Stonewall Life Ins. Co. v. Cooke

• Decision Date: 07 November 1932
• Docket Number: 29987
• Citation: Stonewall Life Ins. Co. v. Cooke, 165 Miss. 619, 144 So. 217 (Miss. 1932)
• Court: Mississippi Supreme Court
• Parties: STONEWALL LIFE INS. CO. v. COOKE

144 So. 217

165 Miss. 619

STONEWALL LIFE INS. CO. v. COOKE

No. 29987

Supreme Court of Mississippi

November 7, 1932

Division B

Suggestion Of Error Overruled January 2, 1933.

APPEAL from circuit court of Bolivar county, HON. WM. A. ALCORN JR., Judge.

Action by Mrs. Myrtle Cooke against the Stonewall Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Affirmed.

E. H. Green, of Cleveland, and Brunini & Hirsch of Vicksburg, and J. D. Frank, of Ft. Wayne, Indiana, for appellant.

The acceptance by an insurance company of a renewal premium on a life insurance policy which has lapsed on account of the non-payment of such premium is not binding on the insurer and does not reinstate the policy when such premium is paid after the death of the insured and is accepted by the insurer in total ignorance of the death of the insured, if the insurer, upon discovery of the facts, promptly disaffirms the transaction by repaying or offering to repay the premium so received by it and demands the return of the premium receipts issued by it in ignorance of the death of the insured.

3 Joyce "The Law of Insurance, sec. 1374, p. 2543; 32 C. J., sec. 629, p. 1351; Couch on Insurance, secs. 635, 2051; Lodge K. P. v. Quinn, 78 Miss. 525, 29 So. 826; Woodmen of Union v. Warner, 157 Miss. 753, 128 So. 558; Miller v. Head Camp, 77 P. 83; Thompson v. Fidelity Mutual Life Insurance Company, 92 S.W. 1098; Franklin Life Insurance Company of Illinois v. McAfee, 90 S.W. 216; United Order of the Golden Cross v. Hooser, 49 So. 354, 360; Mobile Life, etc., Company v. Pruett, 74 Ala. 487, 498.

Patterson v. Equitable Life Assurance Society, 165 S.W. 454; New York Life Insurance Company v. O'Dom, 100 Miss. 219, 56 So. 379; Horstman v. Capitol Life Insurance Company of Colorado, 184 S.W. 1164; Wright v. Metropolitan Life Insurance Company, 221 S.W. 383; Kansas City Life Insurance Company v. Elmore, 226 S.W. 709, 719; Brennan v. Eastern Casualty Insurance Company, 146 A. 341; National Benefit Life Insurance Company v. Brown, 154 S.E. 469; Globe Mutual Life Insurance Company v. Wolff, 95 U.S. 326; Stringham v. Mutual Life Insurance Company, 75 P. 822; Thompson v. Fidelity Mutual Life Insurance Company, 92 S.W. 1098; Sovereign Camp W. O. W. v. Cameron, 41 S.W. 283.

The death of the insured fixed the rights of the parties, and the rights and obligations under the contract must be determined on the facts existing at the time of the death of the insured.

Miller v. Head Camp, 77 P. 83, 84; Stringham v. Mutual. Life Insurance Company, 74 P. 822, 824; Patterson v. Equitable Life Assurance Society, 165 S.W. 454, 456; Carlson v. Supreme Council, 115 Cal. 466, 47 P. 375, 35 L.R.A. 643.

An insured who accepts policies containing provisions authorizing an agent to collect renewal premiums only in exchange for the company's receipt therefor signed by the president or the secretary and countersigned by the agent as evidencing such payment has notice of the limitation of the agent's authority; and, if he makes payment to an agent not holding the receipt, he in effect makes the agent his own, in the absence of agreement, waiver, or estoppel, and the payment must reach the insurer in time to satisfy the terms of the policy.

New York Life Insurance Company v. O'Dom, 100 Miss. 219, 56 So. 379, Ann. Cas. 1914A, 583; Germania Life Insurance Company v. Bouldin, 100 Miss. 660, 56 So. 609; Continental Casualty Company v. Hall, 118 Miss. 871, 86 So. 335; American Banker's Insurance Company v. Lee, 134 So. 836; Kansas City Life Insurance Company v. Elmore, 226 S.W. 709; 2 Cooley's Briefs on Insurance (2 Ed.), 1637; 32 C. J. 1198, sec. 332.

It is a cardinal principal of the law of agency that the principal may either ratify or disaffirm an unauthorized act of an agent and that the ratification of one unauthorized act by the principal does not constitute or show a general authority of the agent to perform other similar acts.

The payment to Davis, if made to, him on May 18 as testified by Fred Cooke, was the same as if it had been made to some stranger. He thereby made Davis his agent to pay the premium to the company.

Kansas City Life Insurance Company v. Elmore, 226 S.W. 709; 32 C. J. 1198, sec. 332; Lauze v. New York Life Insurance Company, 68 A. 31; Gibson v. New York Life Insurance Company, 172 P. 920.

No recovery was warranted on the effort to make payment of the premiums on the policies sued on by check dated May 16, 1931, signed Cooke Brothers by J. W. Cooke, and received by appellant on May 21, 1931.

When premiums are paid on life insurance policies by means of checks sent through the mail, the checks must be mailed in time to reach the insurer within the grace period provided for under the terms of the policies and unless they are received by the insurer within the time specified they do not constitute payment of the premiums regardless of when they were mailed, unless the insurer elects to retain the check and treat it as a payment of the premiums.

32 C. J. 1204, sec. 334.

State v. Connecticut Mutual Life Insurance Co., 61 S.W. 75; Traveler's Protective Association v. Roth, 109! S.W. 1039; Continental Insurance Co. of New York v. Straton, 215 S.W. 416; Continental Insurance Company of New York v. Hargrove, 116 S.W. 256.

The court erred in permitting the witness Ben H. Hardee to testify over the objections of appellant, that he had a conversation with W. F. Davis about a check that had been given to him by one of the Cooke boys in payment of part of the premium.

The trial court erred in admitting over the objection of appellant the letter from the Stonewall Life Insurance Company to W. Fred Davis, dated May 8, 1931.

The burden of proof was upon the appellee to prove payment within the grace period of the premiums of said policies.

26 C. J. 492, 514, 516, secs. 693, 721, 725; Smith v. Ohio Insurance, 26 S.W. 962; Rogers v. Columbian Nat'l Life Ins. Co., 213 N.W. 757; 33 C. J. 110; Farrell v. American Employer's Liability Ins. Co., 68 Vt. 136, 34 A. 478.

In case, however, of a voluntary default in the payment of any installment, when due, or within the grace period, it is expressly provided that the policy shall no longer be an existing contract, and in such case the insurer has no right to collect the remaining installments, and no action can be maintained thereon by the beneficiary.

New York Life Ins. Co. v. Morris, 137 Miss. 101, 102 So. 71; New York Life Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93; Fidelity Mutual Ins. Co. v. Oliver, 111 Miss. 133.

An agent can only bind his principal when acting within the real or apparent scope of his authority, and persons dealing with an agent must know his power and the scope and limit thereof.

Welford v. Arnold, 140 So. 220.

The declaration of an assistant superintendent of the insurer's local office that insurance was effective, notwithstanding default in payment of premiums, neither waived forfeitures therefor nor revived the contract.

Burns v. Prudential Insurance Company of America, 159 A. 606.

The forfeiture provisions of these policies are automatic. The very moment the days of grace expired without the payment of the premiums, the policies thereupon terminated subject to the rights of the insured to have the same reinstated upon the payment of premiums and a sufficient showing to the effect that he was still an insurable risk.

N. Y. Life Ins. Co. v. Statham, 23 S.Ct. 791, 93 U.S. 24, 30, 31, 23 L.Ed. 789, 791; Bergholm v. Peoria Life Ins. Co., 284 U.S. 489, 76 L.Ed. 416, 419; Klein v. New York Life Ins. Co., 104 U.S. 88, 26 L.Ed. 776; Equitable Life Assurance Society v. Serio, 147 S.W. 1152; Iowa Life Insurance Company v. Lewis, 23 S.Ct. 132; New York Life Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93; New York Life Insurance Co. v. Morris, 137 Miss. 101, 102 So. 71; John Hancock Mutual Life Ins. Co. v. Chevillon, 45 F. 980, 983.

Waiver is defined to be the intentional relinquishment of a known right, and it implies an election of the party to forego some advantage which he might have, at his option, insisted upon. There must be both knowledge of the existence of the right, and an intention to relinquish it.

Knights of Pythias v. Quinn, 78 Miss. 525, 29 So. 826; Miller v. Head Camp, 77 P. 83; Globe Mutual Life Ins. Co. v. Wolff, 95 U.S. 326.

Shands, Elmore & Causey, of Cleveland, for appellee.

The rule prevails generally that an ordinary life policy is not a contract to be renewed from year to year by payment of the stipulated premiums. It is an entire contract for life. The premiums are in no wise intended simply as a consideration for the year in which they are agreed to be paid. Each premium is a part of the consideration of the insurance for life. As a consequence, a failure to pay a premium does not forfeit the policy unless the policy contains an express provision to that effect.

Hass v. Mutual Life, etc., 121 N.W. 996, 26 L.R.A. (N.S.) 747; 19 Am. & Eng. Ency. L. 44; 14 R. C. L. 975, par. 148; 37 C. J. 472, par. 189.

The stipulations contained in the policies sued on and substantially similar stipulations are held provisions for forfeiture if payment of the premiums be not made.

John Hancock Mutual Life Insurance Co. v. Chevillon, 45 F. 980; Brans v. New York Life, 148 A. 885; New York Life Insurance Co. v. O'Dom, 100 Miss. 248.

Forfeitures are hateful to the court.

Morgan v. Independent Order, etc., 90 Miss. 864, 875.

Such forfeiture provision does not contemplate a forfeiture absolute at all events. The provision is for the benefit of the insurer, and the insurance becomes void or not at the insurer's option. Therefore, it is written "a condition in a policy that it shall be void if premiums are not paid when due means...