Opinion
No. 31389.
October 22, 1934.
INSURANCE.
Under substitute fraternal certificate of life insurance, providing that nonforfeiture values should be computed as if certificate had been issued on June 1, 1927, values would be so calculated, notwithstanding provision that extended insurance values 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 beneficiary for insured's death on October 18, 1932.
APPEAL from the Chancery Court of Winston County.
E.M. Livingston, of Louisville, for appellant.
The principal issue to be determined by this court is whether under the terms of the certificate the automatic premium loan value provision became effective thirty-six months after June 1, 1927, or thirty-six months after the date of issue of the new policy, viz. June 13, 1929.
The general rule of construction of written contracts applies to these certificates, as well as to other contracts in writing.
13 C.J. 525.
This contract is evidenced by the application for exchange, the certificate issued and the constitution, laws and by-laws of the association.
Dornes v. Supreme Lodge Knight of Pythias, 75 Miss. 466, 23 So. 191.
The certificate provides in so many words that the "extended insurance values shall not become available until three years from the date of issue as set forth on page 1 hereof," and the answer avers and the proof shows that the date of issue set forth on page 1 was the 13th day of June, 1929.
The provision of a by-law of a mutual benefit society that the failure to pay an assessment when due shall suspend a member and his rights under the benefit certificate is a valid agreement self operative.
Fidelity Mutual Life Ins. Co. v. Oliver, 71 So. 302; New York Life Ins. Co. v. Morris, 102 So. 71; Independent Order of Sons and Daughters of Jacob v. Moncref, 50 So. 558; New York Life Ins. Co. v. Alexander, 85 So. 93; Supreme Lodge v. Johnson, 99 S.W. 834; Nelson v. Modern Brotherhood of America, 110 N.W. 1008; Munger v. Brotherhood of America Yeomen, 154 N.W. 879; Sovereign Council Catholic Benevolent Legion v. Grove, 96 N.E. 159; Kennedy v. Grand Fraternity, 92 P. 971; Hay v. Peoples Mutual, 143 N.C. 256, 55 S.E. 623; Sov. Camp v. Newsom, 219 S.W. 759; Grand Lodge v. Taylor, 131 P. 783; Locomotive Assn. v. Thomas, 206 Fed. 409; Kraus v. National Council, 198 Ill. App. 345; Thompson v. Ancient Order, 200 Ill. App. 200; Roberts v. Brotherhood, 160 S.W. 924; Howton v. Sovereign Camp, 172 S.W. 687; Bargainer v. K.O.M., 85 So. 57; Koehler v. M.B.A., 125 N.W. 49; Geddes v. Ann Arbor, 144 N.W. 828; Sumerlin v. American, 167 N.W. 844; Havlicek v. Western Frat. Assn., 163 N.W. 985; MacNick v. Switchmen's Union, 167 N.W. 351; Day v. Supreme Forest, 156 S.W. 721; Bange v. Supreme Council, 161 S.W. 652; Olson v. Supreme Council, 224 S.W. 129; Belk v. Capital Fire, 169 N.W. 262; Kilgore v. Loyal Prot. Assn., 102 A. 344; Makam v. Independent Order, 148 N.Y. Sup. 141.
The record shows that the plaintiff herein as beneficiary in the certificate and the wife of decedent made an attempt to reinstate the policy during the month of February, 1932, after she evidently realized that the policy had become null and void. This was only an attempt at reinstatement. The laws of the association were not complied with and, therefore, it is not binding on the appellant, since attempted reinstatement is not valid unless the laws of the society are strictly complied with.
Sov. Camp v. Anderson, 202 S.W. 698; National Americans v. Howell, 206 S.W. 670; Valentine v. Head Camp, 180 P. 2; Locomotive Assn. v. Thomas, 206 Fed. 409; Sov. Camp v. Shaw, 85 S.E. 827; Neenan v. National Council, 188 Ill. App.? 490; Kelley v. Supreme Court, 195 Ill. App. 501; Jenkins v. A.O.U.W., 144 P. 223; Weekley v. K.O.C., 170 S.W. 937; Cowton v. Sov. Camp, 172 S.W. 687; Koehler v. M.B.A., 125 N.W. 49; Edgerly v. Ladies of M.M., 151 N.W. 692; Smith v. Mystic Workers, 196 S.W. 62; Wiser v. Central Business Mens, 219 S.W. 102; Bosse v. J. L., 220 S.W. 993; McGillion v. U.B., 89 A. 301.
W.A. Strong, Jr., of Louisville, and D.E. J.T. Crawley, of Kosciusko, for appellee.
There is a well settled principal of law that the application for the policy is to be considered a part of the policy. This being true we naturally assume that at the end of three years from the date of the policy, it bearing the date of June 1, 1927, the table as set out on page three of the policy naturally means that June 1, 1930, this being the end of the third certificate year, that the policy had a cash value or loan value as set out in the table of thirty-nine dollars and seventy-eight cents. By the same force of reasoning that on the 1st day of June, 1931, or four years after the date of said policy, the said table shows that the policy had a cash value or loan value of sixty-one dollars and thirty-two cents. Following this line of reasoning when the policy was not paid on for the month of March, 1931, there was a value on said policy at said time of three years, and from June to March of another year of nine months, making a cash value or loan value of three years and nine months.
Insurance contracts are to be interpreted in the light of the fact that they are drawn by the insurer and are rarely, if ever, understood by the people who pay the premiums.
14 R.C.L. 926; Coniglio v. Conn. Fire Ins. Co., 5 A.L.R. 805.
Where words or other manifestations of intention bear more than one reasonable meaning an interpretation is preferred which operates more strongly against the party from whom they proceed, unless their use by him is prescribed by law.
Clause D, section 236, Restatement of the Law of Contracts.
The language of an insurance policy, when ambiguous, is to be construed most favorably for the assured.
Liverpool L. G. Ins. Co. v. Van Os, 63 Miss. 431, 56 Am. Rep. 810; Shivers v. Farmers Fire Ins. Co., 99 Miss. 744, 55 So. 965; Boyd v. Miss. Home Ins. Co., 75 Miss. 47, 21 So. 708; Home Mut. Fire Ins. Co. v. Pitman, 111 Miss. 420, 71 So. 739; American Life Accident Ins. Co. v. Nirdlinger, 113 Miss. 74, 73 So. 875, 4 A.L.R. 87; Germain Life Ins. Co. v. Bouldin, 100 Miss. 600, 56 So. 609; Eminent Household of Columbian Woodmen v. Bunch, 115 Miss. 512, 76 So. 540, Ann. Cas. 1918C 110; United States Fidelity Guaranty Co. v. Hood, 124 Miss. 548, 87 So. 115, 15 A.L.R. 605; United States Fidelity Guaranty Co. v. Citizens' State Bank of Moorhead, 150 Miss. 386, 116 So. 605; Home Ins. Co. of New York v. Moore Rawls, 151 Miss. 189, 117 So. 524; New York Life Ins. Co. v. Blaylock, 144 Miss. 541, 110 So. 432; Southern Ins. Co. v. Wall, 156 Miss. 865, 127 So. 298; Locomotive Engineers Mut. Life Acc. Ins. Co. v. Meeks, 157 Miss. 97, 127 So. 699; Georgia Casualty Co. v. Cotton Mills Products Co., 159 Miss. 396, 132 So. 73; Maryland Casualty Co. of Baltimore v. Beckham, 163 Miss. 836, 143 So. 886; Mutual Ben. Health Acc. Assn. v. Blaylock, 163 Miss. 567, 143 So. 406; Murray v. Metropolitan Life Ins. Co., 145 Miss. 266, 110 So. 660; Windorff, Admr. v. Missouri State Life Ins. Co., 1 S.W.2d 99, 57 A.L.R. 615.
A contract of insurance prepared by the insurance company will be always construed liberally in favor of the insured and strictly against the insurance company.
Boyd v. Miss. Fire Ins. Co., 75 Miss. 47, 21 So. 708; Murray v. Metropolitan Life Ins. Co., 110 So. 660, 145 Miss. 226; Mutual Life Ins. Co. v. Lovejoy, 78 So. 299.
It is our argument that at the time that we failed to pay the premium for the month of March, 1931, there was sufficient funds on hand to our credit to keep the policy in force for a number of months thereafter.
Mutual Life Ins. Co. v. Breland, 117 Miss. 479, 78 So. 362, L.R.A. 1918D 1009; 33 C.J. 548, 1308; Higgins v. Sovereign Camp Woodmen of the World, 141 So. 562; Sovereign Camp Woodmen of the World v. Batty, 148 So. 811; Morgan v. Independent Order, 44 So. 791, 90 Miss. 864.
On June 2, 1905, Edward H. Thomas became the holder of a certificate of life insurance for one thousand dollars in appellant society, which certificate was validly maintained until June 13, 1929, when by agreement between the parties a new certificate in the same sum was issued in the form of an "ordinary whole life certificate," with appellee as the sole beneficiary. To maintain this substituted certificate monthly premiums of three dollars and ten cents were required, and which were thereafter paid by the insured until, but not after, March 31, 1931. The insured died on October 18, 1932. 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 come 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.
The application for the new certificate, which appears to have been signed on May 29, 1929, contained, among others, the following terms: "The new certificate is to become effective on the first day of June, 1929, and to bear the date of June, 1927 and age of forty-eight. It is understood that withdrawal values, if any, on the new certificate will be available to me only after I have made payments on said new certificate for three years from the date thereof." And the certificate or policy contained the following specific stipulation: "The nonforfeiture values shall be computed as if this certificate had been issued on the first day of June, 1927." At three other places in the policy, however, there were provisions to the effect that the non-forfeiture values should become applicable only after "thirty-six monthly payments on this certificate shall have been made," one of these provisions being more specifically that "the cash, loan, paid-up and extended insurance values shall not become available until three years from the date of issue, as set forth on page one hereof," and on turning to page 1 there is the following recital: "Issued at Omaha, Nebraska, this 13th day of June, 1929." Thus the question to be decided is whether the thirty-six month period which is necessary to put the nonforfeiture and extended insurance provisions into force is to be computed from June 1, 1927, or from June 13, 1929.
It will be seen from the statement of facts that this precise question was before the Supreme Court of Alabama in Higgins v. Sovereign Camp, 224 Ala. 644, 141 So. 562, and that the court held that the computation is from the first date; that is to say, the date specifically mentioned in the policy, and which accords with the terms of the application, as the date to which that computation is to be referred, and not the mere date of the issuance of the policy. We have studied the opinion in the Higgins case, and are in accord therewith. The same conclusion has been announced by other courts. Sovereign Camp, W.O.W., v. Hardee (Ark.), 66 S.W.2d 648; Jones v. Sovereign Camp (Tenn. App.), 67 S.W.2d 159; Daly v. Sovereign Camp, 226 Mo. App. 629, 44 S.W.2d 229; Dudley v. Sovereign Camp, 205 N.C. 394, 171 S.E. 352. It follows, therefore, that the decree of the chancellor adjudging that the policy was in force at the date of the death is correct, and will be affirmed.
Affirmed.