Gross v. Michigan Mutual Liability Co.

Chandler, J. On October 20, 1936, defendant issued a policy of insurance to plaintiff’s decedent, insuring against public liability and property damage claims arising out of tbe use of his automobile. Section 3 of the policy provides that defendant, “Does hereby insure the person named in item 13 of the declarations (hereinafter called the insured), in consideration and from date of payment of the entire annual premium stated in the declarations (unless otherwise provided), subject to all conditions and limitations hereinafter contained, against death, dismemberment, loss of sight or disability resulting directly by and independently of all other causes from bodily injuries sustained through external, violent and accidental means caused while the insured is riding in, either as driver or passenger or by being accidentally thrown from the automobile described in the declarations, for the amounts and in the manner as hereinafter provided. ’ ’ According to certain declarations attached to the contract, the policy period was to be from November 9,1936, to November 9,1937. The total premium of $39.45, plus service charges in the amount of $1.25, was made payable in five monthly instalments of $8.14 each, the first thereof 'becoming due on December 9, 1936. Item 13 of the declarations provided: “The emergency road touring and travel service and personal accident protection as provided in sections 2 and 3 of the policy become effective if a dividend or other credit is applied as indicated hereon or upon payment of the first premium payment herein specified.” *3 On December 3,1936, deceased met his death while driving the automobile described in the foregoing policy of insurance. Two days later, defendant was informed of the death, and requested to furnish forms for making proof of loss under section 3. Defendant refused to furnish the forms as requested and denied liability, stating that, ‘ ‘ our records indicate the premium on this policy was never paid to this office, and, therefore, the coverage on the preferred accident feature never went into effect. Begarding this section of the policy, the actual payment of premium must be made before the policy is effective.” Thereupon, this suit was instituted by plaintiff as administrator of the insured’s estate to recover the sum provided in section three for deceased’s accidental death. Following judgment for defendant and a denial of a motion for a new trial, plaintiff has taken this appeal. It is conceded that the first premium instalment had not been paid prior to the insured’s death, and that there was no “dividend or other credit,” within the meaning of this phrase as used in the declarations, that could be applied as a payment on the premium at the time of death. Plaintiff contends, however, that by a broader use of the term “credit,” section 3 of the policy was in effect at the time of the accident, and that the defendant had extended credit for the payment of the premium which kept all provisions of the contract in force from the beginning of the policy period as stated therein until the first premium instalment became due and payable on December 9, 1936. In support of this claim, plaintiff cites cases involving policies issued by mutual benefit associations, and in which it is held that a presumption of payment of the premium, or extension *4 of credit, arises from delivery of the policy. See Taylor v. Supreme Lodge of Columbian League, 135 Mich. 231 (106 Am. St. Rep. 392). Obviously, cases of this type are inapplicable here as the policy in question specifically reveals that the premium had not been paid, and makes provisions for payment thereof in instalments. We find no ambiguity existing relative to the effective date of section 3. Plaintiff’s elaborate argument attempts to distort the plain and unequivocal language of the contract. According to express provisions, section 3 was to become effective upon payment of the entire annual premium “unless otherwise provided.” It was otherwise provided in the declarations, forming a part of the policy, that this section should become effective upon payment of the first premium instalment. Adoption of plaintiff’s argument that a credit was extended and that section 3 thereby became immediately effective would nullify the foregoing plain provisions. It is apparent that credit was extended as to risks insured under section 1. There is nothing to indicate, however, that a similar arrangement was contemplated as to section 3. Contrariwise, actual premium payment was made a condition precedent before the insurance became effective. The judgment is affirmed, with costs to defendant. Wiest, Sharpe, and Potter, JJ., concurred with Chandler, J.