The opinion of the court was delivered by: KNIGHT
A policy of life insurance in the sum of $5,000 was issued to Robert C. Moreau on April 27, 1926. Plaintiff was the beneficiary therein named. Insured died August 24, 1932. The question at issue is whether such policy of insurance lapsed for nonpayment of the premium.
The application for the insurance was dated April 18, 1926. It states that the first premium had not been paid, and also contains this provision: "I understand and agree: (1) that if I shall not have paid the amount of the premium on the insurance herein applied for to the company's agent at the time of making this application, such insurance shall not be in force until the approval of this application by the company at its Home Office, the payment of the first premium as required therein, and the delivery of the policy to me or my agent during my lifetime; and that thereupon said policy shall be considered as having become effective upon the date stipulated in the policy as the date on which the insurance begins."
The application also contained this question and answer: "How do you wish to pay the premium? A. C -- Quarter-annually in advance." The following provision appears in the policy: "Premium, if payable quarterly, $46.15 upon delivery of this policy and like amount on the 21st day of each July, October, January, and April thereafter." The policy also specified that the premiums were payable in advance, and, if any premiums were not paid before the expiration of the grace period, the policy would lapse, provided there were no provision for automatic payment applicable. The grace period was therein fixed as 31 days after any premium, except the first, became due. The face of the policy bears this indorsement: "Policy year and interest begin April 21, 1926."
It is conceded that under certain provisions of the policy the defendant is liable to the plaintiff in the sum of $1,261.94. Defendant denies liability in any other amount.
On July 6, 1932, defendant mailed insured a notice stating that the due date of the next quarterly premium was July 21, 1932. This notice also contained the statement that the policy would be forfeited and become void, if such premium were not paid by or before such due date, or within the grace period of 31 days. Plaintiff claims that on August 24, 1932, plaintiff mailed a check for the amount of the aforesaid premium to defendant's agent at Lawrence, Mass. Insured died on the last-mentioned day. The check was dated August 20, 1932, and it was received by the defendant's agent and credited to plaintiff prior to the agent's knowledge of insured's death. A telegram was sent to defendant's agent advising him that the premium check had been mailed, and requesting that the policy not be lapsed. The agent, then unaware of insured's death replied, that he "would take care of the policy" if the check were received. There were no funds in bank to meet the check when issued. Such funds were made available after insured's death.
Plaintiff seeks to support her cause of action on several contentions.
It is claimed that defendant company waived the forfeiture for nonpayment of premium in question. The basis for this is the claim that the general agent of the company had repeatedly waived delayed payments of premiums on this policy and kept the policy in force. The only proof of the payment of any premium after the expiration of any grace period, except the premium in question, is as regards the premium due, as claimed by the defendant, on April 21, 1932. That premium payment was tendered May 23, 1932. Defendant refused to accept it until an application for reinstatement had been made and accepted. Such application was executed June 1, 1932, and it contains a recital that the policy lapsed for nonpayment of premium due April 21, 1932. There is plenty of authority for the proposition that an insurance company may do or fail to do certain things which constitute a waiver. There was, however, nothing in connection with the payment of the April premium which amounts to a waiver. The requiring of an application for reinstatement refutes the claim that there was any waiver. Thompson v. Knickerbocker Life Ins. Co., 104 U.S. 252, 26 L. Ed. 765; Smith v. New England Mutual Life Ins. Co. (C.C.A.) 63 F. 769; Columbian National Life Ins. Co. v. Morey (C.C.A.) 26 F.2d 580.
It is also claimed that the acceptance of the check dated August 20, 1932, and the communication from defendant's agent stating that the premium would not be lapsed on receipt of the check, constitute a waiver of forfeiture. Since defendant then had no knowledge of insured's death, a waiver cannot be predicated on the communication. Horstmann v. Capital Life Ins. Co., 194 Mo. App. 434, 184 S.W. 1164; 2 May on Insurance, § 566, p. 1205; Bliss on Life Insurance, § 190. In refutation of any intention to waive, it appears that the premium paid was promptly tendered back. Again, the agent had no authority to waive. The policy specifically provided that it could not be modified or altered without the approval of certain of defendant's officers. The agent was not included in such officers. In default of knowledge that the agent was exceeding his authority or acquiescence in practice of permitting waivers, no waiver could be shown. Conway v. P.M.L. Ins. Co., 140 N.Y. 79, 35 N.E. 420. The contention that the defendant has waived forfeiture cannot be sustained.
Plaintiff claims that there is ambiguity in the insurance policy as to the date of the commencement of the premium payment period, and that such ambiguity is to be resolved in favor of the further contention that such period began April 27, 1926, the date of the execution of the policy.
Life insurance is a contract whereby the insured agrees to pay certain sums, called premiums, at specified times, and in consideration thereof the insurer agrees to pay certain sums of money on certain conditions and in specified ways. The terms of such contract are quite uniformly prepared with great care by the insurer and with the purpose to protect its interest in all reasonable ways. The insured usually has not the opportunity to learn every detailed provision of a policy. He depends largely upon the integrity and fair dealing of the insurer. Under such conditions it is sound law that construes the policy "liberally in favor of insured and strictly against the company." 32 C.J. 1152 and cases cited.
The application provides that the insurance shall "not be in force" until the approval of the application, payment of premium, and delivery of policy -- in case the first premium does not accompany the application. The indorsement on the policy says the policy year and insurance begin at a date prior to the approval of the application, payment of premium, and delivery. The indorsement might have been made applicable to any date of or after approval. The application further reads that it "shall be considered as having become effective upon the date stipulated in the policy as the date on which the insurance begins." The application is incorporated in the policy as part thereof. Construing "in force" and "become effective" as having the like meaning, there is ambiguity. Upon the proofs in the case, however, there is not such ambiguity as justifies the construction claimed on behalf of plaintiff.
My reasons for this conclusion are:
(1) In the application, deceased asked the privilege to pay the premium ...