Home Life & Accident Co. v. Haskins

• Decision Date: 27 November 1922
• Docket Number: 10
• Citation: 245 S.W. 181,156 Ark. 77
• Parties: HOME LIFE & ACCIDENT COMPANY v. HASKINS
• Court: Arkansas Supreme Court

245 S.W. 181

156 Ark. 77

HOME LIFE & ACCIDENT COMPANY v. HASKINS

No. 10

Supreme Court of Arkansas

November 27, 1922

Appeal from Lonoke Circuit Court; George W. Clark, Judge; reversed.

Judgment reversed and case dismissed.

T D. Wynne, for appellant.

The faiure to pay the premium note when due voided the policy. 75 Ark. 25; 74 Ark. 507; 25 Cyc. 827; 28 N.J.Eq. 167; 43 N.Y 283; 86 Pa.St. 171; 75 S.W. 735; 86 S.W. 618; 28 S.W. 411; 187 U.S. 335; 104 U.S. 252; 230 S.W. 257; 78 Ark. 127; 85 Ark. 337; 104 Ark. 288; 87 Ark. 70; Bacon on Life & Accident Insurance, vol. 2, § 476. Receipt by the company of a premium note is only prima facie evidence that the premium has been paid, but that such presumption could be overcome by proof to the contrary. 87 Ark. 70; 28 S.W. 411; 67 S.W. 941. An insurance company is not required to declare a forfeiture on an insured's failure to comply with the conditions of the policy. 78 Ark. 507; 75 Ark. 28; 79 Ark 38; 81 Ark. 145; 85 Ark. 337; 104 Ark. 288; 8 Ark. 563.

Williams & Holloway, for appellee.

The payment of a premium on insurance may be made by property or note, or by the obligation of a third person, as well as by money. 94 Ark. 578; 127 S.W. 966. An insurance company is bound by the acts of its agent. 75 Ark. 98; 86 S.W. 817; 75 Ark. 25; 86 S.W. 814; 96 S.W. 365; 81 Ark. 160; 190 S.W. 446; 76 Ark. 328; 88 S.W. 950; 12 Wall. 285. It was a question for the jury to say whether or not Towler had authority to extend the time of payment of the note. 1 Cooley's Briefs on Insurance, p. 345; 81 Ark. 160; 98 S.W. 694; 36 Okla. 733; 29 P. 865; 62 Ark. 562; 36 S.W. 1051; 54 Am. St. Rep. 305

OPINION

SMITH, J.

This is a suit to recover on a policy of insurance issued by appellant insurance company upon the life of D. E. Haskins. There was a verdict in favor of the plaintiff, the beneficiary, and a judgment accordingly, from which is this appeal.

Policies were written on the lives of both Haskins and his wife, the applications therefor having been taken by one Towler, who was a soliciting agent for the insurance company. Towler was only a soliciting agent, and his authority was limited to accepting and forwarding applications for insurance, delivering policies of insurance, collecting premiums and taking notes therefor and forwarding the same to the company. He had the authority also to execute binding receipts for any premiums paid.

The policies were delivered on September 16, 1920, at which time Towler executed and delivered a receipt acknowledging payment of premium for one year. The premium was in fact paid by a note due on or before November 15, 1920, for the amount of the premium, the note being made payable to the order of the insurance company. The note contained the following stipulation: "This note given in payment of first annual premium on policy No. 19405 issued to me by the Home Life & Accident Company. If this note is not paid at maturity, said policy and all risks secured thereby shall terminate, and said policy shall become null and void; but the full amount of the premium on said policy shall be considered as earned premium thereon, while said policy was in force, and this note shall be payable without reviving said policy."

The policy itself provided that "if any premium or installment thereof is not paid when due, this policy shall be ipso facto null and void, and all premiums forfeited to the company, except as herein otherwise provided."

The policy also contained the following provisions: "Reinstatement of this policy, in event of default of premium payment may be made, unless the cash surrender value has been paid, at any time upon presentation at the head office of evidence of insurability satisfactory to the company, and payment of all past due premiums, and the payment of reinstatement of any indebtedness to the company hereon or secured hereby, with cost, at a rate not exceeding 6 per cent. per annum."

The insurance company sent the note for collection to a bank at Humnoke, Arkansas, and the bank notified the insurance company that the note had not been paid. Thereupon the insurance company directed the bank to deliver the note to Towler for collection, and Towler received it for that purpose. Towler failed to collect the note, and on June 17th gave it to C. V. Holloway, an attorney, for collection. Holloway testified that before accepting the note for collection he stated to Towler that he would first see if it was satisfactory with Haskins for him to do so, as Haskins was his client. Holloway at the time was negotiating a loan for Haskins, and, after seeing Haskins, Holloway advised Towler that he would collect the note and that he would guarantee payment thereof as soon as Haskins obtained his loan, and Holloway stated further to Towler that if this was not satisfactory he would advance the money to pay the note, but Towler said this was not necessary and would not be required.

The insured died July 11, 1921, and Holloway paid Towler the note on July 20, 1921.

Towler testified that he had no authority except that of a soliciting agent, and that he was interested in the note to the extent of his agent's commission. He did not remember--but did not deny--that Holloway had told him that, if payment were demanded at the time the note was delivered to Holloway, he (Holloway) would pay it then. Witness was largely indebted to the company, and the note at all times belonged to the company. In March, 1921, witness had a settlement with the company and gave it his note for forty-five hundred dollars, which was the ascertained balance due by him, and witness indorsed all notes in which he had an agent's commission to the company, so that when the notes were collected by the company his commissions would be applied to his account. Haskins' premium note was then long past due, and the effort of witness to collect the note was made for the benefit of the company, and, had it been collected, the company would have given him credit for his agent's commission. Towler further testified that when the note was paid he forwarded the proceeds to the company; and, in view of the jury's verdict, we assume this was true, although the superintendent of the company denied that the company had ever received the proceeds arising from the collection of the note.

The company's superintendent further testified that the policy lapsed when the note fell due and was not paid, and that the company lapsed it by taking it out of its files and marking the insurance not in force on the company's books. Towler was notified of this action, but the insured was not. The company was not required, however, to give the insured notice of the forfeiture. Patterson v. Equitable Life Assurance Society, 112 Ark. 171, 165 S.W. 454. The insured was notified, however, thirty days in advance when the premium note would become due. The superintendent also testified that the company endeavored to collect this note, and that it did so because of the provision of the note giving it that right, and that the policy would not have been revived had the collection been made, and that there was no attempt to reinstate the policy, and that the policy provided that reinstatement could be made only upon a showing by the insured that he was in good health at the time of his application for reinstatement, and such is the provision of the policy, as shown by the excerpt set out above.

The simultaneous delivery of the...