Denton v. Provident Life & Acc. Ins. Co.

• Decision Date: 13 March 1931
• Parties: DENTON v. PROVIDENT LIFE & ACCIDENT INS. CO.
• Court: Kentucky Court of Appeals

36 S.W.2d 657

238 Ky. 26

DENTON v. PROVIDENT LIFE & ACCIDENT INS. CO.

Court of Appeals of Kentucky

March 13, 1931

Appeal from Circuit Court, Pulaski County.

Suit by D. E. Denton against the Provident Life and Accident Insurance Company. From a judgment in favor of defendant plaintiff appeals.

Affirmed.

B. J Bethurum, of Somerset, for appellant.

Ben V Smith & Son, of Somerset, for appellee.

DIETZMAN J.

On February 11, 1928, the appellee executed and delivered to the appellant a policy of insurance indemnifying him among other things against sickness. The policy as written provided for an annual premium of $59.40, but when the agent undertook to deliver it to the appellee, he declined to receive it unless the premium should be payable in quarterly installments and that was agreed upon between them. Appellant paid the first installment of $14.85 covering the quarterly period from February 11 to May 11, 1928. He made no further payment of premium until August 13, 1928, when he sent a check for $14.85 to the appellee at its home office in Chattanooga Tenn. He wrote on the check: "For 1 qr. Pol. 1078780." The company mailed him back under date of August 15, 1928, the following receipt: "Received of Dudley E. Denton Fourteen & 85/100 Dollars on account of balance payment on policy No. 1078780 subject to all the provisions and conditions of said policy." On the 16th day of August, 1928, the appellant became violently ill and remained under the treatment of a physician until January 5, 1929, at which time he was able to sit up but was unable for several weeks thereafter to perform any of the duties pertaining to the business and occupation in which he was engaged. He applied to the appellee to pay him the sick benefits provided for by his policy, and they declining to do so, he brought this suit for $750. The company defended along several lines, but abandoned in the lower court and in this court all of its defenses except those based on section F of the Special Provisions and section 3 of the Standard Provisions in the policy, which read: "Sec. (f). This policy, except Part IX, takes effect at twelve o'clock noon of the date hereof, Standard time, at the Insured's residence, if the Insured is in sound health and free from injury at that time, and Part IX takes effect fifteen days thereafter (in accordance with paragraph (2) of the Insuring Clause) if all premiums due meanwhile have been paid as agreed. If not written on the monthly payment plan, the whole policy expires one year from its date, unless renewed or terminated sooner in accordance with its terms; if written on the monthly premium payment plan the whole policy shall be in force so long as the premiums are paid under the terms of the pay order therefor, unless cancelled by the Insured or the Company at the expiration of the policy year in accordance with the terms of said pay-order."

"3. If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of the premium by the Company or by and of its duly authorized agents shall reinstate the policy, but only to cover accidental injury thereafter sustained, and such sickness as may begin more than ten days after the date of such acceptance."

The company took the position that by the payment of the premium on August 13th, the policy had been reinstated, having theretofore lapsed for appellant's failure to pay the May premium; that although thereby the policy was in effect from August 11th to November 11th, yet the sickness for which the appellant sought compensation having occurred within 10 days after the policy had been reinstated, the company was not liable under the provisions of the policy above quoted. After all the testimony, both that of appellant and that of appellee, had been introduced, the court peremptorily instructed the jury to find for the appellee, and from the judgment entered on that verdict, this appeal is prosecuted.

By reason of the concessions of the appellee abandoning all of its defenses except those stated above, many of the propositions argued by the appellant in his brief are eliminated from the case. The ground for reversal most strongly relied upon is based on the general proposition, which appellee also concedes, that where an insurance company accepts and retains an overdue premium without notice to the insured that conditions are imposed upon reception of the premium, it will be held to have waived any right of forfeiture it may have had or estopped to claim that the policy was not in effect. See Equitable Life Assurance Society of New York v. Brewer, 225 Ky. 472, 9 S.W.2d 206. But, as appellee well argues, that is not the controlling principle of this case. By its own terms, which we have quoted above, the policy was in effect only so long as the premiums were paid. Hence during the period between May 11th and August 11th, the policy was not in effect. As said in Bane v. Travelers' Ins. Co., 85 Ky. 677, 4 S.W. 787, 790, 9 Ky. Law Rep. 211:

"It is really a misnomer to say that the policy in this instance was forfeited by the non-payment of the premium. The insurance, by the express terms of the policy, ceased because of such non-payment. The payment of the premium was a condition precedent to the continuation of the risk, and even

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