Palmer v. Continental Ins. Co.

• Decision Date: 13 June 1888
• Citation: 31 Mo.App. 467
• Parties: WILLIAM D. PALMER, Respondent, v. THE CONTINENTAL INSURANCE COMPANY, Appellant.
• Court: Kansas Court of Appeals

31 Mo.App. 467

WILLIAM D. PALMER, Respondent, v. THE CONTINENTAL INSURANCE COMPANY, Appellant.

Court of Appeals of Missouri, Kansas City.

June 13, 1888

APPEAL from Vernon Circuit Court, HON. W. J. STONE, Special Judge.

Reversed and remanded.

Statement of case by the court.

This was a suit upon a policy of fire insurance. The policy was issued on the instalment plan, and contained the following clause: " 5. This company shall not be liable for any loss or damage under this policy if default shall have been made in the payment of any instalment premium due by the terms of the instalment note. On payment to the company in New York or to the western department in Chicago by the assured or assigns of all instalments of premiums due under this policy and the instalment note given thereon, the liability of this company in this policy shall again attach and this policy be in force from and after such payment unless this policy shall be void and inoperative for some other cause. But this company shall not be liable for any loss happening during the continuance of such default of payment, nor shall any such suspension of liability under this policy on account of such default have the effect of extending such liability beyond the period of its termination as originally expressed in writing herein. It is further provided that no attempt by law or otherwise to collect any note given for the cash premium or any instalment premium due upon any instalment note shall be deemed a waiver of any of the conditions of this policy, or shall be deemed in any manner to revive this policy; but upon payment to the company in New York or to the western department in Chicago by the assured or his assigns of the full amount due upon such notes and costs, if any there be, this policy shall thereafter be in full force unless the same be inoperative or void for some other cause than the nonpayment of such note."

At the time of receiving the policy, the plaintiff paid eight dollars and executed the following instalment note:

" $32.00. The company is authorized to insert in this note the number and date of policy.

For value received, in policy No. B. F. 505,215, dated the ____ day of ______, 18--, issued by the Continental Insurance Company of New York, -- promise to pay to said company or order (by mail, if requested) thirty-two dollars, in instalments, as follows: Eight dollars and ____ cents upon the first day of December, 1884, and eight dollars and ____ cents upon the first day of December, 1885, and eight dollars and ____ cents upon the first day of December, 1886, and eight dollars and ____ cents upon the first day of December 1887, without interest, and it is hereby agreed that, in case of nonpayment of any of the instalments herein named at maturity, this company shall not be liable for loss during such default, and the policy for which this note was given shall lapse until payment is made to this company in New York, or to the western department at Chicago, and in the event of nonsettlement for time expired as per terms on short rates, the whole amount of instalments remaining unpaid on said policy may be declared earned, due and payable, and may be collected by law.

Given in payment for a policy of insurance. If transferred, either before or after maturity, this obligation shall be subject to all defences as if owned by the payee herein named."

The plaintiff testified that he read over and counted up the amounts of the note, but did not read the balance of it, and signed it believing and understanding that he was signing a plain note of hand for the payment of thirty-two dollars.

The loss occurred on December 24, 1885. The instalment due on the first of that month was still due and unpaid at the time of the loss. In July, 1886, the plaintiff paid to the defendant the unpaid balance of the premium.

There was evidence of the note having been sent out from the defendant's office for collection by mistake, but this evidence need not be further noticed for the purposes of this report.

The court gave the following instructions for the plaintiff:

" 6. The jury are instructed that, after default in the payment of the instalment due December 1, 1885, the liability of the defendant was suspended, but if, after plaintiff's loss by fire on December 24, 1885, the defendant, by its duly authorized agents, demanded and received of plaintiff the unpaid instalments due on the note executed by the plaintiff for the premium, with full knowledge at the time of plaintiff's loss, then the policy was revived, and the finding should be for the plaintiff, not exceeding eight hundred dollars."

" 7. The court instructs the jury that if they believe from the evidence, that the plaintiff made a contract of insurance with defendant as contained in the copy of policy offered in evidence, and which was exhibited to him by defendant's agent and delivered to him as the contract and that when plaintiff signed the instalment note he believed and understood that he was signing a simple note of hand for the payment of the premium, then plaintiff is not bound by the conditions of insurance embraced in said note."

From a judgment against it, the defendant has appealed to this court.

GATES & WALLACE, for the appellant.

I. The giving of the eighth instruction for the plaintiff was error because (referring to witnesses testifying falsely) (1) it omitted the element of wilfulness or knowledge on the part of the witness swearing falsely; and (2) there was nothing in the case on which to base it. Smith v. Railroad, 19 Mo.App. 120; Fath v. Hake, 16 Mo.App. 537; Shelnutt v. Bruegestradt, 8 Mo.App. 46; Evans v. Railroad, 16 Mo.App. 522; Bank v. Murdoch, 62 Mo. 70; State v. Brown, 64 Mo. 367; State v. Elkins, 63 Mo. 159; White v. Maxey, 64 Mo. 552; Batterson v. Vogil, 10 Mo.App. 235; Wharton on Evid., sec. 412.

II. The policy delivered by the insurer and the premium note delivered by the insured embraced the obligations incurred by each and constituted the contract of insurance. Shultz v. Ins. Co., 42 Iowa 239; 1 Wood on Fire Ins. [2 Ed.] 12; Rogers v. Smith, 47 N.Y. 327; Shaw v. Ins. Co., 67 Barb. 586; Ins. Co. v. Klink, 65 Mo. 78; Pitt v. Ins. Co., 100 Mass. 500; Greenfield's Estate, 14 Pa.St. 501; Jackson v. Dunbaugh, 1 Johns. Cas. 95, Hamilton v. Elliott, 5 Serg. & R. 375, 380; Gorton v. Ins. Co., 39 Wis. 121.

III. The court erred in instructing the jury that if the plaintiff believed and understood that he was signing a plain note of hand for the payment of the premium when he signed the instalment note, he was not bound by the conditions of insurance embraced therein. The plaintiff could not be permitted to say that he did not understand the terms of the note unless his signature thereto was procured by misrepresentation or fraud or artifice. Addison on Torts, sec. 315; Brown v. Railroad, 18 Mo.App. 568; Rothchild v. Frensdorf, 21 Mo.App. 318; Obrien v. Kinney, 74 Mo. 125; Ins. Co. v. Goben, 50 Ga. 404; Greenfield's Estate, 14 Pa.St. 489, 496, 497.

IV. A collection and retention of the remaining instalments by the company, with a full knowledge of all the facts, would not under the provisions of the policy and note, make it liable for a loss occurring during the default in the payment of the instalment note. The plaintiff's first instruction should have been given. Williams v. Ins. Co., 19 Mich. 451; Williams v. Ins. Co., 19 Mich. 469; Wall v. Ins. Co., 36 N.Y. 157; Muhleman v. Ins. Co., 6 W.Va. 508; Shakey v. Ins. Co., 44 Iowa 540; Shultz v. Ins. Co., 42 Iowa 239; Neely v. Ins. Co., 7 Hill [N. Y.] 49; ...