O'Donnell v. Kansas City Life Ins. Co.

• Citation: 277 S.W. 973
• Decision Date: 21 January 1924
• Docket Number: No. 14926.,14926.
• Parties: O'DONNELL v. KANSAS CITY LIFE INS. CO.
• Court: Court of Appeal of Missouri (US)

277 S.W. 973

O'DONNELL v. KANSAS CITY LIFE INS. CO.

No. 14926.

Kansas City Court of Appeals. Missouri.

January 21, 1924.

Certiorari Denied November 1, 1925.

Appeal from Circuit Court, Jackson County; Charles R. Pence, Judge.

"Not to be officially published."

Action by Sallie B. O'Donnell against the Kansas City Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

George Kingsley, of Kansas City, for appellant.

Solon T. Gilmore, of Kansas City, for respondent.

BLAND, J.

This is a suit upon a life insurance policy in the sum of $5,000, issued September 14, 1915, by the defendant upon the life of James H. O'Donnell in favor of plaintiff as beneficiary. The insured died on August 19, 1916. There was a verdict and judgment in favor of plaintiff in the sum of $6,612.50, and defendant has appealed.

This is the second appeal in the case (see O'Donnell v. Kansas City Life Insurance Co., 222 S. W. 920). The facts concerning this litigation were fully set forth in the opinion in that case, and it will not be necessary for us to go extensively into the testimony except in so far as it may be necessary in passing upon the points raised in this appeal.

It appears that there were two notes taken from the insured by the agent who solicited the insurance, dated August 27, 1915, the date of the application, and due six months after date, payable to the agent and indorsed to defendant by the latter. It was provided in the application that in case it was accepted any note given for the premium should be applied on the first premium. The policy provided that in case of the failure to pay any premium on or before the date when due, or of the failure to pay any premium note when due, the policy issued should become null and void without any action or notice by the company, and all rights should be forfeited to the company except as provided in the policy. The policy stipulated that in case of failure to pay any premium or premium note the company would reinstate the policy at any time upon the written request of the insured, accompanied by evidence of insurability satisfactory to the company, and the payment of all premiums in arrears, and the payment or reinstatment of any indebtedness existing at the date of the default, together with interest thereon.

The undisputed evidence shows that the notes were not paid when due, and in fact were never paid; that after they became due defendant sought to collect them from the insured; that on or about the 24th day of August, 1916, without knowledge that insured was ill, defendant sent a notice that a premium would be due on the policy on September 14, 1916; this notice stated that:

"A grace of 30 days, during which the insurance will remain in full force, will be allowed in the payment of all premiums except the first."

On the reverse side of the notice appeared, the following:

"Notice to Policy Holders.—You are hereby notified that the premium required to renew your policy will become due and payable at this office on date given on reverse side, and unless said premium shall be paid on or before said date the policy will have become void, and all payments made thereon will become forfeited."

The evidence further shows that after the death of the insured, an attorney, acting for plaintiff, called defendant's home office over the phone, and was put in communication with defendant's assistant secretary. Without telling him that insured was dead, the attorney asked him if the policy was in force, and he replied, "Wait a minute." He left the telephone, and in a few minutes came back and said, "The policy is in force, and the next premium will be due on the 14th day of September." The assistant secretary was put upon the stand by the defendant, and testified upon cross-examination that, as an officer of the defendant in charge of its premium department, he had charge of the premium notes at the time of the happening of these matters; that he knew whether or not they were paid, and that he knew the notes were in default from the time of their maturity; that he remembered when plaintiff's attorney called up in reference to the policy and his asking whether the policy was in force; that he thereupon made inquiry of the renewal department of the person, in charge thereof and who kept the records of that department where he would go for information on the subject, and was told that "the policy appeared to be in force";. that he gave the attorney information to this effect; that on August 24, 1916, after learning of the death of the insured, he wrote plaintiff that the policy was not in force for the reason that insured did not pay the premium notes.

Afterwards plaintiff's attorney went to the office of the defendant and saw the assistant secretary, and at this time the latter said to him "that he had had a number of conversations with Mr. O'Donnell" (the insured), "one of which was shortly before his death, and that Mr. O'Donnell had promised that he would pay; would come in shortly to pay the premium." (Evidently this refers to the payment of the premium notes.) Defendant failed to offer in evidence the records of the renewal department to show whether or not they disclosed that the information obtained by the assistant secretary at the time of the telephone conversation was an error or true.

It is insisted that the court erred in failing to give defendant's instruction in the nature of a demurrer to the evidence at the close of all the testimony, for the reason that under the provisions of the application and the policy, and the admission that the premium notes were not paid when due, it was the duty of the court to direct a verdict for the defendant. This, no doubt, would be true if it were not for the facts appearing in the evidence tending to show a waiver on the part of the defendant of the forfeiture of the policy for the nonpayment of the premium notes.. When the case was here before it was reversed and remanded for the reason that at the former trial plaintiff attempted to recover upon the theory that defendant was looking to the soliciting agent to whom the notes were made for their payment; that credit was extended by the agent to the insured for the amount of the premium instead of by the defendant. There was no evidence that defendant looked solely to the agent for payment, and, in view of the provisions of the application and policy, it was held that there could be no recovery upon this theory. The court, in remanding the "case, said, at loc. cit. 924:

"* * * Although the contract provided for a forfeiture in case of default, yet the effect of that may be nullified if the same be waived; and it would seem that in this case there is room for a jury to find that the prompt payment of the notes was waived by the company and by the agent also, if the forfeiture clause be for his benefit too. For this reason we do not reverse the case outright, as defendant so earnestly insists, but reverse the judgment and remand the cause for a new trial on the theory of waiver if the plaintiff chooses to do so."

It appears that the case was tried the second time on the theory outlined by the court. We think there is no question but that there was sufficient evidence to show a waiver of the forfeiture provisions. After the notes became due and were unpaid, defendant sought to collect the premium notes covering the full year's premium, and notified the insured that the second year's premium was about to mature, that the insurance was in full force, and that it would become null and void unless the premium was paid on or before a certain date mentioned. This was clearly a recognition that the policy had not .yet lapsed. After insured's death the officer in charge of the records of defendant admitted the policy was in full force and effect. These records were not produced or introduced in evidence showing that any mistake had been made. There is clearly an inference that defendant's records show that the policy was in force...