Morgan v. Northwestern Nat. Life Ins. Co.

• Decision Date: 26 February 1906
• Parties: MORGAN v. NORTHWESTERN NAT. LIFE INS. CO.
• Court: Washington Supreme Court

84 P. 412

42 Wash. 10

MORGAN v. NORTHWESTERN NAT. LIFE INS. CO.

Supreme Court of Washington

February 26, 1906

Appeal from Superior Court, Walla Walla County; Thomas H. Brents Judge.

Action by James Morgan against the Northwestern National Life Insurance Company. Judgment for plaintiff. Defendant appeals. Affirmed.

W. F Crowe and R. J. Burglehaus, for appellant.

Sharpstein & Sharpstein, for respondent.

DUNBAR J.

Action on a life insurance policy. The policy contained the provision that all premiums were payable in advance. It also contained a provision that premiums might be paid to agents producing receipts signed by the president and secretary and countersigned by the agent, and that nonpayment of any premium, when due, should forfeit the premiums paid on the policy and terminate the liability of the company therein. It also contained the following provision: 'Notice. That each and every payment of premium is due at the date named in the policy, is given and accepted by the delivery and acceptance of this policy, and further notice is hereby expressly waived. The giving of any other notice or the acceptance of any premium after it is due is to be considered as an act of courtesy only, and shall not be deemed as establishing a custom or as waiving or disturbing any of the conditions as to payment of premiums thereafter due.' The premiums were payable quarterly, on or before the 1st day of December, March, June, and September in every year. The mode of payment was afterwards changed by the company to monthly payments. At the beginning of the second year the first monthly installment was paid in advance, but thereafter none of the installments were paid on the 1st day of the month on which they fell due, but were all paid during the month. The last payment was made on the 19th day of September in the second year, and the insured died on the 13th day of October, without paying the installment for the month of October. The policy provided for reinstatement during the life of the insured, within 12 months of the date of the lapse, by the payment of all past-due premiums and a fine of 10 per cent. per annum thereon. Upon the death of the policy holder the company refused to pay the policy, and this action was brought for its collection, and a judgment obtained for the amount alleged to be due on the policy.

The only assignment of error by the appellant is to the following instruction given by the court: 'Now, if you find from the evidence that she made all of the payments of these monthly installments of premium toward the latter part of the month, after the making of the new arrangement, and that the company received them without objection and without calling her attention to the fact that they were payable sooner, and if you further find that, by such course of dealing, she, as a prudent person, was led to believe, and did believe, that she was making these payments according to the terms of this new arrangment, by making them at any time during the month if you find that she so understood the new arrangement, and that the custom and conduct of the company in receiving these payments without objection were calculated to lead an ordinarily prudent person to so understand and believe, and that she was thereby induced to rest in that belief and understanding at all times previous to her death and that, in consequence of such conduct on the part of the company, she had good reason to believe, and did believe, up to that time that she had paid all these installments as they became due, and that the last one was then overdue, if you find all these facts from the evidence in the case--then I instruct you that the company is estopped and has waived its right to insist upon the forfeiture of this policy by reason of the nonpayment of the last installment of premium; and in that case your verdict should be for the plaintiff.' This instruction seems to us to be so fully and completely in accord, not only with the established principles of law, but with the universally accepted principles of good morals, that it is difficult to make an argument in its defense. The rule announced by the court could certainly not be questioned if it were applied to the dealings of individuals with each other, for no individual would be allowed by his attitude his conduct, and long-continued custom of doing business with another individual, to mislead him, to his disadvantage. And, if so, why should not the same rule control insurance companies, where confessedly parties do not stand upon the same level footing as do individuals in making contracts with each other? The instruction was guarded and made to apply only to persons ordinarily prudent, and if such ordinarily prudent person, by the course of conduct of the company, was misled to her disadvantage, the party who misled her cannot claim any advantage from such wrongdoing. As showing the construction that these parties placed upon this contract, it will only be necessary to cite the dates of the payments under the new arrangement, including the nine months preceding the death of the insured. The payments made were as follows: January 31, 1903, $10; ...