Home Fire Insurance Co., of McAlester, Oklahoma v. Stancell

• Decision Date: 25 April 1910
• Citation: 127 S.W. 966,94 Ark. 578
• Parties: HOME FIRE INSURANCE COMPANY, OF MCALESTER, OKLAHOMA, v. STANCELL
• Court: Arkansas Supreme Court

127 S.W. 966

94 Ark. 578

HOME FIRE INSURANCE COMPANY, OF MCALESTER, OKLAHOMA, v. STANCELL

Supreme Court of Arkansas

April 25, 1910

Appeal from Cleburne Circuit Court; Garner Fraser, Special Judge reversed in part.

Walter D. Jacoway, for appellant.

When a policy of insurance stipulates that it should be void during the time the policy note or any part of it should remain unpaid, after becoming due, the insurer is relieved from liability during the continuance of such default. 74 Ark 507; 85 Ark. 337; 75 Ark. 25. The burden of proof is on the insured to show a waiver of forfeiture by the insurer. 67 Ark. 584; 13 Ency. Ev. 539, 1020. And the proof must be clear and convincing. 13 Ency. Ev. 1020, and 29 Ency. Ev. 1105.

U. S Bratton, for appellee.

If agreed to by the parties, payment may be made by check or note. 133 N.C. 179; 9 How. 390; 46 A. 1005; 59 Neb. 451; 81 N.W. 312; 165 N.Y. 608. A draft on a third person, if accepted and received by the insurer, constitutes payment of the premium. When the insurer is to look to a third person for the payment of the premium, it will be treated, so far as the insured is concerned, as fully paid. 72 Miss. 333. The findings of the court are as conclusive as the verdict of a jury. 56 Ark. 621; 57 Ark. 93; Id. 483; 90 Ark. 372; Id. 375; Id. 494; Id. 512; 88 Ark 587; 84 Ark. 359.

FRAUENTHAL J. BATTLE and HART, JJ., dissent.

OPINION

FRAUENTHAL, J.

This was an action instituted by Mrs. E. M. Stancell, the plaintiff below, to recover upon a policy of insurance, by the terms of which the defendant insured the plaintiff's house against loss by cyclone. In its answer the defendant pleaded that notes had been executed for the premium of the insurance, which were not paid at maturity, and that thereby the policy was avoided.

The cause was tried by the court sitting as a jury, who made a finding of fact and of law in favor of plaintiff; and a judgment was entered accordingly. From this judgment the defendant prosecutes this appeal.

The defendant is a foreign insurance company, and W. L. Burt was its agent at Heber, Ark., and issued the policy of insurance on the property situated at that place. This agent was authorized to make terms of insurance, to issue such policies as are involved in this case by countersigning and delivering same, and to collect the premiums given therefor. He solicited the insurance of the property from plaintiff; and, after they agreed upon the amount of the policy and the premium, he wrote the policy at his office, and returned to plaintiff's house to deliver same to her. He also brought three notes, which he had drafted for the premium, and which he had expected her to execute. When he arrived at the plaintiff's house, he found that she was not there, but found her husband, A. C. Stancell. He told Mr. Stancell that he had the policy duly executed, and wanted the plaintiff to sign the notes. Mr. Stancell told him that he would sign the notes himself if he would accept him. The agent testified that he then agreed to accept the notes of A. C. Stancell, and that the notes were then signed by A. C. Stancell, and that he "accepted them in payment of the premium." The notes were dated October 10, 1908, and were due respectively on the 16th day of November and December, 1908, and January 16, 1909.

In the notes it was stated that they were given "for premium on my insurance applied for," and if not paid at maturity the contract for insurance shall be null and void, so long as the notes or any part of same remained due and unpaid. The policy was issued to and insured Mrs. E. M. Stancell; and it does not appear from the testimony that there was any provision in the policy that same should be avoided by the failure to pay the notes, nor that the plaintiff was in any way a party to said notes. At the time of the execution of said notes and continuously to the time of the trial of the case A. C. Stancell was perfectly solvent, but the plaintiff was not. The notes were forwarded by the agent to the defendant, and when the first note became due it notified A. C. Stancell by mail of its maturity, and asked that payment be sent to it at its home office at McAlester, Okla., at which place the notes stated that they were payable. Thereupon A. C. Stancell wrote to defendant that it was his understanding that the notes were to be paid to the agent at Heber, and that he did not care to send payment to the home office; and that, if defendant would not send the notes to its agent at Heber to be there paid, it could cancel the policy. Thereupon the defendant sent said first note to its agent at Heber with direction to collect, which he did. The defendant did not send the other two notes to its agent, and on this account they were not paid at the time of the loss, which occurred on April 29, 1909.

It is claimed by plaintiff that the premium for the policy was paid when the defendant's agent took and accepted the notes of a solvent third party in payment of such premium. And under the testimony adduced in this case we think this position is correct. The payment of the premium is ordinarily a condition necessary to the operation of a policy of insurance, and usually a provision to that effect is made in the policy. But a valid payment of the premium may be made by property or note or the obligation of another as well as by money; and if something other is accepted in lieu of money, the sole question to be determined is whether or not the same was accepted as actual payment of the premium. Certainly, the company could make such agreement for the payment of the premium, and we think its agent had such authority under the evidence in this case. In the case of American Employers' Liability Ins. Co. v Fordyce, 62 Ark. 562, 36 S.W. 1051, this court quotes with approval the following from Miss. Valley Ins. Co. v. Neyland, 72 Ky. 430, 9 Bush 430: "A general agent of an insurance company whose business it is to solicit applications for insurance and receive first premiums has the right to waive the condition requiring payment in money and to accept the promissory note of the applicant or of a third party in lieu thereof, or to undertake to make payment to the company himself; and when the cash payment is actually waived in either of these modes, the contract binds the company, notwithstanding the recital in the policy that it is not binding until the first premium is paid in cash." Even if it had been shown in this case that the policy contained a provision avoiding it on the failure to pay the premium or the notes given therefor, the agent waived such provision by accepting as actual payment of the premium the notes of A. C. Stancell. This agent was authorized to make contracts of insurance, and to issue policies by countersigning and delivering same, and to collect the premiums. The general...