Court Opinion

ID: 3534217
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:47:04.886138+00
Date Added: 2024-06-11T14:20:46.480138
License: Public Domain

DISSENTING OPINION.
I am unable to concur in the opinion written herein by our worthy and able commissioner because I believe the opinion construes into our nonforfeiture statutes a meaning and a purpose not expressed by the Legislature. Also because the opinion, as I view it, fails to construe the policy herein liberally in favor of the insured, but on the contrary construes both the policy and the nonforfeiture statutes most favorably to the insurer, thereby in this respect conflicting with numerous decisions of our Supreme Court.
It will be observed that our commissioner's conclusion is based upon the decision in Cleaver v. Central States Life Ins. Co. (Mo.), 142 S.W.2d 474, which he regards as having overruled Fletcher v. Metropolitan Life Ins. Co. (Mo. App.), 137 S.W.2d 621, and as having approved Smith v. Equitable Life Assur. Soc.,232 Mo. App. 935, 107 S.W.2d 191, both last-named cases having been decided by this court before the Cleaver case was decided by the Supreme Court. It will be noted that, although the Fletcher case, supra, was cited in the briefs in the Cleaver case, it was not mentioned in the Cleaver case opinion.
As I see the problem, there are important differences in the terms of the policy in the case at bar and the policy in the Fletcher case, supra, on the one hand and the policies in the Smith and Cleaver cases, supra, on the other. The cases named are the main cases around which the contentions of the parties herein revolve. In the Smith and Cleaver cases there were language in the policies which was clear, positive and unambiguous, specifically excluding double indemnity if death should occur after default in premium payment.
In the Smith case, supra, option (c) of the policy promised "to continue the insurance for its face amount . . . as paid-up extended term insurance for the period shown in the opposite table . . . but without . . . double indemnity . . ." (Emphasis ours.) Opposite option (c) in the policy in said case was the table referred to therein showing plainly the number of years and months the policy should be continued as paid-up extended term insurance "without double indemnity" after the policy had been in force for a given period of years short of maturity. By the insured's failure to pay a certain premium when due, option (c) of the policy automatically went into effect "for its face amount" as paid-up extended term insurance, but, in accordance with the specific language of the policy, "without double indemnity."
In the Cleaver case, supra, the policy itself contained on its face a definition of "face amount" by promising to pay upon receipt of due proof of death of the insured "the sum of $10,000which is the face amount hereof." Furthermore, the policy in the Cleaver case specifically provided for the exclusion of double indemnity for accidental *Page 599 
death in the following language: "The additional sum payable in the event of the accidental death of the insured shall be due if the Company receives due proof that such death occurred duringthe premium paying period before default in the payment of anypremium . . ." (Italics ours.)
By the provision in the policy in the Cleaver case for the payment of the additional sum or double indemnity if accidental death should occur "during the premium paying periods," a clear distinction was made between such a death occurring at such a time and such a death occurring during the extended insurance period, thereby specifically, positively and without any doubt excluding, in so far as the policy was concerned, benefits for accidental death during such extended insurance period. The policies in the Smith and Cleaver cases were therefore entirely different from the policy involved in the case at bar and the policy involved in the Fletcher case.
In the Fletcher case, supra, the language in the policy was: "While this policy is in force and while premiums are not in default beyond the grace period specified in the policy, the Company will pay, in addition to any other sums due under this policy and subject to the provisions of this policy, an accidental death benefit equal to the face amount of insurance then payable at death." The language of the policy on this point in the case at bar is identical with the language in the Fletcher case, supra. It will be noted that, while in the Smith and Cleaver cases, supra, there is language which excludes double indemnity if the accidental death of the insured should occur at a time clearly and unambiguously stated, no such definiteness and clarity appeared in the language of the policies in the Fletcher case and the case at bar. The language in the policy in the case at bar as well as in the Fletcher case, namely, "while this policy is in force and while premiums are not in default beyond the grace period," does not constitute a clear, unequivocal and unambiguous exclusion of double indemnity. It cannot accurately be said that the policy was not "in force" after premiums due were not paid by the insured because, upon such nonpayment of premium, the nonforfeiture statutes brought into effect the extended insurance, thereby keeping it "in force." Those statutes are read into every such policy whether stated therein or not. [Cleaver case, supra, l.c. 478.] It is argued by the defendant herein that the policy "lapsed" upon default in premium payment. There was not in any true sense of the word a "lapse" of the policy herein because it was still "in force" by virtue of extended insurance under the nonforfeiture statutes. The premiums then were being paid as a net single premium out of the net value reserve fund belonging to the policyholder. [Westerman v. Supreme Lodge K. of P., 196 Mo. 670, 712, 94 S.W. 470.]
The term "lapse," as used by defendant in its arguments herein, comes down from the days preceding our nonforfeiture statutes. *Page 600 
Such a term may have been properly used before our nonforfeiture statutes were enacted, but it does not now correctly describe the status of a policy running on extended insurance under such statutes. While there may be a failure of the insured to pay the amount of a premium due, a "lapse" of the policy does not then occur. There cannot really be a "lapse" in such a policy since the time our nonforfeiture statutes were enacted until the period of extended insurance purchased by the net single premium, coming from the accumulated reserve on the policy, has expired. The very purpose and motive of the Legislature in enacting such statutes was to avoid and defeat forfeitures. Our Supreme Court, quoting with approval from an opinion by Judge THAYER in Mutual Reserve Life Ins. Co. v. Roth, 122 F. 853, said:
"The Legislature intended to secure the policy-holders the benefit of the reserve on their policies if they had paid `two full annual premiums,' and not permit the reserve to be forfeited or appropriated by the insurer. It is a well-known fact that the forfeiture of such reserve values for non-payment of premiums had become a source of great profit to insurance companies, because the premiums which they were in the habit of exacting from the insured on life policies were so fixed as to be considerably in excess of the cost of simply carrying the risk from one annual period to another so as to accumulate a reserve. The Legislature deemed it inequitable to deprive the insured of the benefit of payments which he had actually made." [Westerman v. Supreme Lodge K. of P., 196 Mo. 670, 713, 94 S.W. 470.]
The Legislature did not say that the extended insurance provided for in the statutes was to be applied only to straight life insurance. It takes elaborate and involved argument to "construe" such a meaning into them. Such argument is not convincing. Surely, if the Legislature intended to limit the protection of its nonforfeiture enactments to certain kinds of insurance only and exclude others it would have plainly said so. No amount of argument can supply what the Legislature did not say. When we find as here a clause using the phrase "while this policy is in force and while premiums are not in default" as the only language descriptive of the time of the accidental death for which the double indemnity will be paid, I think there is ambiguity in the policy.
I believe there is a substantial difference between the language in the policy in the Cleaver case on the one hand and the Fletcher case and the case at bar on the other which not only justifies but calls for a conclusion different from that reached by our commissioner. This view is strengthened when it is considered that in the Fletcher case, which held there was ambiguity in the policy therein, certiorari was applied for but was denied by the Supreme Court. Moreover, although the Fletcher case was called to the attention of the Supreme *Page 601 
Court in the briefs in the Cleaver case, the court did not even mention the Fletcher case in deciding the Cleaver case. Of course, denial of certiorari does not necessarily mean approval of the opinion attacked, nevertheless the court thus had two opportunities to disapprove the Fletcher case but did not do so. I think I may without impropriety suggest that the reason the court did not mention the Fletcher case in deciding the Cleaver case was that the two cases were regarded as being so unlike that no discussion was deemed necessary.
In the Fletcher case this court confined itself strictly to the case before it and held that, since there was no clear and unambiguous exclusion of double indemnity, any doubt as to the meaning of the language used should be resolved in favor of the insured and against the insurer, thus following the long-established rule laid down and followed by our Supreme Court and the Courts of Appeals in this State for many years, and that under the nonforfeiture statutes the policy remained "in force" for both kinds of benefits promised therein. In the Fletcher case this court did not attempt to pass upon whether or not a clear and specific exclusion of double indemnity in such a policy would have been in violation of our nonforfeiture statutes, sometimes called extended insurance statutes. In that case we were not required to discuss that question because we found there was no such exclusion, and there was no decision of our Supreme Court at that time disallowing the double indemnity where the death occurred while the policy was running on extended insurance, the Cleaver case not having then been decided. We therefore held that the nonforfeiture statutes extended the insurance not only for the single indemnity but also for the additional or so-called double indemnity, it having been conceded therein that the insured had died through accidental means.
It must not be forgotten that the Supreme Court in the Cleaver case itself followed and applied the rule of liberal construction in favor of the insured. The court in that case did not deny the double indemnity. On the contrary, it allowed such indemnity under the above-mentioned rule of liberal construction. It is true the court, by way of incidental discussion, did say that "if" the automatic loan provision should be found to be invalid under the Missouri nonforfeiture statutes, then Cleaver's insurance became temporary term insurance, and that "the double liability agreement terminated when such extended insurance began." The court then cited the Smith case, supra, and Valenti v. Prudential Ins. Co., 71 F.2d 229, but did not discuss the point any further than the statement last above quoted. It must be remembered, however, that the court did not reach the conclusion that the automatic loan provision was invalid. The hypothetical "if" situation referred to was not present. On the contrary, the court reached the opposite conclusion, namely, that the automatic loan provision was valid and that the whole policy, including *Page 602 
the double indemnity agreement, remained in force. It is thus apparent that the Cleaver case was not decided upon the point which the defendant company in the case at bar claims it was. The precise points of the decision in the Cleaver case were that the automatic loan provision was valid; that there was no default of premium on the policy; that it never became subject to commutation to term insurance, but that all of its terms and agreements remained in full force and effect; and that the plaintiff therein was entitled to recover the accidental death insurance sued for.
The statement by the court in the Cleaver case, made in incidental discussion, that "the double liability agreement terminated when such extended insurance began," has been seized upon by defendant company and constitutes the foundation of its contention herein, but it is not in my opinion a sufficient basis to say that the court intended thereby to "construe" for the first time into our nonforfeiture statutes without any further discussion of this tremendously important question, a meaning and purpose on the part of the Legislature to permit insurance companies to issue policies of insurance promising double indemnity for death by accidental means and to escape performance of such promise where such death occurs while the policy is running on extended insurance. I believe I am justified in saying that the Supreme Court did not intend so to hold because the court did not discuss that question at all. The Supreme Court itself has held that a Court of Appeals is not bound to follow incidental discussions in a Supreme Court opinion. [State ex rel. Anderson v. Hostetter et al. (Mo.), 140 S.W.2d 21, 24.] Furthermore, in view of the undeviating position taken by our Supreme Court for many years on the question of ambiguity in insurance policies and the construction of statutes relating thereto, I think it is not improper to venture the view that when that court comes to consider fully such question for final decision, it is not likely to read into the nonforfeiture statutes anything which is not clearly expressed therein by the Legislature.
The defendant company in the case at bar presents an extended argument giving its interpretation of the meaning and purpose of Section 5852, R.S. Mo. 1939, of our nonforfeiture statutes, especially that part thereof which provides that the amount of temporary (extended) insurance "shall be such as is specified in the policy but never less than the face amount insured by the policy reduced by the unpaid portion of notes and indebtedness aforesaid." The insured, of course, did not have the benefit of such extended argument when the announcement was issued to him by the company which undoubtedly led him to believe he was getting an addition to his policy which would pay his beneficiary double indemnity in case of his death by accidental means at any time while the policy was "in force." Neither did the insured have the slightest knowledge of the *Page 603 
actuarial difficulties presented at length by defendant in its briefs herein with respect to carrying death benefits on extended insurance for death by accidental means. That was a matter of internal management of the company with which the insured was not concerned and not responsible for.
I think it is unnecessary for me to prolong this opinion to discuss the meaning and purpose of Section 5852, supra. It is sufficient to say I am in agreement with the separate opinion written by Presiding Judge HUGHES on that question, although I do not concur in the conclusion he reached. He concluded that under the Cleaver case we are required to reverse the judgment herein, whereas I think that case is distinguishable from the case at bar. The reasoning in Judge HUGHES' opinion on the meaning of Section 5852, supra, is in harmony with and gives effect to the language used by the Legislature in Section 5854, Revised Statutes, Missouri, 1939, as follows:
"If the death of the insured occur within the term of temporary insurance covered by the value of the policy as determined in section 5852, and if no condition of the insurance other than the payment of premiums shall have been violated by the insured, the company shall be bound to pay the amount of the policy, the sameas if there had been no default in the payment of premium,anything in the policy to the contrary notwithstanding . . ." (Italics ours.)
If the terms of the policy in the case at bar were not distinguishable from the terms of the policy in the Cleaver case, I would, of course, be bound under the constitution and my oath of office to concur in our commissioner's opinion and follow the decision in the Cleaver case, a duty which I would cheerfully and without hesitation or reservation perform regardless of any individual opinion I might entertain. However, I believe there is a clear distinction on the facts between the Cleaver case on the one hand and the Fletcher case and the case at bar on the other. As I have pointed out, the Cleaver case was definitely decided on the question of the validity or non-validity of the automatic loan provision contained in the policy and not on any language in the nonforfeiture statutes. The court upheld the loan provision therein and ordered the double indemnity for accidental death to be paid. In making that clear decision, the court, in passing, made the hypothetical remark heretofore quoted but did not discuss the language, meaning, purpose or history of the nonforfeiture statutes at all. It therefore seems clear to me that the court did not intend by such brief remarks to pass upon the nonforfeiture statutes and determine for the first time their meaning, purpose and application in connection with such a contention as is made by the defendant company in the case at bar.
When we consider the language and history of our nonforfeiture statutes, it seems to me to be crystal clear that the Legislature had in mind one supreme purpose in the enactment thereof as well as in *Page 604 
making subsequent amendments, and that was to protect policyholders against forfeitures of their insurance by extending the period of insurance after a policyholder's failure to pay premiums when due. This was accomplished by requiring that a portion of the net value or accumulated reserve of the policy, which belongs to the policyholder and not to the company (Westerman case, supra), be used to keep the policy "in force" for such period of time as said value taken as a net single premium will purchase. The Legislature said nothing whatsoever about any distinction between "straight life insurance" and "insurance for accidental death" or "death by accidental means."
Notwithstanding the fact that the Legislature's deliberate purpose in enacting such laws was to avoid and defeat forfeitures, we are urged by defendant herein to hold, in effect, that the lawmaking body intended to make such "non-forfeiture" statutes become "forfeiture" statutes with respect to insurance for death by accidental means. I cannot see my way clear to adopt such a view. The argument of defendant that, under the construction of the statutes urged by it, the period of extended insurance for death other than by accident would be lengthened by cutting off the accidental death benefit is in my opinion beside the point. The answer to such contention is that the Legislature did not so provide, and that was and is a matter of legislative policy solely within the province of that body. Furthermore, such a construction would result in a "forfeiture" of the accidental death benefit and thereby defeat the very purpose of the Legislature in enacting the "nonforfeiture" statutes. If the statute presents actuarial difficulties or works hardship on insurance companies with respect to accident insurance, the remedy is for the Legislature and not for the courts.
Candor requires that I should say I concurred in the Smith case opinion written by our worthy Commissioner, but the passage of time and the advent of this case before us have afforded opportunity for further study of the questions involved, as a result of which I feel compelled to take a different view.
I regret to say that, as I view it, the opinion of our commissioner in the case at bar is in error in construing the nonforfeiture statutes. Also it has inadvertently failed to follow the long-established rule laid down by our Supreme Court to the effect that insurance policies contained doubtful or ambiguous terms must be construed liberally in favor of the insured and against the insurer, and is therefore in conflict with State ex rel. Security Mutual Life Ins. Co. v. Allen et al.,305 Mo. 607, 613, 267 S.W. 379; Henderson v. Massachusetts Bonding  Ins. Co., 337 Mo. 1, 84 S.W.2d 922, as well as the Cleaver case, supra, and many other cases unnecessary to set forth here.
For the reasons given, I dissent from the opinion of our commissioner *Page 605 
and request that the cause be certified to the Supreme Court so that it may express its authoritative views on this important question to guide us in future similar cases.