Wells v. Vermont Life Insurance

Roby, J. Appellant’s complaint consisted of three paragraphs, to each of which a demurrer for want of facts was sustained; refusing to plead further, a judgment was rendered against him, from which he appeals. It is averred in the first paragraph of the complaint that on December 2, 1893, he applied to appellee and received from it a life insurance policy of $2,000. A copy of the policy is filed with and made part of the pleading. It is further averred that upon the delivery of said policy appellant paid the first three annual premiums in one lump sum of $244.68; that the policy has never been assigned and has always been free from indebtedness. That after the payment of three annual instalments of premium, said policy provided that it might be surrendered and converted into a paid-up policy. That on February 11, 1899, he tendered it to appellee and demanded the issuance of a paid-up policy for $300, which tender and demand were refused and not complied with. That the policy is brought 'into court for the use of appellee, and that he is ready to surrender the same for a paid-up policy. The third paragraph is not different in substance from, the first. The second paragraph contains averments designed to excuse appellant’s failure to surrender the policy within the time therein stipulated and named. The facts thus added do not amount to- a charge of fraud or mistake, but consist of statements made by the agent prior to the acceptance of the written contract, in which, under the well known rule, previous negotiations were merged." Tlie provisions of the contract by reference to which the rights of the parties must be determined, are as follows: [622] “The Vermont Life Insurance Company, Incorporated 1868. In consideration of the agreement, statements and warranties contained in the application for this bond, which is hereby referred to and made a part of the contract, and of the payment in advance of $81.56, on delivery of this bond, and of the like payment thereafter, at the' office of the company, Burlington, Vt., before twelve o’clock, noon, on the 2nd day of December in every year* for the term of twenty years from the date hereof, hereby promises and agrees, within ten days after receipt and acceptance of satisfactory proofs of Hie death, during the continuance of this bond, and prior to the 2nd day of December, 1913, of •Jerome B. Wells, of Indianapolis, Ind., to pay -the principal sum, $2,000, at its office in the city of Burlington, Vermont, to Mrs. Golia Graves, sister, beneficiary, if living; if not, to the executors, administrators or assigns of the insured. nonforfeiture provisions: If the instalments are not paid when due this bond may he converted into paid-up insurance for the amounts stated below, which will be payable in the same manner and conditions as provided in the face of the bond. Guaranteed paid-up values of bond if surrendered to the company in accordance with its provisions. At end of year, paid-up values; at end of 3 years, $300 paid-np insurance. If the instalments are not paid as provided herein, then in every such case the company shall not be liable for the payment of the sum insured, and this bond shall cease and determine, excepting only, that after three or more annual instalments have been paid upon this bond it may be surrendered, provided it is freed from any indebtedness to the company at the time, within six months after default in payment, for a paid-up non-participating bond, subject to all the conditions and payable as provided in a table of values written herein.” The policy stipulates (1) for the payment of premiums; (2) for their payment on a day certain; (3) for forfeiture if they are not so paid. These stipulations stand on pre [623] cisely the same footing, and when appellant mdde default in the fourth annual payment the policy was no. longer in force. Klein v. New York Life Ins. Co., 104 U. S. 88, 26 L. Ed. 662; Forbes v. Union Central Ins. Co., 151 Ind. 89; Willcuts v. Northwestern, etc., Ins. Co., 81 Ind. 300. The fourth annual payment was due December 2, 1896; within six months after that time appellant could have demanded and would then have been entitled to. receive a paid-up policy or bond for $300. The tender and demand are alleged to have been made on February 11, 1899, and the question is whether at that time he was entitled to. the right which was admittedly his, within six months after default. The language of the policy is not ambiguous. It provides “That, after three or more instalments have been paid upon this bond, it may be surrendered, * * * within six months after default in payment for a paid-up non-participating bond.” The use of the word “may” implies and creates an option upon the part of the assured. In order to exercise that option it devolved upon appellant to surrender the policy within the time limited, as a condition precedent to the issuance of the paid-up bond or policy. Knapp v. Homeopathic, etc., Ins. Co., 117 U. S. 411, 6 Sup. Ct. 807, 29 L. Ed. 960; Hudson v. Knickerbocker Life Ins. Co., 28 N. J. Eq. 167; Universal Life Ins. Co. v. Whitehead, 58 Miss. 226, 38 Am. Rep. 322; Attorney-General v. Continental Life Ins. Co., 93 N. Y. 70; Coffey v. Universal Life Ins. Co., 7 Fed. 301; Sheerer v. Manhattan Life Ins. Co., 20 Fed. 886. In the following cited cases a different rule was declared: Chase v. Phoenix Life Ins. Co., 67 Me. 85; Montgomery v. Phoenix Life Ins. Co., 77 Ky. 51; Mutual Life Ins. Co. v. Jarboe, 102 Ky. 80, 42 S. W. 1097, 39 L. R. A. 504, 80 Am. St. 343; Manhattan Life Ins. Co. v. Patterson (Ky.), 60 S. W. 383, 53 L. R. A. 378. The decisions cannot be harmonized and the better reason is believed to be as above stated. [624] We do not decide that facts may not exist excusing the surrender of the policy within the time limited; the reverse is true. Coffey v. Universal Life Ins. Co., supra. But we hold that negligence and inattention are not a sufficient excuse for such failure. The demurrers were therefore correctly sustained. Judgment affirmed.