Appeal by defendant from the Circuit Court of Cook county; the
Hon. JOHN PRYSTALSKI, Judge, presiding. Heard in the first
division of this court for the first district at the June term,
1950. Affirmed. Opinion filed April 9, 1951. Released for
publication May 7, 1951.
MR. JUSTICE TUOHY DELIVERED THE OPINION OF THE COURT.
Plaintiff filed suit in the circuit court of Cook county seeking a judgment declaratory of the effective date of a policy of health and accident insurance which he holds in defendant company and a declaration to the effect that the policy is in full force and effect.
The policy on its face provides that "it takes effect on the 12th day of December, 1945, and continues in effect until the 12th day of December, 1946; . . . Each such renewal shall continue this policy in effect until the expiration of the period for which premium has been paid." The application, expressly made a part of the policy, provided that the policy should not take effect until it was delivered to the insured while in good health and the first premium paid. The policy was admittedly continued in force until January 12, 1949, when defendant insists that it lapsed on account of nonpayment of premium.
The facts disclose that on December 4, 1945, plaintiff made application to defendant for a policy of noncancellable health and accident insurance and a policy of life insurance. The health and accident policy in question was executed by defendant on February 11, 1946. The policies were admittedly delivered "on or before January 4, 1946." The premiums on the policy in question were paid until January 14, 1949, and when the plaintiff sought to pay by check on this date the company refused payment, maintaining that the policy had been forfeited for failure to pay within the time provided by the policy, and offered to issue a conditional receipt and application for reinstatement, with which conditions plaintiff refused to comply.
Plaintiff contends that the effective date of the policy was January 6, 1946, and that by the payment of the premiums it was continued from year to year until January 6, 1949, and that he then under the terms of the policy had 31 days' grace thereafter in which to pay the premium. He further maintains that, even though the effective date be as insisted by defendant, defendant having on prior occasions accepted yearly premiums after the last day of grace, has waived its right to insist upon strict payment within the policy provisions.
Defendant contends, inasmuch as the effective date appearing on the face of the policy is December 12, 1945, that such date is controlling; that the provisions of the policy in this respect are clear and unambiguous; and that by failure to pay the premiums within 31 days after December 12, 1948, defendant was entitled to declare the policy lapsed.
Thus, a question is presented as to whether the effective date of the policy was December 12, 1945, as contended by the defendant, or January 6, 1946, as found by the court.
The policy on its face provides:
"It takes effect on the 12th day of December, 1945, and continues in effect until the 12th day of December, 1946; and until the Insured becomes sixty years of age he shall have the right to renew this policy for further consecutive periods by the payment in advance of the Annual renewal premium of $215.16. Each such renewal shall continue this policy in effect until the expiration of the period for which premium has been paid."
Attached to the policy was the application for insurance. This application is made a part of the policy in the following language:
"It is understood and agreed that this application . . . as amended shall form a part of any policy issued hereunder."
Then appears the following language under question No. 16 of the application:
"Do you agree that in case no amount has been tendered to the Agent on such premium at the time of this application that such insurance shall not take effect until the application is approved and accepted by the Company at its Home Office and the policies delivered to you while in good health and the first premium thereon have been paid in full?"
In other words, the face of the policy provides, as its effective date, December 12, 1945 the application, "on date of delivery."
The law is well settled that where a policy of insurance is susceptible to two constructions that construction will be adopted which is favorable to the insured. Monahan v. Fidelity Mutual Life Insurance Co., 242 Ill. 488; McMaster v. New York Life Ins. ...