National Union Fire Insurance Company v. Wright

• Decision Date: 28 January 1924
• Docket Number: 123
• Parties: NATIONAL UNION FIRE INSURANCE COMPANY v. WRIGHT
• Court: Arkansas Supreme Court

257 S.W. 753

163 Ark. 42

NATIONAL UNION FIRE INSURANCE COMPANY v. WRIGHT

No. 123

Supreme Court of Arkansas

January 28, 1924

Appeal from Clay Circuit Court, Western District; W. W. Bandy Judge; reversed.

Judgment reversed and cause remanded.

F. G. Taylor, for appellant.

1. The court should have directed a verdict in favor of the defendant, because the proof showed conclusively that the plaintiff never paid any part of the premium. 74 Ark. 507; 75 Ark. 25; 104 Ark. 288.

2. Because plaintiff sold the land on which the insured property was located, contrary to the express provisions of the policy sued on.

3. Because plaintiff failed to give notice and proof of loss as required by the terms of the policy. 156 S.W. 848; 108 Ark 261; 87 Ark. 171.

4. Instruction No. 2, given by the court on its own motion, was manifest error. It is an instruction as to a fact not in evidence. Art. 7, § 23, Constitution; 43 Ark. 289; 45 Ark. 165; 49 Ark. 165; 53 Ark. 383; 53 Ark. 244; 58 Ark. 108; Id. 504.

5. There is no waiver of forfeiture here. The check given by plaintiff to Stephens was not paid when presented, and a notice from the home office to the effect that the premium note, due January, 1922, was unpaid, even if considered a demand for payment, would not. change the result, for the policy was already forfeited. 150 Ark. 60; 156 Ark. 77.

Oliver & Oliver, for appellee.

Appellant has recognized the validity of the judgment and made payments thereon. The appeal should therefore be dismissed. 3 C. J 669; 47 P. 835; 175 P. 204; 176 P. 241; 190 S.W. 468; 243 U.S. 273; 61 L. ed. 715; 171 P. 1110; 78 So. 574; 109 Ark. 548; 192 N.W. 250; 251 S.W. 841; 61 S.E. 80.

OPINION

SMITH, J.

On September 19, 1921, appellee was the owner of a forty-acre tract of land, on which there were a barn and certain other buildings. On the date mentioned the appellant insurance company issued to appellee its policy of insurance, by which it insured said buildings and certain corn and hay and seed stored therein. The policy specified the amount of insurance upon the buildings and upon the agricultural products separately. About the time the policy was issued and delivered appellee sold the land, but he remained in possession of the premises after the delivery of the deed. He did not sell the hay, etc., but it was all destroyed, in a fire which consumed the barn.

Suit was brought to recover the insurance on the personal property, and the insurance company answered and denied liability on three grounds: (1), that the premium had not been paid; (2), that the policy was canceled by the sale; (3), that no proof of loss was made as required by the policy.

Appellee testified that Stephens, the company's agent, applied to him to take out the policy sued on, but he explained to Stephens that he did not, at the time, have the money to pay the premium; that Stephens told him it would be all right, and could be arranged by appellee giving a check for $ 15 of the premium and a note for the balance. Stephens was advised that appellee did not have sufficient money in the bank to pay the check at the time it was drawn, but Stephens agreed to carry the check as a cash payment for a few days, until appellee had deposited in the bank against which the check was drawn enough money to pay the check on presentation. Appellee testified that Stephens told him he would remit the company its portion of the premium, and that he later told him that he had done so. The application showed a cash payment of $ 15, this being the amount of the check. The deposition of the company's service manager at Memphis, Tenn., through whose hands the transaction passed and who acted for the company in the matter, was taken, and he was asked to attach the letter of Stephens to the company which accompanied the application, but it was not done, and no explanation of the failure to do so was made. It is insisted that, if this letter had been exhibited, it would have appeared that Stephens did, in fact, remit the premium to the company, less his agent's commission, as Stephens had told appellee he had done. Appellee further testified that he promised to pay the check on a designated Saturday, but the fire occurred the Friday preceding.

Stephens testified that he accepted the check as a cash payment, and presented it at the bank for payment, but payment was refused because appellee did not have sufficient funds in the bank, and that he called upon appellee to redeem the check, and he never at any time agreed to carry it for appellee, and he denied having remitted the company its portion of the premium.

This issue of fact was submitted to the jury under instructions which, in effect, told the jury that no recovery could be had because of the failure to pay the premium unless the facts were found to be as stated by appellee. The company insists, however, that this issue should not have been submitted to the jury, and that a verdict should have been directed in its favor because the check had not, in fact, been paid, and the policy provided that no recovery could be had thereon if any loss occurred during the time any part of the premium was due and unpaid. Appellant cites several cases from this court in which this provision of a policy has been upheld. But, if appellee's version of the matter is accepted, the premium had been paid. The check was payment thereof. Stephens had authority to issue policies, to collect premiums, and to issue receipts therefor, and if he, in fact, accepted the check as a cash payment with an agreement to treat the same as cash for a definite time, there would have been no default in payment of the premium until appellee had failed to redeem the check, and especially is this true if Stephens did, in fact, remit to the company its part of the premium. Home Life & Accident Co. v. Haskins, 156 Ark. 77, 245 S.W. 181; Robnett v. Cotton States Life Ins. Co., 148 Ark. 199, 230 S.W. 257; Hutchins v. Globe Life Ins. Co., 126 Ark. 360, 190 S.W. 446.

Upon the proposition that the policy was canceled by the sale of the land, the testimony is as follows: Appellee testified that, when he made the sale, he advised Stephens of that fact, and stated to him that, if the policy was not good as to the unsold personal property, he wanted the policy rewritten to cover the personal property. Stephens told appellee that one of the company's general agents was in town, and the matter would be submitted to him. This was done, and the general agent was told by Stephens that the premium had been paid in cash and by a note for a year, and the general agent advised, and Stephens concurred in the view, that the policy was in effect as to the personal property, inasmuch as appellee was in possession of it, but this agent and Stephens told appellee that, if they found they were mistaken, a new policy would be issued covering the personal property, and appellee heard nothing further about the new policy.

If this testimony is true--and its truth was submitted to the jury upon conflicting testimony--the company will be held to have waived the provision of the policy forfeiting it in case of sale. There had been no sale of the property on which appellee sought to collect the insurance, and the conduct of the agent who issued the policy, and who had the authority to...