Beets v. Inter Ocean Cas. Co.
| Decision Date | 19 October 1929 |
| Citation | 20 S.W.2d 1040,159 Tenn. 564 |
| Parties | BEETS v. INTER OCEAN CASUALTY CO. et al. |
| Court | Tennessee Supreme Court |
Appeal from Chancery Court, Knox County; R. M. Jones, Judge.
Action by Lela Beets against the Inter Ocean Casualty Company and another. From a decree of the Court of Appeals, entered on appeal from the chancellor's decree, complainant appeals. Reversed in part, and affirmed in part.
S. E Hodges, of Knoxville, for complainant.
Cates Smith, Tate & Long, of Knoxville, for defendants.
By an arrangement with the Southern Railway Company, named as defendant herein, the Inter Ocean Casualty Company issued contracts of accident insurance to employés of the railway company, and for the premiums took orders on the railway company's paymaster for payment out of the wages of the insured employés.
Complainant's husband, Hugh Beets, contracted for and received such a contract or policy, effective by its terms on December 10 1927, with complainant named as beneficiary. The insured met death by accident on April 7, 1928, and payment of the insurance was successfully resisted in the chancery court and Court of Appeals on the ground of forfeiture for nonpayment of premiums.
The insured had two pay days each month. On the last day of each month he was paid wages earned during the first half of the month. His wages for the last half of the month were paid on the 15th of the following month. The company did not require the payment of any premium when the policy was issued, but the contract provided that premiums for two months ($9.20) should be paid out of his "wages the month of January," and that the same amount should "be deducted the month of February." Those two payments, if made, would have extended the insurance beyond the date of the insured's death.
The order on the paymaster, signed by the insured and made a part of the insurance contract, contains a further provision as to the wages from which premiums were to be paid, as follows "I also agree that if my wages are paid to me other than once a month then each installment, instead of being deducted and paid from a month's wages as herein provided is to be deducted and paid from that part of the month's wages first payable to me."
The insurer and the railway company construe this clause to constitute an agreement by the insured that each premium installment would be paid each month out of wages earned during the first half of the month and payable on the last day of the month, and that, when not so paid, an installment would be in default. So contending, the insurer relies upon a provision of the contract that upon default of a premium installment the "insurance shall at once terminate without notice."
While the contract designated the paymaster as the agent of the insured for the payment of the premiums, the custom and practice pursued by the insurer did not call for any initiative on his part. Each month the insurer presented to the paymaster a list of employés from whose wages a specified deduction was to be made, and payment was so made whenever the earned wages were sufficient.
Pursuant to this custom, the insurer, near the end of January, made request of the paymaster to deduct $9.20 from the wages earned by the insured in January, which was refused because he had not earned that amount during the first half of the month. The request tendered the paymaster was phrased: "List of deductions to be made from wages of employés earned in the month of January, 1927, on account of insurance as per orders given by them." It was tendered and dishonored before the wages earned in the last half of January were payable. The same request was repeated the latter part of February, and was refused for the same reason. No further action was taken by the insurer, and no notice of forfeiture was given to the insured.
While neither of the lists submitted to the paymaster expressly requested that the deduction be made only from wages earned during the first fifteen days of each month, both the insurer and the railway company so treated them, and it is agreed that no request for deductions from the earnings of the latter part of the month was ever made by the insurer.
The uncontroverted evidence is that the wages of the insured for the first half of January were insufficient to meet the payment of $9.20; and that he earned nothing in the first half of February. However, his earnings for the last half of January were $28, and for the last half of February $14.40. His earnings in March were: First half, $32.50; last half $40. This $40, and $16 earned in April,...
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Equitable Life Assur. Soc. of U.S. v. Davis
...of the evidence; the instructions were very favorable to the defendant, especially in view of the rule of law laid down in Beets v. Inter-Ocean Casualty Co., supra, wherein it was held that the burden of proof was upon insurer to show that the insured knew that he was receiving payment in f......