Opinion
No. 28441.
September 16, 1952. Rehearing Denied October 17, 1952.
APPEAL FROM THE CIRCUIT COURT, CITY OF ST. LOUIS, WILLIAM H. KILLOREN, J.
Sluggett Sluggett, and John T. Sluggett, III, St. Louis, for appellant.
Shifrin Shifrin, and Louis Shifrin, St. Louis, for respondent.
This is a suit on two fire insurance policies issued by defendant to cover household furniture which was destroyed by fire on December 11, 1950. The controversy was submitted on an agreed statement of facts to the trial court, which found for defendant and plaintiff appealed. For convenience, designation of the parties below will be followed here.
The plaintiff assigns as error (1) that non-payment of premiums is an affirmative defense and this was not pleaded in defendant's answer; (2) that the policies were in full force and effect at the time of loss.
Defendant asserts that its defense is not based on non-payment of premiums with consequent lapse of policies, but that under the very terms of the policies themselves recovery is barred.
Stipulation of facts filed by the parties below admits the issuance of the policies, the loss by fire, demand and refusal to pay, and includes, among other things, Exhibits A and B, the policies in question, which provide for payment of the original premium
"Before the date hereof and thereafter the payment of a like premium in advance on or before Monday of each week hereafter as renewal premiums * * *"
and
"This policy shall not lapse for the non-payment of premiums until the premiums are two Mondays in arrears. Should any loss insured against under this policy occur when the premium payments on this policy are two Mondays or more in arrears the Company shall not be liable for any sum as insurance hereunder, and the subsequent acceptance of such arrears by the company, or any of its duly authorized agents, shall reinstate the policy, but only to cover such loss as may be sustained by fire occurring more than three (3) days after such acceptance."
The stipulation also provides, in Section 3 thereof,
"That on December 9, 1950, the Plaintiff paid to the Defendant the sum of Two ($2.00) Dollars for the premiums on said policies of insurance that were due October 30, November 6, November 13 and November 20. And on December 11, 1950, the Plaintiff paid to the defendant the sum of One ($1.00) Dollar for the premiums of said policies that were due November 27 and December 4, 1950."
However, by Paragraph 4 of the stipulation "Exhibit C is attached hereto (and) is the weekly premium receipt book showing the money paid by the plaintiff to the defendant as premiums on said policies of insurance for the period of time shown on said exhibit". from which premium receipt book is copied the following as to payments made, the dates thereof, and periods to which such payments were applied:
Weekly Date when due Date when paid Premium Day Month Day Month .50 11 Sept. .50 18 30 10 .50 25 30 10 .50 2 Oct. 11 11 .50 9 11 11 .50 16 11 11 .50 23 11 11 .50 30 9 12 .50 6 Nov. 9 12 .50 13 9 12 .50 20 9 12 .50 27 11 12 .50 4 Dec. 11 12 11
Preliminary to discussion on the merits it should be observed that under Section 510.310, subd. 4, RSMo 1949, V.A. M.S., this Court will review an action at law tried without a jury, both upon the facts and the law and judgment should not be set aside unless clearly erroneous. Cosentino v. Heffelfinger, 360 Mo. 535, 229 S.W.2d 546, loc. cit. 549; House v. Santa Fe Trail Transportation Co., Mo.Sup., 217 S.W.2d 382, loc. cit. 383.
It is also true that in case of ambiguity in an insurance policy it will be liberally construed in favor of insured and against forfeiture or lapse. Fallis v. Massachusetts Bonding Ins. Co., 210 Mo. App. 579, 243 S.W. 217; Watson v. Commonwealth Life Accident Ins. Co., Mo App., 17 S.W.2d 570.
As to the first contention of the plaintiff, i. e., that non-payment of premiums should have been pleaded by the defendant, it is sufficient to say that the stipulation of facts filed by the parties shows that defendant, though claiming that payments were out of time, admits they were actually made. It denies liability on the theory that under the terms of the policy itself any reinstatement shall be "only to cover such loss as may be sustained by fire occurring more than three days after such acceptance", of premiums in arrears. Since such defense is based on the terms of the policy and not on its lapse for nonpayment of premiums, this point is ruled against plaintiff. Bowdon v. Metropolitan Life Ins. Co., 227 Mo.App. 710, 59 S.W.2d 787,790.
Moreover, if there was an affirmative defense which it was necessary to plead, plaintiff could not avail herself of the point in view of her action in agreeing to and filing the stipulation of facts including the exhibits. It was said in Kennedy v. National Accident Health Ins. Co., Mo. App., 76 S.W.2d 748, loc. cit. 754, in a similar situation:
"It is immaterial that the defendant did not in its answer affirmatively plead such a defense. It appears from the record that the policy, with all its provisions, together with the copy of the application indorsed thereon, was introduced in evidence by the plaintiff. With it so introduced in evidence, the defendant had the right to take advantage of such evidence to defeat plaintiff's right of recovery by showing that it disproved his own claims." See also Warren v. Royal Exchange Assur. Co., Mo.App., 205 S.W.2d 744, loc. cit. 747.
Plaintiff next contends that the policies were in benefit at the time of loss evidently on the theory that to hold otherwise "would require the insured to pay something for nothing and would, therefore, be without consideration". There is no question about the validity of that principle of law. It was so held in Fallis v. Massachusetts Bonding Ins. Co., 210 Mo.App. 579, 243 S.W. 217 (Spg.); Kennedy v. National Accident Health Ins. Co., Mo.App., 76 S.W.2d 748, loc. cit. 752 (K.C.); Halsey v. American Central Life Ins. Co., 258 Mo. 659, 167 S.W. 951; Kelly v. Abraham Lincoln Life Ins. Co., 225 Mo.App. 317, 33 S.W.2d 992 (K.C.); Watson v. Commonwealth Life Accident Co., Mo.App., 17 S.W.2d 570.
In an effort to come within the holding of these cases, the plaintiff points out the provision in the policies that any reinstatement will be "only to cover such loss as may be sustained by fire occurring more than three (3) days after such acceptance" of premiums; that if the policy is not in benefit for such three-day period after reinstatement there was no consideration for the premium paid for such three days and any term of paid insurance should begin to run after the three days have expired.
However, in the case of Freedman v. Mutual Benefit Health and Accident Ass'n, Mo.App., 119 S.W.2d 1017, this Court considered an accident policy with a similar clause providing for ten days' non-coverage following the reinstatement of the policy and in upholding the provision it was there said, 119 S.W.2d loc. cit. 1020, by the Court that such provision "may, in some instances, prevent frauds from being perpetrated against the insurer. The validity and binding force of such clauses are supported by a wealth of authorities." (Citing numerous cases from many jurisdictions.) See also Wiser v. Central Business Men's Ass'n, Mo.App., 219 S.W. 102.
In further attempt to support her position that premiums were paid without consideration, plaintiff reviews the premium payments made on the several dates (see copy from premium receipt book above) and invites attention to the weeks for which premiums were accepted when the policy was out of benefit. However, we do not agree entirely with the calculation in plaintiff's brief. As we see the situation, we must first omit the $2.00 paid on December 9 and the $1.00 December 11th, because the fire on December 11th occurred within three days of both these payments, during which there was non-coverage under the term of the policy. Therefore, we can only consider the payment of $1.00 October 30th and $2.00 November 11th.
Now, reference to the above tabulation from the premium receipt book shows that the premium for the week of September 11, 1950, had been paid; this insured the premises for one week, that is, to Sunday midnight, on September 17, and the two "Mondays" grace period (not two weeks) extended this to September 25, Monday midnight; from that time no payment was made, there was no benefit and no liability until October 30 when $1.00 or two weeks' coverage, was paid. The defendant contends that this payment should be applied to weeks (beginning September 18th and 25th) in which the payments were in "arrears" but under the authorities cited above this cannot be done. This amount of $1.00 paid on October 30 should, therefore, first be applied to the time during which the grace period was running, September 18 to September 25, inclusive, and for which term the insurance company must be reimbursed. Watson v. Commonwealth Life Accident Ins. Co., Mo.App., 17 S.W.2d 570, loc. cit. 572. As this period is eight days, there will only remain six days' premium to apply from October 30 to November 4, Saturday, inclusive. Therefore, the policy was reinstated in benefit by the payment of October 30 to Saturday, November 4, which, with grace period of two Mondays, would expire at midnight on November 13, Monday. On November 11, (Saturday), however, $2.00 covering four weeks was paid, which, when applied first to the grace period of November 4 to November 11, (as it was not necessary to use the last two days of the grace period) would leave a balance extending three weeks to Saturday, December 2 inclusive; if we add to this the two Mondays of grace (December 4 to 11 midnight) the insurance was in force until midnight of the day of the fire. As the fire occurred during the day of December 11, the loss was clearly covered by insurance policies in suit. To hold otherwise would approve the action of the defendant in accepting premiums on occasions when in doing so it knew that the policies would still remain out of benefit; in fact, according to the defendant's contention, the policies never were in benefit from September 25, 1950 until the date of the loss, December 11, 1950; yet during the 13 weekly periods from September 17 midnight to the week beginning December 11, a total of $6.00 or twelve weekly payments were made.
It does not appear from the record whether the attention of the learned trial Judge was invited to the apparent discrepancy existing between section 3 of the stipulation (above) and the premium receipt book as to dates when premiums "were due" in the light of decisions cited supra, but in any event we believe manifest injustice would result if the holding of the lower Court should be affirmed. In re Duren, 355 Mo. 1222, 200 S.W.2d 343, 170 A.L.R. 391.
The judgment is reversed and the cause remanded with directions to the trial Court to enter judgment for plaintiff against defendant for $1,000.00 with interest from December 21, 1950, at 6%.
BENNICK, P. J., and ANDERSON, J., concur.