Gunter v. Philadelphia Life Ins. Co.
| Decision Date | 11 November 1924 |
| Docket Number | 11607. |
| Citation | 125 S.E. 285,130 S.C. 1 |
| Parties | GUNTER v. PHILADELPHIA LIFE INS. CO. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Aiken County; C. C Featherstone, Judge.
Action by Hattie Gunter against the Philadelphia Life Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with directions.
Parker Stewart, McRae & Bobbitt, of Charlotte, and Herbert E. Gyles of Aiken, for appellant.
R. L. Gunter and Hendersons & Salley, all of Aiken, for respondent.
Action upon a life insurance policy issued to Thomas L. Gunter, March 26, 1918, in the sum of $1,000. He died in January, 1922, and this action is by the plaintiff, his widow, the beneficiary under the policy.
The documentary evidence in the case and the admissions of counsel establish beyond and without controversy the following facts: The annual premium payable in advance was $34.45 (and not $32.85 as stated by counsel for respondent in their brief); the premiums accruing at the issuance of the policy, March 26, 1918, and upon the anniversaries in the years 1919 and 1920, were paid; no controversy has arisen as to them; on October 22, 1920, the insured borrowed from the company the loan value of the policy at that time, $26, and gave his note, signed also by the beneficiary, for that amount, payable March 26, 1921, the anniversary of the policy, with interest at 5 per cent. payable in advance. It appears that the interest from October 22, 1920, to March 26, 1921, was deducted from the $26, at the date of the note. This loan note cuts very little figure in the case, and is referred to in explanation of the settlement made by the parties in reference to the premium which fell due on March 26, 1921.
Prior to that date, on March 21st, the insured wrote the company that he could not pay the premium which fell due on the 26th, and asked for an extension of 30 days. On the 24th he wrote that he could not pay the loan note, and asked for an extension of 30 or 60 days. The company complied with his request by extending the payment of the premium to May 26, 1921, and the loan note to March 26, 1922, by accepting a premium note for $32.85, payable May 26, 1921; the amount being arrived at in this way:
| Premium due March 26, 1921 .............................. | $34 45 |
| Interest in advance on loan note .......................... | 1 30 |
| Interest in advance on premium note ......................... | 29 |
| ------ | |
| $36 04 | |
| ------ | |
| ------ | |
| Credit by dividend earned on policy ..................... | $ 3 19 |
| Balance due, represented by the premium extension note ... | 32 85 |
| ------ | |
| $36 04 |
Prior to May 26, 1921, the date of the maturity of the premium extension note, the insured wrote the company, asking for a further extension of 60 days. On May 30, 1921, the company wrote the insured, agreeing to extend the premium extension note to July 26, 1921, if he would pay $3 thereon, and allowing him until June 8th to make that payment. The insured paid the $3, and the note was extended to July 26, 1921. It was not paid at maturity or afterwards.
Notwithstanding this failure, the company wrote the insured repeatedly, declaring the policy lapsed, but offering to reinstate it if he would pay the balance due on the note, $29.85 ($32.85 less the payment of $3), with interest, and furnish satisfactory evidence of insurability. They wrote him to this effect on August 11, August 29, September 14, September 28, and October 15, 1921. In the last letter they offered to accept a note of $14, if he would pay the difference, $15.85 and interest in cash. He paid no attention to any of these offers, paid nothing upon the note, and died, as stated, in January, 1922.
The policy provides:
" Failure to pay any premium or note when due will forfeit the policy and all payments made thereon."
The premium extension note provides:
" If this note is not paid at maturity, or at the expiration of any period, to which it shall have been extended, the said insurance contract No. 40717, and all further liability of said Philadelphia Life Insurance Company on account of said contract, shall immediately cease and determine."
At the time the premium extension note was given and accepted by the company, the latter gave the insured a receipt, as follows:
At the same time the company gave to the insured a receipt for $1.30, the interest at 5 per cent. in advance for a year, upon the $26 loan note. At the close of the evidence on both sides, the defendant moved the court to direct a verdict in its favor, upon the ground that, under the terms of the policy and of the premium extension note, the failure of the insured to pay the premium extension note at maturity (an admitted fact in the case) forfeited all rights of the insured under the policy, and that there was no evidence tending to show a waiver by the company of such forfeiture.
His honor, the circuit judge, refused the motion, saying:
--which in his charge he accordingly did. The jury rendered a verdict in favor of the plaintiff for $932.90, and from the judgment entered thereon the defendant has appealed. The exceptions are numerous, but in the view which we take of the case the discussion will be confined to the single question, whether or not the circuit judge erred in refusing the motion of the defendant for a directed verdict. Concluding that he did, the other questions raised by the exceptions are negligible.
Both the policy and the premium extension note provide especially for a forfeiture of all rights under the policy, upon failure of the insured to pay the premium note at maturity. Of this failure there is not the shadow of a doubt. The fourth premium was due March 26, 1921. The insured obtained an extension to May 26, 1921, and a further extension to July 26, 1921, and, although he was entreated by the company, in not less than five letters, between August 11, 1921, and October 15, 1921, to have his policy reinstated, not a line or a penny was received from him.
The contention of the counsel for the plaintiff is thus expressed in their brief:
"The plaintiff's theory [is] that the note of March 26, 1921, was actually accepted as in payment of the premium, and not as a mere evidence of indebtedness, the stipulation of the policy and note to the contrary notwithstanding,"
--and this they propose to demonstrate by the terms of the receipt.
Counsel do not contend that the receipt is evidence of a cash payment of the premium. They could hardly take that position in view of the letter of the insured, stating that he could not pay the premium, and asking for an extension, and the execution of the note in compliance with his request. Their contention, as we understand it, is that inasmuch as the receipt for the premium makes no reference to the execution of a premium note, nor to the condition of forfeiture contained in both the policy and the note, the receipt is evidence that the premium note was accepted as in payment of the premium, although the note itself contains a statement directly to the contrary; in other words, that an absolute receipt for the premium annihilates the condition stated in the note.
The policy requires the payment of a premium in cash, in advance. There can be no doubt, however, of the proposition that the company may waive this requirement by accepting a premium note. There is nothing in the policy which requires the company to do so, however, and its acceptance of a premium note, in lieu of the cash, is purely a matter of convention between the insured and the company. Being a matter of convention, it plainly is subject to such terms as the parties may agree upon; that it amounts simply to an extension of the time for the payment of the premium, waiving nothing but the payment in cash, and leaving all other conditions in force, appears too plain for an argument. As a matter of fact it was accepted in response to the request of the insured for an extension. As is very clearly stated in the case of Hipp v. Insurance Co., 128 Ga. 491, 57 S.E. 892, 12 L. R. A. (N. S.) 319:
What then, is the effect of the receipt given by the company for the premium that was due on March 26, 1921? It would appear from the argument of counsel for the plaintiff, based upon the decision of this court in the case of Clark v. Insurance Co., 101 S.C. 249, 85 S.E. 407, that this depended upon the question whether the receipt was absolute in its terms or not. Assuming for the moment that this is the true test, we do not think that the plaintiff's contention that the receipt is of this character can be sustained. What we mean by a receipt absolute in terms, if such an explanation be necessary, is a...
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