The insurance policies involved in this action consisted of a life policy and an accident policy and were issued upon a single written application made therefor by the insured, Richard J. Brun, on July 31, 1940. The application expressly provided that it was to become a part of any contract of insurance which should be thereafter issued to the applicant. Pursuant to that provision, the application was attached to the life policy, No. 233-186, issued to the insured on August 6, 1940. On the same day, the accident policy, No. A233-186, was also issued to the insured.
The life policy contained a provision on its front page reading as follows: *Page 573
"THIS POLICY is issued in consideration of the Application and of the payment to the Company of an Annual Premium of Thirty-Eight and 74/100 Dollars on the date hereof, and like payment on the 1st day of August in each and every year during the life of the insured." (Italics mine.)
The written application, which was attached to the life policy but which covered both the life policy and the accident policy, provided for an annual premium of $75.64, payable in twelveinstallments of $6.81 each. It is conceded by all parties that, out of these installments, $3.76 was to be allocated to premium on the life policy and $3.05 to premium on the accident policy.
The life policy moreover specifically provided, under the heading of "Premiums," that the first and all other payments duethe company under the policy were payable in advance in cash. Upon the outside cover of that policy there appeared, with other descriptive matter, this statement: "Payable August 1st Annually OR $3.76 the 1st of each month" (Italics mine), followed by the monition:
"READ your policy and notify the Company immediately in event of any error in the policy or copy of application."
The accident policy provided for a payment of $3.05 for the term of one month only, but, as indicated in the majority opinion, the parties intended that it should be a continuing policy so long as the insured complied with its conditions and until canceled by the insurer. The contract of insurance in its entirety thus covered both policies and called for monthly payments of $6.81, as provided by the terms of the application attached to the life policy.
I fully agree with the majority opinion in holding that it was the intention of the parties that the premiums should be paid intwelve monthly installments *Page 574 of $6.81 each, rather than that the premiums might be paid in a lump sum at any time during the current year, as now contended by the respondent. I cannot agree, however, with the majority in holding that the monthly installments could be paid as late as the last day of each month, with an added thirty-one days' grace for such payment.
The provisions of the policies, read in connection with those of the application, clearly provide that all the premium payments were to be made in advance on the first day of eachmonth, if paid in installments, and that the thirty-one days of grace ran from that date only, and not from the last day of the month. Not only do the terms of the insurance contract taken as a whole indicate that the premiums were to be paid in advance, but upon the cover of the policy, in prominent display, that requirement was specifically called to the attention of the insured. Furthermore, the subsequent negotiations between the company and the insured demonstrate that both parties recognized and acted upon that interpretation and understanding of the insurance contract. On October 8, 1940, when the two monthly installments for September and October, amounting to $13.62, were past due, the company wrote to the insured asking him to fill out the prescribed form of application for reinstatement contained on the back of the company's letter. The first provision of that application reads:
"I, Richard J. Brun, holder of the above numbered policy of insurance which lapsed for non-payment of the premium due on the1st day of September, 1940, do hereby apply for reinstatement of Policy No. 233-186 No. A233-186 only and make the following statements." (Italics mine.)
The insured filled out, in his own handwriting, the answers to a list of eleven questions contained in the *Page 575 application for reinstatement and sent it to the company, accompanied by a letter enclosing a check for $6.81 (one-half of the past due premiums) and promising to send the balance on or before October 15, 1940. Thus the insured himself recognized that the policy had lapsed for nonpayment of premium on the first day of September.
It is true, as stated in the majority opinion, that the insured did not sign the application for reinstatement, although it was otherwise filled out by him. That oversight, however, is readily accounted for by the fact that underneath the line for his signature appeared his name in typewriting, which he undoubtedly understood to be sufficient. In any event, he received the notice, recognized it, and acted upon it. Because of the insured's failure to personally sign the application, however, the company sent him a new application for his written signature and at the same time called his attention to the fact that, even if the policy were then reinstated, the October installment would be past due. The reinstatement was never completed nor was the October premium payment ever made.
The remittance of $6.81, made by the insured on October 9th, was not credited by the company to the payment of the premium for September, but, as appears by endorsement on the check itself, was credited to the suspense account pending the company's approval of the application for reinstatement.
If the check for $6.81 was never applied to the payment of the September premium, then the policies clearly lapsed not later than October 3, 1940. If, on the other hand, it should for any reason be held that the check should have been applied to the premuim due for that month rather than credited on the suspense account, still the policies lapsed for nonpayment of the October 1st premium within the grace period of thirty-one *Page 576 days thereafter. The insured never at any time made the October payment.
I think that the judgment should be reversed and the action dismissed.
ROBINSON and JEFFERS, JJ., concur with STEINERT, J.