Gannaway v. STANDARD ACC. INS. CO. OF DETROIT, MICH.
| Decision Date | 27 July 1936 |
| Docket Number | No. 1409.,1409. |
| Citation | 85 F.2d 144 |
| Parties | GANNAWAY v. STANDARD ACC. INS. CO. OF DETROIT, MICH. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Wade H. Loofbourrow, of Oklahoma City, Okl., and Meacham, Meacham & Meacham, of Clinton, Okl., for appellant.
M. U. Hayden, of Detroit, Mich., and Ned Looney and Edgar Fenton, both of Oklahoma City, Okl., for appellee.
Before PHILLIPS, McDERMOTT, and BRATTON, Circuit Judges.
This action presents for determination the liability of the insurance company on its accident policy insuring Clarence Gannaway with double indemnity in the event death should result from bodily injuries effected through accidental means while the insured was driving or riding in an automobile.
Plaintiff is the nominated beneficiary in the policy and the surviving widow of the insured. She instituted the suit in the state court alleging that the policy was dated January 17, 1928, and provided for an annual premium of $27.50; that F. H. Palmer was the agent of the company at Clinton, Okl.; that it was agreed between the insured and the company through Palmer that the policy should not lapse without notice thereof in advance; that it would be renewed from year to year and kept in force unless the insured notified the company otherwise and that he would pay the premium; that the insured depended upon the company to keep the policy in force and to send him a statement for the premium as it became due; that annual premiums were paid to the agent on February 1, 1929, March 1, 1930, and February 6, 1931; that they were paid and accepted and the insurance continued in force in accordance with such agreement, custom and practice; that the company held Palmer out to the insured and others as its agent clothed with full apparent power to enter into the agreement and do the things set forth; and that on January 27, 1932, while the insured was depending upon such understanding and agreement that the policy was in force and without any notice from the company that it had lapsed, the insured sustained bodily injuries through accidental means while riding in an automobile from which he died the following day. Subsequent to removal of the case to the United States court and more than three years after the death of the insured, a supplement to the petition was filed in which it was alleged that some time in January, 1932, the company issued its usual and customary certificate of renewal at its office in Oklahoma City and forwarded it to Palmer; that Palmer displayed it to the insured and advised him that the policy was renewed and in force for another year; and that if the insured did not actually pay the premium for such renewal at the time the certificate was issued, the company extended him credit for the amount in accordance with the custom and practice between them.
A demurrer on the ground that the alleged facts failed to state a cause of action and that the action was barred by the statute of limitation and by the limitation fixed in the policy was sustained. Plaintiff appealed.
It is contended that the amendment introduced a new cause of action which had become barred, but the conclusion which we have reached respecting the basic question of liability upon the policy renders it unnecessary to consider that point. The policy was an annual contract which expired upon failure to pay the renewal premium on the due date. It provided that, subject to its conditions and limitations, it might be renewed with the consent of the company and by payment of the premium; that if default should be made in the payment of the premium, the subsequent acceptance of such premium should reinstate the insurance, but only to cover accidental injury thereafter sustained; that no change in its terms should be valid unless approved by an executive officer of the company and indorsed thereon; and that no agent should have authority to change the policy or to waive any of its provisions. Manifestly, there were two plainly provided requisites for renewal. They were payment of the premium and...
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