Swetland v. New World Life Ins. Co.

• Decision Date: 22 February 1922
• Citation: 206 P. 190,35 Idaho 109
• Parties: NETTIE SWETLAND, Respondent, v. THE NEW WORLD LIFE INSURANCE COMPANY, a Corporation, Appellant
• Court: Idaho Supreme Court

206 P. 190

35 Idaho 109

NETTIE SWETLAND, Respondent, v. THE NEW WORLD LIFE INSURANCE COMPANY, a Corporation, Appellant

Supreme Court of Idaho

February 22, 1922

LIFE INSURANCE-FORMATION OF CONTRACT-WAIVER.

1. Where an application for life insurance contains a provision that the policy shall not take effect unless the application shall have been approved by the company and the first annual premium shall have been paid during the good health of the applicant, a contract of insurance is not effected upon the approval of the application unless payment of the first premium has been made or waived.

2. The record examined, and held that there is insufficient evidence to show a waiver of payment of the first premium.

APPEAL from the District Court of the Seventh Judicial District, for Canyon County. Hon. Ed. L. Bryan, Judge.

Action to recover on life insurance policy. Judgment for plaintiff. Reversed.

Judgment reversed, with costs to appellant.

Graves Kizer & Graves and C. C. Cavanah, for Appellant.

The policy in suit never became effective, because the first annual premium, which was a condition precedent to the policy taking effect, was not paid during the continuance of Swetland in good health, or paid at all, nor was there any waiver of payment of said premium by the defendant. (Rathbun v. New York Life Ins. Co., 30 Idaho 34, 165 P. 997; Cranston v. West Coast Life Ins. Co., 63 Ore. 427, 128 P. 427; American Bankers' Ins. Co. v Thomas, 53 Okla. 11, 154 P. 44; Yount v. Prudential Ins. Co. (Mo. App.), 179 S.W. 749; Boston etc Transfer Co. v. Contractors' etc. Ins. Co., 226 Mass. 372, 115 N.E. 494; John Hancock etc. Ins. Co. v. McClure, 218 F. 597, 134 C. C. A. 355; Missouri State Life Ins. Co. v. Salisbury, 279 Mo. 40, 213 S.W. 786; 1915 Sess. Laws, 393; 40 Cyc. 249-261, 269; 29 Am. & Eng. Ency. of Law, 1093-1096, 1105; Virginia etc. R. Co. v. Hawk, 160 F. 348, 87 C. C. A. 300; Samulski v. Menasha Paper Co., 147 Wis. 285, 133 N.W. 142; 21 R. C. L. 81-83; Pride v. Continental Cas. Co., 69 Wash. 428, 125 P. 787; Randall v. Travelers' Ins. Co., 206 Mich. 418, 173 N.W. 388; Stringham v. Mutual Ins. Co., 44 Ore. 447, 75 P. 822; Union etc. Ins. Co. v. Pauly, 8 Ind.App. 85, 35 N.E. 190; Bowen v. Mutual etc. Ins. Co., 20 S.D. 103, 104 N.W. 1040; Mutual etc. Ins. Co. v. Lucas, 25 Ky. Law Rep. 2052, 79 S.W. 279; Brady v. Northwestern etc. Aid Assn., 190 Pa. 595, 42 A. 962; Selman v. Manhattan etc. Ins. Co., 20 Ga.App. 440, 93 S.E. 60; Poste v. American etc. Ins. Co., 32 A.D. 189, 52 N.Y.S. 910; Perkins v. Philadelphia etc. Ins. Co., 93 S.C. 88, 76 S.E. 29; Nielsen v. Provident etc. Assur. Soc., 6 Cal. Unrep. 804, 66 P. 663; Parry v. Southeastern etc. Ins. Co., 95 S.C. 1, 78 S.E. 441; Johnson v. Retail Merchants etc. Ins. Co., 112 Minn. 418, 128 N.W. 462; Linn v. New York Life Ins. Co., 78 Mo.App. 192.)

The local agents did not have authority to waive prepayment of the first premium, or to accept anything but cash in payment thereof, as the policy sued upon provided limitations upon the powers of defendant's agents, and the said Swetland is in law charged with knowledge of such limitations, which will be enforced and the insured will not be heard to claim that the agent agreed to that which by the terms of the written instrument he had no power to agree to. (1915 Sess. Laws 392, 393; Simpson v. Remington, 6 Idaho 681, 59 P. 360; Vadney v. State Board, etc., 19 Idaho 203, 112 P. 1046; 9 Cyc. 391; Brown v. Massachusetts etc. Ins. Co., 59 N.H. 298, 47 Am. Rep. 205; Northern Assur. Co. v. Grand View Bldg. Assn., 183 U.S. 308, 22 S.Ct. 133, 46 L.Ed. 213; Aetna Life Ins. Co. v. Moore, 231 U.S. 543, 34 S.Ct. 186, 58 L.Ed. 356; Prudential Ins. Co. v. Moore, 231 U.S. 560, 34 S.Ct. 191, 58 L.Ed. 367; Neff v. Metropolitan L. Ins. Co. (Ind. App.), 73 N.E. 1041; Russell v. Prudential Ins. Co., 176 N.Y. 178, 98 Am. St. 656, 68 N.E. 252; Ormond v. Fidelity Life Assn., 96 N.C. 158, 1 S.E. 796; Mutual Reserve etc. Assn. v. Simmons, 107 F. 418, 46 C. C. A. 393; Oliver v. Mutual L. Ins. Co., 97 Va. 134, 33 S.E. 536; Metropolitan Life Ins. Co. v. Thompson, 20 Ga.App. 706, 93 S.E. 299; Lyke v. American etc. Assur. Co. (Mo. App.), 187 S.W. 265; Batson v. Fidelity etc. Ins. Co., 155 Ala. 265, 130 Am. St. 21, 46 So. 578; 40 Cyc. 259-262; 31 Cyc. 1333, 1334.)

Hawley & Hawley and S. S. Griffin, for Respondent.

Since the matter of the payment of the premium was a matter wholly between Swetland and the agents, they had authority to waive payment in cash. (Marysville Mercantile Co. v. Home Fire Ins. Co., 21 Idaho 377, 121 P. 1026; Kimbro v. New York Life Ins. Co., 134 Iowa 84, 108 N.W. 1025, 12 L. R. A., N. S., 421; Miller v. Brooklyn L. Ins. Co., 12 Wall. (U.S.) 285, 20 L.Ed. 398; Manhattan Life Ins. Co. v. Hereford, 172 Ala. 434, 55 So. 497; Jurgens v. New York Life Ins. Co., 114 Cal. 161, 45 P. 1054, 46 P. 386; Rosenborg v. Johnson, 45 Colo. 53, 99 P. 315; Dunn v. Abrams, 97 Ga. 762, 25 S.E. 766; Williams v. Empire Mut. etc. Ins. Co., 8 Ga.App. 303, 68 S.E. 1082; Southern Mut. L. Ins. Co. v. Best, 8 Ky. Law Rep. 535; Mooney v. Home Ins. Co., 80 Mo.App. 192; Union L. Ins. Co. v. Parker, 66 Neb. 395, 103 Am. St. 714, 92 N.W. 604, 62 L. R. A. 390; Perea v. State Life Ins. Co., 15 N.M. 399, 110 P. 559; New England Mutual L. Ins. Co. v. Hasbrook's Admx., 32 Ind. 447; Thies v. Mutual Life Ins. Co., 13 Tex. Civ. App. 280, 35 S.W. 676; Buckley v. Citizens' Ins. Co., 188 N.Y. 399, 81 N.E. 165, 13 L. R. A., N. S., 889; Life Ins. Co. of Virginia v. Hairston, 108 Va. 832, 128 Am. St. 989, 62 S.E. 1057; Lawrence v. Penn Mut. L. Ins. Co., 113 La. 87, 1 Ann. Cas. 965, 36 So. 898; Devine v. Federal L. Ins. Co., 250 Ill. 203, 95 N.E. 174; Reppond v. National L. Ins. Co., 100 Tex. 519, 15 Ann. Cas. 618, 101 S.W. 786, 11 L. R. A., N. S., 981; Carson v. Jersey City Ins. Co., 43 N.J.L. 300, 39 Am. Rep. 584; Jacobs v. Omaha Life Assn., 146 Mo. 523, 48 S.W. 462; Thum v. Wolstenholme, 21 Utah 446, 61 P. 537; Raulet v. Northwestern Nat. Ins. Co., 157 Cal. 213, 107 P. 292; Aseltine v. Perry, 75 Vt. 208, 54 A. 190.)

Limitations of an agent's authority not communicated to the applicant are not binding upon him. (Riordan v. Equitable Life etc. Soc., 31 Idaho 657, 175 P. 586; 1 Cooley's Ins. Brief, p. 451; Bacon, Insurance, sec. 153; Clement, Insurance, pp. 452, 453; 5 Elliott on Contracts, sec. 4164; Odell v. Manhattan Life Ins. Co., 9 Ohio Dec. 589; Hall v. Union Central Life Ins. Co., 23 Wash. 610, 83 Am. St. 844, 63 P. 505, 51 L. R. A. 288; Relief Fire Ins. Co. of New York v. Shaw, 94 U.S. 574, 24 L.Ed. 291; Taylor v. Aetna Life Ins. Co., 13 Gray (Mass.), 434; Fried v. Royal Ins. Co., 50 N.Y. 243; Schwartz v. Germania Life Ins. Co., 18 Minn. 448; Mississippi Valley Life Ins. Co. v. Neyland, 9 Bush (Ky.), 430; Going v. Mutual Benefit Life Ins. Co., 58 S.C. 582, 37 S.E. 228; Kimbro v. New York Life Ins. Co., supra.)

The order on the Stanfield Sheep Co. was accepted as payment. (Veal v. Security Mutual Life Ins. Co., 6 Ga.App. 721, 65 S.E. 714; Pennsylvania L. Mut. Fire Ins. Co. v. Meyer, 126 F. 352, 61 C. C. A. 254; Stewart v. Union Mutual L. Ins. Co., 155 N.Y. 257, 49 N.E. 876, 42 L. R. A. 147.)

RICE C. J. Budge and McCarthy, JJ., concur. DUNN, J., Lee, J., Dissenting.

OPINION

RICE, C. J.

This is an action by respondent as beneficiary of a life insurance policy, alleged to have been issued by appellant, upon the life of her son Alden W. Swetland. The application signed by him provided that the policy "shall not take effect unless this application shall have been approved by the company and the first annual premium shall have been paid by me, during my continuance in good health." The policy, upon which the action is founded, contains a like provision.

It is conceded that the policy was never delivered, and that the first premium was not paid. In the complaint it is alleged that the consideration for the issuance of the policy was the promise of Alden W. Swetland to pay to appellant the sum of $ 75.80, as follows: Twenty-five dollars by means of a written order drawn by Alden W. Swetland upon the Stanfield Sheep Company, the balance of $ 50.80 to be paid by Alden W. Swetland at his convenience within six months after the date of the application; that the order was drawn and accepted as a payment of $ 25; that the promise of Alden W. Swetland to pay the remaining amount due was accepted by appellant in lieu of the cash payment thereof. These allegations were denied by the answer.

Under the conceded facts it is plain that no contract of insurance was effected upon the life of Alden W. Swetland, unless the payment of the first premium was waived. According to the evidence contained in the record, it is clear that Kernohan, general agent of the company, had authority to waive the payment of the first premium in cash. But a careful examination of the record discloses that there was no substantial evidence tending to prove waiver of the payment of the first premium, either by appellant or its general agent, Kernohan.

At the close of the testimony, appellant renewed its motion for nonsuit upon the same ground as set forth when the motion was originally made at the close of respondent's case. The ground upon which the motion was based, in substance, was that appellant had failed to prove a sufficient case for the jury. A judgment for nonsuit upon that ground is not res judicata. If appellant had asked for a peremptory instruction in its favor, it should have been granted.

Upon the record in this case, the judgment will be reversed, with costs to appellant.

Budge and McCarthy, JJ., concur.

(April 28, 1922.)

ON PETITION FOR REHEARING.

RICE C. J.--A petition for rehearing was filed in this case, in which it is ably and earnestly contended that the court by its decision...