Inter-Southern Life Ins. Co. v. Duff

• Decision Date: 09 May 1919
• Citation: 184 Ky. 227,211 S.W. 738
• Parties: INTER-SOUTHERN LIFE INS. CO. v. DUFF ET AL.
• Court: Kentucky Court of Appeals

211 S.W. 738

184 Ky. 227

INTER-SOUTHERN LIFE INS. CO. v. DUFF ET AL.

Court of Appeals of Kentucky.

May 9, 1919

Appeal from Circuit Court, Breathitt County.

Action by Mollie M. Duff and others against the Inter-Southern Life Insurance Company. Motion for new trial overruled, judgment on verdict for plaintiffs, and defendant appeals. Affirmed.

Helm Bruce and Clarence C. Smith, both of Louisville, for appellant.

G. W Fleenor, of Winchester, for appellees.

THOMAS J.

The appellees (the widow and children of A. A. Duff, deceased) brought this suit to recover on a $2,000 life insurance policy, in which they are the beneficiaries, which the Southern National Life Insurance Company issued upon the life of deceased on the 20th of September, 1912. After the policy was issued, the appellant and defendant, Inter-Southern Life Insurance Company, purchased all of the assets and assumed all of the liabilities of the Southern National Life Insurance Company and agreed to carry out the terms of the policies which it had theretofore issued, including the one sued on.

The substance of the petition as amended alleged the issual of the policy; its assumption afterwards by the defendant; that the first premium was paid in cash; and that the second one which was due on September 20, 1913, was paid partly in cash and partly by a note, which note was not paid at maturity. But facts are pleaded showing that its payment at that time was waived by the defendant, and that within the time agreed upon whereby the payment was extended it was tendered to the defendant, but it wrongfully refused to accept the tender and wrongfully forfeited the policy; and that this wrongful forfeiture excused either the payment or tender of payment of subsequent premiums.

At this point it might be well enough to dispose of a preliminary question raised by defendant on this appeal, viz., that a waiver by the defendant of the payment of the note is not relied on in either the petition, amended petition, or any pleading filed by plaintiffs. We cannot agree to this contention, because facts are alleged which, if true constitute a waiver, and it was not necessary for the pleader to label his allegations as such. It is sufficient if the facts constituting a cause of action or defense are stated in the pleading of the party relying on them, without specifically naming the legal principle entitling him to sue or to defend.

The answer pleaded the failure of payment and insisted upon the forfeiture of the policy, as well as denying any agreement to extend the time for the payment of the note. It also relied on the fact that when payment was tendered, although it may have been within the time of the alleged extension, it did not include interest on the note, and defendant was therefore authorized to decline to receive it and to cancel the policy. This contention of defendant was attempted to be met by urged constructions of certain provisions of the policy relating to loan values at the expiration of each of the 20 years in which premiums were to be made before the policy matured, and constructions relative to the payment of coupons attached to the policy, by which the policy holder was to receive a cash dividend or reduction in his premium in an amount represented by the coupon due each year; it being insisted by plaintiff's counsel that the construction which he placed upon those provisions of the policy supplied sufficient funds and cured the omission to include the interest in the tender of the payment of the note and rendered the attempted forfeiture of the policy by the defendant wrongful and illegal and void so far as plaintiffs are concerned. A trial of the case resulted in the jury returning a verdict for plaintiffs for the full amount of the policy, less the amount due the defendant for unpaid premiums and interest thereon from the dates they respectively matured. Defendant's motion for a new trial having been overruled, and judgment pronounced on the verdict, it prosecutes this appeal, insisting on a number of grounds for reversal, chief among which is that the court should have sustained its motion for a peremptory instruction directing a verdict in its favor.

According to the view which we take of the record, it will be unnecessary to notice any of the grounds urged for a reversal, since the testimony--to which there is neither objection nor grounds for objection--very clearly shows that it was the duty of the court to peremptorily instruct the jury to return the verdict which it did. These conclusions are based upon the grounds: (1) That neither the policy nor the note given for part of the second premium provided that the policy should lapse or be forfeited if the note was not paid at maturity; but if such provisions had been contained in the policy and note, or in either of them, the defendant elected to and did waive them by its action in treating the note as an asset after it became due and unconditionally demanding its payment. (2) The defendant having forfeited the policy when it had no legal right to do so, and having informed the insured that it would not accept the premium from him, and that his policy was lapsed and dead, he was excused from either paying or offering to pay any subsequent premiums, but was only required to account to the defendant in a final settlement of the policy for the unpaid premiums and notes representing them, with interest from the time they should have been paid. A brief discussion of these two grounds will now be made, and in doing so we will confine ourselves strictly to the direct questions involved without indulging in any comments upon any collateral issues which might under certain contingencies, not appearing here, be involved.

1. In the cases from this court of Union Cent. Life Ins. Co. v. Duvall, 46 S.W. 518, 20 Ky. Law Rep. 441; Manhattan Life Ins. Co. v. Savage, 63 S.W. 278, 23 Ky. Law Rep. 483; N.Y. Life Ins. Co. v. Warren Deposit Bank, 75 S.W. 234, 25 Ky. Law Rep. 325; Same v. Meinken's Adm'r, 80 S.W. 175, 25 Ky. Law Rep. 2113; Union Central Life Ins. Co. v. Spinks, 119 Ky. 261, 83 S.W. 615, 84 S.W. 1160, 26 Ky. Law Rep. 1205, 27 Ky. Law Rep. 325, 69 L.R.A. 264, 7 Ann.Cas. 913; St. Louis Mutual Life Ins. Co. v. Grigsby, 10 Bush, 310; Moreland v. Union Central Life Ins. Co., 104 Ky. 129, 46 S.W. 516, 20 Ky. Law Rep. 432; Manhattan Life Ins. Co. v. Pentecost, 105 Ky. 643, 49 S.W. 425, 20 Ky. Law Rep. 1442; Manhattan Life Ins. Co. v. Myers, 109 Ky. 372, 59 S.W. 30, 22 Ky. Law Rep. 875; Moore v. Continental Ins. Co., 107 Ky. 273, 53 S.W. 652, 21 Ky. Law Rep. 652; Fidelity Mutual Life Ins. Co. v. Price, 117 Ky. 25, 77 S.W. 384, 25 Ky. Law Rep. 1148; Walls v. Home Ins. Co. of New York, 114 Ky. 611, 71 S.W. 650, 24 Ky. Law Rep. 1452, 102 Am.St.Rep. 650; New England Mut. Life Ins. Co. v. Springgate, 129 Ky. 627, 112 S.W. 681, 113 S.W. 824, 91 L.R.A. (N. S.) 227; New York Life Ins. Co. v. Evans, 136 Ky. 391, 124 S.W. 376; Limerick v. Home Ins. Co., 150 Ky. 827, 150 S.W. 978, 44 L.R.A. (N. S.) 371; Natl. Council J. O. U. A. M. v. Thomas, 163 Ky. 364, 173 S.W. 813; Federal Life Ins. Co. v. Warren, 167 Ky. 740, 181 S.W. 331; and Ray v. Commonwealth Life Ins. Co., 211 S.W. 736, this day decided--it was held that where an insurance company had the right to forfeit a policy for nonpayment of a premium note, such right could be waived, and that it was waived when the company made an unconditional demand of the insured for the payment of the note, and some of them hold (where the facts present the question) that, when the company once elects to treat the note as a valid subsisting obligation by making the unconditional demand, it cannot afterward, during the year for which the note was executed as a premium, retract its election and forfeit the policy. Thus in the Springgate Case (129 Ky. 627, 112 S.W. 681, 113 S.W. 824) the court quotes with approval section 1379 of 2 Joyce on Insurance, which says:

"As a general rule, if the company has treated the policy as valid, and has sought to enforce payment of the premium, or has otherwise, with knowledge, recognized, by its acts or declarations or those of its agents, the policy as still subsisting, it waives thereby prior forfeitures."

The opinion then takes up and discusses a number of prior cases from this court dealing with this subject, and then says:

"This principle is that the company must stand on the forfeiture if it wishes to have the benefit of it. It cannot claim the forfeiture and insist on the payment of the note. Its assertion of a claim on the note is inconsistent with a claim that the policy is forfeited; for, if the policy is forfeited, there is nothing to be paid on it. To allow the company to treat the policy as valid after the right to forfeit it has accrued, and insist on the note being paid as long as it deems this to its interest, and then, when it learns that the assured is sick or dead, to rely on the past forfeiture, which, at the time it elected to waive, would be to allow it to take inconsistent positions. So the question comes to this: Did the company, when the right to forfeit the policy accrued, elect to forfeit it or to treat it as a subsisting obligation? If it elected then to treat the policy as a subsisting obligation, it cannot, when subsequent events make it to its interest to do so, withdraw the election it then made, and say the policy was forfeited. It is not a question of misleading the insured, to his prejudice. It is not material whether the note was sent to an attorney, a bank, or an agent for collection. These things may be evidence of the company's intention; but the intention may be shown otherwise. Forfeitures are not favored in law. When once waived, they cannot be afterwards insisted on. So in each case the question is: On

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