Noem v. Equitable Life Ins. Co. of Iowa

• Decision Date: 11 April 1916
• Docket Number: No. 3676.,3676.
• Citation: 157 N.W. 308,37 S.D. 176
• Parties: NOEM v. EQUITABLE LIFE INS. CO. OF IOWA.
• Court: South Dakota Supreme Court

37 S.D. 176

157 N.W. 308

NOEM

v.EQUITABLE LIFE INS. CO. OF IOWA.

No. 3676.

Supreme Court of South Dakota.

April 11, 1916.

Appeal from Circuit Court, Brookings County; C. G. Sherwood, Judge.

Upon rehearing. Affirmed.

For original opinion, see 35 S. D. 593, 153 N. W. 652.Cuckow & Berke, of Brookings (Parsons & Mills, of Des Moines, Iowa, of counsel), for appellant.

Hall, Alexander & Purdy, of Brookings, for respondent.

GATES, J.

In July, 1915, this court rendered an opinion in the above-entitled cause. 35 S. D. 593, 153 N. W. 652. The cause is now before us upon a petition for rehearing. We frankly acknowledge that in preparing that opinion we overlooked certain allegations of the complaint which rendered the South Dakota standard form of life insurance policy inapplicable to this case. This being an appeal from an order overruling a demurrer to the complaint, the facts alleged in the complaint must be taken to be true, and, as the former opinion ignored certain of those facts, it is now disavowed as applied to this case.

A policy of life insurance was written by defendant in December, 1912, upon the life of plaintiff's son with premium payable semiannually in June and December thereafter. The second annual premium due June 18, 1913, was not paid. The insured died by accidental drowning on July 16, 1913.

Paragraph 6 of the complaint is as follows:

“(6) That on or about the 1st day of July, 1913, with full knowledge on its part that the second premium under said contract or policy of insurance, which was payable June 18, 1913, was unpaid, and with the purpose and intent of leading the said Alfred P. Noem to understand and believe that the payment of said premium on the 18th day of July, 1913, had been, and was, by said defendant waived, and with the purpose and intent of leading the said Alfred P. Noem to understand and believe that the time for the payment of said premium had been, and was, extended by the said defendant for the period of 30 days from and after the 18th day of June, 1913, and with the purpose and intent of so extending said time of payment, and with the purpose and intent of leading the said Alfred P. Noem to believe that the said contract or policy of insurance should, and would, be in full force and effect until the expiration of 30 days from and after the 18th day of June, 1913, and with the purpose and intent of making the same effectual for said period, [the defendant] sent and delivered to the said Alfred P. Noem the following communication, to wit: ‘Equitable Life Insurance Company of Iowa. Des Moines, July 1, 1913. A. P. Noem, Esq., Fonda, Iowa-Dear Sir: We note that the premium due June 18, 1913, on your policy in our company, No. 72972, is still unpaid, and we write to remind you of the matter, as we are inclined to think you have simply overlooked it. The contract has many liberal features, and we are sure you do not wish to forfeit the protection it affords. If there are any points regarding the policy that are not fully understood, and upon which you desire information, we would be glad to have you write us. We inclose herewith a personal certificate of health, which if satisfactory, will be accepted within thirty days from the date the premium was due. After that time a physician's statement would be required, so the matter should not be delayed. Kindly complete this health certificate and return to us with a remittance for the amount of the premium, $28.22. Trusting you will give this matter your prompt attention, we beg to remain, Very truly yours, Chas. A. Snyder, Secretary.’ That the foregoing facts stated in this paragraph are hereby pleaded as a waiver and estoppel against the said defendant.”

It is the theory of plaintiff that, by reason of a provision in the policy which gave a grace of one month for the payment of any premium after the first policy year, the policy was in force at the time of the death of the insured; but, if wrong in this theory, then that the letter above set forth constituted a waiver of any forfeiture to which the defendant might have been entitled under the forfeiture clause of the policy, and that defendant should be estopped from asserting the contrary. Defendant, in opposition to the latter theory, urges that the letter of July 1, 1913, ought not to be considered as a waiver of the right of forfeiture because: (a) The same was without a new consideration; (b) it contained a condition to the effect that a personal health certificate must accompany the delayed payment; (c) that payment was not made before the death of the insured, which occurred during the period of extension mentioned; and (d) that the letter was a mere offer to reinstate the policy.

[1] One of the provisions of the policy was:

“Failure to pay any premium *** when due and payable shall cause this policy to cease and determine.”

But that was a provision which might be waived by the company:

“A condition in a policy that it shall be void if premiums are not paid when due means only that it shall be voidable at the option of the company.” Grigsby v. Russell, 222 U. S. 149, 32 Sup. Ct. 58, 56 L. Ed. 133, 36 L. R. A. (N. S.) 642, Ann. Cas. 1913B, 863;Smith v. St. Paul F. & M. Ins. Co., 3 Dak. 80, 13 N. W. 355.

Respondent urges that the following well-recognized rule is applicable to this case, viz.:

“Any agreement, declaration, or course of action, on the part of an insurance company, which leads a party insured honestly to believe that by conforming thereto a forfeiture of his policy will not be incurred, followed by due conformity on his part, will, and ought to, estop the company from insisting upon the forfeiture, though it might be claimed under the express letter of the contract.” Hartford Ins. Co. v. Unsell, 144 U. S. 439, 12 Sup. Ct. 671, 36 L. Ed. 496.

We cannot agree that this rule is applicable. It involves the principle of estoppel, some of the elements of which are wanting in the complaint. But there is a marked distinction between the doctrine of estoppel and of waiver. “Waiver” is defined in Smiley v. Barker, 83 Fed. 684, 28 C. C. A. 9, as follows:

“‘Waiver’ is where one in possession of any right, whether conferred by law or by contract, and of full knowledge of the material facts, does or forbears the doing...