Klein v. Avemco Ins. Co.

• Decision Date: 02 July 1975
• Docket Number: No. 7510DC154,7510DC154
• Parties: Henry J. KLEIN, Administrator for Natalie Lisiewicz Klein, Substitute Plaintiff, v. AVEMCO INSURANCE COMPANY.
• Court: North Carolina Court of Appeals

Page 479

216 S.E.2d 479

26 N.C.App. 452

Henry J. KLEIN, Administrator for Natalie Lisiewicz Klein, Substitute Plaintiff, v. AVEMCO INSURANCE COMPANY.

No. 7510DC154.

Court of Appeals of North Carolina.

July 2, 1975.

Certiorari Allowed by Supreme Court Aug. 25, 1975.

Vaughan S. Winborne, Raleigh, for plaintiff appellant.

Smith, Anderson, Blount & Mitchell by C. Ernest Simons, Jr., Raleigh, for defendant appellee.

MORRIS, Judge.

It is first contended that since plaintiff paid seven of the ten premium installments, the policy should be considered as remaining in effect for seven-tenths of the year, or 255 days, which would mean the policy continued in force until 28 September 1973, will past 28 July 1973, the date when the airplane was damaged. Plaintiff urges that even without considering the last payment, the policy should be considered as having remained in force for six-tenths of the year, or 219 days, which would mean the policy continued in effect until 23 August 1973. We disagree.

'It is elemental law that the payment of the premium is requisite to keep the policy of insurance in force. If the premium is not paid in the manner prescribed in the policy, the policy is forfeited. Partial payment, even when accepted as a partial payment, will not keep the policy alive even for such fractional part of the year as the part payment bears to the whole payment. (Citation omitted.)' (Emphasis supplied.) Clifton v. Insurance Co., 168 N.C. 499, 499--500, 84 S.E. 817, 818 (1915).

Plaintiff next argues that by the acceptance of the last two payments and its past conduct as to late payments, defendant waived its right to insist on immediate payment of the premium installments and to require a forfeiture of the policy for delay in payment. We find no merit in this contention.

With respect to the last two payments actually received by the defendant, we note that the payment sent by plaintiff on 10 July 1973 was for the premium payment due in June. Defendant had earned the full amount of that payment. Similarly, defendant had earned a portion of the payment sent by plaintiff on 27 July 1973, since, under the terms of the cancellation notice, coverage was in effect until 22 July 1973. Plaintiff was entitled to and did receive a refund amount of $35.10, which represented unearned premiums subsequent to 22 July 1973.

Turning to the question of whether defendant's past conduct as to late payments amounted to a waiver, we note that [26 N.C.App. 455] paragraph 20 of the policy, which is entitled 'Cancellation for Non-payment of Installment Premium--All Coverages', in pertinent part, provides as follows:

'Upon the failure of the named insured to pay any installment of the premium, the insurance shall cease and terminate, provided at least ten (10) days notice is mailed by the company to the named insured at the address shown in this policy stating when thereafter such cancellation shall become effective.'

All of the evidence in the case at bar shows that the defendant sent the plaintiff notice of cancellation of the policy in accordance with the above terms each time plaintiff was delinquent in the payment of premiums. In each instance the policy was reinstated only after the receipt of the necessary premiums. Defendant was in no way obliged to reinstate the policy at any time after plaintiff's default in the payment of premiums, and, in...