Moreland v. Union Cent. Life Ins. Co.

• Decision Date: 14 June 1898
• Citation: 46 S.W. 516,104 Ky. 129
• Parties: MORELAND v. UNION CENT. LIFE INS. CO. [1]
• Court: Kentucky Court of Appeals

46 S.W. 516

104 Ky. 129

MORELAND v. UNION CENT. LIFE INS. CO. ^[1]

Court of Appeals of Kentucky.

June 14, 1898

Appeal from circuit court, Scott county.

"To be officially reported."

Action by Carrie Moreland against Union Central Life Insurance Company on a policy of life insurance. Judgment for defendant, and plaintiff appeals. Reversed.

Owens &amp Finnell, for appellant.

Robert Ramsey, for appellee.

HAZELRIGG J.

On the 26th of October, 1894, the appellee company issued and delivered to Louis H. Moreland a policy of insurance on his life; and at the same time, by its general agent, executed to the assured the following receipt: "Premium, $35.83. Union Central Life Insurance Co., Cincinnati, Ohio. Received $35.83, being the first premium on policy No. 122,599, issued upon the life of Louis H. Moreland, continuing said policy in force to the 30th day of October, 1895, at noon. This receipt is subject to the conditions of any and all the notes which have been given or may be given for the amount of said premium, or any part thereof. This receipt is not valid unless paid, also countersigned and dated the day of payment by C. C. Early, Agent. Paid at Louisville, Ky. by note this 26th day of October, 1894. [Signed] C. C. Early, Agent." The note given to the company is as follows: "Interest at 6 per cent. Gt. Crossings, Sept. 26th, 1894. Four months after date, I promise to pay to the order of C. C. Early state agent Union Central Life Insurance Company, thirty-five and eighty-three [83/100] dollars, without discount or defalcation, value received, negotiable and payable at Louisville Banking Company, Louisville, with interest at 6 per cent. per annum. For premium on policy in said company. [Signed] L. H. Moreland." The particular clause of the policy with which we are here concerned reads as follows "The failure to pay, if living, any of the first three annual premiums or notes or interest upon notes given to the company for any of said premiums, on or before the days on which they become due, shall void and nullify this policy without action on the part of the company or notice to the insured or beneficiary; and the payments made upon this policy shall be deemed earned as premiums during its currency." On the 25th of July, 1895, Louis H. Moreland died, and his wife, the appellant, who is the beneficiary in the policy, instituted this action for the amount of the policy, $1,000, less $35.83, the amount alleged to have been owing the company by the insured at the time of his death. The company, as a defense, pleaded the nonpayment of the note as a bar to recovery, relying on the condition of the policy contained in the clause quoted above as to forfeiture. The appellant filed a reply, to which a demurrer was sustained, and the petition finally dismissed. The sufficiency of the reply is the sole question presented. The substance of this pleading is that after maturity of the note, on January 29, 1895, the company, in March, 1895, being then in possession of the note, and holding it as its property, demanded the payment thereof of the assured; and, on his indicating his inability to then pay the note, it was then sent by the company to its attorneys, at Georgetown, Ky. for suit, if it could be collected upon judgment against the maker, the defendant thereby treating the note after its maturity as a binding and subsisting obligation of the assured to pay same; that thereupon the attorneys notified the assured at his home, some miles distant, that the note was in their hands for collection by suit; that the assured left his home at some trouble and expense, to attend the notice and see about payment of the note, and to prevent suit thereon; that there was then no demand on the assured for a surrender of the policy, and no offer to surrender the note to Moreland, but payment of same in full was urged upon him months after its maturity; that, after the death of Moreland, the note was ordered to be sent back to the company, and it still holds same; that Moreland, in his lifetime, offered to surrender the policy to the company if it would surrender the note to him, and the offer was not accepted by the company; that, by reason of these facts, the nonpayment of the note was waived, and not relied on by the company to avoid the policy, and the company is estopped to rely on such nonpayment as a defense; that the receipt delivered to the assured acknowledged payment of premium, and undertook to keep the policy alive to the 30th of December, 1895, subject alone to the conditions of the note; and that there were no conditions in the note.

The most important fact disclosed by these averments, it seems to us, is that after maturity of the note, and when, by terms of the contract, the...