Kan. City Life Ins. Co. v. Hislip

Citation6 P.2d 678,1931 OK 669,154 Okla. 42
Decision Date03 November 1931
Docket NumberCase Number: 20503
PartiesKANSAS CITY LIFE INS. CO. v. HISLIP.
CourtSupreme Court of Oklahoma
Syllabus

¶0 1. Insurance -- Payment of Premiums -- Waiver of Payment in Cash.

In reference to the annual premium stipulated for in the policy of insurance the insurance company has a right to demand cash payment, and it also has a right to waive the payment of the premium in cash and to accept in payment, notes or any other thing of value, not in conflict with law, satisfactory to the company. Mutual Life Insurance Co. v. Chattanooga Savings Bank, 47 Okla. 748, 150 P. 190.

2. Same--Policy Binding Upon Insurer Upon Acceptance of Note for Premium.

Where an insurance policy provides as a condition that the policy will not bind the insurer until the premium is paid, acceptance of a note by the insurer constitutes payment. American National Insurance Co. v. Brown (Ky.) 201 S.W. 326.

3. Same--Life Policy Held Binding Upon Acceptance of Part Cash and Note in Payment of Premium.

A life insurance policy which recites: "This policy is issued in consideration of the stipulations, agreements and representations made in the application for this policy, a copy of which application is hereto attached and made a part hereof, and said policy and application constitute the entire contract between the parties hereto, and in further consideration of the annual premium of one hundred fifty-eight dollars and seventy cents for one year's term insurance from date hereof," clearly acknowledges receipt of the first year's premium, and the insurance company when it accepts part cash and note in payment of the first premium cannot be heard to deny payment in so far as the binding effect of the policy is concerned. Masson v. New England Life Ins. Co. (Cal.) 260 P. 367; Noble v. Kansas City Life Ins. Co., 33 S. D. 458, 146 N.W. 606.

4. Same--Policy Binding Upon Delivery and Agent's Acceptance of Note for First Year's Premium.

"When an insurance company issues a policy of life insurance and its agent delivers the policy to the insured and such agent, on behalf of the insurance company, receives and accepts the promissory note of said insured for the amount of the first year's premium on said policy, this constitutes a complete contract and creates a liability on the insurance company under the terms of the policy." North Carolina Mutual Life Ins. Co. v. White, 130 Okla. 118, 265 P. 642.

5. Same--Effect of Incontestability Clause.

A life insurance policy which expressly stipulates, "This policy is absolutely free from restriction as to residence, travel, or place of death, and is incontestable after one year from date," means "that, if the premiums are paid, the liability shall be absolute under the policy, and that no question shall be made of its original validity. The language admits of no reasonable construction other than that the company reserves to itself the right to ascertain all the matter and facts material to its risk and the validity of its contract for one year; and that if within that time it does not ascertain all the facts, and does not cancel and rescind the contract, it may not do so afterwards upon any ground then in existence." Metropolitan Life Ins. Co. v. Peeler, 122 Okla. 135, 176 P. 939.

6. Same--In Action to Recover Permanent Disability Benefits Provided in Life Policy, Such Disability Occurring Before Payment of First Premium Note, Answer Held to State no Defense and Judgment on Pleadings Proper.

Record examined. Held, that the payment of part cash and the giving and accepting of a note prior to the time the disability of the insured accrued, which cash and note represented the amount of the first annual premium, constituted payment of the premium within the meaning of the provisions of the policy of insurance in question, and an answer which admits the premium was paid in aforesaid manner and that the disability accrued subsequent to the payment of said cash and the acceptance of said note and prior to the payment of said note, states no defense to the petition in the instant case and the court properly sustained a motion for judgment on the pleadings.

Appeal from District Court, Oklahoma County; Wyley Jones, Judge.

Action by Francis Hislip against the Kansas City Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Keaton, Wells, Johnston, & Barnes and Frank W. McAlister, for plaintiff in error.

Ames, Cochran, Ames & Monnet, for defendant in error.

McNEILL, J.

¶1 This is an appeal from the judgment of the district court of Oklahoma county. The parties will be referred to as they appeared in the trial court. The plaintiff filed his petition against the Kansas City Life Insurance Company, alleging in substance that on July 5, 1927, said defendant issued to plaintiff its policy of insurance, whereby defendant insured the life of plaintiff in the sum of $ 10,000 and agreed that should plaintiff, after payment of the first annual premium of said policy, become totally and permanently disabled by bodily injury or disease, said defendant would, upon receipt of proof of said disability, pay to plaintiff a monthly income of $ 10 per month for each $ 1,000 of the amount of the insurance named in said policy. It was further alleged that on or about August 1, 1927, plaintiff, as the result of tuberculosis, became totally and permanently disabled and has been since said date confined to his bed, and is wholly unable to transact any business or follow any occupation; that said total and permanent disability accrued after the payment of the first annual premium on said policy and before default was made in any subsequent payment and that said disability did not result directly or indirectly from any of the causes excluded under said disability provisions.

¶2 Plaintiff also alleged that, on or about July 10, 1928, due proof of said disability was delivered to said defendant; that said plaintiff has complied with all the terms and provisions of said policy; that under and by virtue of said provisions defendant has become indebted to plaintiff in the sum of $ 300 on account of such disability, and prays for judgment against said defendant in said amount.

¶3 To this petition defendant files its answer, admitting the allegations of the petition, except as therein stated, as follows:

"Defendant specifically denies that the total and permanent disability of plaintiff alleged in his petition accrued after the payment of a first annual premium on said policy, but defendant alleges that at the time such total and permanent disability accrued, the plaintiff had paid upon said first annual premium the sum of $ 39.69 and no more, and that for the balance of said first annual premium he had given his note to the defendant company for the sum of $ 115.89 due September 28, 1927, and which note was not paid until on or about the date the same became due. That by reason thereof the disability provision of said policy had not become effective and did not cover total disability accruing before the date of the actual payment of said first annual premium."

¶4 On March 2, 1929, plaintiff filed his motion for judgment on the pleadings for the reason that the matters contained in the answer of the defendant did not constitute a defense to the action, and prayed for judgment against said defendant. This motion came on for hearing on March 9, 1929. The court sustained said motion and rendered judgment in favor of plaintiff and against defendant for $ 300, interest, and costs, to all of which the defendant excepted and the cause was regularly brought to this court upon the certified transcript of the record.

¶5 The facts are not in controversy. The only question presented for determination is whether or not under the pleadings the court properly rendered judgment for plaintiff.

¶6 The part of the provisions of the policy material to the determination of this case is as follows:

"Upon receipt, at the home office of the company, of due proof, upon blanks furnished by the company for that purpose, that, after the payment of the first annual premium upon this policy, and before default in the payment of any subsequent premium, and while the policy is in force, and before the insured has attained the age of 60 years, the insured has become and is totally and permanently disabled by bodily injury or disease, except as hereinafter provided, and will be continuously and wholly prevented thereby for life from engaging in any occupation, employment, or work for wages, gain, or profit, and that such permanent and total disability has existed during the preceding period of 30 days, the company will waive the payment of any subsequent premiums of this policy which fall due during the continuance of such total and permanent disability; and after the lapse of 60 days from the receipt of the aforesaid proof, if such total and permanent disability as herein defined has continued and then exists, the company will pay the insured a monthly income of $ 10 per month for each $ 1,000 of the amount of insurance named on the first page of this policy, the first of such monthly income payments to be made immediately upon approval of claim therefor, and a like amount on the corresponding day of each calendar month thereafter during the continuance of such total and permanent disability and the life of the insured."

¶7 It is admitted by the pleadings that plaintiff paid upon said first annual premium the sum of $ 39.68 cash, and gave his note to the defendant, due September 28, 1927, for the balance of said first annual premium, which note was paid on or about the date it became due.

¶8 Counsel for defendant, in their brief, state:

"Defendant specifically denies that the total and permanent disability of plaintiff alleged in his petition accrued after the payment of the first annual premium on said policy; but defendant alleges that at the time such total and permanent disability accrued, the plaintiff had
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7 cases
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    • Supreme Court of Oklahoma
    • September 25, 1935
    ......"Nina G. Cutlip. "Post Office 1105 E. Park, Okla. City, Oklahoma. (on back side) "7.20 applied on Ext 12/28/33. "Stamped: ... support of her contention plaintiff cites the case of Kansas City Life Ins. Co. v. Hislip, 154 Okla. 42, 6 P.2d 678, decided by this court on ......
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