Gleason v. Prudential Fire Ins. Co.
Decision Date | 19 December 1912 |
Citation | 151 S.W. 1030 |
Parties | GLEASON et al. v. PRUDENTIAL FIRE INS. CO. |
Court | Tennessee Supreme Court |
Bill by M. D. Gleason and others against the Prudential Fire Insurance Company. From a decree for defendant, petitioners appeal. Reversed and remanded.
Saylor & Moore, of Knoxville, for appellant Martin. Wm. Davis, of Tazewell, for appellant Phelps. Jerome Templeton and C. W. Lester, both of Knoxville, for appellant Gleason. Jerome Templeton, of Knoxville, for appellant Sellers. Webb & Baker, of Knoxville, for appellants Leeson and Drummond. Walter H. Anderson, of Harriman, and Hughett & Hughett, of Knoxville, for appellants Adkisson. Wright & Jones, of Knoxville, for appellant Birdwell. W. A. Owens, of La Follette, for appellant Silcox. Green, Webb & Tate, of Knoxville, for receiver.
This bill was filed by the complainant, claiming to be a creditor of defendant insurance company, and seeking to recover the amount alleged to be due him under a policy of insurance which had been issued to him. The bill was also filed as a general creditors' bill, alleging the insolvency of the company, and asking for the appointment of a receiver, and that its affairs be wound up under the supervision of the chancery court.
A receiver was appointed for the company, and publication was made for creditors, and numerous intervening petitions were filed in the cause.
A final decree was passed by the chancellor, and the case is for the second time before us, and several questions which will hereafter be disposed of relative to the rights of the complainant and of various petitioners are involved on this appeal.
The first matter arising is as to the right of the complainant himself to a recovery on his policy. This policy appears to have been issued June 5, 1909, for $2,000, on a stock of goods, storehouse, and fixtures. The premium on the policy was $72, for which complainant executed two notes, for $36 each, dated June 5, 1909, and payable, respectively, in 30 and 60 days.
No payment was made on either note until August 20th, when complainant paid $20 to the insurance company's collector.
The complainant contends that at this time an agreement was made between him and the collector whereby both of these notes should be extended until November 15th. The fire occurred on November 4th. The contention made for the receiver is that, upon the payment of the $20 aforesaid, the first note was extended until October 1st, and the second note was extended until November 1st.
Indorsements upon the notes bear out the receiver's contention, and it is in evidence that the company wrote to the complainant early in October, calling his attention to the fact that his note due October 1st was unpaid. The company's agent, who dealt with complainant in regard to this policy, and made the collection of the $20, also states that, upon receipt of that payment, extensions were made as claimed by the receiver.
On behalf of the complainant, he himself and two other witnesses testify that at the time of the $20 payment the company's agent agreed with the complainant to extend both notes until November 15th.
Much is said by counsel for each side reflecting on the credibility of testimony offered in behalf of the other.
This controversy, along with the others arising in the case, was referred to the master for determination. The master reported against complainant's claim, and this report was confirmed by the chancellor.
We see no reason for departing from the rule that we will uphold a concurrent finding of the master and chancellor, where there is any evidence to sustain it. There is abundant evidence to sustain the finding here, and it must be regarded as conclusive.
This being the case, and complainant being in default on these notes at the time of this loss, he is not entitled to any recovery against the company.
The policy provides on its face that, on the failure of the assured to pay any premium note when due, it "shall lapse and the liability of the company thereon be suspended, and no loss or damage shall be collectible from the company, if loss or damage shall occur to the insured during the period of such lapse caused by arrearage."
The notes also provide, if they are not paid at maturity, that "the policy shall be null and void," and so remain until same shall be fully paid.
"Failure to pay an installment or premium on a fire policy at maturity will defeat the assured's recovery for a loss that occurred during his default, where both the policy and the installment notes provide that the policy shall lapse upon default in payment of premium." Dale v. Continental Insurance Co., 95 Tenn. 38, 31 S. W. 266.
"A policy of insurance containing a stipulation to the effect that nonpayment at maturity of any premium note given by the assured and accepted by the insurer would forfeit the policy is rendered void and nonenforceable by the nonpayment of the note at maturity." Ressler v. Fidelity Mutual Insurance Co., 110 Tenn. 411, 75 S. W. 735.
"Where a life insurance policy provides that it shall lapse and be void if the premiums thereon are not paid when due, it is well settled that such policy will be forfeited if the premiums are not paid as stipulated." Life Insurance Co. v. Galbraith, 115 Tenn. 471, 91 S. W. 204.
Without further discussion, therefore, it is obvious that the complainant is not entitled to recovery upon his policy, when rules of law fully established in this state are applied to the facts herein concurrently found by the master and chancellor.
Accordingly, the decree of the chancellor must be affirmed, in so far as it denied relief to the complainant on his policy.
Another question arises on this bill. It was drafted as a general creditors' bill, and a flat for injunction obtained from the chancellor. Some days elapsed before it was filed. Immediately thereafter, Leeson and Drummond presented to the chancellor a bill in the nature of a general creditors' bill against the company, which was allowed to be filed pro tempore as a sort of petition in Gleason's suit. Leeson and Drummond had been officers of defendant corporation, as well as creditors, and they denied the validity of Gleason's claim, and said they filed their bill to insure the winding up of the company by the court, if Gleason failed to establish his claim.
Some preliminary proceedings were had before the chancellor, and he made an order sustaining Gleason's bill as a creditors' bill; but such order was conditioned on the validity of Gleason's claim, and provided, if such claim proved ill founded, then the bill of Leeson and Drummond should be treated as the general creditors' bill.
The final decree dismissed Gleason's bill outright, and it is here said that this action, as well as the former order conditionally sustaining the bill as a general creditors' bill, were both erroneous. These criticisms are well made.
Upon the insolvency of the company becoming apparent, as it did, from the answer to Gleason's bill, the chancellor should have unconditionally sustained said bill as a creditors' bill. It was the first one presented and filed, and there is no reason for saying it was not preferred in good faith. Its status as a creditors' bill could not be affected by the ultimate decision of the merits of complainant's demand, if other creditors intervened. The condition of the corporation, not the individual right of Gleason to recover, should have been chiefly considered by the chancellor in making the preliminary order. There was no justification for the bill of Leeson and Drummond as a creditors' bill. They could have come into Gleason's suit by petition, and thereby have secured and made certain the administration of the affairs of this corporation by the court, irrespective of the final disposition of Gleason's claim.
The order of the chancellor provisionally sustaining the Gleason bill as a creditors' bill was erroneous, and properly excepted to. The subsequent decree dismissing said bill outright was also erroneous. Petitions had been filed in the cause, and the administration of the corporation's affairs undertaken, and the bill of Gleason should have been retained as the general creditors' bill, even though he failed to establish his claim. He was properly taxed with part of the costs. He should pay such of those as accrued with respect to the trial of his claim.
The chancellor's decree will be modified, so as to sustain the Gleason bill as a general creditors' bill.
A number of controversies arising upon intervening petitions are before us on this appeal, which we proceed to consider separately.
G. W. Sellers.
This petitioner took out a policy for $2,500, on his residence in Newport. The policy was dated May 19, 1909, and was to run three years. The petitioner paid the premium exacted by the company. The property was destroyed by fire August 24, 1910. The creditors' bill was sustained, and a receiver appointed, it will be remembered, on November 15, 1909.
The petitioner claims that, having procured and paid for insurance for a term of three years from May 19, 1909, the insolvency of the company did not terminate this contract, but that the receiver is liable for this loss. Petitioner avers that no part of his premium was returned to him or offered to him by the receiver, but, on the contrary, a call or demand for contingent premium has been made upon him. An answer was filed by the receiver, in which he denied petitioner's right to recover, and the receiver also filed his answer as a cross-bill to recover from petitioner the contingent premium aforesaid.
This company was a mutual insurance company, authorized by chapter 461, of the Acts of 1907.
This case, on other features, was before this court at the last term, coming from the Court of Civil Appeals by certiorari. We had occasion at that time to consider the nature of such companies, and the...
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