ARK:] THE . TRAVELERS PROTECTIVE ASSOCIATION 753 V. SHERRY. THE .TRAVELERS PROTECTIVE ASSOCIATION V. SHERRY. ! • OPinion delivered.May 18, 1936. . IsTiam4i.—Where a ' health and accident Policy ' insuring agairiSt total arl riartial disability the preraium on which was due Decein-• bee 31.,* arid' no grace period during which the policy should 'remain ; effective after the maturity date of the premium, the Rued, injured at 1 , 0:30 p. m. on the last day for payment, was not entitled to recover on the policy altbough ihe polidy proyided that' a ' Member Might be r' einstated, if, Within 48 days after "default, the premium was paid. " . •INguRANcE .- . —AcCepting past .dUe premium's . a tim llO e Wed by policy as condition th reinstatement is not. , a waiver of, ;the provision for payment . on due date; the , eff,ect of nonpayment ; of premaims on due , date is to suspend tbe policy, and, if a loss is g listained during its suspension, ihe insurance C'ould. recovered. , $ $ . Appeal from Pulaski Circuit Court,, Third Division; J. S. .Uley, Judge ; reversed., ,,Qwens :Ehnnan and E. L. MeHaney, .Jr,, for appellant. ; Vick ce , -Slyyter and June P. ooten, for appellee,,,, BUTLER,• J. The. appeal in this case , .challenges, the verdict and judgment of the court below for Several:ma-, sons: It :will be necessary, however, to notice only 'one ; that is, the contention made that the verdict is' not• sUpported by sufficient legal evidence. : : ,: • The action is .baSed upon an accident : policy !iSsued by.the appellant to appellee's husband who wft s in an antomobile : - accident On January 27, 1935'; On Janu, arY. 30, folloWirig, :the : fnsured's son, aCting . A,s agent for Mrs. Julia Sherry, the beneficiary; notified the'local agent of appellant company of the death of his father and made inquiries conCerning the status of the accident policy. He was informed that there •was no 'liability . for • the death of the inSured because of failure to pay the * semiannrial premiuin due arid payable on December 31, 1934. At that time: the son: : informed the 'agent that the e insnied had received an accidental injury on the evening of Ii1e-ceinber 31, 1934,, at' abOut 10 :30 p. 'which had totally
disabled the : insured, for a timO' and partially idisabled
754 THE TRAVELERS PROTE6TIVE ASSOCiATION [192
v. SHERRY. him for an additional period, and requested that $7.50 of the benefits for this disability be applied to the payment of the past-due preminm. When this information was received by the • agent,.he ftirnished blanks for making proof of claim and notified the association .by letter at its home office informing it that the. insured had been killed in an automobile accident subsequent to the hi-jnry in December preceding. Upon receipt -of 'proof of injurY appellant paid for the total and partial diSability claim without investigation • in the sum of: $57.15... This payment was made by check .which was indorsed and collected by Mrs. Sherry. •Thereafter, in March, 1935, a elaiin was made for death benefits iii • the sum of .$2,500, which the association refused te reeegnize and the 'suit followed resulting in a verdict and judgment in 'favor of appellee. The position was taken by the , appellee, and is now contendedfor, that while it is trne that the insured failed to make the semiannual preinium payment' of $7.50 due cin December 31, 1934, yet, because Of the injury received by the insured on that date from which dis,ability-the appellant owed-the insnred a sufficient amount td pay the premium and that the *appellant's- duty Was to apply a sufficient amount of this indebtedness tO • the payment Of the premium so as to .avoid a , forfeiture of the policy.-' This-contention must be determined by the 4- plicable provisions of the' poliey• and 'by-laws:: • The insnred was. a Class, "A" mernber of the -Lasso-ciation and entitled, so long as the. policy waS in foree, to receive a certain amount of weekly benefits fer accidental injury resulting in total or partial :disability, and .also, in . case of death from accidental injuries,.in the . sum sued for. The dues or premiums were -payable annually in advance on December 31 of each year, or in .semiannual installments,' if preferred, on December .31 and June 30 without notice. No grace period was proVided . in Which the policy should remain effective, after the maturity date of the premium', but any. member might be reinstated, if, -within forty-eight days after :default, the 'premium waS paid. He was not, however, entitled to *receive, benefits • for any injury between the date of default and the tender
ARK.] THE TRAVELERS PROTECTIVE ASSOCIATION 755
v. SHERRY. and acceptance of the past-due premium. 'It was further provided that after the -forty-eight days had elapsed the member could he restored only by making formal application in the' manner provided for new Members. There. was the • further provision that the board of directors . of the association might Cancel any membership if deemed advisable, whenever. the risk, in the opinion of the board, became more hazardous than when first assumed, for. any other reason which at the discretion and. in the opinion of .the board•of directors makes such cancellation advisable ;" and," ' that the board of director§ shall have-the -power -at any dues-paying . period-to refuse- to, reneNV the membership of any -member and . decline.to accept his. dues . when. the membees duties or physical condition in.the discretiOn and. in the opinion of . the board of directors warrants such action." . . The accident suffered by the insured which resulted in his total di§ability Occurred; at 10:30 p. m: on the 31st of December, 1 . 934. The notice was given certainly, not earlier than January •30, following, and proof was made. on .February 6. following: . According to the certificate of the physician which was accepted by appellant the insured: was. totally disabled for approximately a week and.partially disabled thereafter until January 26, and claim was made for these• disabilities in the sums of $21.43, total . disability . for six days, and $35.72, partial disability for two weeks and six days.. These amounts were, allowed, and paid to . the appellee. If it be conceded that something was due the insured on December 31, 193-1,. for the injury he suffered at 10:30 p. m. on that date;.it. -could h0 . 1; have been for a period of more than one :and: a half hours before midnight of that day and wouldhave been insufficient ,to . cover the semiannual premium due of $7.50; and to .prevent .suspeusion, of the benefits under the pol y ic . The . cases .referred to by counsel for appellee where it :is held that .the lapse of a policy was prevented were those where the insurer had in its hands at or before the lapse of the , policy sufficient funds to keep the same in force until the. death or disability of the insured. Typical of these is the case of American National Insurance
756 THE TRAVELERS PROTECTIVE ASSOCIATION [192 • v. SHERRY. Compchiy• v. Mooneij;_111 Ark: 514; 164 AV. . 276. In this case the . insured died and liability was . denied On the ground that he . .had failed 'to- pay . the premium and the polity had lapsed. -In addition to the death benefit, however; there Were : sick benefits provided by the policY. The Contention was • made . .by. the beneficiary that at the time of- the alleged . lapse the insUrance . company owed • the insured sick : benefits sufficient to carry the policy beyond the date . of hfs death..., : The court there: announced. the folloWing:to be the rule : ."If, however,. as plaintiff contended•, • a sun' . of money.was due, sufficient to pay the. preminms and: . keep the policies alive up to the death of• Weatherall, then' there was no forfeiture of .the Policies; for the . reasen. that Me amount due . should . have been ap-. Plied 'by' the coMpany . in satisfaction of the .premiums.,. so as to keep the policies alive.' ? . • •• • . : i This rule, has •no application to. the 'instant case for the.reason that there , Was :nothing due the insured by . the. association until after. the 'Policy had. lapSed or became. suspended. : Furthermore, under the provisiens of the bylaws: which have been; set , forth, • no absolute .auty rested. upon the' association • to •reinstate • the Tolley" where . Payment was tendered . after• the 'thie date,-but such reinstateMent Was discretionary with the board of directors.' The appellee strongly 'relies' upon the case Of Orile.e of, Ry: COnductors 'of America V. Skiimer; -190 'Ark. 116,. 77 'S.' W. (2d):793.,- where' it : Was held" that paYment Of a ' iir6mitIm' after the exPitation Of the : grace period' nained in 'the eentract was Sufficient to . keeP the . poliey 'in 'h.:lice. This 'conchision rested nPon the' fact shown tha repeated acceptance : of premiums . 'beyond the grace period.'waived that 'provision, : of. the' . contract;' where demand• was* made br the . insurer' that the insured should 'oomply with' the 'provisions of . the 'contract. - In the case • at bar, how:-' ever, there was no waiver. The most the evidenee shoWs is that on a-number 'of 'occasions . the premiumS 'were not paid' on Their- due dates, but' they were all Made within. the . fortyeight ; days' allowe d ' : by the contract in • which: payment might' . be made and these paynients ' served to reinstate'the insurance. The 'only effect of the nonpayment of the'premium on the due date . was to suspend
757, the . obligation of the .contract;blit; if a loss . wag sustained during its suspension, • the -insurance `could. not te.recoV-: ered. 3 , Couch Cyc. Ins Law; :2023.. , • • Contract§ .of . insurance -of dubion's Of' doubtful meaning the construction shduld ;be. placed.'•Upon Ahem`, most favorable to the,:insured, but where the . provkions are . 'unaMbiguons they . must .be construed according to their plain meanifig.'.. We .find 'no 'ambiguity in the • coir. tract relating . to the', payment of premium'§ after, their due' date. : The forty-eight . days in which these 'Payments might be made' are clearly' not .day's .of grace, as' in:the - ordinary effect -of' Whieh • is' -ter 'extend, the.; bility- of the in§trer throughout those days;.but it is plain: that.. during . the itime the premiums reniain : unpaid; . the insurance is not : in-force.: • : . ••• • !•)' -. It follows : 'froth 'the view ' s'''Ocpresed that the trial‘ court erred in' refusing to direet: verdiet . fel' 'the appel:: 'The jUdgment is' :therefore 'reversed; and : , as the cause seems to .. have • been fay' develOped, tbe case : k• dismissed. : ': •
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.