Johnson v. Southern Mut. Life Ins. Co.
| Decision Date | 09 June 1881 |
| Citation | 3 Ky.L.Rptr. 26,79 Ky. 403 |
| Parties | Johnson v. The Southern Mutual Life Insurance Company. |
| Court | Kentucky Court of Appeals |
1. The retention of Johnson's note by appellee as its property after the the request had been made that it issue a paid-up policy, was sufficient evidence of further grace, and a determination to demand the payment thereof.
2. Inasmuch as appellee did not notify Johnson of the forfeiture of his policy, and did not offer to surrender his note, he had the right to treat the action of appellee as a waiver of the forfeiture and a continuance of the credit extended to him for the premium embraced in part in the note.
3. In order to inflict a forfeiture, the Company is required to adhere inflexibly to the contract and its modifications, and they must not attempt to secure profits which may result from the variation of its terms and the inability of the assured to comply with the added or altered conditions.
4. The offer to surrender the original policy and the demand for a new and paid-up policy were made within a reasonable time.
APPEAL FROM LOUISVILLE CHANCERY COURT.
D. M RODMAN AND J. K. GOODLOE FOR APPELLANT.
1. We insist that appellee cannot forfeit $600 by reason of the failure to demand a paid-up policy within thirty days after the note for $107 was due. It cannot enforce a forfeiture for failing to pay the note and still retain it as its property.
2. The demand for a paid-up policy was made in a reasonable time. (Montgomery v. Phœ nix Mut. Ins. Co., 10 Bush, 64; 9 Dana, 151.)
3. The failure to pay the note at maturity did not render the note or policy void. (2 Parsons on Cont., 677; 33 E. C., 38; Chitty on Cont., 1092.)
BARRETT & BROWN FOR APPELLEE.
1. The assured should have surrendered the original, and demanded a paid-up policy within a reasonable time. (7 Ins. Law Journall, Ills., 23.)
2. The opinion of this court upon the former appeal is the law of the case. (Davis v. McCorkle, 14 Bush, 746.)
3. The case of Montgomery v. Phœ nix Life Ins. Co. is not in point. There is no identity of condition in the two policies. (MS. Opinion in this case, March 14, 1878.)
October 21, 1869, Jilson P. Johnson's life was assured by the appellee, the Southern Mutual Life Insurance Company, in the amount of four thousand dollars, to be paid to his wife, if she should survive him, within ninety days after notice and evidence of his death, " deducting therefrom the amount of all unpaid notes given for premiums or loans on this policy, and all deferred premiums."
The consideration for the policy was $129.88, in hand paid, at its issuance, and of the annual premium of a like sum, to be paid on or before the 21st day of October in every year during the continuance of the policy.
It was stipulated that in case the assured failed to pay the annual premiums as they became due, the Company should not be liable to pay the sum insured, or any part thereof, and the policy should cease and determine.
The following provision is also contained in the policy:
" Provided, that if this policy shall become null and void by reason of the violation of any of the foregoing conditions, all payments made hereon shall be forfeited to said Company; but if three or more full years' premiums shall have been paid hereon, a new and paid-up policy will be issued by said Company, upon demand thereof within thirty days after the said forfeiture, for the equitable value of the original policy. "
Johnson paid the annual premiums to October 21, 1874, covering a period of five years.
The Company loaned to him on each of the 1st and 2d annual premiums the sum of $43.
For the annual premium due October 21, 1875, he paid $22.88, and executed his promissory note on that day for the residue of the premium, payable ninety days after date, with interest at eight per centum per annum until paid.
He failed to pay the note at its maturity, and on the 7th of February, 1876, he was notified by the Company that it claimed the forfeiture of his policy. During Christmas week 1876, Johnson, through his agent, demanded a new and paid-up policy for the equitable value of the original policy, which he at the same time offered to surrender.
The Company refused to accept the original, or issue a paid-up policy.
Thereafter, on the 1st of February, 1877, Johnson and wife instituted this action to compel the Company to issue to him a paid-up policy.
They alleged substantially the facts above recited.
To the petition a demurrer was sustained, and upon their appeal the cause was reversed, the court, in its opinion, saying:
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