George Washington L. Ins. Co. v. Norcross

• Decision Date: 14 December 1917
• Citation: 178 Ky. 383
• Parties: George Washington Life Insurance Company v. Norcross.
• Court: Kentucky Court of Appeals

178 Ky. 383

George Washington Life Insurance Company v. Norcross.

Court of Appeals of Kentucky.

Decided December 14, 1917.

Appeal from Warren Circuit Court.

T. W. & R. C. P. THOMAS for appellant.

PROCTER & GARDNER for appellee.

OPINION OF THE COURT BY WILLIAM ROGERS CLAY, COMMISSIONER — Affirming.

Seaton A. Norcross, brought this suit against the George Washington Life Insurance Company, to recover on a policy insuring the life of his wife in his favor. A trial before a jury resulted in a verdict and judgment against the company for the full amount of the policy, and the company appeals.

By the policy in question, which was issued and delivered to Seaton A. Norcross, and his wife, Jennie F. Norcross, the company agreed to pay to the survivor the sum of $1,000.00, on proper proofs of the death of the other. The policy was dated October 7th, 1914, and issued upon written applications which were attached to and made a part of the policy. At the beginning of the policy the premium was stated to be $44.46. The body of the policy contained the following provisions:

". . . . Premium, eleven & 78/100 dollars, ($11.78) payable on delivery of this policy and thereafter quarter annually at the home office of the company in exchange for the company's receipt on or before the twenty-fifth day of March, June, September and December in every year during the continuance of this policy until twenty (20) full year premiums shall have been paid, or until the prior death of either of the insured."

The usual thirty days grace for the payment of premiums was also provided for. The original applications provided for a premium of $44.15 payable quarterly in advance. Before the delivery of the policy, the parties were required to amend their applications, and the amendment stated that the quarterly premium on the policy applied for was to be $11.78, and that Jennie F. Norcross's nearest birthday was thirty-one years instead of thirty. The insurance was solicited by T. H. Poore, the company's local agent at Bowling Green, and V. A. Bate, the company's state agent at Louisville. They were told by Seaton A. Norcross that he had just returned from his vacation and did not have the money to pay the first premium. Thereupon the state agent told Mr. Norcross, that he could pay the first premium by executing his note for the sum of $44.46, and pay the note either quarterly or semi-annually as he saw fit. On November 2nd, the policy was delivered and a note for $44.46 executed to Poore and Bate. On January 4th, 1915, Mr. Norcross paid T. H. Poore the sum of $11.78. The three remaining payments were made to Mr. Poore on February 18th, April 3rd, and May 3rd. The first check given to Mr. Poore, was kept at the direction of Mr. Bate. Poore deducted his commission out of the three remaining checks and sent the net to the company at its general office in Louisville, by checks payable to the state agent. A few weeks later these checks were returned to Mr. Poore, but none of the money was ever returned to the insured.

On February 8, 1915, the company notified the insured that the policy had lapsed because of their failure to pay the second quarterly premium by December 25, 1914, or within the one month of grace allowed by the policy. The insured were further notified that they would have to file a written application for the reinstatement of the policy and undergo the usual medical examination. On June 15th, 1915, Mrs. Norcross filed a written application for reinstatement, which was considered by the company and declined on July 7th, 1915. On July 2nd, 1915, Mr. Norcross filed a similar application for reinstatement which was likewise considered and declined.

After the company claimed that the policy had lapsed because of non-payment of the second quarterly premium, Edgar Needham, supervisor of agents, was sent from the company's home office at Charlestown, West Virginia, to Bowling Green, to investigate the policy in question. While in Bowling Green, he procured affidavits from Mr. Poore and Mr. Norcross, to the effect that Mr. Bate, the state agent, had accepted from Mr. Norcross, the latter's note in payment of the first annual premium. While there, Mr. Norcross and Mr. Poore both say that Needham told Norcross in substance, not to worry about his insurance, that there was no way for the company to get out of it. He further directed Mr. Norcross to go ahead and pay the note and told Mr. Poore to collect it. Though claiming that he had no authority to make a settlement or to adjust the matter in any way, Mr. Needham practically admits that he made these statements to Messrs. Poore and Norcross, but qualifies his admission with the further statement that he was merely expressing his own private opinion and had no authority to bind the company.

The premiums due in September and December, 1915, were sent in cash to the company at its home office at Charleston, West Vinginia, but were immediately returned by the company.

Mr. Poore, who was the local agent of the company when the policy was solicited, but its state agent when he gave his testimony, testifies unequivocally to the fact that he had a right to collect the first year's premium. Mr. Milair, the company's secretary, also says that the company's agents collect the first premiums whether quarterly, semi-annual, or annual. On being asked if either Bate or Poore had authority to accept notes in payment of the premium, or modify the policy as to time or method of payment of premium, he answered as follows:

"No agent of the company had authority to accept notes in payment of premiums on behalf of the company. If a soliciting agent accepts a...