Hoover v. Hartford Fire Ins. Co.

• Decision Date: 18 December 1928
• Citation: 11 S.W.2d 976,227 Ky. 88
• Parties: HOOVER et ux. v. HARTFORD FIRE INS. CO.
• Court: Kentucky Court of Appeals

11 S.W.2d 976

227 Ky. 88

HOOVER et ux. v. HARTFORD FIRE INS. CO.

Court of Appeals of Kentucky

December 18, 1928

Appeal from Circuit Court, Hopkins County.

Action by G. L. Hoover and wife against the Hartford Fire Insurance Company. Judgment for defendant, and plaintiffs appeal. Affirmed.

Thos E. Finley and J. A. Jonson, both of Madisonville, for appellants.

Fox &amp Gordon and J. T. Gooch, all of Madisonville, for appellee.

WILLIS J.

This is an action upon a contract of insurance. G. L. Hoover and wife insured their dwelling, household goods, barn, and some other property in the Hartford Fire Insurance Company for a period of five years. They paid $40.56 in cash on or before November 1, 1922, and executed an installment note to the insurance company for $162.24 for the balance of the premium, payable one-fourth on the 1st day of November in each of the ensuing four years. The installment note and insurance policy each contained a provision to the effect that the company should not be liable for any loss or damage that might occur to the insured property whilst any installment of the premium note or any portion thereof, remained due and in default. In March, 1925, all of the insured property was destroyed by fire. The company denied liability for the loss, and this action upon the contract was instituted by the insured. At the conclusion of the evidence offered by the plaintiffs, a peremptory instruction was given the jury to find for the defendant. A new trial was requested and refused, resulting in this appeal by the plaintiffs. The defense of the insurance company was rested upon the admitted failure of the insured to pay the installments of the premium note that fell due, respectively, on November 1, 1923, and on November 1 1924. The appellants relied upon a waiver of the suspension provisions of the note and policy by reason of an unconditional demand for payment and retention of the note by the company. The waiver was denied. The question is whether there was sufficient evidence of waiver of the conditions of the note and policy to require submission of the case to the jury.

The collection of the agreed premiums for insurance is vital to the insurance business, and it is consistent with the policy of the law to stipulate in the contract that the payment of any note given for the premium shall operate as a condition to the continuance of the contract. Morgan v. Home Insurance Co., 216 Ky. 589, 288 S.W. 321; Ray v. Commonwealth Life Ins. Co., 184 Ky. 215, 211 S.W. 736; Clifton v. Hartford Ins. Co., 203 Ky. 779, 263 S.W. 338; New England Mutual Life Ins. Co. v. Springate, 129 Ky. 627, 112 S.W. 681, 113 S.W. 824, 19 L. R. A. (N. S.) 227.

The condition, however, is for the benefit of the insurance company, and this court has held that such stipulation may be waived by the insurance company holding the note and making an unconditional demand for payment of it. Cases supra. The election of the company to treat the insurance as in suspension during default in the payment of the note cannot be reconciled with holding the note as a valid obligation and making unconditional demand for its payment. If the note be treated as a valid and subsisting obligation, the insurance contract cannot be treated as void. The company in this case retained the note, so the question is narrowed to a consideration of the evidence to ascertain whether an unconditional demand for payment was made. No demand whatever...