New England Mut. Life Ins. Co. v. Clinchfield Coal Corp.
| Decision Date | 20 October 1925 |
| Docket Number | No. 2357.,2357. |
| Parties | NEW ENGLAND MUT. LIFE INS. CO. OF BOSTON, MASS., v. CLINCHFIELD COAL CORPORATION. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Harold A. Ritz, of Charleston, W. Va. (Brown, Jackson & Knight, of Charleston, W. Va., on the brief), for plaintiff in error and cross-defendant in error.
Joseph M. Sanders, of Bluefield, W. Va., and Walter H. Robertson, of Warrenton, Va. (Morison, Morison & Robertson, of Bristol, Va., and Sanders, Crockett & Fox, of Bluefield, W. Va., on the brief), for defendant in error and cross-plaintiff in error.
Before WOODS, WADDILL, and ROSE, Circuit Judges.
Defendant in error instituted its action at law in the circuit court of Mercer county, W. Va., to recover under a certain policy of insurance issued by the plaintiff in error on the life of Clarence Brewer Sweet. The policy was made payable to the National Lumber Company, Inc., and was subsequently assigned to the defendant in error. The suit was regularly removed into the United States District Court, where it was docketed and tried, resulting in a verdict in favor of the defendant in error. Both parties assign error. The facts in the case are briefly as follows:
On the 27th of June, 1922, plaintiff in error issued its policy of insurance upon the life of Clarence Brewer Sweet for the sum of $10,000 payable to the National Lumber Company at his death. The annual premium amounted to $307, of which $107 was paid in cash, and the balance, $200, by two notes for $100 each, payable at 6 and 9 months after date, respectively. Each of the notes contained a stipulation that it was for part payment of the premium on the policy, the policy being pledged as security for payment of the notes, and a further provision that, if the notes, or either of them, were unpaid at maturity, the policy would without notice cease to be in force and have no value. A receipt given for the cash payment, and the two notes likewise, recited that, upon failure to pay either of the notes at maturity, the policy should thereupon, without further notice, cease to be in force and of no value. The first, or 6 months' note, was paid by Sweet at maturity on the 27th of December, 1922. On the 11th of November, 1922, prior to the payment of this note and before default was made in payment of the second, or 9 months' note given by Sweet, the National Lumber Company, the beneficiary in the policy, assigned its interest therein to the Clinchfield Coal Corporation, for the purpose of securing to it the payment of subsisting demands of the Clinchfield Coal Company against the National Lumber Company at the time of the death of Sweet, which amounted, on the 14th of July, 1923, the date of death, to the sum of $6,281.75.
This assignment was made to the defendant in error upon the regular form of assignment furnished by the insurance company, signed by the National Lumber Company by C. B. Sweet, president, and C. B. Sweet in person, and was regularly filed in the office of the plaintiff in error in the city of Boston, on the 27th of December, 1922, and the policy was delivered to the defendant in error. At the time the assignment was made, an officer duly authorized to represent the defendant in error familiarized himself with the terms of the policy, the right to make an assignment thereof, and especially the statements therein that the first annual premium of $307 referred to in said policy had been paid by Sweet, and that the policy and the application therefor constituted the entire contract between the parties, and it was accepted; the assignee relying on the statements contained therein, believing them to be true.
Defendant in error did not know, prior to the death of Sweet, that the first annual premium was settled in the manner above indicated, viz. by the payment of a part thereof in cash, and the execution of the two notes for the balance, and no notice to this effect was given defendant in error by plaintiff in error; nor was defendant in error advised either of the existence, or date of maturity of said notes.
When the 9 months' note became due on the 27th of March, 1923, it was not paid, and has not been paid up to the present time.
Plaintiff in error insists that, in accordance with the terms of the notes and receipt given therefor, the policy was void and of no effect, and no longer in force when the insured died on the 14th of July, 1923, more than a year after the date of the policy, but within the grace period of 30 days allowed for payment of premiums after the expiration of one year.
There is little dispute as to the facts of the case. Defendant in error, plaintiff in the District Court, insists that the policy which it accepted in good faith, and which upon its face acknowledged that the first premium had been fully paid, was valid and binding, and that, the insured having died within the grace period, the policy was a live and subsisting one, subject to the payment of the charge incident to the grace extension period, and that it had no knowledge of and was in no manner bound by conditions and limitations prescribed by the premium notes or receipt given therefor, covering the initial premium payment which the policy showed had been paid, and that likewise such attempted limitations were invalid under the laws of the state of West Virginia.
Plaintiff in error, on the other hand, insists that the policy became invalid and inoperative because of the failure to pay the note given for the last deferred payment of the premium.
The case was tried by the court by consent of parties by counsel without a jury, upon stipulation between them as to the facts. Each party asked for instructed findings and judgment by the court in their respective favors, predicated upon their several views of the facts, and the District Court found that the policy was a live one, and not void, and was valid for the amount due the assignee, the defendant in error, under the assignment, at the date of the death of the assured, and accordingly rendered its judgment for the sum of $6,781.31 in favor of the defendant in error, with interest and costs, to which action plaintiff in error excepted, as did the defendant in error for failure of the court to award judgment for the face value of the policy, $10,000. It is as to the correctness of the conclusion thus reached that we have to pass.
The assignments of error made by the respective parties briefly present their separate views as to what should have been the court's findings upon the facts, and as to what the law of the case is. Those of the plaintiff in error are, first, that the District Court erred in failing to find in its favor upon the agreed statement of facts upon which the case was submitted, second, in finding for the defendant in error the amount for which judgment was rendered in its favor upon said agreed statement of facts, and, third, in not entering judgment in favor of plaintiff in error; and those of the defendant in error because, upon the agreed statement of facts, upon which the case was submitted, the court should have found in its favor for the face value of the policy of $10,000 with interest, less two items of $100 and $307, with interest, and instead thereof in entering judgment for only $6,781.15.
A sufficient answer to the assignments made by each party will be, perhaps, that, having submitted the case on the merits to the trial court on the agreed statement of facts, and each side having asked a finding of facts and binding instruction and judgment in its favor, they are bound by the conclusion reached by that court, and cannot secure relief therefrom on these cross-writs of error, unless this court is convinced that there was no substantial testimony to warrant the District Court's finding and action. Authorities to sustain this may be said to be entirely clear, and the law definitely settled, that, where both parties request a directed verdict, they thereby submit to the court the ascertainment and final determination of the facts, and its conclusion is final and binding upon both, and this court should accept and enforce the same in the proper disposition of the case. Larabee Flour Mills Corporation v. City Flour & Grain Co., 9 F.(2d) 44, decided at the present term of this court, to which case, and the citations therein contained, reference is made.
The real contention urged upon the court by plaintiff in error is that no recovery should be had upon the policy of insurance sued on because the first year's premium was not fully paid, and that, in the notes given for deferred installments of the premium, there was a proviso that, if such notes were not paid, the policy should be forfeited.
This raises the question of just what is the insurance contract in this case, and the legal sufficiency of the same as between the parties thereto, or those lawfully interested therein. The holder of the policy, the assignee thereof, insists that it is in all respects a legal and binding undertaking, duly and formally entered into, and is in full force and effect; and, whatever there may be ordinarily in the questions raised by the plaintiff in error, they cannot be availed of as a defense in this case under the policy in suit, which provides:
"In consideration of the application upon which this policy is issued, which is made a part hereof, and of the payment in advance of $307 and of the payment of a like sum on or before the 27th day of June in each year thereafter during the life of Clarence Brewer Sweet of Bluefield, West Virginia, the insured, the New England Life Insurance Company promises and agrees to pay," etc. "That in case of failure to pay any premium when due or during the period of grace, this policy shall cease to be in force and shall have no value," etc. "This policy and the application constitute the entire contract between the parties hereto."
Moreover, the statute of West Virginia (Barnes' Code 1923, c. 34, § 15) is as...
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