Atlanta Mut. Ins. Co. v. Price

• Decision Date: 11 October 1923
• Docket Number: 7 Div. 423.
• Citation: 97 So. 826,210 Ala. 334
• Parties: ATLANTA MUT. INS. CO. v. PRICE.
• Court: Alabama Supreme Court

97 So. 826

210 Ala. 334

ATLANTA MUT. INS. CO. v. PRICE.

7 Div. 423.

Supreme Court of Alabama

October 11, 1923

Rehearing Denied Nov. 15, 1923.

Appeal from Circuit Court, Etowah County; Woodson J. Martin, Judge.

Action on a policy of life insurance by Jim B. Price against the Atlanta Mutual Insurance Company. From a judgment for plaintiff, defendant appeals. Transferred from Court of Appeals under Acts 1911, p. 449, § 6. Reversed and remanded.

Victor Vance, of Gadsden, for appellant.

Motley & Motley, of Gadsden, for appellee.

GARDNER J.

Suit by appellee against appellant upon a life insurance policy insuring the life of one Ida B. McGarvin, wherein the plaintiff in the court below was named as beneficiary. The premiums on this policy were payable weekly, and it contained a provision that, if such payments were not made for four succeeding weeks, then the policy should be null and void, and all payments previously made forfeited to the company.

It was contended by the defendant that the policy had lapsed by virtue of the nonpayment of these premiums as provided in the policy. This was a contested issue of fact, which was submitted for the jury's determination, resulting in a verdict in favor of the plaintiff, from which the defendant has prosecuted this appeal.

The question of prime importance upon this appeal relates to the ruling of the court in rejecting evidence offered by defendant to the effect that just previous to the death of the insured she stated to the defendant's witness, one Solomon, that this particular policy was no longer in force and that she had permitted it to lapse. The defendant had previously offered evidence tending to show that in fact the policy had lapsed for nonpayment of premium; and the foregoing evidence was offered in rebuttal of that offered by the plaintiff upon this issue of fact. The trial court ruled that this evidence was inadmissible.

Counsel for appellant rely upon the general rule of law recognized by the great weight of authority that declarations of the insured, not a part of the res gestæ, are inadmissible as against the beneficiary named in the policy. 1 R. C. L 506; 14 R. C. L. 1438; 1 Ency. of Evi. 573; Neblick on Benefit Soc. § 325. An investigation of the authorities discloses that these authorities so stating the general rule dealt principally with what is referred to as "old line" insurance, where the contract is between the company and the beneficiary, to whom a vested interest in the insurance passes upon the issuance of the policy.

It appears, however, that the decided weight of authority has adopted a contrary rule in cases where the contract of insurance is between the insured and the company, with a right on the part of the insured to change the beneficiary at any time, the beneficiary, therefore, in such policies having only an expectant interest. Cases dealing with both phases of this question are commented upon in Neblick on Benefit Soc. § 325, above referred to, and numerous authorities are cited in the note to Taylor v. Grand Lodge, etc., 101 Minn 72, 111 N.W. 919, 11 L. R. A. (N. S.) 92, 118 Am. St. Rep. 606, 11 Ann. Cas. 260. Particular reference may be made to the following authorities: Van Frank v. U.S. Benefit Ass'n, 158 Ill. 560, 41 N.E. 1005; Steinhausen v. Pref. Mut. Ass'n, 59 Hun, 336, 13 N.Y.S. 36; Supreme Conclave v. O'Connell, 107 Ga. 97, 32 S.E. 946; Thomas v. Grand Lodge, 12 Wash. 500, 41 P. 882; Callies v. Modern Woodmen, 98 Mo.App. 521, 72 S.W. 713; Manhattan Ins. Co. v. Myers, 109 Ky. 372, 59 S.W. 30, 22 Ky. Law Rep. 875; Nophsker v. Supreme Council, 215 Pa. 631, 64 A. 788, 7 Ann. Cas. 646, and authorities cited in note; Knights of Maccabees v. Shields, 156 Ky. 270, 160 S.W. 1043, 49 L. R. A. (N. S.) 853; Schwarzbach v. Ohio Valley Prot. Union, 25 W.Va. 622, 52...