Life & Casualty Insurance Company of Tennessee v. Walters

• Decision Date: 13 November 1944
• Docket Number: 4-7453
• Parties: Life & Casualty Insurance Company of Tennessee v. Walters
• Court: Arkansas Supreme Court

183 S.W.2d 515

207 Ark. 910

Life & Casualty Insurance Company of Tennessee v. Walters

No. 4-7453

Supreme Court of Arkansas

November 13, 1944

Appeal from Saline Circuit Court; Thomas E. Toler, Judge.

Reversed.

Sidney F. Keeble and Moore, Burrow, Chowning & Hall, for appellant.

Kenneth C. Coffelt, for appellee.

OPINION

Knox Justice.

There is little or no conflict in the material facts presented by this record. On the 7th day of July, 1941 appellant issued a policy of insurance, insuring the life of John Freeman in the amount of $ 250. One Rosie Freeman was designated as beneficiary. One provision set out in the policy reads as follows: "Reinstatement -- If the policy lapse for nonpayment of premiums, it may be reinstated upon application of insured made within one year from the date to which premiums have been duly paid and payment of all arrears, provided evidence of the insurability of the insured satisfactory to the company, be furnished, but such reinstatement shall not take effect, unless at the date thereof the insured is living and in sound health."

It is undisputed that John Freeman, the insured died on August 7 1943. Thereafter appellee instituted this action, alleging that although her real name was Rosie Walters she was in fact one and the same person as the "Rosie Freeman" designated as beneficiary in the policy, and this fact is not seriously questioned by appellant.

Rarely were premiums paid when due, and defaults in payments thereof were more often the rule than the exception. For several weeks prior to August 3, 1943, the insured had failed to pay premiums. On that date the sum of $ 3.06 was paid to E. E. Thompson, agent for appellant, and an application for reinstatement of the policy, purporting to have been signed by the insured was delivered to Thompson. Appellee, Rosie Walters, testified that she actually made this payment. She introduced a receipt, which she testified was delivered to her by Thompson, and which reads as follows: "Life & Casualty Insurance Co. of Tennessee. Home Office Life & Casualty Building, Nashville, Tenn.

"8/3/1943

"Received from John Freeman $ 3.06, being the arrears of policy to 8/16, which the applicant desires the company to revive.

"Under no circumstances will the company be liable under said policy in case of sickness, accident, or death, until the policy has been revived on the books of the company and the money credited in the premium receipt book belonging to said policy.

"E. E. Thompson, Agent.

"If the company accept the revival application, the amount will be credited on the premium receipt book belonging with the policy, otherwise the money will be refunded."

As before stated, the insured, John Freeman, died on August 7, 1943, but appellant, the insurance company, was not promptly advised. On August 16, 1943, the application for reinstatement by John Freeman came up for consideration in the home office of appellant insurance company, and such company still having no information as to the death of insured, the home office approved such application.

Thereafter this action was brought, and at the trial appellant insurance company requested a peremptory instruction, on the ground that the approval of the application for reinstatement by the home office having occurred after the death of the insured was ineffectual to reinstate the policy. The request for such peremptory instruction was denied, and the cause submitted to the jury, resulting in a verdict in favor of appellee, Rosie Walters. The sole question argued by appellant here is whether the policy was reinstated by the action taken in the home office after the death of the insured.

Appellee contends that the record contains testimony to the effect that there had been defaults on prior occasions for such lengths of time as would cause the policy to lapse under the strict terms thereof, but that at such times appellant had accepted overdue premiums without requiring an application for reinstatement, and counsel for appellee says: "Rosie Walters testified that she had been as many as six payments or six weeks behind in the payment of premiums and that even when she was behind six weeks, which was two weeks more than the four weeks' provision in the policy for it to lapse, there never was even a request for an application for reinstatement and that the agent accepted this payment for this length of time and recorded it in the receipt book. It is our contention that this was the custom established by the company in dealing with this negro woman. It waived the provisions in its policy which they argue on this appeal when it allowed their agent to carry on their business with this insured in this...