Morgan v. Home Insurance Company

• Decision Date: 16 November 1926
• Citation: 216 Ky. 589
• Parties: Morgan v. Home Insurance Company.
• Court: United States State Supreme Court — District of Kentucky

216 Ky. 589

Morgan v. Home Insurance Company.

Court of Appeals of Kentucky.

Decided November 16, 1926.

1. Insurance. — Policy stipulation that insurer shall not be liable for loss while note for premium is unpaid may be waived by insurer's retention of note and unconditional demand for payment.

2. Insurance. — To constitute waiver of forfeiture provisions of policy, election by insurer need not embrace elements of estoppel.

3. Insurance. — If policy of insurance lapsed before destruction of property by fire and was then suspended, nothing done by insurer's agent had effect of reinstating it.

4. Insurance. — Right to enforce forfeiture of policy for nonpayment of premium or premium note is not waived by mere silence or inaction of insurer.

5. Insurance. — Retention of premium note after maturity and mailing of notice to insured that policy has lapsed, and to revive it insured must pay note, is not unconditional demand for payment, nor does it constitute waiver.

6. Insurance. — Retention and demand for payment of past due premium note subsequent to loss of property by fire and in ignorance of destruction does not constitute waiver of right to forfeit policy.

7. Insurance. — Evidence that, after fire, agent informed insured's husband that he had received notice for collection of premium note, held consistent with theory that note was being retained by insurer to give insured opportunity to reinstate policy.

Appeal from Oldham Circuit Court.

ROBERT T. & WILLIAM J. CROWE for appellant.

ROBERT G. GORDON and BRUCE, BULLITT, GORDON & LAUENT for appellee.

OPINION OF THE COURT BY JUDGE McCANDLESS.

Affirming.

Appellant sued to recover $1,200.00 on an insurance policy covering a barn and two silos which were destroved by fire. At the close of her evidence the court gave a directed verdict for the defendant and she has appealed.

The policy was issued for a term of five years, payable in annual installments in advance; the first installment was paid at the time the policy was issued and the other four were embraced in a note of $203.50, payable in equal installments of $50.80 each the first day of October in each of the years 1923, 1924, 1925 and 1926, respectively. The installment due October 1, 1923, was paid, but the one maturing October 1, 1924, was not paid. The property was destroyed by fire on November 4th, 1924. The premium note contained the usual stipulation that "in case any one of the installments herein named shall not be paid at maturity . . . this company shall not be liable for loss during such default and the said policy shall lapse until payment is made to this company at the Farm Department as Chicago." It was also provided in the policy "that this company shall not be liable for any loss or damage that may occur to the property herein mentioned while any installment of the installment note given for the premium upon this policy remains past due and unpaid . . . the company may collect by suit or otherwise any past due notes or installments thereof, and the receipt from the said Chicago office of the company for the payment of the past due notes or installments must be received by the insured before there can be a revival of the policy, such revival to begin from the time of said payments, and in no case to carry the insurance beyond the end of the original term of its policy."

No communication passed between the parties before the fire, and the only witness introduced was appellant's husband, who testified that the soliciting agent of the company called on him on the 7th, and, "He says, `Jim, is your insurance paid?' I says, `Yes, there is none due until the first of December.' He says, `You are mistaken.' he says, `I received notice from the company, says, it was due the first of October.' I says, `I think you are mistaken, I will look up my policy, and I found out he was correct.' I says, `I will give you a check for that money.' He says, `I am going down to Louisville Monday, you can give it to me any time between now and then and I will take it in and I am going to write them,' so I gave him the check the next day and he wrote and sent it in to Chicago, and on the eleventh I received notice of the cancellation. I have always depended on them giving me notice when my insurance was due and have always sent them check when I received the notice. I carry a great number of policies." . . . Q. "Now, then, what did he say to you, if anything, about having a note to collect against you?" A. "He asked me about the insurance being paid, he said they had sent him a notice or note for collection." Q. "Sent him a note for collection?" A. "Yes, sir. . . ." Q. "Did you know where the installment note was?" A. "It was in Chicago." Q. "It was in the office of the Home Insurance Company?" A. "Yes, sir." Q. "Has it ever come into your possession?" A. "No, sir, not until after they cancelled it." Q. "When did they send it to you?" A. "On November eleventh." Q. "It was returned together with your check on...