Ashbrook v. Phoenix Mut. Ins. Co.

• Decision Date: 16 January 1888
• Citation: 94 Mo. 72,6 S.W. 462
• Parties: ASHBROOK v. PHOENIX MUT. INS. CO.
• Court: Missouri Supreme Court

6 S.W. 462

94 Mo. 72

ASHBROOK v. PHOENIX MUT. INS. CO.

Supreme Court of Missouri.

January 16, 1888.

INSURANCE — FORFEITURE FOR NON-PAYMENT OF PREMIUM — WAIVER.

A life policy of insurance, dated July, 1868, contained an agreement for the issuance of a paid-up policy upon certain conditions. The premiums were paid up to July, 1877, when default was made. The customary period allowed by defendant company for the payment of premiums after default was 30 days. The policy was not entered upon defendant's books as canceled until December, 1877. In the mean time assured made efforts to continue the policy for the full amount, and it did not appear that he attempted to procure a paid-up policy. Held that, even though defendant company had wrongfully refused to issue a paid-up policy, such refusal did not have the effect of continuing the risk for the full amount of the original policy, and the failure to pay the premium at the time specified in the policy terminated the contract of insurance, the delay in declaring forfeiture not constituting a waiver of prompt payment.

Appeal from St. Louis circuit court; WM. H. HORNER, Judge.

Noble & Orrick, for appellant. David Murphy, for respondent.

BLACK, J.

The defendant, by its policy dated thirteenth July, 1868, insured the life of Obadiah Ashbrook in the sum of $5,000, for the sole use of his wife, the plaintiff, on the plan of annual payments. The consideration was a premium of $190 to be paid on the thirteenth July of each year. The policy contains this stipulation: "And the said company do further promise and agree that if, after having received not less than three (3) annual premiums, this policy shall be surrendered while in force, a new policy will be issued for the whole amount of even dollars of premiums received by the said company, (subject to any indebtedness on account of premiums,) without subjecting the assured to any subsequent charge, except the interest, annually in advance, on all indebtedness on this policy." Other agreements therein contained are, in effect, that if the premiums should not be paid on or before the agreed dates, then the company should not be liable for the sum assured, and in such case the policy should determine, and all payments should be forfeited to the company. The premiums were paid for more than three years, namely, up to July 13, 1877. The insured had given to the company three notes, each due in one year, with 6 per cent. interest, payable in advance, for the one-half of the premiums for the years beginning on the thirteenth July, 1868, 1869, and 1870. The annual interest on these notes became due on the thirteenth July, 1877, and neither the interest then due, nor the premiums for that or any subsequent year, was ever paid. Ashbrook, the insured, died on the sixteenth January, 1881.

The petition states that while the policy was in full force plaintiff offered to surrender it, and at the same time she demanded a paid-up policy, but that the defendant, during the life of the insured, failed and refused to accept the surrender, and refused to issue a paid-up policy, as it had agreed to do. It is further alleged that the company elected to keep the policy in full force and effect. The answer puts in issue these allegations of the petition, and sets up the failure of the insured to pay the premiums and interest due in 1877, and that, by reason of all which, it thereafter and in the same year canceled the policy. To this the plaintiff replied that defendant waived prompt payment of the premiums for 1877, and gave her further time to pay the same, or to surrender the policy for a paid-up one, and that the policy was thus...