American Ins. Co. v. Austin

• Decision Date: 03 December 1928
• Docket Number: (No. 30.)
• Citation: American Ins. Co. v. Austin, 11 S.W.2d 475, 178 Ark. 566 (Ark. 1928)
• Parties: AMERICAN INS. CO. v. AUSTIN.
• Court: Arkansas Supreme Court

Page 475

11 S.W.2d 475

AMERICAN INS. CO. v.AUSTIN.

(No. 30.)

Supreme Court of Arkansas.

December 3, 1928.

Appeal from Circuit Court, Nevada County; J. H. McCollum, Judge.

Action by W. E. Austin against the American Insurance Company.From a judgment for plaintiff, defendant appeals.Reversed, and cause dismissed.

Lewis R. Featherstone, of Memphis, Tenn., and McRae & Tompkins, of Prescott, for appellant.

U. A. Gentry, of Hope, R. P. Hamby, of Prescott, and Coleman & Riddick, of Little Rock, for appellee.

McHANEY, J.

This is an action upon a fire insurance policy issued by appellant to appellee dated the 15th day of February, 1926, insuring appellee's residence in the sum of $1,500 and his personal property located therein in the sum of $500, for a period of five years from the 13th day of February, 1926, to the 13th day of February, 1931, for the total premium of $162, payable $32.40 cash with the application, and $32.40 payable on the 1st day of February each and every year thereafter, for which a note was executed in the total sum of $129.60.

Appellant's local agent at Prescott, Ark., took appellee's application for the policy on the 12th day of February, 1926, and received the first year's premium therefor on said date, together with the note for the sum aforesaid, payable as stated, and forwarded same to appellant's general agent at Memphis, Tenn.The policy issued contained the following provisions:

"In consideration of $32.40 paid and the payment of installments when due on an installment note of $129.60 due and payable as follows: $32.40 on the 1st day of each February, 1927, 1928, 1929 and 1930 respectively, does insure," etc.

* * * * * * *

"No agent or employee of this company, or other person or persons except an officer, or the Southern Farm Department Manager in writing shall have power or authority to waive or alter any of the terms and conditions of this policy."

* * * * * * * * *

"It is understood and expressly agreed that the company shall not be liable for any loss or damage that may occur to the property herein mentioned while any installment of the installment note, given for premiums on this policy remains past due and unpaid," etc.

The installment note contained this provision:

"And it is hereby agreed that, in case of nonpayment of either of the installments herein mentioned at maturity this company shall not be liable for loss during such default and the policy for which this note is given shall lapse until payment is made to the company at Memphis, Tennessee."

The policy contained this further provision:

"This policy shall not be valid until countersigned by the duly authorized agent."

It was countersigned by the agent at Prescott, Ark., but the date thereof is not definitely established by the evidence.The counter signature bore the date of February 15, 1926, but the proof showed that this date was put on the policy in the Memphis office.The agent at Prescott was not able to state the definite date it was countersigned.The uncontradicted proof shows that it was not received by appellee until February 22, the policy being mailed him from Prescott to his post office address at Drab, Ark., about twelve miles from Prescott, and would, if delivered in ordinary course, have reached appellee the day following its mailing.

The first installment on the note became due, according to the terms of the note, on February 1, 1927, and was not paid when due, and on the 16th of said month a fire occurred which totally destroyed appellee's property.He then called upon appellant's agent in Prescott, and advised him of the loss, delivered him the policy, and the agent notified appellant's general agent at Memphis, who declined to recognize the claim and to pay the loss, for the reason that said installment on the note had not been paid.This was within the time allowed appellee in which to make proof of loss.The case was submitted to the jury under instructions authorizing a recovery by appellee, if they should find that appellant waived proof of loss by denying liability within the time, and that the loss occurred within one year from the date said policy was countersigned by the local agent at Prescott, Ark., and that appellee had paid one year's premium on said policy; otherwise, they were to find for the defendant.There was a verdict and judgment for appellee in the sum of $2,000, at 6 per cent. interest from May 18, 1927, 12 per cent. penalty, and $250 attorney's fee.

Appellant seeks to reverse the judgment on two grounds: First, that the policy was suspended for failure to pay the installment due on premium note before the loss occurred; and, second, that the failure to furnish proof of loss avoided the policy.

It will not become necessary to decide the second proposition above stated, in view of the disposition we make of the first.The question is: Did the failure of appellee to pay the installment of $32.40 on February 1, 1927, suspend the operation of the policy until it was paid, and, not having been paid prior to the loss, relieve appellant of liability?It is true that there is a slight conflict between that provision in the policy providing that appellant insured the property of appellee"for the term of five years from the 13th day of February, 1926, to the 13th day of February, 1931," and the other provision in the policy that "this policy shall not be valid until countersigned by the duly authorized agent."The application was taken on the 12th day of February, mailed to the general agent in Memphis, Tenn., who issued the policy, dating it the 13th day of February, and also put in the date of the counter signature as of the 15th, assuming, no doubt, that it would take until the 15th for it to reach the local agent in Prescott, and be countersigned in the ordinary course of business, as the 13th was on Saturday.While the local agent at Prescott did not remember the actual date of countersigning the policy, it is quite probable that it may have been countersigned on the 15th, and deposited in the mail on said date for delivery to appellee.But, regardless of whether it was countersigned on...