Court Opinion

ID: 8874223
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:46:11.368353+00
Date Added: 2024-06-11T17:06:17.102418
License: Public Domain

Niemeyer, P. J., dissents. The Supreme Court has not passed on the question presented on this appeal-. The majority opinion cites Appellate court cases involving life policies and one combined life and accident policy. Only Stramaglia v. Conservative Life Ins. Co. of Wheeling, West Virginia, 319 Ill. App. 20, involved the lapsing of a policy. In none of the other cases except Rogers v. Western & Southern Life Ins. Co., 280 Ill. App. 547 (a combined .life and accident policy), had the policy become effective. In the latter case the .court held, under the facts and circumstances in evidence and “in the absence of a provision stating the precise date on which the policy should go into effect,” that the parties intended that the policy should become effective on delivery. The policy before us is for abcident and health insurance. The statute (Illinois Insurance Code, Sec. 356) prohibits the issuance or delivery of an accident or health policy “unless the time at which the insurance théreunder takes effect and terminates is stated in a portion of the policy preceding its execution by the insurer.”-.There is no similar provision in the code in respect: to any other class of insurance. It was clearly the intent of the legislature thát the dates required to be stated in the particular portion of the policy specified in the foregoing section should be for all purposes the dates at which the policy took effect and terminated, notwithstanding other provisions of the policy or application. Any other construction would permit the parties to defeat the purpose of the legislature and nullify the statute. It is well settled that where the legislature has prescribed a statutory form of policy, any provisions to the contrary in the policy contract are ineffective. Gudinas v. Globe Mutual Life Ins. Co., 248 Ill. App. 232; Trust Co. of Chicago v. Iroquois Auto Ins. Underwriters, Inc., 285 Ill. App. 317, 323; Heim v. American Alliance Ins. Co., 147 Minn. 283; Maryland Casualty Co. v. American Lumber & Wrecking Co., 204 Minn. 43. In accordance with the statutory mandate, the policy herein recites on the first page, preceding the date of the execution of the policy and the signature of the president of the insurer, that “it takes effect on the 12th day of December, 1945, and continues in effect until the 12th day of December, 1946; and until the Insured becomes sixty years of age he shall have the right to renew this policy for further consecutive periods by the payment in advance of the Annual renewal premium of $215.16.” It was executed December 17, 1945, and delivered on or before December 31, 1945. It was reissued under date of February 11, 1946, without change of the dates at which it became effective and terminated, in order to incorporate additional benefits in the nature of a hospital supplement applied for by the insured January 6, 1946. Plaintiff, a business executive, accepted the policy and paid three premiums. In the absence of fraud and mistake — and none is charged — both parties were bound by the terms of the policy requiring payment in advance of the annual renewal premium on December 12th, or within the 31-day period of grace thereafter. Rose v. Mutual Life Ins. Co., 240 Ill. 45; Forch v. Western Life Indemnity Co., 157 Ill. App. 244; Soucie v. Illinois Agricultural Mut. Ins. Co., 323 Ill. App. 456; Mutual Life Ins. Co. v. Hurni Packing Co., 263 U. S. 167; Metropolitan Life Ins. Co. v. Jankowski, 285 Mich. 291. If the provisions of the statute be disregarded, the time of payment of the annual premiums will not be changed. The majority opinion, following the Stramaglia decision (319 Ill. App. 20), is based on a supposed conflict between the statement in the policy that it is in force from December 12, 1945, until December 12, 1946, and plaintiff’s agreement in the application that the policy shall not take effect until delivery and payment of the first premium. There are no other Illinois decisions to this effect. In Forch v. Western Life Indemnity Co., 157 Ill. App. 244, this court, citing Rose v. Mutual Life Ins. Co., 240 Ill. 45, held that the provision of the policy as to the date of payment of the premium prevailed over the provision that the policy should not take effect until payment of the first premium. In Monahan v. Fidelity Life Ins. Co., 242 Ill. 488, the court held that the incontestable clause ran from the date of the policy and not from the date of delivery a month later. The court did not hold that there was a conflict between the two clauses, but said that if the clauses were in conflict the first provision as to the date of the policy would prevail, being more favorable to the insured. In Weber v. Prudential Ins. Co., 284 Ill. 326, the court held (contrary to the holding of the Appellate court, 208 Ill. App. 117) that the insurance would have been effective and the contract completed without delivery of the policy if the first premium had been paid and the application accepted before any change in the health of the applicant. In that case the application provided that the policy should not take effect until it was issued and delivered and the first premium paid while the applicant was in the same condition of health as described in the application. By the greater weight of authority the date mentioned in the policy for the payment of premiums prevails. Many cases expressly hold that there is no conflict between provisions fixing a definite day as the effective date of the policy and for the payment of premiums, and provisions that the policy shall not take effect until delivery and payment of the first premium, etc. As stated in New York Life Ins. Co. v. Silverstein, 53 F. (2d) 986 (C. C. A. 8th Cir.): ‘ ‘ There is no real inconsistency between these above-quoted provisions in the policy and the provision in the application to the effect that the policy should not take effect until its delivery and the payment of the first premium. The policy definitely provides that the premiums following the first shall be due on definite dates, or at the expiration of definite periods. These contract provisions must control.” (Citations.) In Travelers Ins. Co. v. Wolfe, 78 F. (2d) 78 (C. A. A. 6th Cir.), certiorari denied, 296 U. S. 635, the court said: “There is no conflict between this provision and the provision in the application. Bead together, they mean that the contract shall not take effect unless the first premium is paid while the insured is in good health, but that when it does take effect it operates from the date stated therein. This is the ordinary connotation of the terms used, and we see no occasion for giving them a strained construction.” In Shira et al. v. New York Life Ins. Co., 90 F. (2d) 953 (C. C. A. 10th Cir.), the holding was that “The provision in the application (as to delivery, etc.,) does not fix the effective date of the insurance contract. It simply imposes a condition precedent to the taking-effect of the insurance coverage.” (Citations.) When the day of delivery is the effective date of a policy the insurance is thrown into doubt and uncertainty by leaving the term to depend upon oral testimony. Rose v. Mutual Life Ins. Co., supra. In a well considered opinion in which many authorities are cited, the court in Pladwell v. Travelers’ Ins. Co., 134 Misc. 205, 234 N. Y. Supp. 287 (affirmed in 225 App. Div. 663, 231 N. Y. Supp. 856), quoted from McCampbell v. New York Life Ins. Co., 288 Fed. 465 (C. C. A. 5th Cir.), certiorari denied, 262 U. S. 759, as follows: ‘ ‘ The time when a premium is due should be definite, and that cannot be if the date upon which the first premium was in fact paid should fix the dates upon which subsequent premiums should be paid. Therefore the date mentioned in the policy for the payment of premiums governs. The date when the first premium was paid, which is almost always uncertain, and in most instances impossible of ascertainment, is immaterial. ’ ’ Among the cases cited in the McCampbell case, is Forch v. Life Indemnity Co., 157 Ill. App. 244. See also Timmer v. New York Life Ins. Co., 222 Ia. 1193; McKenney v. Phoenix Mut. Life Ins. Co., 138 Wash. 315; Wolford v. National Life Ins. Co., 114 Kan. 411; Fish’s etc. v. Massachusetts Mut. Life Ins. Co., 278 Ky. 492; and Kansas City Life Ins. Co. v. Harper, 90 Okla. 116. The holding of these cases that the date mentioned in the policy for the payment of premiums governs, is the construction the parties placed on the policy before us. The insurer issued receipts for premiums payable on December 12th and refused to accept payment after the expiration of the 31-day period of gracé in January, 1949. The insured paid the second and third premiums by checks dated January 11, 1947 and January 12, 1948, respectively. He accepted without protest receipts stating the payments were for premiums due December 12th of the respective years. After rejection of his January 1949 payment he applied for reinstatement. He did not take his present position until the insurer insisted upon an answer to a question in the application which he had left unanswered. It is purely an afterthought. Construction by the parties is of great aid in determining what they intended (Walter v. Sohio Petroleum Co., 402 Ill. 33), and may be controlling. Nelson v. Colegrove & Co. State Bank, 354 Ill. 408. It should control in this case. The insured is not uneducated and unfamiliar with business transactions. He is an experienced business executive, aided in his insurance transactions by experienced insurance men of his own selection. The lapse of the policy was due to a mistake or oversight of his agents. There are no equities in his favor. There is no basis in the evidence for the court’s finding that defendant waived prompt payment of premiums on two occasions. The evidence shows without contradiction that the payments of the second and third premiums were made by checks dated January 11, 1947 and January 12, 1948, respectively, and that defendant dated its receipts on the day they were sent to the insured, one to five days after actual receipt of the payment. The burden of proving waiver is on the plaintiff. The judgment should be reversed and the cause remanded for entry of a judgment in accordance with the views expressed herein.