, May, June, July, August and September, 1932, in cash in order for her to have recovered.
The above is gathered from the original record filed in the Supreme Court in this case and from the agreement of counsel concerning the testimony of complainant.
In that case the court held that, "The certificate last mentioned contained nonforfeiture and extended insurance provisions to the effect that, at the end of the third certificate year, the policy would, upon default of payment of premiums, carry insurance in force for the additional period of two years and three hundred and five days. If therefore this nonforfeiture and extended insurance provision had gone into operative effect on March 31, 1931, when the last premium was paid, the extended period of insurance was sufficient to carry the policy beyond the date of death, which as said was October 18, 1932."
Now in this case the policy was to be dated as of the first day of June, 1924, and it is admitted that he paid the insurance premiums through February, 1930. This being true, according to the table as set out in the insurance policy table "A," to which reference is specifically made, and to the said table as set out on page 103 of the transcript of the testimony, at the end of the first certificate year which would be on June 1, 1929, the cash or loan value would amount to one hundred seventeen dollars and thirty-five cents with an extended insurance at that time of three years, three hundred nine days, to which should be added the additional value of the certificate which was increased by payments from June, 1929, to March, 1930, and which is by the appellant here admitted to be the sum of twenty dollars and two cents. The premiums having actually been paid to March, 1930, and the death having occurred on May 3, 1933, which is three years and two months after the date of the last payment, if we follow the decision of the court in the Thomas case, as above set out, there was sufficient accumulation under the nonforfeiture and extended insurance provision to have carried the policy for three years and three hundred nine days, plus the amount of extended insurance the twenty dollars and two cents would have bought, or for a long period of time subsequent to the date of the death of the insured.
Under this interpretation as was followed by the court in the Thomas case, 157 So. 83, this case must be affirmed or the former case must be overruled in order to support the theory and contention of the appellant here.
In addition to this theory, however, the appellee maintains that by the position of the appellant taken before the Thomas case was decided by this court, it placed itself in such a position that it cannot deny that the letters written by it to Mr. McClure, as well as the warranty of health which it advised him he must sign, are such as to lead an ordinary holder of the Woodmen of the World's certificate to the inevitable conclusion that it was necessary for him to be in good health before he might resume payments upon his policy.
The only difference that I have been able to ascertain in the Thomas case and the instant case is that tender was made in the one and not in the other. Having tried both cases, the counsel in this case are naturally more familiar with the facts and circumstances surrounding the two than one who is not familiar in detail with both cases.
It is true that tender was made in the Thomas case but it is never necessary to do a vain and idle thing.
Since the law does not require any one to do vain and useless things, a formal tender is never required where it appears that had it been made the money would not have been received, as where a creditor states that an actual tender will be useless because he will not accept it, or where one party to a contract states that he will not comply with its terms.
26 R.C.L. 624; Griffith's Chancery, sec. 523; 54 So. 654; McClain v. Meletio et al., 147 So. 878.
The duty of an insurance company to apply the funds in its hands belonging to the insured is settled in the following cases which hold that the insurance company cannot escape liability by refusing to so apply such funds.
Mutual Life Ins. Co. v. Breeland, 117 Miss. 479; L.R.A. 1918D 1009; 33 C.J. 1308.
Courts do not favor forfeiture when to do so would be against equity and good conscience.
National Life Ins. Co. v. Sparrow, 118 So. 196.
Where there are two constructions that may be placed upon a policy, the one favorable to the insured must be adopted.
Columbian Woodmen v. Ramsey, 118 Miss. 455; Morgan v. Independent Order, 44 So. 793.
The appellee is the beneficiary in a life insurance policy issued to her husband, James C. McClure, by the appellant on June 24, 1929. James C. McClure died on May 3, 1933, and this suit is by the beneficiary to recover on the policy.
James C. McClure became a member of the defendant association on February 25, 1909, and received a policy of insurance different from the one here involved. He surrendered this policy, and on the 24th day of June, 1929, received from the appellant the one here sued on in lieu thereof, which contains the following stipulation: "The nonforfeiture values shall be computed as if this certificate had been issued on the 1st day of June, 1924." The policy provides for a cash surrender value, and stipulates that, "after thirty-six monthly payments on this certificate shall have been made, should the member fail to pay any subsequent monthly payment, the member, within three months after due date of the monthly payment, in default, but not later, upon written application and legal surrender of this certificate, may select one of the following nonforfeiture options" (options omitted). It then provides: "Automatic Premium Loan: After thirty-six monthly payments on this certificate shall have been paid, if any subsequent monthly payment be not paid on or before its due date, and if the member has not, prior to such due date, selected one of the options available under the nonforfeiture provisions of this certificate, the Association will, without any action on the part of the member, advance as a loan to the said member the amount of the monthly payments required to maintain this certificate in force from month to month until such time as the accumulated loans, together with compound interest thereon at the rate of five per cent per annum and any other indebtedness hereon to the Association, equal the cash value hereof at the date of default in the payment of the monthly payments. When the said cash value has been consumed in loans advanced and interest thereon, then this certificate shall become null and void; provided, that while this certificate is continued in force under this provision, the member may resume the payment of monthly payments without furnishing evidence of insurability, and the accumulated loans and interest thereon shall become a lien upon this certificate and shall continue to bear interest at the same rate. Provided further, that such lien may be paid in whole or in part at any time by the member, but if not paid said loan and accumulated interest thereon shall be deducted upon any settlement with the member, or from the amount payable at the death of the member."
The insured paid the monthly assessments due on this policy up to and including February, 1930, after which he made no further payments. He exercised none of the options set forth in the policy, including the resumption of the monthly payments due by him under the policy.
The bill alleges, in substance, that it was the duty of the appellant, under the "Automatic Premium Loan" clause, to apply the cash surrender value of the policy to the payment of the monthly premiums on the policy as they became due. That in October, 1931, James C. McClure received a letter from the appellant stating that he had been suspended for more than six months, and offering to permit him to reinstate the policy by payment of the current monthly premium due thereon, and the signing of a certificate warranting that he was then in good health, and that the appellant would charge his back unpaid premiums to, and they would be a charge on, the policy. That he received a letter from the appellant to practically the same effect in February, 1932. That he was not then in good health, and therefore could not make the required warranty of good health. That he was misled by these letters into believing that the appellant would not permit him to resume payments of monthly premiums on his policy without this warranty of good health which he was unable to make, and therefore he did not resume payment of these monthly premiums as he had a right to do under the automatic premium loan clause of the policy. McClure did not reply to either of these letters, and never offered to resume the payment of premiums on the policy. The policy was in force under the automatic premium loan clause when these letters were written, but unless McClure resumed the payment of the premiums thereon, or was excused from so doing, it expired before his death.
We will assume that the evidence discloses that the appellant would not have permitted McClure to have resumed the payment of the monthly premiums on the policy without a warranty by him that he was then in good health, and it seems from the evidence that it construed the thirty-six months provisions in the automatic premium loan clause to begin on the date of the policy, which was June 24, 1929; but this court held, in Sovereign Camp, W.O.W., v. Thomas, 171 Miss. 99, 157 So. 83, on a similar policy, that the thirty-six months began on the date fixed in the policy for the computation of its nonforfeiture provision, which here, as hereinbefore stated, is the first day of June, 1924.
The only evidence introduced by the appellee in support of her contention that McClure desired to resume the payment of the monthly premiums on his policy, and would have so done but was misled, by the letters hereinbefore referred to, into believing that it would be useless for him to tender the payment of premiums thereon without a warranty by him that he was then in good health, was that of the appellee herself, who testified that McClure told her that such was the case. This evidence was, by the court, excluded, and properly so; it being merely hearsay testimony.
The appellee's contention is that since the appellant would not have accepted further monthly payments on the policy, and so indicated in its letters to the insured, without his warranting that he was then in good health, which warranty he could not make, it would have been useless for him to have offered to resume the payment of such premiums, and, therefore, the policy continued in force and she is entitled to collect the face thereof less the premiums due thereon. The court below so held. No offer to pay these premiums was made by McClure, nor did appellant notify him that such an offer would not be accepted if made.
Failure to make a formal tender may be excused if it appears that the tenderee would not have accepted the tender if made; but to avail himself thereof, the tenderer must show that he was able and desired to make the tender. Hunt on Tender, end of sec. 236; Somerton State Bank v. Maxey, 22 Ariz. 365, 197 P. 892, 14 A.L.R. 1117; Lamar v. Sheppard, 84 Ga. 561, 10 S.E. 1084; Steele v. Biggs, 22 Ill. 643; Supreme Tent, Knights of Maccabees of the World, v. Fisher, 45 Ind. App. 419, 90 N.E. 1044; Selby v. Hurd, 51 Mich. 1, 16 N.W. 180; Brown v. Davis, 138 Mass. 458. And according to some authorities, but which we do not now decide, the tenderer also must show that he advised the tenderee of his desire to make the tender. There are exceptions to this rule, among which are where the tenderee has notified the tenderer that he would not accept a tender of performance; where the tenderee has himself rendered it impossible for him to accept the tender if offered; and where the tenderee in a contract for the sale of land is without the state and performance is tendered by the plaintiff or complainant with his declaration or bill of complaint.
It may be true that the appellant would not have accepted the premiums if they had been tendered to it, non constat McClure may not have desired or been able to resume the payment thereof. One cannot complain because another would not have accepted that which he was unable, or had no desire, to offer.
The decree of the court below will be reversed, and the cause dismissed.
Reversed and dismissed.
ON SUGGESTION OF ERROR.
The appellee suggests that we erred in holding that the court below committed no error in excluding her evidence that the insured told her that he desired to resume payment of premiums on the policy and would have done so had the appellant's letters not indicated that it would not receive such payments without a warranty by him that he was then in good health. This evidence, the appellee says, was admissible, under an exception to the hearsay rule, in order to show the insured's state of mind with reference to the payment of premiums, and therefore the cause should be remanded so that the evidence can be introduced and considered.
If we should hold that this evidence was erroneously excluded, the rendition of final judgment here for the appellant would nevertheless be required. The only evidence that the insured was financially able to pay the premiums offered in the court below was that he had so told the appellee. This was also excluded, and was, of course, pure hearsay. From this it follows that whether the court below properly excluded the insured's declaration of desire and intention is here of no consequence, and a decision thereon is wholly unnecessary, consequently the statement that it was properly excluded will be withdrawn and no opinion will be expressed thereon.
Overruled.