Gray v. Stone

• Decision Date: 22 January 1912
• Parties: GRAY v. STONE.
• Court: Arkansas Supreme Court

143 S.W. 114

GRAY v. STONE.

Supreme Court of Arkansas.

January 22, 1912.

Appeal from Circuit Court, Howard County; Jeff T. Cowling, Judge.

Action by J. L. Gray against W. C. Stone. From a judgment for defendant, plaintiff appeals. Reversed and remanded, with directions.

This was a suit on a promissory note for $135.93, executed May 18, 1910, by W. C. Stone and due J. L. Gray on December 1st thereafter.

The answer admitted the execution of the note and that it had not been paid, but alleged that it was made in settlement of a premium on two policies of life insurance, one upon his own life, the amount of the premium being $83.20, and the other upon the life of his wife, the premium amounting to $52.70; that Stone was the agent of the life insurance companies issuing the policies and solicited the risks; that he agreed to pay the premium on the policy on his wife's life, only on the condition that he should be made beneficiary in the policy, and that the policy was issued contrary to such agreement on the life of his wife and payable to her estate in the event of her death; that he received no benefit or consideration whatever, on account of its issuance, and that relative to the premium on his own policy, he stated in his application that his age at his nearest birthday would be 61 years; that the agent, intentionally or by mistake, wrote it in the application "60" years; that it was the rule of the companies issuing the policies not to issue a policy on the life of any person exceeding the age of 60 years, and that if his age had been correctly stated in the application no policy would have been issued, and that having been falsely stated it would avoid the policy, and that the note was wholly without consideration or benefit to him on that account; that all these facts were known to the agent who took the note at the time the application was made, and the note was then executed and long before the policies were issued; that as soon as he discovered the mistake as to his age he wrote to the company offering to surrender the policy if his note was returned, and after discovering that his wife's policy was made otherwise than as agreed, he notified Stone, who refused to take up the policy or deliver the note and that by reason of these facts the consideration of the note sued on had wholly failed.

The testimony tended to show that W. C. Stone executed the note sued on in payment for the premium for one year on two policies of life insurance, one upon his own and the other upon the life of his wife; that he told the agent at the time that at his next nearest birthday he would be 61 years of age; told him that he was born in June, 1849, that the agent wrote it in the application "60" years, stating the date of his birth to be June, 1850; that he told the agent, after being advised that he could not write a policy on the joint lives of himself and wife, that he would take out one on his own life for his sister, and one on his wife's life for himself as beneficiary, and he said the agent told him that under the law he would be entitled to the money due upon the policy upon the death of his wife without being made beneficiary therein. The policies were issued and delivered some time after the premium note was given and a receipt signed by both W. C. Stone and his wife, acknowledging receipt of the policies and "the same being as applied for and said policies comply fully with the terms and conditions as represented to me by the agent," and a warranty that each was in good health and had paid the premium required. W. C. Stone afterwards discovered that his age was stated in the policy as "60" years. He then went down to Dr. Wright, the examiner of the insurance company, and asked him to notify the agent, Mr. Gray, to call and see him when he was next in the community. He also wrote the company on November 25, 1910, and received a reply November 28, 1910, acknowledging the information as to his correct birthday, and agreeing to date the policy back to December 21, 1909, reducing his age to 60 years and requiring him to pay another annual premium. Appellee refused to accept this proposition, not caring to pay two annual premiums, but he did not return nor offer to return the policy on his own life, nor did...