Krebs v. Security Trust & Life Ins. Co.

• Citation: 156 F. 294
• Decision Date: 12 October 1907
• Docket Number: 3,032.
• Parties: KREBS v. SECURITY TRUST & LIFE INS. CO.
• Court: U.S. District Court — District of Oregon

156 F. 294

KREBS v. SECURITY TRUST & LIFE INS. CO.

No. 3,032.

United States Circuit Court, D. Oregon.

October 12, 1907

This is an action for the recovery of damages alleged to have been sustained by plaintiff through the refusal on the part of defendant to accept further payments of premium on a life insurance policy issued to the plaintiff, or to further recognize such policy as still of binding force and effect. The policy was issued March 14, 1899, in consideration of the sum of $313, and an annual premium of a like amount to be paid on the 15th day of March of each year thereafter for 19 years, and conditioned for the payment of the sum of $10,000 with certain accumulations and dividends, on the death of plaintiff, to Conrad Krebs, her husband.

Plaintiff paid six annual premiums, and defendant refused to receive the seventh. By the fourth and fifth paragraphs of the complaint it is alleged:

'That the defendant directed this plaintiff to pay the said annual premium so due by the provisions of said policy to one Charles B. Soule, who was manager for said defendant having his office at the city of Chicago, in the state of Illinois, and all the foregoing payments so made to the defendant by plaintiff were made to the said Soule, as manager of the defendant at Chicago, and the said defendant issued receipts to the plaintiff for such payments by and through the said Soule, and on the 15th day of March, 1905 plaintiff, in accordance with the usual custom of dealing with defendant in regard to the payment of said premium mailed to the said Charles B. Soule, to his address in the city of Chicago, Ill., a certified check, payable to the order of said defendant company, for said sum of $313, and deposited the same in the United States post office at Salem, Or., directed to the said Charles B. Soule, as aforesaid.

'That shortly thereafter the said check, and the said letter containing said check, was returned to the plaintiff unopened, whereupon plaintiff immediately remailed said check to the defendant itself at its office in the city of Philadelphia, Pa.; but, despite the fact that plaintiff was willing and anxious to pay said annual premium, and that said check was payable to said defendant company and was mailed on the date the same was due to said Charles B. Soule, as plaintiff had theretofore done when paying said premium, and despite the fact that defendant received said check and knew all said facts, it wrongfully refused to accept said payment or said check, and returned the same to the plaintiff with a notification that her policy had lapsed, and wrongfully refused further to be bound thereby, for the alleged reason that said Soule, to whom said check was sent, was no longer its agent; but plaintiff alleges that if such was the fact the defendant wholly failed to notify her of any such change of agency.'

By the seventh paragraph it is further alleged, in effect, that defendant has always retained, and now wrongfully retains, each and all of the annual premiums paid to it by plaintiff, to her damage in the sum of $2,365.50, being the sum of six annual premiums, of $313 each, paid as aforesaid, with interest on such payments from date thereof at 6 per cent. per annum.

Defendant interposed a motion to strike out this last paragraph, but at the argument the question was submitted also, as if upon demurrer, whether the complaint states facts sufficient to constitute a cause of action.

Carson & Cannon, for plaintiff.

Chamberlain & Thomas, for defendant.

WOLVERTON District Judge (after stating the facts as above).

Upon the question whether the complaint states facts, it is submitted that, since the complaint shows that the payments of premium were to be made in Chicago, Ill., and there being no allegation that premiums were receivable by mail, it was incumbent upon plaintiff to have the check in Chicago on or before March 15th, the day upon which the premium was made payable by the terms of the policy, and that it was not sufficient to constitute payment at the time required that the premium was placed in the post office at Salem, Or., addressed to the defendant's manager at Chicago, on that date.

Answering the objection, I am of the opinion, however, that, having alleged that defendant directed plaintiff to pay the premiums to Soule, the manager of defendant at Chicago, to whom all foregoing payments had been made, and having further alleged that, in accordance with the usual custom of dealing with defendant in regard to the payment of such premiums plaintiff mailed to Soule at Chicago, by certified check, the premium, by depositing it in the post office at Salem, Or., on March 15th, the complaint is sufficient to show payment to the company on that date. These allegations are sufficient to show that, by a course of dealing between the plaintiff and the insurance company with reference to the payment and receipt of the annual premiums, such premiums were not only payable to Soule at Chicago, as recognized by the company, but payable through the post office, thus effecting a waiver of strict payment to the company, in person, at its home office, on or before the very day on which the premium fell due. When payment by mail was authorized or recognized by the company, and there do not appear to be any restrictions that the money shall be at the company's office on or before the...