Opinion
No. 31523.
January 14, 1935.
1. INSURANCE.
Where notice sent insured with policy stated that insured should see that dues were paid on or before first day of each month and secretary of insurer, by deposition in action on policy by beneficiaries, so interpreted notice, premium held payable on or before first day of succeeding months, regardless of stipulation in policy for payment on or before last day of immediate month.
2. INSURANCE.
Where monthly premium on life policy was payable on or before first day of succeeding month, insured, dying about midday of first day of month, held not to have been in default, although premium for preceding month had not been paid, since insured had throughout entire day to pay premium.
3. EVIDENCE.
Insurance societies doing business in state are presumed to have in all things proceeded in good faith.
4. CONTRACTS.
Party relying on time provision in contract as being of essence of contract must show that he has been definite and certain in his contract stipulations in respect to time relied on.
5. INSURANCE.
Insurer having before any loss accrued under policy accepted from agent and retained past-due premium without inquiry waived any forfeiture for late payment of such premium, although agent receiving premium was without power to waive forfeitures.
APPEAL from the Circuit Court of Holmes County.
Johnson White, of Lexington, for appellant.
The insured, John W. Rhyne, died on the first day of March, 1933. The assessment or dues on his certificate of insurance for the month of February, 1933, had not been paid on or before the last day of the month as provided in the certificate itself, and as provided in section 63 (a) of the constitution and by-laws of the defendant association. Under this section of the constitution and by-laws, the certificate of insurance became void and the contract of insurance was terminated.
Section 5249, Code of 1930.
The proof in this case shows without any conflict that the assessment due for the month of February, 1933, was not paid on or before the last day of the month, and in fact was never paid.
Although the witness Reid, and Marie Rhyne testified that assessments had been collected after the last day of the month in which they were due, yet there is no testimony whatever in the record that the defendant or any general officer thereof ever had any notice or knowledge thereof, or ever acquiesced therein. On this point the proof on behalf of plaintiffs is absolutely silent. Failure to make proof of this was fatal to plaintiffs' case.
Odd Fellows Benefit Assn. v. Smith, 101 Miss. 332, 58 So. 100; Sovereign Camp, W.O.W., v. Hyde, 134 Miss. 705, 99 So. 256.
Should the court hold that a reasonable inference of waiver or estoppel might properly be drawn by the jury from the evidence introduced by plaintiffs, we still contend that the testimony of Yates denies all facts from which any such inference might be drawn, and taking his testimony as true, it was error to grant the plaintiffs a peremptory instruction.
It is the well established rule that everything must be considered as proved which the evidence in the case establishes directly or by reasonable inference against the party who obtains a peremptory instruction.
Keith v. Yazoo Miss. Valley Railroad Co., 151 So. 916, 168 Miss. 519.
The whole effort on the part of appellees has been to set up waiver or estoppel, as against appellant, by reason of an alleged custom or course of conduct on the part of the local secretary, and the local lodge in violation of the provisions of the laws and constitution of the appellant, the very thing prohibited by section 5249, Code of 1930.
Modern Order of Praetorians v. Griffin, 151 Miss. 312, 118 So. 175.
The premiums due by Rhyne for the month of February were never paid to the appellant, and no general officer thereof ever did or said anything from which a waiver might have been inferred, as was done in the Stonewall case. A.M. Pepper, of Lexington, for appellees.
This court has at all times protected the rights of policyholders and beneficiaries under circumstances and conditions similar to those shown by the record in this case.
The case of Murphy v. Independent Order of the Sons Daughters of Jacob of America, 77 Miss. 830, has been one of the leading cases since its rendition, for in that opinion this court not only cited with approval the case of Supreme Lodge Knights of Pythias v. Withers, 177 U.S. 260, but incorporated the opinion of the court in that case as the opinion of this court on the question of forfeiture, assessments, subordinate lodges, agency, and construction of policies and by-laws of fraternal orders.
Morgan v. Independent Order, 90 Miss. 864, 44 So. 791; Fraternal Aid Union v. Whitehead, 125 Miss. 153, 87 So. 453.
It is true that where the insurer by custom and course of dealing with the insured in receiving, without objection, premiums or assessments past due, has led him to believe that he is entitled to a reasonable time for the payment of premiums or assessments after they mature, the insurer cannot claim a forfeiture for failure to pay premiums or assessments on the day they become due, and this is true whether the tender of past due premium is made before or after the death of the assured.
5 Cooley's Briefs on Insurance (2 Ed.), page 4383.
The ground on which this rule rests is that the insured has been misled by such custom or specific dealings with him, into delaying payment of his premium or assessment to a day later than that fixed therefor.
5 Cooley's Brief on Insurance, page 4389; Odd Fellows v. Smith, 101 Miss. 332, 58 So. 100; Modern Order of Praetorians v. Griffin, 151 Miss. 312, 118 So. 175.
Insurer may waive forfeiture of life insurance policy for nonpayment of premiums; provision therefor being for insurer's benefit.
Stonewall Life Ins. Co. v. Cooke, 165 Miss. 619.
Argued orally by H.H. Johnson, for appellant, and by A.M. Pepper, for appellees.
More than thirty-five years ago appellee's decedent took a policy or certificate of life insurance in appellant association, and throughout all these years, month by month, he paid all premiums and assessments down to and including the month of January, 1933. The insured died about midday on March 1, 1933. The premium or dues for the month of February, 1933, had not been paid at the time of the death of the insured, and the society denied liability on the policy.
To meet new conditions, especially in respect to changes in beneficiaries, there had been surrenders of existing policies and the issuance of new policies in lieu thereof. The last policy was issued on February 6, 1924. This policy stipulated that the monthly premiums should be paid "on or before the last day of each month," and the constitution and by-laws of the society provide that if an insured fail to make any such payment on or before the last day of the month, he shall thereby become suspended and his beneficiary certificate shall be void.
Attached to, or accompanying, the policy or certificate of insurance last mentioned, there was the following document:
"Beneficiary Certificate.
6.87 34 Miss. Apt. 5 App. Record. O.K. H.D.L. Number 5086 Amount $2,000 Sov. J.W. Rhyne Certificate issued Feb. 6, 1924.
Woodmen of the World a Benevolent Secret Beneficiary Fraternity.
"Important.
"The Member Should See That His Assessments and Dues Are All Paid on or Before the First Day of Every Month.
"The delivery of this Beneficiary Certificate shall not be binding upon the Sovereign Camp unless Section 56 of the Constitution and Laws of this Order has been fully complied with.
"Feb. 6, 1924 Feb. 6, 1924."
The quoted document or notice is an equivalent to the formal declaration by the home office of the society that although the policy and the constitution and by-laws of the association require the payment of the monthly premium on or before the last day of the month, nevertheless, if paid on or before the first day of the month, the payment will be regarded and accepted as being within due time. Moreover, this payment refers to the dues of the month just closed, for the payment for that month was not due even under the terms of the policy itself until the last, not the first, of the month.
Consequently, under the terms of the quoted notice or declaration by the society, the insured had throughout the entire day of March 1, 1933, to pay the February, 1933, premium, the rule being as stated in Love Petroleum Co. v. Atlantic Oil Producing Co., 169 Miss. 259, 270, 152 So. 829, 153 So. 389, "that where performance is to be within a specified time the party bound has until the last moment of the last day so specified;" and the insured having died at noon on March 1, 1933, there had at that time been no default and the policy was in full force.
Appellant contends, however, that the quoted declaration or notice was not a part of the policy sued on. That it was sent to the insured along with the policy is shown by the evidence introduced by the appellant itself; but we think it immaterial whether it was actually attached to the policy or was sent along with the policy or was sent at another time. In any event, it was a declaration of purpose as aforesaid by the society, and, if it did not mean that a premium for an immediately preceding month would be regarded and accepted as being within time when paid on the first of the immediately succeeding month, then the notice or declaration would have to be denounced as having no sincere or honest purpose; but we do not ascribe any such unworthy purposes to a reputable insurance society doing business in our state. Equitable Life Assur. Soc. v. Serio, 155 Miss. 515, 521, 124 So. 485. On the contrary, it is presumed that these societies have in all things proceeded in good faith, and, in any event, precisely that will be required of them by our courts.
But the society itself has construed the effect of the notice aforesaid to be exactly as we have above stated. The deposition of the secretary of the Sovereign Camp was taken and introduced; and, in answer to the thirteenth interrogatory, he stated as follows: "The monthly payments provided for in said beneficiary certificate were paid to and including the month of January, 1933; but the monthly installment due and payable on or before the last day of February, 1933, was not paid on or before March 1, 1933." Thus there is a clear recognition in this answer that the February, 1933, premium could have been paid on March 1, 1933, and, if so paid, would have been within time; so that the defense of the society, apparently, is not that the premium would be too late if paid on March 1, 1933, but rather is upon the fact that it was not actually paid on that day, thereby overlooking the fact that the policy remained in full force throughout that day and that the death occurred before the close of that day.
If, however, it may be said that the court should not hold the society to the interpretation admitted by its head secretary as above quoted from his answer, the result must be the same, for the reason that the notice or declaration of the society sent out from its head office is capable of the construction given by its secretary, and is, in fact, as we have already shown, the more reasonable construction; and we may therefore recur to the pertinent principle affirmed in Love Petroleum Co. v. Atlantic Oil Producing Co., 169 Miss. 259, 270, 152 So. 829, 153 So. 389, that "when a party relies upon a time provision in a contract as being of the essence of that contract, it is no more than just that when he thus calls for strictness in adjudication he should show that he has been as definite and certain in his contract stipulations in respect to the time relied on as he is in the strictness to which he seeks to hold the other party in relation thereto," or perhaps more pertinent still is the passage from the opinion of this court in Morgan v. Independent Order, 90 Miss. 864, 875, 44 So. 791, 794: "If the order seeks to avoid its liability by requiring of its members technical exactness in the payment of their dues, this court will exact of it technical exactness in its moral duties towards its membership, to the end that none may be misled."
The course of the argument has indicated that perhaps the present contention, in part, of appellant is that the January, 1933, premium was not paid on time and that the policy was forfeited for that reason, some parts of the testimony being that the premium for that month was paid on February 1, 1933, and other parts that it was not paid until about February 5, 1933. This contention, if intended to be insisted upon, is not available, for the settled rule in this state is that the acceptance of a premium after the time when it should have been paid is a waiver of the forfeiture which might have been enforced because it was not paid when due. Continental Life Insurance Co. v. Clanton, 149 Miss. 289, 294, 115 So. 569. And we add that this rule applies where, before any loss has accrued under the policy, the premium is received after it is due by an agent without power to waive forfeitures and is afterwards accepted and retained by the insurer without inquiry, as was the case here. 14 R.C.L., p. 1189, section 367.
Affirmed.