Wilkie v. New York Mutual Life Insurance

Walker, J., after stating the case: The original policy was filed in this Court for our inspection, and the decision of the case turns upon its true construction. The plaintiff contends that, as the policy was issued on 2 December, 1901, and as the two full premiums for two years had been paid, this carried the insurance to 2 December, 1903, and that by the terms of the contract the insurance was automatically continued from the latter date for two years and two months, which would carry it to 2 February, 1906, and, as the insured died on 26 January, 1906, the policy was in full force and effect at .the time of his death. The defendant, on the contrary, insists that the date from which the count of time must be made is 22 November, 1901, according to the stipulations of the contract and the notice to the insured, at the time of the delivery of the policy to him, that the insurance year would begin *518 22 November, which date, in 1901, was tbe beginning of the first insurance year; and that, this being so, the insurance, when extended according to. the contract, expired 22 January, 1906 — just four days before the death of the insured. As between these two contentions, we are with the defendant, and we think, therefore, that the Judge was right in his decision upon the case agreed. The policy provides that, if no request for paid-up insurance is made, the policy will automatically continue in force for two years and two months from the date to which premiums are duly paid. The question, then, is presented, To what date ha'd premiums been fully paid, under the terms of this policy ? Manifestly, as we read the contract, and in view of the law applicable to such cases, to 22 November, 1903. The premiums were payable in advance, and they had been paid, according to the facts agreed upon, for two full years. In view of the plain language of the policy, it can make no difference that the policy was not issued until 2 December, 1901. We find this provision in the policy: “This agreement is made in consideration of the sum of sixty-three dollars and sixty-six cents, the receipt of which is hereby acknowledged, and of the payment of a like sum on the twenty-second day of November thereafter, in every year during the continuance of this policy, until twenty full years’ premiums shall have been paid.” It is made perfectly clear that the parties intended to make 22 November the beginning of each insurance year and the date to which the advance premiums should be paid, when the clause just quoted is read in connection with a prior one in the policy, which is as follows: “This policy participates in the profits of the company as herein provided. If the insured is living on the twenty-second day of November, nineteen hundred and twenty-one, which is the end of the twenty-year accumulation period of this policy, and if the premiums have been duly paid to that date, and not otherwise, the company will then apportion to this policy its share of the accu- *519 nmlated profits, and the insured shall then have the option of one of the following five accumulation benefits.” It therefore appears that twenty annual premiums were required to be paid for the full time, and 22 November was expressly designated as the day of payment; that date, in the year 1921, was fixed as the end of the “twenty-year accumulation period of the policy”; and it is stipulated that, “if the premiums have been fully paid to that date, and not otherwise,” the company will then apportion to the policy its share of the accumulated profits, with any other benefit to which the -insured is entitled. If we accept the contention of the plaintiff that 2 December is the beginning of the insurance year, within the meaning of the parties to this contract, we are met by the positive and clearly inconsistent provision that the full term of the insurance will end 22 November, and that her share of the profits and the benefits under the policy shall then accrue to her as the beneficiary, if the premiums have been paid to that date. This provision is, of course, in conflict with the plaintiff’s contention, because, if the insurance became effective 2 December, 1901, and the insurance year was therefore to commence on that date and end on the corresponding date of each and every year thereafter, the full term would thereby be extended, contrary to the express provision of the policy, nine days, at least, beyond the date fixed for its termination. ■ A construction of the policy which will produce such a result is, of course, not admissible. Payment being required in advance, the premium paid when the policy was actually issued would run until the next pay day should come — that is, until 22 November, 1902. The fact that this would be ten days short of a full year from the date of the policy cannot be allowed to affect the case, since payments of premiums, being but parts of a fixed total, are not to be considered strictly as made for a full year, but as payments due on a particular day of the year. This question was directly presented in an action upon a policy worded substantially like the one now being con *520 strued, and the Court beld that the fact of the policy having been issued and the first premium paid on a day subsequent to the pay day did not change the due date of premiums as fixed by the express words of the contract. Bryan v. Insurance Co., 21 R. I., 149. The same point was similarly decided in Frazier v. Insurance Co., 108 N. W. (Minn.), 819. And so it is said, in May on Insurance (4th Ed.), sec. 400, at page 920: “When the policy itself covers a period antecedent to its date, and does not specify the contingency upon which it shall take effect, the date of the policy, or of its actual delivery, becomes of little or no importance in determining when the insurance takes effect.” The intention of the parties to make such a contract as is described in the passage just quoted seems to be apparent in every part of the written policy now under construction. There is another permissible view of this case, which leads us to the same conclusion we have already reached. The final clause in the policy recites that the insurance contract is made in consideration of the receipt of the first premium ($66.23), “and of the payment of a like sum on 22 November thereafter, in every year during the continuance of the policy, until twenty full years’ premiums shall have been paid.” What does the expression, “in every year during the continuance of the policy,” mean? Does it refer to the current year, commencing 2 December, the date of the policy, and the years succeeding, with the same date as their beginning, or does it refer to the succeeding calendar years — that is, to the year 1902 and the calendar years thereafter? Plainly, to the latter, for, if not, and the first construction should prevail, the second premium would fall due, not on 22 November, 1902, but on 22 November, 1903, that being the first day of that date after the full year beginning with 2 December, 1901, had expired, if the latter date is to be taken as the first day of the insurance year and the policy is kept in force, or the premium is in effect paid for a full year *521 thereafter, or to 2 December, 1902, there being no doubt that the premiums were payable 22 November, for it is so expressly stated in the policy. This would produce a direct conflict with the other explicit terms of the policy, and especially with the one which requires that the term or life of the policy shall expire when twenty full years’ premiums shall have been paid, or on 22 November, 1921, as specified in the policy, for then only nineteen premiums would be paid to the latter date. If 2 December is to be taken as the first day of the insurance year, the “twenty-year accumulation period” of the policy would not expire until 2 December, 1921, or ten days after the time so clearly designated in the contract. But the policy further provides that the insurance will continue automatically for two years and two months from the date to which premiums have been duly paid. This necessarily means the date when the premium which has not been paid falls due by the terms of the contract of insurance. The policy designates 22 November as the day of payment. There can be no mistake as to this being the fact. By what rule of construction applicable to any kind of instrument — will, deed or contract — can we change that date and substitute another later in the year, simply because the policy was delivered and the premium paid on the latter date ? That would be making a contract for the parties, which we are forbidden to do, and not merely construing one they have made for themselves. “The intention of the parties must be collected from the whole instrument and not from any detached portion of it, and greater regard is to be paid to their clear intent than to any particular form of words or to the phraseology by which they have undertaken to express it.” Clark on Contracts (2d Ed.), pp. 402, 403 et seq. It is true that words in a contract are to be construed against the party using them, if there is any ambiguity, and this rule applies with special force to insurance policies, which will receive that interpretation,' in cases of doubt, which is most favorable to the assured. Bray v. *522 Insurance Co., 139 N. C., 390. But all instruments should be construed reasonably, and, where the intention of the parties clearly appears, a contract will be interpreted so as to effectuate it. We are of the opinion, after a careful examination of the terms of this policy, that it was intended that the second premium should be paid on 22 November, 1902, and the others in succession on the same date of each year thereafter, until the full accumulation period of twenty years had expired. Any other construction would annul the plainly expressed provisions of the contract, subvert the leading idea of the parties in making the agreement, and destroy the computation adopted for adjusting and settling the rights and benefits accruing to the assured at the time unmistakably fixed by the policy. We find that there are many decisions sustaining our view, a few of which we will cite: Tibbitts v. Insurance Co., 159 Ind., 671; Thomas v. Insurance Co., 142 California, 19; Johnson v. Insurance Co., 143 Fed., 950; Frazier v. Insurance Co., 108 N. W., 819; Methvin v. Life Association, 129 California, 251; McConnell v. Providence Savings Society, 92 Fed., 769; Insurance Co. v. Patterson, 28 Ind., 17. AVe have not referred to the fact that the insured, Clarence Wilkie, accepted the policy with notice from the defendant of the initial day of each insurance year, because we have not found it necessary to do so in order to arrive at a conclusion as to the proper meaning of the contract. If he was thus notified, it would seem to have been nothing but right to return the policy if it was the Avrong date, and refuse to accept another Unless it conformed to the terms of the application made to the company. Passing to another point, it is true that thirty days of grace are allowed for the payment of any premium, if it should not be paid the day it is due. In Insurance Co. v. Meinert, 199 U. S., at p. 179, Justice Peckham, for the Court, says: “There can be no doubt that the premium did become due on *523 the 5th of March, and the thirty clays’ extension simply permitted a payment within that time to save a forfeiture.” It did not change the due date of the premium, but was no more than an act of grace or favor on the part of the company to the insured. "When a premium is paid, the date to which it is paid, within the meaning of the policy, is the day on which the next premium will be due, as fixed by the terms of the contract, and this was 22 November, as we have said. The clause allowing days of grace was inserted merely to prevent a forfeiture by extending the time of payment, and the additional period, or the time of the extension, is not covered by the last premium paid. If there had been a default in payment on the day named in the contract, and the premium should thereafter have been paid within the thirty days of grace, -it would have saved the insurance; but if the days of grace should be given the effect of adding thirty days to the insurance year, instead of merely preventing a forfeiture, there would necessarily follow a disarrangement of the entire scheme of insurance, as evidenced by the policy. This is made clear, too, by the very terms of this policy, distinguishing between the due date and the day upon which the extension of credit or time of grace expires, and requiring interest to be paid for the time of extension. The distinction is also recognized in the following clause of the policy: “If any premium is not paid on or before the day when due, or within the month of grace, the liability of the company shall be only as hereinbefore provided for such a case.” Each premium, therefore, is paid to the next due date, and not to the day on which the month of grace may end. The plaintiff relied mainly on McMaster v. Insurance Co., 183 U. S., 25, but that case will be found, upon examination, to be materially different from the case at bar in several respects. One essential difference is that the company alleged that the policies of McMaster were dated 12 December, 1893, which was the day he agreed should be the first of the insur- *524 anee year, when, in fact, they were dated 18 December, 1893, the day on which they were actually issued, and the application of McMaster for the insurance expressly stated that they should not be in force until actual payment and acceptance of the premiums; and it further appeared that it had been orally agreed between the company’s agent and McMaster that the premiums should be payable annually- — that is, at the end of each insurance year, which, by the terms of the application, commenced with 18 December, 1893. The Court held that 'McMaster was not estopped to show these facts by reason, even, of the explicit requirement of the policy that the premiums should be paid 12 December of each year, as the day of payment had been antedated by the fraud of the company’s agent, and in violation of the agreement. It further appeared that the agent represented to McMaster that the payment of a year’s premium in full would secure to him a contract of insurance for thirteen months from the payment of the premium. The Court, in discussing this feature of the case, said, by Qhief Justice Fuller: “We are dealing purely with the question of forfeitures,” and it was accordingly held that, as the payment of the first premiums insured McMaster for thirteen months by virtue of his agreement with the agent, by which the company was bound, the next premium was not due until 18 December,' 1894, and, as McMaster died 18 January, 1895, within the month of grace, the policies were in force at the time of his death, and the plaintiff was entitled to recover. The two cases are radically different. One involved simply the question of forfeiture, and was dependent for its decision upon the alleged agreement and fraud of the company’s agent in connection with the terms of the application, all of the facts upon these controverted matters having been found in favor of the plaintiff; while in our case the application was not in evidence, and there was no agreement established between the agent and the insured which altered the contract, as expressed in the policy. There are other dif *525 ferences, more or less important, but which need not be noticed. Indeed, we think that the reasoning of the learned Chief Justice in that case clearly sustains our construction of the policy .upon which this suit was brought. Besides the cases we have cited in support of our rulings, a recent decision upon facts substantially identical with those in this case sustains our view of the law. Insurance Co. v. Stegall, 58 S. E. Rep. (Ga.), 79. The policy of the plaintiff’s intestate was not in force at the time of his death, and the court below, therefore, rendered the proper judgment upon the case agreed. Affirmed.