Home Ins. Co. v. Karn

• Citation: 39 S.W. 501
• Parties: HOME INS. CO. OF NEW YORK v. KARN.
• Decision Date: 10 March 1897
• Court: Court of Appeals of Kentucky

39 S.W. 501

HOME INS. CO. OF NEW YORK v. KARN.

Court of Appeals of Kentucky.

March 10, 1897

Appeal from circuit court, Daviess county.

"Not to be officially reported."

Action by Powell Karn against the Home Insurance Company of New York on a policy of fire insurance. From a judgment for plaintiff defendant appeals. Reversed.

J. A Dean, for appellant.

Sweeney Ellis & Sweeney, for appellee.

BURNAM J.

The appellant, the Home Insurance Company, issued to the appellee, Powell Karn, a policy of insurance upon his dwelling house, household furniture, family wearing apparel provisions, etc., on the 1st day of August, 1888, for a period of five years, in consideration of the sum of $4.80 paid, and the payment of installments on installment note of $19.20, due as follows: $4.80 on the 1st day of August of the years 1889, 1890, 1891, and 1892. The said policy contained on its face this agreement: "But it is expressly agreed that this company shall not be liable for any loss or damage that may occur to the property herein mentioned while any installment of the installment note given for premium upon this policy remains past due and unpaid, or while any single payment, promissory note (acknowledged as cash or otherwise) given for the whole or any portion of the premium, remains past due and unpaid. Payments of notes and installments thereof must be made to said Home Insurance Company at its Western department office at Chicago, Illinois, or to a person or persons specially authorized to collect the same for said company. The company may collect, by suit or otherwise, any past-due notes or installments thereof, and a receipt from the Chicago office of the company for the payment of the past-due notes or installments must be received by the assured before there can be a revival of the policy, such receipt in no event to carry the insurance beyond the original term." The first two deferred premium installments were paid promptly, but the third one, due August 1, 1891, was not paid, and was, after default, sent to the company's local agent for collection. The local agent, May, called on the insured at his dwelling for the purpose of collecting the past-due installment, but failed to collect same. The agent testifies positively that this call was made on the 5th day of May, 1892, and that on the following Sunday, the 8th day of May, about noon, the dwelling house was destroyed by fire, and the said overdue installment or premium remained unpaid. The company declined to pay the loss, and the insured brought this suit to coerce payment. The appellant pleaded and relied on the foregoing provision of the policy as to the date when the installment premium should have been paid, and seeks to avoid responsibility because of the nonpayment of the premium note. Appellee, in reply to this, seeks to escape the forfeiture provided for in the policy by default in the payment of the premiums upon the following grounds, viz.: Because he says that his note due August 1, 1891, had been placed by the defendant company in the hands of one May, its duly-constituted agent, who had power to extend the time of payment of said note; that said agent presented said note to appellee, and appellee explained to him that he was not at that time prepared to pay same, and wished an extension of time on same until the note of August 1, 1892, fell due, when he would pay both of said notes. And the appellee avers that said agent, having the authority in law to contract with plaintiff, stated to plaintiff that it was satisfactory to him; that he was willing to make the extension; and that he would extend the time of the payment of the note due August 1, 1891, until the maturity of the note due August 1, 1892; but that he would write to the defendant company, and state plaintiff's request, and, if said request was not satisfactory, he would at once notify plaintiff; and that plaintiff relied upon the agreement with said May that the time of the payment of said note would be extended, and that if said extension was not satisfactory to the company, that he would receive notice thereof. And, upon the issues thus joined, the case went to trial.

The questions of the forfeiture provided by the policy, and the waiver thereof, can best be understood and determined by recalling the evidence of the witnesses who testified on this point, especially as they are few in number, and their statements clear. The plaintiff, in answer to an interrogation of his counsel, said: "May came to see me about the note that was past due. My understanding was, when I took the policy out, that, when I got tired of it, I could drop it. He came to notify me of its being due, and said I had it to pay; that I could not drop it when I wanted to that they had my notes, and they had been given to him to collect; that they had a right to collect them by law; and that he was going to sue on them. I told him that I was not prepared to pay it right then, and that, if he would let it go on until the other note became due, I would pay them together; if I had it to pay, I would let it go that way; that I could not pay it then. He said it was agreeable to him if it was to the company, and that he would write to the company, and see, and, if it wasn't he would let me know." He claims that he relied upon this agreement made with May, and that he never heard anything from the company before the fire, and he says this conversation with May occurred about a week before the fire, and that he would have paid the note, rather than be sued on it. On cross-examination, plaintiff admitted that May told him that, if he chose to carry his own insurance, he had better have his flue fixed, and that he told him he was not protected as long as the note was unpaid, and that he advised him as a friend to pay the note, and reinstate the insurance. L. G. Smyser also testified as to what occurred between the agent May and the plaintiff. He says May came and asked Mr. Karn why it was that he did not answer his letters. "Powell told him just because he was aiming to drop the insurance, and did not want to keep it any longer; that it was his understanding, when he took it out, that he could drop it whenever he wanted to; and Mr. May told him he could not do anything like that. Karn told May that if he was bound to pay it, he would wait until the last payment was due, and then pay it off; and Mr. May said it was agreeable to him, that he would write to the company, and, if it was not agreeable to them, they would notify him." On cross-examination he said that he remembered Karn telling May that he wanted to carry his own insurance and take his own risk. This witness also said, in answer to this question: "After the agreement between May and Karn, which you have detailed here,-that it was satisfactory with May that this note that was past due might be paid off in August with the other note; that he would notify the company, and, if it was not satisfactory to them, they would notify Karn,-what was said about the policy being in full force, if anything?" "I think Mr. May told him he would have to carry his own risk." This was all the testimony of the plaintiff. Defendant's agent May testified as follows: "I received the note late in 1891, or early in 1892. It was sent to me for collection, being past due and unpaid. After notes are three months past due, they are sent to me for collection, the company having been unable to collect same." He says further that he wrote Karn that the note had been sent to him for collection, and asked a remittance; that he received no response; that he did this several times; that finally he went to see ...