Jackson v. United Benefit Life Ins. Company

• Citation: 86 P.2d 1089,54 Wyo. 62
• Decision Date: 07 February 1939
• Docket Number: 2081
• Parties: JACKSON v. UNITED BENEFIT LIFE INS. COMPANY
• Court: United States State Supreme Court of Wyoming

86 P.2d 1089

54 Wyo. 62

JACKSON v. UNITED BENEFIT LIFE INS. COMPANY

No. 2081

Supreme Court of Wyoming

February 7, 1939

APPEAL from the District Court, Weston County; HARRY P. ILSLEY Judge.

Action on a life policy by Belle Jackson, formerly Belle Ventling against the United Benefit Life Insurance Company. Judgment for plaintiff, and defendant appeals.

Reversed.

For the appellant, there was a brief by Philip E. Horan of Omaha Nebraska, and Preston T. McAvoy of Newcastle, Wyoming, and oral arguments by Messrs. McAvoy and Horan.

Death of either party to a contract fixes the contractual status. This status cannot thereafter be changed by the acts of the representative of the deceased. The contract of insurance was terminated by Harry Jackson prior to his death. He desired to continue his health and accident policy and discontinue his life policy. He sent the company $ 15.00 with instructions to that effect. While correspondence was passing between the company and Jackson on the subject, Jackson died. The real question in this case is whether the relation between Harry Jackson and the insurance company could be changed after his death. It is the contention of the defendant that it could not. Thompson v. Travelers Ins. Co. (N. D.) 91 N.W. 75; Ivie v. Life Ins. Co. (Ala.) 117 So. 176; Lockwood v. New York Life Ins. Co., 161 N.Y.S. 700; Lofaro v. Mutual Life Insurance Company, 239 A.D. 64; Larmar v. Life Insurance Co., 85 F.2d 141; Goodard v. Equitable Life Assur. Soc. (Ala.) 172 So. 678; Gibbo v. Insurance Company, 272 N.Y.S. 374; Gardner v. Nat. Life Ins. Co., 161 S.E. 308.

For the respondent, there was a brief by L. H. Sennett and Harris & Harris of Casper, and oral argument by Mrs. Laura B. Harris and Mr. Sennett.

Appellant waived its right to exercise the forfeiture clause contained in the policy. Having received and kept the money and retained it until after the death of the insured fixed the rights of the parties. The company had the money and Jackson had the policy. Having waived the forfeiture clause in the policy, the company is estopped to now claim forfeiture as a defense. 37 C. J. 536. Forfeitures are abhorred in law. Cope v. Jefferson Standard Life Ins. Co. (S. C.) 133 S.E. 440; Howrey v. Star Ins. Co., 46 Wyo. 409. The conduct of the company must be consistent with forfeiture. Francis v. Supreme Lodge A. O. U. W., 130 S.W. 500; 2 Bacon (3d Ed.) 431; Spencer v. National Life Ins. Co. (Mo.) 200 S.W. 80; Equitable Life Assur. Society of the U. S. v. Ellis, 147 S.W. 1152; Life Ins. Company v. Jacobson, 137 P. 869; Life Ins. Co. v. Howard, 52 A. 397; Texas State Ins. Co. v. Capers, 183 S.W. 794; Insurance Co. v. Freeman (Tex.) 47 S.W. 1025; Noem v. Equitable Life Ins. Co. (S. D.) 157 N.W. 308; Washburn v. Union Central L. I. Co. (Ala.) 38 So. 1011. The retention or acceptance of the premium after demand for its return by the insured will be a recognition of the continuing force of the contract and an election by the insurer to waive any existing breach of its provision. Parsons Company v. Lane (Minn.) 106 N.W. 485; Mishiloff v. American Cent. Ins. Co. (Conn.) 128 A. 33; Kidder v. Knights Templars & Masons Life Indemnity Co., 69 N.W. 364; Roberts v. American Nat. Assur. Co., 220 S.W. 996; Travelers' Ins. Co. v. Jones (Tex.) 73 S.W. 978. An insurer cannot treat the contract as valid for the purpose of collecting premium and invalid for the purpose of indemnity. Kentucky Ins. Co. v. Stout (Ky.) 194 S.W. 318; Monger v. Davis, 31 S.E. 609. A waiver, once made, is irrevocable. U. S. F. & G. v. Miller (Ky.) 34 S.W.2d 938.

BLUME, Justice. RINER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is a suit on a life insurance policy by Belle Jackson, plaintiff, against the United Benefit Life Insurance Company, a corporation, with its home office at Omaha, Nebraska, and with a local office at Cheyenne, Wyoming. Plaintiff recovered judgment as prayed, and the insurance company above named has appealed. The facts, mostly contained in an agreed statement of facts, are, so far as material herein, as follows:

On August 26, 1932, the defendant insurance company, in consideration of the semi-annual payment of $ 17.72, issued to one Harry Jackson its policy No. C 78104 on the life of the insured in the sum of $ 2000. The beneficiary of the policy is the plaintiff and respondent herein. The semi-annual payments were due respectively on February 26 and August 26 of each year. It is provided in the policy that premiums may be paid in advance in semi-annual or quarterly installments at the company's rates therefor, but that the payment of any premium or installment shall not maintain the policy in force beyond the date when the next premium or installment become payable. The policy further provides that "Upon default in payment of any premium this policy shall be null and void and all premiums forfeited to the company." 31 days of grace, however, were allowed, during which the policy was to remain in force.

At the same time at which the foregoing policy was written and delivered, the defendant herein furnished to insured an accident and health policy, No. LE3-9659, issued by the Mutual Benefit Health and Accident Association. The two policies were delivered in a single folder; premiums were collected as one item of $ 32.72 semi-annually. "While the billing of premiums on the two policies, as well as the payment, had always been treated as a single item, and the two policies were designated by a single number, yet each separate policy recited a separate consideration, the semi-annual premium on the life contract being $ 17.72, and on the health and accident contract $ 15." The premiums due up to and including August 26, 1933, were duly paid, but none thereafter except as herein mentioned. Prior to February 26, 1934, the company sent to the insured a written notice that a semi-annual premium of $ 32.72 would be due and payable on that date. Nothing, however, was paid on that date, but on March 23, 1934, the insured wrote a letter as follows:

"Newcastle, Wyoming, March 23, 1934

United Benefit Life Insurance Company, Omaha, Nebraska.

Dear Sirs:

Please find money order for fifteen dollars ($ 15.00) for my payment on accident policy #LE3-9659. I'm unable to carry both of the policies so I wish to drop Policy C-78104 and just carry the accident policy. Please mail receipt or advise as to whether this can be done or not.

Yours truly,

Harry Jackson."

The insured secured a money order for the sum of $ 15.00, payable to the United Benefit Life Insurance Company, and mailed the foregoing letter to the company at Cheyenne, instead of to Omaha, Nebraska. The money order and letter were received at that place by the company's manager. He indorsed and deposited the money order, and he applied it as shown by a letter written by him to the insured, which is as follows:

"March 28, 1934

Mr. Harry Jackson, Newcastle, Wyoming.

Dear Mr. Jackson:

We received your money order for $ 15.00 today and wish to advise that it will be impossible for you to continue your present health and accident policy separate from your combination life, health and accident policy.

However, the quarterly premium on your combination policy is $ 16.53 or $ 32.72 on the semi-annual basis, which you no doubt have confused with the quarterly premium. The quarterly premium is $ 16.53, and as you have already sent us $ 15.00 if you will mail us an additional $ 1.53, we will be very glad, indeed, to mail you our receipt covering your combination life, health and accident for the next three months. We believe that by handling your premium on the quarterly basis, you will find it convenient to continue the entire contract in force.

We are enclosing a self-addressed envelope for your convenience and trust that we receive your remittance of $ 1.53 by return mail, at which time our official receipt will be mailed to you."

This letter was never answered, and no further correspondence took place between the insured and the Cheyenne agent. A number of communications, however, were received by the insured from the company's office at Omaha. On March 24, 1934, the company wrote to the insured as follows:

"Mr. Harry Jackson,

Osage, Wyoming.

Dear Mr. Jackson:

We still do not have record of receiving remittance to cover your semi-annual premium. If this has not been taken care of, either by remittance direct to this office or with one of our representatives, your policy has reached the danger point, for you have only two more days of grace in which to meet payment.

It has just occurred to us, perhaps you are not prepared to conveniently meet the full six months' premium. If this is the case would suggest you change your policy over to the quarterly basis, for the time being at least. The attached change in Premium Mode Endorsement shows the quarterly rate.

If you will just return this, with the remittance shown, we will make the necessary changes for you, --this, of course, with the understanding you have the privilege of changing back to the semi-annual basis any time. This will cover you for the next three months by the best protection money can purchase."

Subsequently a notice, apparently on April 2, 1934, was sent from the office at Omaha, Nebraska, advising the insured that the premium on the foregoing policies had not been paid; that this was doubtless due to an oversight, and that for the convenience of the insured a form of reinstatement was enclosed, in order that he might apply for restoration; that if the application for such restoration were approved, his insurance would be restored; that otherwise his remittance sent along with the application for reinstatement, would be returned. On April 10, 1934, another letter was...