American Ins. Co. v. Dean.

• Decision Date: 05 July 1922
• Docket Number: No. 16623.,16623.
• Citation: 243 S.W. 415
• Parties: AMERICAN INS. CO. v. DEAN.
• Court: Missouri Court of Appeals

243 S.W. 415

AMERICAN INS. CO. v. DEAN.

No. 16623.

St. Louis Court of Appeals. Missouri.

July 5, 1922.

Appeal from Circuit Court, Audrain County; E. S. Gantt, Judge.

"Not to be officially published."

Action by the American Insurance Company against Charles EL Dean, to recover the amount of premium notes. Judgment for plaintiff on directed verdict, and defendant appeals. Affirmed.

A. C. Whitson, of Mexico, Mo., for appellant.

R. D. Rodgers and J. W. Buffington, both of Mexico, Mo., for respondent.

BIGGS, C.

This is a suit on defendant's promissory note in the sum of $140, payable in installments of $35 each on the first days of March, 1916 to 1919, inclusive, and which note, together with the sum of $35 in cash, was given to the plaintiff as a premium on a five-year policy of fire insurance covering the defendant's farmhouse in Audrain county, Mo., from March 8, 1915, to the same date, 1920. An opinion being heretofore filed in the cause by this court, appellant's motion for rehearing was sustained, and the cause has been reargued and resubmitted.

The petition is in the usual form, and the premium note sued on provided that a failure to pay the installments when due rendered the whole amount due and payable, and that the plaintiff's liability under the policy stood suspended while the assured was in default in his installment payments.

As a defense the answer sets up the fact that the defendant had sold the property insured to one Price in February, 1916, about one year after the policy was issued, and that defendant had asked for a cancellation after the sale, which was refused by the plaintiff, and that the defendant had no insurable interest in the property thereafter, and therefore the consideration for the note had failed.

It is further set up that the policy provided, in case of default in the payment of the premium installments, that the same was void, and, in the event of default, the plaintiff company was entitled to receive and the defendant would pay the unpaid portion of the earned premium at the customary short rates, and the answer alleges that the defendant offered to pay such unpaid portion, but that the plaintiff refused to accept same, and that there was no consideration for the note sued on, and that the same had been canceled by plaintiff's agent and by the terms of the policy.

At the trial the court gave to the jury a peremptory instruction to find for plaintiff. The propriety of giving this instruction is the main complaint made by defendant upon his appeal here. Defendant asserts that instead of giving said instruction the lower court should have sustained his demurrer to the evidence. Inasmuch as the defendant admitted the execution of the note, and the fact that nothing had been paid thereon, the question as to whether or not the court was justified in instructing the jury to find for plaintiff hinges on whether there was any evidence to substantiate the defense of failure of consideration, assignment, cancellation of the policy, and payment of the note by reason of a willingness and offer to pay the amount claimed by defendant to be due thereon.

In determining the rights of the parties the premium note and the policy constitute the contract, and they must be considered and construed together. The policy contained the following material provisions:

"It is expressly agreed that this company shall not be liable for any loss or damage that may occur to the property herein mentioned, while any note, or part thereof, or order given for the premium remains past due and unpaid, and in case of default of the payment at maturity of any note or part thereof, or order given for the premium, the assured agrees to pay the company the unpaid portion of the earned premium, calculated at customary short rates, and the collection, whether by legal process or otherwise, payment or receipt of payment thereof, shall in no case revive or create any liability against this company, for loss occurring while she assured was in default. The payment of the premium in full, however, revives the policy and makes it good for the balance of the teem. In case of loss prior to the maturity of any note or notes or parts thereof given for the premium of this policy, the same shall become due and payable and may be deducted from the amount of said loss. This company reserves a right to cancel this policy, or any part thereof, by tendering to the assured the unearned premium; and the assured may cancel when the premium, or note or obligation given for such premium, has been actually paid in cash, in which case the company will retain the customary short rates and expenses of taking the risk."

There was a further provision to the effect that, when a change takes place in the title to the property insured without the consent of the western manager of the company indorsed on the policy, the same should become null and void, and that no assignment of the policy would be permitted until the written consent of the said officer was obtained; and there was a further provision that no agent or employé of the company except the said western manager, in writing, shall have the power or authority to waive or alter any of the terms of the policy.

It was conceded that the defendant failed to pay the first installment due on the note March 1, 1916, or any part thereof or any installment. On April 24, 1916, the plaintiff company wrote to the defendant with reference to his failure to pay and requested payment. Defendant replied to this letter, saying that he had traded the property, and that he thought he would transfer the policy to Mr. Price, the party he traded with, but that Mr. Price did not want to take the policy, as he was insured in another company. Defendant in the letter asked the plaintiff to cancel the policy, and to inform him as to the amount of his indebtedness. On May 15, 1916, following, the plaintiff wrote the defendant, informing him that the policy could not be canceled until the premium notes had been paid as provided by its terms, and in answer to defendant's request for the amount of his indebtedness stated that it would be $56 if the defendant wanted to...