Fidelity Mut. Life Ins. Co. v. Bussell

• Decision Date: 08 April 1905
• Citation: 86 S.W. 814
• Parties: FIDELITY MUT. LIFE INS. CO. v. BUSSELL.
• Court: Arkansas Supreme Court

86 S.W. 814

FIDELITY MUT. LIFE INS. CO. v. BUSSELL.

Supreme Court of Arkansas.

April 8, 1905.

Appeal from Circuit Court, Union County; Charles W. Smith, Judge.

Action by Thomas P. Bussell against the Fidelity Mutual Life Insurance Company. From a judgment in favor of plaintiff, defendant appeals. Reversed.

On the 25th of June, 1900, the appellant insurance company issued a policy of $1,000 upon the life of John T. Bussell, payable to his father, Thomas P. Bussell, the appellee. The premium was $50.40, payable on the 25th of June, 1900, and every year thereafter for 20 years. No premium was paid on delivery of the policy, other than 80 cents, the cost of the revenue stamps; and, in lieu of cash premium, John T. Bussell executed his note for said premium (less the revenue tax), $49.60, due November 1, 1900. Thereupon the insurance company issued him a receipt for the first premium, which contained this stipulation:

"It is understood and agreed that a protested check or a past due note or obligation of any kind is not payment, and that any obligation given in exchange for this receipt when dishonored or not paid at maturity shall render this receipt and said policy absolutely void, and when payment hereof is made to an authorized agent such agent must countersign at the date of paying as evidence of payment to him."

When the note fell due it was sent to R. A. Cloud, the local soliciting agent for the company, for collection. Bussell paid $25, and for the balance executed the following note:

"$24.60. Junction, Ark. Nov. 1st, 1900. On or before December 20th, without grace, after date I promise to pay to the order of R. A. Cloud Twenty-four and 60/100 dollars at Junction, Ark., without defalcation for value received. If this note is not paid at maturity, Policy No. 107561, issued by the Fidelity Mutual Life Insurance Company of Philadelphia, for which it is given, shall be ipso facto null and void without notice to the maker hereof and without any act on the part of the company, and shall remain so until restored as provided by its terms. It is expressly agreed and understood that in the event of failure to pay the note at maturity the maker of this note shall be liable for its face value with interest from date at the rate of ____ per cent. per annum with all costs of collection, including attorney's fees of ten per cent. as liquidated damages. J. T. Bussell. No. ____. Due ____. [Indorsed] R. A. Cloud. Reaves & Bright. [Stamp.]"

This note was indorsed by Cloud, and sent to the general agents of the company at Little Rock (Reaves & Bright); and they in turn indorsed it and sent it to the home office of the company, where it was accepted. Before it was due the company sent it to Little Rock, to its cashier, Bright, for collection, and he sent it to Cloud for collection. The evidence conflicts as to the course of events when Cloud presented it. Evidence for appellee tends to show that Cloud waived the prompt payment, and agreed to wait a few days for payment, and, in the time indicated, Bussell was killed. Evidence of appellant tends to show that there was no waiver, nor act from which it could be inferred, and that a waiver was beyond the scope of Cloud's agency. Evidence was adduced by appellee tending to prove that the company was accustomed to accept payments after maturity without requiring a health certificate as stipulated in the policies, and evidence was adduced contradicting or explaining the instances proved. After the death of Bussell, his partner paid Cloud the amount of the note, and received this receipt:

"$24.60. Jany. 1, 1901. Received of E. A. Burnside, Twenty-four and 60/100 Dollars, To pay balance on J. T. Bussell policy. R. A. Cloud."

The evidence conflicted as to the circumstances under which this payment was made. Cloud sent the money to the cashier, and he returned it by first mail, and Cloud turned it back to Burnside. The application contained a clause to this effect, "That the policy issued hereon shall not become binding on the company until the first payment due thereon shall have been actually received by the company or its authorized agent during his lifetime and good health," and to the further effect that no statements to whomsoever or however made should modify the contract...