Hockert v. New York Life Ins. Co.
| Decision Date | 14 December 1937 |
| Docket Number | 44054. |
| Citation | 276 N.W. 422,224 Iowa 789 |
| Parties | HOCKERT v. NEW YORK LIFE INS. CO. |
| Court | Iowa Supreme Court |
Appeal from District Court, Dickinson County; F. C. Davidson, Judge.
This was a suit on an insurance policy, claiming double indemnity for accidental death. Defense was a denial of liability on the part of the insurance company by reason of the lapse of the policy for failure to pay premiums. Jury was waived and the case tried to the court, which returned a verdict in favor of the beneficiary for the full amount sued upon. The Insurance Company appeals. Opinion states the facts.
Affirmed.
Milchrist, Schmidt & Marshall, of Sioux City, for appellant.
H. E Narey, of Spirit Lake, and Wilson Cornwall, of Spencer, for appellee.
On August 24, 1927, the New York Life Insurance Company issued its policy to George B. Hockert in the original amount of $5,000, at which time he was 28 years of age. The semiannual premiums were in the amount of $71.60 and were due on August 18th and February 18th. The original beneficiary was Olive Hockert, the mother of insured, but on January 20, 1928, the beneficiary was changed to Constance Hockert, his wife. On February 18, 1928, the face amount of the policy was reduced to $3,000 and the semiannual premium to $42.96. The policy provided for double indemnity in the event of death from accidental causes.
On August 13, 1934, the insured borrowed on said policy the sum of $212, which indebtedness drew interest at the rate of 6 per cent. payable semiannually, and the total amount of the indebtedness against the policy on February 18, 1935 including the interest, was $218.36. On the date of default, February 18, 1935, the policy had been in force seven and a half years, and its cash surrender value was $220.50. Deducting the indebtedness due on that date of $218.36, there was left a cash surrender value of $2.14.
On May 15, 1935, the insured, in compliance with instructions from the company, made an application for reinstatement, which was accompanied by what is known as a blue note, dated February 18, 1935, due May 18, 1935, in the sum of $32.46. Insured also sent his check in the amount of $10.50. On the 16th day of May, 1935, the company's manager at Sioux City acknowledged receipt of the application, the note and the check for $10.50, and then, by letter, advised the insured that the policy would again lapse on the 18th day of May, 1935, and in order to prevent that they were enclosing in the same letter what is known in the record as the second blue note. We quote in full the letter:
Cashier In Reply Refer to
File __--
May 16, 1935.
Mr. George B. Hockert,
Arnolds Park, Iowa.
Dear Mr. Hockert:
In Re Pol. 9 966 634
We are in receipt of your application for reinstatement together with your blue note properly signed by you and your check for $10.50. Under this arrangement, your premiums would only be extended to May 18, and if this blue note were not paid on or before that date then your policy would lapse again and it would be necessary that you apply for reinstatement and make arrangements to take care of balance premium or a further extension.
We are enclosing another blue note which with the deposit of $4.56 will extend the balance of your premium payment to June 18, 1935, provided that this blue note and your remittance is mailed on or before Saturday, May 18.
Therefore, kindly give this your immediate attention and let us have the enclosed requirements by return mail.
On the 17th day of May, 1935, the insured, in compliance with the written instructions from the insurance company, signed the second blue note, executed his check in the amount of $4.56, payable to the company, then enclosed and mailed these instruments to Sioux City. This note and the check were received at Sioux City on the morning of May 20, 1935, and on that date the company returned to insured, by mail, the first note, informing him that the policy had been extended, and enclosed a receipt, which acknowledged receiving the $4.50 in cash, and the second blue note. The reason the receipt did not show $4.56 was that the 6 cents was interest. The check was deposited by the insurance company in its account at a Sioux City bank and cleared through the Federal Reserve Bank at Chicago. On the day it was received at the Spirit Lake bank, the insured did not have sufficient in his account to cover this check, and it was returned marked " insufficient funds." The agent of the New York Life Insurance Company at Milford testified that on the morning of the 25th of May he received notice from the company that the check had not cleared through the bank on which it was drawn. He immediately notified the company that Hockert had been killed in an accident. At exactly what time this information reached the company does not appear in the record. However, it is interesting to note that on the 27th of May, which was the day the letter from the agent at Milford reached the office at Sioux City, informing them that Hockert had been killed, the New York Life Insurance Company notified Hockert (although he was at that time dead) that his policy had lapsed. The local agent then asked for proofs of loss and was informed by the Sioux City office of the company that they would have to take the matter up with the New York office. A month or six weeks later they informed the beneficiary that the company was not liable on the policy. Constance Hockert brought this action to collect the amount due her. The jury having been waived, the case was tried to the court, which rendered a verdict against the insurance company for the full amount. The company being dissatisfied, has appealed.
There is no dispute between the parties as to the law of this case. It is conceded, both by appellant and appellee, that the general rule regarding checks is that the acceptance of a check by a creditor is not payment of a debt in the absence of some agreement to accept the check as payment. The question in this case is the application of the law to the facts. Appellee contends that the check in the amount of $4.56 was accepted as payment by the New York Life Insurance Company and that there was an agreement as shown by the facts in the case.
In the case of Dille v. White, 132 Iowa 327, at page 335, 109 N.W. 909, 912, 10 L.R.A.(N.S.) 510, this court said: " That the intention of the parties shall prevail in determining whether the delivery and acceptance of a note, check, or draft, drawn by the debtor or by a third person are to be treated as payment in themselves, or as payment conditional upon the honoring of the paper by the drawee, is held with substantial unanimity by all the courts."
On page 342 of 132 Iowa, 109 N.W. 909, 915, 10 L.R.A.(N.S.) 510, we read: " It is the settled rule of this court that the intent with which the note or check is received is a fact to which the parties may testify."
At page 341 of 132 Iowa, 109 N.W. 909, 914, 10 L.R.A.(N.S.) 510, we find the following: " Whether the delivery of cashier's checks like those involved in this suit was intended and accepted as absolute payment has been held to be a question of fact for the jury."
At pages 64, 65 of 21 R.C.L. the rule is stated: ...
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