Opinion
No. 28493.
December 16, 1952. Motion for Rehearing or for Transfer to Supreme Court Denied January 16, 1953.
APPEAL FROM THE CAPE GIRARDEAU COURT OF COMMON PLEAS, J. HENRY CARUTHERS, J.
Ward Reeves, Caruthersville, for appellant.
Strom Spradling, Cape Girardeau, for respondent.
This is a suit on a policy of liability insurance brought by Everett E. Stevens, as plaintiff, against defendant, Farm Bureau Mutual Insurance Company of Missouri, a corporation. The cause was tried to the court and resulted in a finding and judgment for plaintiff in the sum of $1,479.32. From the judgment, defendant has appealed.
The facts are not in dispute, and are as follows:
On December 31, 1949, plaintiff made application to defendant for a policy of liability insurance to cover his Buick automobile, and for membership in the defendant company. This application, after setting out in detail various matters, including the coverage applied for, recited:
"Policy Period: The term of the policy shall be from 12-31-1949 to 6-30-1950, 12:01 A.M. standard time at above address as to each of said dates, and for such terms of six calendar months each thereafter as the required renewal premium is paid by the insured on or before expiration of the current term and accepted by the company."
The application was signed by plaintiff and given to Joe A. Reilly, defendant's agent, together with a check for the premium of $41.80 in payment of coverage fee, premium, and membership fee. This check was dated December 31, 1949, and was payable to agent Reilly. It was later delivered to and cashed by defendant.
On January 6, 1950, defendant wrote plaintiff the following letter, with an insurance binder attached:
"The attached coverage binder, which constitutes acknowledgement of your application for insurance, is issued to afford coverage as specified, for the interval of time required for the routine processing of your application.
"Whereas our policy is written for a coverage period of six calendar months, the coverage binder is valid for not more than thirty days. It is expected that the time required for routine processing of an application will not in any case exceed the duration of the binder. Should additional time be required, however, we will notify you and will issue an extension binder.
"We appreciate this opportunity to serve you and thank you for accepting this binder as evidence of your insurance coverage pending the final processing of your application."
The binder attached to the letter contained the name of the insured, a description of the automobile, and the insurance coverage. It also contained the following:
"The Period of This Binder Shall Be from December 31, 1949, to January 30, 1950, 12:01 A.M. standard time as to each date at the address of the insured stated above, unless canceled as herein provided. Pending issuance of a policy, the company agrees to cover the insured, named above, under the provisions of such policy in current use by the company as indicated below.
* * * * * *
"This binder is not valid unless countersigned by a duly authorized representative of the company.
"January 6, 1950 Wayne R. Walquist "Date of Issue Authorized Representative."
Thereafter, on January 19, 1950, defendant issued its policy and, on February 3, 1950, issued a "corrected copy". The latter is the policy sued on and is identical with the first one issued except for corrections in the schedule of premiums and coverage fees. Said corrected policy provided for payment to the insured of all sums which insured should be obligated to pay by reason of liability imposed upon him by law for damages, because of bodily injury, sickness or disease, including death, sustained by any person, by accident arising out of the ownership, maintenance or use of the automobile, within the limits of $10,000 for one person, and $20,000 for each accident, and for liability for property damage imposed under the same conditions. Said policy also gave collision coverage with respect to said automobile for damages in excess of $50.
Said policy further provided that the company would:
"defend any suit against the insured alleging such injury, sickness, disease, or destruction, and seeking damages on account thereof, even if such suit is groundless, false or fraudulent, * * *
* * * * * *
"Policy Period, Territory, Purposes of Use. This policy applies only to accidents which take place and to direct and accidental losses to the automobile which are sustained during the policy period. * * *"
Said policy contained the following provision with respect to the term of said insurance:
"Policy Period: The term of the policy shall be from December 31, 1949, to June 30, 1950, 12:01 A.M. standard time at above address as to each of said dates and for such terms of six calendar months each, thereafter as the required renewal premium is paid by the insured on or before expiration of the current term and accepted by the Company."
Said policy also contained the following provision defining certain rights insured possessed as a member of defendant company:
"Membership. The coverage fees set out in this policy, which are in addition to the premiums, are not returnable but entitle the named insured to insure one automobile for the coverages for which said fees were paid.
"While this policy is in force, the named insured is entitled to vote at all meetings of members and to share in the distributable net earnings and savings of the Company in accordance with the dividends declared by the Board of Directors on this and like policies."
It was also provided in said policy:
"By acceptance of this policy the named insured agrees * * * that this policy embodies all agreements existing between himself and the Company or any of its agents relating to this insurance."
On February 8, 1950, defendant wrote the following letter to its agent:
"Re: Policy No. 32429 "Insured Everett E. Stevens Lutesville, Mo.
"Dear Agent:
"The above account with us shows an underpayment $4.60 because of:
"List price changed from group 0-$750 to group $1001-$1400. This list price is our basis for determining premium.
"In order to comply with Regulations of the Insurance Department of the State of Missouri, we must collect all underpayments.
"We would certainly appreciate your contacting the insured, to explain the underpayment and make collection.
"If the underpayment is not received 10 days from date of this letter we will write the insured for same.
"Yours very truly,
"Farm Bureau Mutual Insurance Company
"(Signed) Wayne R. Walquist
"Wayne R. Walquist
Underwriter
"WW: rs
"cc: General Agent
"Please show policy number on your check"
Thereafter, on February 27, 1950, defendant forwarded to the insured the following letter:
"Mr. Everett E. Stevens
"Lutesville
"Missouri
"Dear Sir: Re: Policy No. 32429
"Your account with us shows that you owe this company $4.60 on the above policy because of:
"List price changed from group 0-$750 to group $1001-$1400. List price is our basis for determining premium.
"In order to comply with regulations of the Insurance Department of the State of Missouri, we must collect all underpayments.
"We would certainly appreciate getting your check or money order to cover this amount by return mail. Thank you for your cooperation.
"Sincerely yours,
"Farm Bureau Mutual Insurance Company
"(Signed) G. L. Gifford
"G. L. Gifford
"Chief Accountant"
Thereafter, and on June 30, 1950, at 6:30 p. m. on that date, said automobile, while being operated by plaintiff, collided with another automobile. As a result of said collision the passengers in plaintiff's automobile were severely injured, one of such passengers being fatally injured. The operator of the other car, and the four occupants thereof, were injured, two of them being fatally injured. Thereafter, claims for damages for personal injuries were made against plaintiff by the persons injured in said collision. Claims were also made by the dependents of those killed in said collision.
Immediately after the collision plaintiff gave notice of the accident, as required by the terms of the policy, and made demand upon defendant to investigate, defend or adjust all claims made against plaintiff, and pay plaintiff the damage to his automobile.
Defendant refused to comply with the demand of plaintiff and denied any liability under said policy. Thereafter, plaintiff employed an attorney to represent him in the matter of said claims made against him, and said attorney performed services in connection therewith and in defense of a suit for damages filed against plaintiff by one of said claimants.
It was stipulated between the parties that the reasonable value of the services of said attorney for plaintiff was the sum of $500. It was also stipulated that plaintiff sustained a property loss as a result of said collision in the sum of $911. It was also agreed "that any and all amounts found to be due plaintiff by reason of plaintiff's petition, shall be considered as due and payable under date of October 1, 1950, and that interest shall be computed thereafter at the rate of six per cent (6%) until paid, if any amount be found to be due the plaintiff by virtue of his petition."
The defense interposed by defendant was that it was not liable to plaintiff for the reason that the policy was not in force at the time of the collision, the policy having expired at 12:01 a. m. on June 30, 1950.
The Court found that plaintiff was entitled to recover of the defendant the sum of $911, together with interest thereon at the rate of six per cent. per annum from October 1, 1950, in the sum of $68.32, and the sum of $500, the amount expended by plaintiff as an attorney's fee for services in connection with the claims made against him.
Appellant assigns as error the refusal of the court to sustain its motion to dismiss, and states that from the evidence adduced it appears as a matter of law that the policy sued on was not in force at the time of the accident.
Respondent claims that under the authority of Halsey v. American Central Life Ins. Co., 258 Mo. 659, 167 S.W. 951, 952, the contract was in full force and effect at the time of the accident.
In the Halsey case, supra, the policy sued on contained conflicting and ambiguous provisions as to the termination of the first year's insurance and the due date of the second year's premium. In that case, the insuring clause provided that the company "hereby insures the life of Augustus C. Halsey, * * * for a period of one year from the 24th day of May, 1906"; while in another clause of said policy it was provided that: "The payment of the first annual premium thereon is a condition precedent to the taking effect thereof, and it is expressly agreed that this policy shall not become binding upon the company until said premium is actually paid during the lifetime and good health of the insured, * * *." The policy was issued on May 31, 1906, and delivered on June 5, 1906, at which time the first premium was paid. A tender of the second premium on the policy was made on May 31, 1907, but was refused by the company. The insured died on June 8, 1907. The court held that, because of the conflict in the two above quoted provisions as to when the policy should take effect, there was an ambiguity which should be resolved in favor of the insured; that the insurance became effective on June 5, 1906, and since the second premium was tendered within one year from that date, the insurance was in full force at the date of the insured's death.
Respondent also cites and relies on the following cases: Kennedy v. National Accident Health Ins. Co., Mo.App., 76 S.W.2d 748; Burner v. American Ins. Co. of Newark, N.J., 221 Mo. App. 1193, 300 S.W. 556; Howard v. Aetna Ins. Co., 350 Mo. 17, 164 S.W.2d 360; and Billings v. Independent Mutual Fire Ins. Co., Mo.App., 251 S.W.2d 393. The foregoing cases follow and apply the Halsey doctrine. In each case there were policies of insurance with ambiguous provisions to be construed by the court.
Subsequent to the decision in the Halsey case, our Supreme Court decided the case of Prange v. International Life Ins. Co. of St. Louis, 329 Mo. 651, 46 S.W.2d 523, 80 A.L.R. 950, in which case the court declined to apply the rule of the Halsey case for the reason there was no ambiguity with reference to the policy term by reason of conflicting provisions.
Cases following the Prange case are: Tabler v. General American Life Ins. Co., 342 Mo. 726, 117 S.W.2d 278; National City Bank of St. Louis v. Missouri State Life Ins. Co., 332 Mo. 182, 57 S.W.2d 1066; Hussey v. Ohio National Life Ins. Co., Mo.App., 119 S.W.2d 455; Magers v. Kansas City Life Ins. Co., 239 Mo.App., 457, 191 S.W.2d 320; Lacy v. American Central Life Ins. Co., 232 Mo.App. 1132, 115 S.W.2d 193; Winters v. Reserve Loan Life Ins. Co., 221 Mo.App. 519, 290 S.W. 109; and Vail v. Midland Life Ins. Co., Mo.App., 108 S.W.2d 147. See also, DeWalt v. State Farm Mutual Automobile Ins. Co. of Bloomington, Ill., 8 Cir., 111 F.2d 699.
In the case at bar, there are no stipulations in the policy which in any way affect or modify the plain provision that the term of the insurance purchased by the first premium would expire on June 30, 1950, at 12:01 a. m. We cannot rewrite the policy, even though we believe that insured made a bad bargain. The fact that insured did not get six months' insurance was a matter for his consideration when he made application for the policy. His application called for a policy term exactly as set out in the contract subsequently issued. If insured thought he was not receiving adequate consideration for the premium payment, he should have insisted on a different term. It follows, that the trial court erred in holding that plaintiff was entitled to recover.
The judgment appealed from is reversed.
BENNICK, P. J., and HOLMAN, J., concur.