Equitable Life Assur. Soc. of U.S. v. Brewer

• Decision Date: 12 June 1928
• Citation: 225 Ky. 472,9 S.W.2d 206
• Parties: EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES v. BREWER.
• Court: Kentucky Court of Appeals

9 S.W.2d 206

225 Ky. 472

EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES v. BREWER.

Court of Appeals of Kentucky

June 12, 1928

Rehearing Denied Oct. 9, 1928.

Appeal from Circuit Court, Christian County.

Action by Albertine Brewer against the Equitable Life Assurance Society of the United States. Judgment for plaintiff, and defendant appeals. Affirmed.

William Marshall Bullitt, Leo T. Wolford, and Bruce & Bullitt, all of Louisville, for appellant.

S. Y Trimble, of Hopkinsville, for appellee.

WILLIS J.

The Equitable Life Assurance Society of United States insured Jack Brewer in the sum of $2,000, payable, in the event of the death of the insured, to his mother, Albertine Brewer. Jack Brewer died on January 12, 1926, and the beneficiary instituted this action to recover the full amount of the insurance. The policy contained a provision to the effect that failure to pay any premium on the date it was due, or within 31 days thereafter, lapsed the contract. The society defended on the ground that the policy lapsed on December 22 1925, for nonpayment of the quarterly premium due November 21, 1925, and was not reinstated. The beneficiary denied the defense, and averred that the belated premium was paid and accepted. The circuit court rendered a judgment for the plaintiff for the amount claimed, and the society has prosecuted this appeal.

The facts material to a decision of the case are not in dispute. Brewer did not pay the premium due on November 21, 1925 within the period of grace allowed by the contract, but on December 30, 1925, tendered a check in payment of that premium. The check was received on December 31, 1925, duly indorsed by the cashier of the society in its name, and deposited to its credit in the bank. The check was paid and the society used the money, and, indeed, is still using it. The cashier testified that, when he received the check and deposited it, he mailed to the insured an "escrow receipt," which provided that the society was holding the money subject to certain conditions. He also testified that he wrote a letter to the insured, advising him that the check had been received, but, as the grace period had expired, it was a necessary condition to reinstatement of the contract that the society be assured of his good health. A form of certificate of good health was inclosed for his signature, in order that reinstatement might be made. It is not shown that this letter was delivered to, or the contents thereof communicated to, the insured. Brewer became ill on or about December 30th, and on that date the doctor says he was delirious and remained in the hospital until his death.

If it be assumed from the testimony of the cashier that he mailed the letter with the inclosures to Brewer, there is still no proof that Brewer received it. Any presumption arising from the mailing of the letter, properly addressed and stamped, is rebutted by the uncontradicted proof that Brewer was confined by illness, and could not and did not receive the documents. It is not proven, however, that the letter was mailed to Brewer's address, or properly stamped, or that the return address of the sender was on the envelope. The cashier further testified that he wrote the insured a letter on February 3d, advising him that the declaration of health was necessary in order that restoration of the policy might be submitted, and, not being received, a check payable to his order for the last premium was inclosed. The letter was apparently received by the appellee, as it is referred to in a letter of an attorney, who wrote the insurance society on behalf of the beneficiary, requesting blanks for proof of claim, stating that the assured had died in January.

The ultimate question involved is whether a premium payment, tendered after expiration of the grace period and retained by the insurance company on conditions, is binding on the company, when the conditions annexed to the acceptance are not communicated to the assured, or assented to by him, either expressly or impliedly. The provision of the contract regarding reinstatement of a lapsed policy, even if notice thereof be chargeable to the insured, did not contain the conditions, but merely provided that, if the policy should lapse for nonpayment of premium, it could be reinstated upon production of evidence of insurability satisfactory to the society and the payment of all overdue premiums. When the payment of the premium was tendered after the grace period had expired, the company was not required to accept it; but, when the company did accept it, it was incumbent on it to bring home to the insured any conditions it desired to impose. The company could not take the money of the assured as a payment of the premium, retain and use it, and at the same time deny that a payment was made. Citizens' National Ins. Co. v. Egner, 167 Ky. 478, 180 S.W. 778.

The company could not receive and retain the premium, and repudiate liability under the policy. It should wait to accept the money until its conditions were communicated to the assured and complied with by him. If it accepted the money in anticipation of the health certificate, it took the risk of liability accruing before notice of the desired conditions was brought home to the assured. When the company received the money, unaccompanied by a health certificate, it constituted an unconditional tender of the premium. The company might have held the check pending performance of the conditions, and no liability could have arisen; but acceptance of the money did not carry with it the conditions, until those conditions were assented to by the assured, or until he was advised of them and given an opportunity to accept or reject them. It is clear in this case that the conditions were not communicated to or accepted by the assured. Indeed, it is not so claimed. The case of Shea v. Massachusetts Benefit Association, 160 Mass. 289, 35 N.E. 855, 39 Am.St.Rep. 475, deals with a similar question on facts resembling those here appearing, and the court said:

"It was not in dispute that the defendant received and kept the money sent for this call; and, ordinarily, an acceptance of the money, though it was paid after the expiration of the time fixed, implies a waiver of objection growing out of the delay. Hodsdon v. Guardian Life Ins. Co., 97 Mass. 144, 93 Am.Dec. 73; Insurance Co. v. Wolff, 95 U.S. 326 ; Ph nix Life Ins. Co. v. Raddin, 120 U.S. 183, 196 [7 S.Ct. 500, 30 L.Ed. 644]; Wing v. Harvey, 5 De Gex, M. & G. 265, 270. The money was tendered unconditionally; and, if the company should retain it without objection, it would be held to assent to the terms of the payor. One who receives and retains money, which is sent to him to be kept on certain terms, must be deemed to assent to those terms, if he keeps the money, unless he makes it known to the sender that he will only keep the money on some other and different terms; and, if he seeks to establish different terms while keeping the money, it rests upon him to make that fact known. If the defendant would establish different terms

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