Continental L. Ins. Co. v. Clanton ( 1928 )

^* Corpus Juris-Cyc References: Accident Insurance, 1CJ, p. 413, n. 10; Insurance, 32CJ, p. 1348, n. 11; p. 1350, n. 20, 23 New; p. 1351, n. 46 New. Effect of acceptance of check for insurance as preventing forfeiture for nonpayment, see annotation in 40 A.L.R. 419; 14 R.C.L. 1189; 3 R.C.L. Supp. 353; 6 R.C.L. Supp. 863. Appellee filed her bill in the chancery court of Rankin county against appellant on a life, accident, and sick insurance policy held by her husband, Jesse Clanton, at the time of his death, to recover the principal sum of two hundred fifty dollars named in said policy, which policy provided, upon certain conditions named therein, that said sum should be paid to appellee in event of the death of her husband. The case was tried on bill, answer, and agreed facts embodied in writing and made a part of the record. The stipulations of the parties covering the facts were as follows:

"It is agreed by and between the attorney for the complainant, and the attorney for the defendant, for the purpose of the trial of the above cause, that the following statement is a true, complete and full statement of all the facts in said cause, and that the said cause shall be submitted to the court for judgment upon the said statement alone: That, on the 23d day of March, 1926, the Continental Life Insurance Company, through its lawful agents, executed and delivered to Jesse Clanton, a policy of insurance, being policy No. LU 201416, a copy of which is filed herewith marked Exhibit A, and made a part of this agreed statement as fully as if it were set out herein in detail. That the principal sum of the said policy was two hundred fifty dollars. The policy is made a part of this agreement. That the complainant, Lena Clanton, was the beneficiary in said policy of insurance. That the insured, Jesse Clanton, paid, upon delivery of the policy, the premium due ``until ten o'clock noon, Standard time, of the 1st day of May, 1926.' That on the 6th day of May, 1926, the advance monthly payment of two dollars and thirty cents was made by the insured and accepted by the defendant. That on the 10th day of June, 1926, the advance monthly payment of two dollars and thirty cents was made by the insured to the defendant and accepted by the defendant. That the monthly payment due under said policy was two dollars and thirty cents. That the insured, Jesse Clanton, died on the 3d day of July, 1926, in Rankin county, Miss., and proof of death was promptly made by the beneficiary, the complainant herein, to the defendant company, and demand made for the payment of the said insurance, which was refused by the defendant. That the payment made upon the delivery of the policy as of March 23, 1926, the payment of May 6, 1926, the one of June 10, 1926, constitute all the payments made upon the said policy of insurance. That said policy became effective on March 23, 1926."

There was a decree for the appellee for the amount sued for, from which decree the appellee prosecutes this appeal. As shown by the agreed facts, the policy was issued and delivered March 23, 1926, and the advance premium was then paid. This kept the policy in force until May 1, 1926. The monthly premiums were due May 1, 1926, and on the 1st days of each month thereafter. The premium due May 1, 1926, was not paid until May 6, 1926, the one due June 1, 1926, was not paid until June 10, 1926, and the one due July 1, 1926, was never paid. The insured died July 3, 1926.

Section F of the "special provisions" of the policy reads as follows:

"After this policy has been maintained in continuous force for not less than three consecutive months, the company will give a grace of five days for the payment of any subsequent premium, and during this period of grace the insurance hereunder shall continue in force without the payment on the premium, but subject otherwise to all the provisions, conditions and limitations of this policy."

The last sentence of C of the "special provisions" of the policy is as follows:

"The payment of any past-due premium shall not continue this insurance in force beyond the 1st day of the succeeding month."

Paragraph 3 of the policy, under the caption "Standard Provisions," is in this language:

"If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of the past-due premium by the company, or by any of its duly authorized agents, shall reinstate the policy but only to cover accidental injury thereafter sustained, and such sickness as may begin more than ten days after the date of such acceptance."

Appellant's contention is that the policy was avoided, and therefore appellee was not entitled to recover thereon, because at the time of the default in the payment of the premium due July 1, 1926, the policy had not been maintained in continuous force for as much as three consecutive months. That default in the payment of the premiums due the 1st days of May, June, and July, 1926, caused lapses in the policy for the space of time between the dates of such payments and the dates they were due; in other words, that the acceptance by appellant of the overdue premiums did not have the effect of keeping the policy in continuous force from its date to the time of the death of the insured, but only had the effect of renewing the policy from the time of such payments and the acceptance thereof by appellant.

By acceptance of the overdue payments from the insured, the appellant was precluded from thereafter asserting a forfeiture of the policy upon the ground that they were not paid when due. Each of the overdue payments related back to, and took effect from, the time it was due. 32 C.J., p. 1348, section 624; Morgan v.Independent Order Sons and Daughters of Jacob, 90 Miss. 864, 44 So. 791. Therefore, between the dates of the payment of the overdue premiums and the dates they were due, there was no suspension of the insurance. That could have happened only by appellant taking advantage of the nonpayment of the premiums by refusing to accept them when tendered. It follows that on July 1, 1926, the policy had been in continuous force for more than three months, and that under section F of the "special provisions" of the policy, the five days of grace for payment of the premium due on that date had not expired, and, the insured having died within the five days of grace, the policy was in full force at the time of his death.

Appellant contends that, under section 3 of the "standard provisions" of the policy, the appellee was not entitled to recover the principal sum for the death of the insured, notwithstanding the fact that appellant accepted payment of the overdue premiums, because of the provision in said section that the "subsequent acceptance of the past-due premiums by the company, or by any of its duly authorized agents, shall reinstate the policy, but only to cover accidental injury thereafter sustained, and such sickness as may begin more than ten days after the date of such acceptance."

We do not agree with appellant's construction of that provision of the policy. The policy provides for the payment to the beneficiary, in case of the death of the insured, the principal sum of two hundred fifty dollars, a monthly accident indemnity of thirty dollars, and a monthly sickness indemnity of thirty dollars. The purpose of section 3 of the "standard provisions" of the policy was to provide that, where the appellant accepted past-due premiums from the insured, the indemnity for sickness should only become payable when such sickness began more than ten days after such acceptance, and that the accident indemnity should not become payable unless such accident should be thereafter sustained, and has no reference to the payment of the principal sum of two hundred fifty dollars in case of death of the insured. To illustrate, the first advance premium was due on May 1, 1926, and was not paid until May 6, 1926. If the insured had received an injury between those two dates, under the provisions of the policy he would not have been entitled to recover the monthly accident indemnity of thirty dollars, and he would not have been entitled to recover the monthly sickness indemnity of thirty dollars if such sickness had begun within ten days after the payment of, and acceptance by appellant, such overdue premium.

It follows from these views that the decree of the court below should be affirmed.

Affirmed.

PACK, J., took no part in this decision.