Commonwealth Life Ins. Co. v. Pendleton

• Decision Date: 19 November 1929
• Citation: 21 S.W.2d 985,231 Ky. 591
• Parties: COMMONWEALTH LIFE INS. CO. v. PENDLETON et al.
• Court: Kentucky Court of Appeals

21 S.W.2d 985

231 Ky. 591

COMMONWEALTH LIFE INS. CO. v. PENDLETON et al.

Court of Appeals of Kentucky

November 19, 1929

Appeal from Circuit Court, Floyd County.

Action by Nell Pendleton and another against the Commonwealth Life Insurance Company. Judgment for plaintiffs, and defendant appeals. Reversed for a new trial.

Combs &amp Combs, of Prestonsburg, and Batson, Cary & Welch and H. W Batson, all of Louisville, for appellant.

Howard & Mayo, of Prestonsburg, for appellees.

WILLIS J.

Edgar Wallace Pendleton carried a life insurance policy with the Commonwealth Life Insurance Company. It was dated July 24 1918, and by its terms the insurance company agreed to pay $2,000 to Nell Pendleton, the wife, and Alice Pendleton, the daughter, of Edgar Wallace Pendleton, upon receipt of due proofs of the death of the insured. The annual premium of $49.48 was payable in equal quarterly installments. Pendleton died on June 23, 1926, and forms for the proofs of death were requested. The insurance company denied liability and declined to pay the beneficiaries upon the ground that the policy of insurance had lapsed for nonpayment of the premium, and that the extended insurance automatically given by the contract had expired before the death of the insured. The beneficiaries brought this action against the insurance company and recovered a judgment for the amount of the policy, resulting in this appeal.

The contentions urged here are that the company was entitled to a peremptory instruction in its favor, or if not correct in that contention, that the verdict of the jury was palpably against the evidence, upon which ground it should be awarded a new trial. The contract provided an automatic extension of the insurance for the full amount of the policy for on year and eleven months from the last anniversary of the policy, if premiums for three years had been paid, and for four years from the last anniversary of the policy, when premuims for five years had been paid. Pendleton died within the period of four years after the policy lapsed, and the issue between the parties is whether five annual premiums had been paid. If so, the plaintiffs were entitled to recover, but otherwise there was no liability. The beneficiaries rely upon proof of payments made to the insurance company and its general agent in excess of five full annual premiums and upon an admission by the company to the effect that five annual premiums had been paid. The company relies upon evidence to the effect that only eighteen quarterly premiums were actually paid and that its admission to the contrary was made by a mistake on the part of its agent. The parties agree that eighteen quarterly premiums were paid, so that the dispute is narrowed to the payment of two quarterly premiums. The plaintiff introduced proof of other payments made from time to time and the argument of the parties revolves around an analysis of this evidence. The testimony for the insurance company tends to prove that all these payments, except the eighteen quarterly premiums on the policy in suit, were applicable to other obligations of Pendleton. It is said that the evidence for the defendant is uncontradicted and completely overthrows the prima facie case made for the plaintiff, which the jury was not at liberty to disregard. It is true that the uncontradicted and unequivocal testimony of disinterested witnesses, who are not impeached, may not be arbitrarily disregarded. Barkley v. Bradford, 100 Ky. 306, 38 S.W. 432, 18 Ky. Law Rep. 725; Sinclair's Adm'r v. I. C. R. R. Co., 129 Ky. 828, 112 S.W. 910; Bannon v. Louisville Trust Co., 150 Ky. 401, 150 S.W. 510; Johnson's Adm'r v. Louisville & Interurban R. R. Co., 199 Ky. 524, 251 S.W. 843; Louisville & N. R. R. Co. v. Philpot's Adm'r, 215 Ky. 682, 286 S.W. 1078; Louisville & N. R. Co. v. Slusher's Adm'r, 217 Ky. 738, 290 S.W. 677. But the positive testimony of a witness may be contradicted by circumstances, Penick v. Metropolitan Life Ins. Co., 220 Ky. 626, 295 S.W. 900; Martyn v. Jacoby's Adm'r, 223 Ky. 674, 4 S.W.2d 684; and explanation by witnesses of a prima facie case for the adverse party makes merely an issue for the jury, Ohio National Life Ins. Co. v. Cradock, 221 Ky. 821, 299 S.W. 964. An uncontradicted witness may be so evasive, equivocal, confused, or otherwise uncertain as to make his credibility essentially a question for the jury, Chesapeake & O. Ry. Co. v. Warnock, 158 Ky. 664, 166 S.W. 179; Moore on Facts, §§ 66 to 131; and a jury is not even allowed, much less authorized, to rest a verdict on testimony at variance with well-established and universally recognized physical and mechanical laws, Louisville & N. R. R. Co. v. Chambers, 165 Ky. 703, 178 S.W. 1041, Ann. Cas. 1917B, 471; Louisville Water Co. v. Lally, 168 Ky.

348, 182 S.W. 186, L. R. A. 1916D, 300; Consolidation Coal Co. v. Potter, 182 Ky. 562, 206 S.W. 776.

The plaintiffs made out a prima facie case by showing payments to the company and its general agent sufficient to cover five annual premiums on the policy involved in the action, and by proving an admission of the company to the effect that such a number of premiums had been paid. The admission consisted in the payment by the company to Pendleton of three dividend coupons detached from the policy, coupled with a statement that two more coupons, which were not payable unless and until five full annual premiums had been paid, were not then due, but would be due respectively in April, 1923, and April 1924. That action and declaration of the company tended to prove that the payments had been made as claimed by appellees. Proof of the payments actually made and the admission of the company respecting the dividend coupons were obviously sufficient to carry the case to the jury. The appellant insists, however, that it proved without contradiction that the payments proven by the plaintiff to have been made by Pendleton, except the admitted eighteen quarterly payments, were not applicable to the policy in suit, but were addressed to and applied upon other obligations of Pendleton. It also insists that its admission and the payment of the dividend coupons were the result of a mistake on the part of its agent, and that its proof entitled it to a peremptory instruction at the conclusion of all the evidence. The explanation of the proof of the several payments, and of the admission, constituted a defense to the plaintiffs' prima facie case, but the truth of the explanations depended upon the credibility of the witnesses. The witnesses for the defendant were its general agent and vice president. The testimony as to the mistake in paying the dividend coupons was but an inference of the witness deduced from the records of the company as to what actually had been credited. He had no personal knowledge of the matter. The man who made the mistake, if it was made, was not introduced. The alleged mistake was not discovered until after the death of Pendleton and after suit was filed upon the policy, and it is not conclusively proven that any mistake was made. It developed in the defendant's proof that in June, 1924, after the other two coupons had matured according to the company's letter to Pendleton, the company actually paid the coupons due in April, 1923, and in April, 1924. This circumstance constituted a further admission that the five annual premiums had been paid, as otherwise the coupons were not payable at all. The inference from the records, as they now appear, that the payment was made by mistake, would not arise if the records had been changed in the meantime, as the erasures thereon tend to suggest. It was explained that the erasures were merely actuarial...