Kentucky Live Stock Ins. Co. v. Stout

• Decision Date: 01 May 1917
• Citation: 175 Ky. 343,194 S.W. 318
• Parties: KENTUCKY LIVE STOCK INS. CO. v. STOUT.
• Court: Kentucky Court of Appeals

194 S.W. 318

175 Ky. 343

KENTUCKY LIVE STOCK INS. CO. v. STOUT.

Court of Appeals of Kentucky.

May 1, 1917

Appeal from Circuit Court, Fayette County.

Suit by Newton Stout against Kentucky Live Stock Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

J. S McElroy, Jr., of Louisville, for appellant.

W. P Kimball and D. C. Hunter, both of Lexington, for appellee.

CLAY C.

On September 23, 1914, the Kentucky Live Stock Insurance Company issued to Newton Stout a policy insuring the life of his trotting stallion Crystal Direct in the sum of $1,000. The stallion died on October 29, 1914, and, the company having denied liability, Stout brought this suit to recover on the policy. A trial before a jury resulted in a verdict and judgment for Stout, and the company appeals.

The policy contained the following provisions:

"III. It is expressly agreed that this company shall not be liable for any loss that may occur while any premium, or part thereof, or order given for the premium, remains past due and unpaid; except that the assured shall be entitled to such proportion of the total insurance, as the amount actually paid in cash shall bear to the total amount of the premium, nor shall this company be liable for loss from accident, disease or other cause happening, or having its inception, during the period of such default; and the receipt of such payment shall not be a waiver of this or any other stipulation or condition of this policy. * * *

V. There shall be no liability on the part of the company * * * if the assured, in case of sickness or accident to the animal (or animals) hereby insured, shall fail to render, at once, notice in writing to the secretary of the company of such sickness or accident; and should the company not be satisfied with the care and attention given said animal while sick or disabled, the company reserves the right to remove same from the owner's premises, and take full charge of it, at the expense of the insured, until its death or recovery."

While the company pleaded a violation of both of the above provisions, it abandoned the defense based on the failure of plaintiff to pay the premium before the loss occurred, and relied entirely on the defense that plaintiff failed to give written notice of the sickness of the horse to the secretary of the company. In his reply plaintiff pleaded a waiver.

Briefly stated, the facts are as follows: The insurance was solicited by defendant's agent, Roland C. Drake, who lived at Lexington. Drake was the special agent of the company for the states of Indiana, Ohio, Illinois, and Kentucky. He had authority to take applications, deliver policies, collect the premiums and accept premium notes, and appoint local agents, subject to the approval of the company. Stout's application was taken on September 21, 1914. The application was accepted by the company, and the policy issued on September 23, 1914, and mailed direct to Stout, who received it a day or two later. The premium of $65 was not paid when the policy was delivered, it being agreed between the agent and Stout that the premium might be paid at a later date, either in cash or by note payable in 30 or 60 days. Thereafter Drake and Stout agreed to meet on a certain day and arrange about the premium. Pursuant to this agreement, they did meet at the Leonard Hotel in Lexington, and Stout executed and delivered to Drake a note for the amount of the premium, dated October 17, 1914, and payable in 30 days. The note was forwarded to the company and accepted, and retained by it until after the death of the horse, when it was returned to Stout with a disclaimer of liability. According to Stout's evidence, the horse was taken ill two days before the meeting at which the note for the premium was executed. When Stout saw Drake on that occasion he immediately told him that the horse was ill, but was on his feet and taking his feed, and his illness was not regarded as serious. Drake asked him what steps he had taken to care for the horse. Stout replied that Dr. Hagyard, a veterinary surgeon of Lexington, had been called to treat the horse. Drake then complimented Dr. Hagyard, and assured Stout that he could not have made a better selection if he had searched the world over. On being asked what Drake said when told that the horse was sick, Stout replied:

"He said: 'Newt, that is all right; your horse is insured, and it was insured when it was well, and I will take your note for the amount of $65 for 30 days, and if you have not got the whole amount at that time, so you can pay it off in 30 days, you can pay half of it in 30 days and renew the other half for 60 or 90 days, and I will send the note in to the company, and you will be all right; your horse will be insured.' "

After enumerating his duties, Drake testified that on the occasion...