Continental Ins. Co. v. Daly

• Decision Date: 04 June 1885
• Citation: 7 P. 158,33 Kan. 601
• Court: Kansas Supreme Court
• Parties: THE CONTINENTAL INSURANCE COMPANY v. SARAH C. DALY, as Administratrix, &c

7 P. 158

33 Kan. 601

THE CONTINENTAL INSURANCE COMPANY v. SARAH C. DALY, as Administratrix, &c

Supreme Court of Kansas

June 4, 1885

Error from Bourbon District Court.

ACTION upon a policy of insurance. On December 14, 1882, The Continental Insurance Company, of New York city, insured J L. Daly against loss or damage to a dwelling house, together with the furniture and bedding therein, on account of fire and lightning, in a sum not exceeding seven hundred dollars. The term of the policy was five years, and the premium thereon was fourteen dollars, which was not paid in cash, but a note was given therefor, due December 1, 1883, and bearing interest at the rate of seven per cent. per annum. The dwelling house was occupied by the insured and his family as a homestead at the time the policy was executed. Among the stipulations stated in the policy was the following:

"If a note is taken for the premium or any part thereof, it shall be accepted as payment thereof only until the maturity of such note, and if the same be not paid at maturity according to its terms, this policy shall be void so long as the same remains unpaid, unless the time of payment has been duly extended by consent of the superintendent of this company in writing; provided, however, that on payment to the company in New York, or to the western department in Chicago, by the assured or assigns of all premiums due under this policy and the note given thereon, the liability of this company on this policy shall again attach and this policy be in force from and after such payment, unless this policy shall be void and inoperative from some other cause. But this company shall not be liable for any loss happening during the continuance of such default of payment; nor shall any such suspension of liability under this policy on account of such default have the effect of extending such liability beyond the period of its termination as originally expressed in writing hereon."

The premium note given by the insured, J. L. Daly, contained the following provision:

"And it is hereby agreed that in case of non-payment of this note at maturity, this company shall not be liable for loss during such default, and the policy for which this note was given shall lapse until payment is made to this company in New York, or to the western department at Chicago; and in the event of non-settlement for time expired, as per terms in contract, the whole amount of note may be declared earned due and payable, and may be collected by law. Given in payment for a policy of insurance. If transferred either before or after maturity, by the company, it is agreed this note shall be subject to all defenses as if owned by the company herein named."

On August 28, 1883, J. L. Daly died, and on the 14th day of September following, Sarah C. Daly was duly appointed administratrix of his estate. On December 21, 1883, the property insured was totally destroyed by fire. Soon thereafter a notice of the loss was given to the insurance company, but payment of the insurance money was refused by the company on the ground of the non-payment of the premium note, which was and is wholly unpaid.

On March 13, 1884, Sarah C. Daly, as administratrix of the estate of J. L. Daly, deceased, brought an action in the district court of Bourbon county against the insurance company, to recover the amount of insurance stated in the policy. The cause was tried without a jury, at the September Term, 1884, and upon an agreed statement of facts the following findings of fact and of law were made by the court:

"1. That J. L. Daly died August 28, 1883, and on September 14 1883, plaintiff was duly appointed and qualified administratrix of his estate.

"2. The personal property inventoried and subject to payment of debts is $ 1,182.

"3. No debts have been proved or presented up to this date.

"4. On December 14, 1882, defendant issued to said J. L. Daly the policy of insurance set up in plaintiff's petition.

"5. The only consideration for said policy was a note of $ 14 executed by said Daly to defendant, dated December 12, 1882, due in one year from the first day of December, 1882, with seven per cent. interest.

"6. Said note contained the following stipulation: 'And it is hereby agreed that in case of non-payment of this note at maturity, this company shall not be liable for loss during such default, and the policy for which this note was given shall lapse until payment is made to the company in New York, or to the western department at Chicago; and in the event of non-settlement for time expired, as per terms in contract, the whole amount of note may be declared due and payable, and may be collected by law. Given in payment for a policy of insurance.'

"7. Said note is still wholly unpaid.

"8. The property covered by said policy was destroyed by fire, without fault of the assured, his executors, administrators or heirs, on or about December 21, 1883.

"9. Said property was owned and occupied by said Daly as a residence at the time of his death, and was owned and occupied by his family (wife and children) as his heirs at the time it was destroyed by fire.

"10. The value of said property destroyed was seven hundred dollars.

"11. On Jan. 8, 1884, this plaintiff notified S. G. Parker, a soliciting agent of this defendant in Bourbon county, Kansas, that the property covered by said policy was wholly destroyed by fire on Dec. 21, 1883, and said Parker notified the defendant on the same day by telegraph of such loss.

"12. On January 11, 1884, the defendant sent a letter to said Parker, which letter was delivered to this plaintiff, and which is as follows: 'Office Western Department Continental Insurance Company of New York, Lakeside Building, corner Clark and Adams streets.--Chicago, Jan. 11, 1884.--S. G. Parker, Fort Scott, Kansas, Dear Sir: Your telegram notifying us that Mr. Daly has lost his dwelling and contents, was duly received. We find that Mr. Daly promised to pay a note of $ 14, on the 1st of December, 1883, and that he neglected to do so. His failure to keep his agreement in this matter is unfortunate for him, and he of course bears the usual penalty. It is to be regretted that he was not more prompt. Yours truly, A. WILLIAMS, Supt.'

"13. No notice of the death of said Daly was given this defendant until after the loss occurred, unless the publication of' the notice of such plaintiff's appointment was such notice.

"14. Defendant wrote to J. L. Daly by mail of Nov. 23, 1883, of the time of maturity of said note.

"15. Said letter was duly received at Hepler, Kansas, Dec. 24, 1883.

"16. The heirs-at-law of said Daly are named as follows: Sarah C. Daly, widow; children: Mary E. England, Minnie E. Daly, Edgar C. Daly, Maggie E. Daly, Frederick E. Daly, William C. Daly."

As conclusions of law upon the foregoing facts, the court found:

"1. That said defendant waived proof of loss of the property destroyed.

"2. That plaintiff is entitled to recover from defendant the amount of loss, $ 700, less amount of the note and interest amounting to $ 15.70, the sum of $ 684.30."

Upon these findings judgment was entered against the Insurance company, and the purpose of the proceeding in this court is to reverse that judgment.

Judgment reversed.

E. M. Hulett, and J. D. McCleverty, for plaintiff in error.

Bawden & Martin, for defendant in error.

JOHNSTON J. All the Justices concurring.

OPINION

JOHNSTON, J.:

It is agreed that the only consideration for the insurance policy in suit was the premium note of fourteen dollars. In the policy, as well as in the note, it was expressly stipulated that a non-payment of the premium note at maturity would render the policy void, and that the insurance company should not be liable for any loss occurring during the continuance of such default. The note had been due and unpaid for twenty days prior to the happening of the fire which destroyed the property insured, and payment had not been made at the commencement of this action. That the provision prescribing a forfeiture of the policy in case of the failure to pay the premium note when it became due was reasonable and just, and a contract the parties were capable of making, cannot be denied. The premium is the consideration that induces the insurer to assume the risk; its prompt payment is essential to the success of the...