Sullivan v. Germania Life Ins. Co.

• Decision Date: 18 March 1895
• Citation: 39 P. 742,15 Mont. 522
• Parties: SULLIVAN v. GERMANIA LIFE INS. CO.
• Court: Montana Supreme Court

39 P. 742

15 Mont. 522

SULLIVAN v. GERMANIA LIFE INS. CO.

Supreme Court of Montana

March 18, 1895

Appeal from district court, Lewis and Clarke county; H. R. Buck Judge.

Action by James Sullivan against the Germania Life Insurance Company on a life insurance policy. From a judgment for defendant plaintiff appeals. Affirmed.

After a policy of insurance, containing a clause denying authority to agents to waive forfeitures, had been by the company declared forfeited for nonpayment of premiums, the insured tendered the vice president and manager the balance due on such premiums, which he refused, referring the insured to the agent who issued the policy, stating that whatever the latter might do would be accepted by the company. The agent promised to "fix it up" in accordance with a contract between himself and the insured, made when the policy was issued, whereby the premiums were to be offset by rents due the insured from the agent. Held, that such acts and statements by the company did not constitute an affirmance of the contract as to rents, nor a waiver of the forfeiture.

The defendant pleads that it conducted its insurance business in Montana in 1889, 1890, and 1891, one Fred S. Doremus being the manager in Montana. About November 20, 1889, the plaintiff and defendant entered into an agreement by which the plaintiff insured his life with defendant for $5,000. The policy was delivered November 30, 1889, and the premium for 1889, amounting to $263.15, was duly paid. The complaint alleges payment for the premium due November 30, 1890; and that of the premium due November 30, 1891, plaintiff paid $111.85 before November 1, 1891, and on November 6, 1891 offered and tendered to defendant the remainder of the premium due for 1891, to wit, $151.30; but defendant refused to accept the same, and has not given the plaintiff the receipt for the premium due and paid on November 30, 1890 but withholds the same, and refuses to give plaintiff the receipt for $263.15, paid and tendered to defendant as the payment due November 30, 1891. Plaintiff alleges that on November 6, 1891, the defendant declared said policy void, and refused to further deal with plaintiff; that plaintiff has done everything required to be done; wherefore he prays that the receipts for premiums paid and tendered be delivered by defendant to him on payment into court of said sum of $151.31, and, in the event of the failure to deliver said receipts, that plaintiff have judgment against defendant for $638.15. Attached to the complaint as an exhibit (A) is a copy of the policy, in the usual form of dividend tontine insurance policies. On the back of the policy are various conditions and agreements. One condition is that if the premiums mentioned, or any of them, shall not be paid on or before a number of the several days stipulated for the payment thereof, respectively, or within three days thereafter, respectively, the policy shall cease, and be null and void. A further condition is that agents may receive premiums at or before the time when due, only upon production and delivery of receipt of the secretary of the company, but cannot make, alter, or discharge contracts or waive forfeitures. The annual premium was $263.15. The defendant, by answer, admits that about November 20, 1889, an insurance contract for $5,000 was entered into, but denies that it agreed to pay plaintiff the sum of $5,000, save and except as in accordance with the terms of the policy; admits the first payment of $263.15, but denies that of the premium due on November 30, 1890, there was anything paid to defendant, as alleged in plaintiff's complaint; denies that of the premium due November 30, 1891, plaintiff paid $111.85 at any time; and denies, on information and belief, that on November 6, 1891, plaintiff tendered to defendant the remainder of said premium, to wit, $151.30. Defendant admits that it has not given plaintiff receipt for the 1890 premium, and says plaintiff was not entitled thereto; admits that it has not given plaintiff the receipt for 1891; and alleges that plaintiff refused and failed to pay the premium due, $263.15, for 1891. The defendant pleads that the policy issued to plaintiff was canceled long prior to November 6, 1891; and affirmatively then sets forth that Fred S. Doremus, who was manager for the defendant in Montana, was indebted in 1890 to plaintiff in the sum of $375, for private rooms occupied by said Doremus in the Diamond block, in Helena, of which block plaintiff was the owner; that plaintiff and said Doremus entered into an agreement, without any authority so to do, and without the knowledge or consent of this defendant, whereby said Doremus was to apply his private indebtedness to plaintiff in payment of the premium which plaintiff owed defendant for the year 1890; that prior to November 30, 1890, defendant was informed of the aforesaid agreement, and immediately notified plaintiff and said Doremus that it would not accept the same, and would not and did not ratify the act of its said agent Doremus in entering into said agreement, and would not accept the substitution of debtors,--all of which plaintiff well knew before the premium for 1890 became due and payable; that said Fred S. Doremus did not pay defendant the premium due November 30, 1890; that on or about November 30, 1890, the day when said premium became due, defendant demanded payment of the $263.15, as premium, but plaintiff refused to pay, that defendant never agreed with plaintiff, or with the said Doremus, to accept the said substitution of debtors, as the contract of employment between defendant and Doremus prohibited the incurring of debts or obligations on the part of defendant, except by its written consent, of which contract plaintiff had knowledge before the 1890 premium became due; that on or about November 30, 1890, in consequence of the failure, refusal, and neglect of plaintiff to pay the defendant the 1890 premium, to wit, $263.15, the plaintiff's policy was declared null and void, in accordance with the conditions of said policy. The plaintiff's replication denies the material matters of defendant's answer, and sets up that all the transactions with Doremus were with him as manager of the defendant corporation, and that a large portion of the rentals was for an office for defendant; pleads that the arrangement between plaintiff and Doremus as manager was ratified and indorsed by the defendant by its subsequent acts, and that said arrangement was made before the original delivery of the policy, and the policy delivered in pursuance to said arrangement; denies that the company ever notified plaintiff that it did not accept and ratify the aforesaid arrangement; denies that the company ever demanded payment of premiums alleged; and denies, on information and belief, that on or about November 30, 1890, the policy was declared null and void, but that if such act was done no notice thereof was ever communicated to plaintiff. There was a trial to the court without a jury. At the conclusion of plaintiff's testimony defendant moved for a nonsuit. The court granted the motion, and entered judgment of dismissal in favor of the defendant for costs. The plaintiff appeals from the judgment, and asks this court to review the order of the trial court granting the motion for nonsuit.

On the trial plaintiff swore that Fred S. Doremus, manager of the company, occupied insurance offices in the Gold block, and rooms for his private uses in the Diamond block, both of which he leased from plaintiff: At the solicitation of Doremus, plaintiff, about November, 1889, took a policy for $5,000, after Doremus had told him that the company were paying good rents to defendant, and a couple of months' rents each year would really pay for the insurance policy He stated this before plaintiff agreed to take the policy, and before its issuance. Plaintiff paid the first premium by four months rent of rooms in the Diamond block and one month's rent of the offices. A memorandum, showing private and office-rent accounts, was made out at the time between plaintiff and Doremus. At the end of that accounting the policy was delivered. The terms of the policy are outlined in the statement of the case. Plaintiff further said that the foregoing transactions disposed of the business for a year. In July or August of 1890, Doremus asked plaintiff if he would apply the room rent to the second year's premium. Plaintiff told him, "Yes," and they entered into a settlement of accounts, evidenced by a memorandum of private and office rents, which memorandum was as follows:

Nov..... $115 00 Dec..... $115 00 Jany.... $115 00 Feby.... $115 00 Mrch.... $115 00 Apl..... $115 00 May .... $115 00 June ... $115 00 ------- $920 00 Cash, policy ........ $263 00 Check, Dec.31 ....... $195 00 Apl. 10 ...... $230 00 May 29, Dep .... 50 00 June 5 ....... $180 00 ------- $918 15 30 00

Doremus accepted the memorandum, plaintiff issued receipt, and, so far as the premium of 1890 was concerned, the matter was settled. Doremus went away about August, 1890. Plaintiff wrote him that he had received a formal printed notice of the premium for 1890 becoming due,--this was in November 1890,--and he wished Doremus would attend to it, and see that his receipt was forthcoming. Doremus said he would attend to it. The agreement that subsequent rents should be applied to the 1891 premium was by letter. When the insurance was made in the first place there was talk, and it was understood in a general way, about applying the rents to the premiums, and that rents should apply to the premiums. It did not make any difference whether the company credited it up with the rent, or whether plaintiff tendered defendant a check and he returned the rent. They also corresponded...