The Continental Insurance Company v. Dorman

• Decision Date: 24 September 1890
• Docket Number: 15,535
• Citation: 25 N.E. 213,125 Ind. 189
• Parties: The Continental Insurance Company v. Dorman
• Court: Indiana Supreme Court

25 N.E. 213

125 Ind. 189

The Continental Insurance Company v. Dorman

No. 15,535

Supreme Court of Indiana

September 24, 1890

From the Howard Circuit Court.

The judgment is reversed, at costs of appellee, with instructions to proceed in accordance with this opinion.

J. C Blacklidge, W. E. Blacklidge, B. C. Moon and T. Bates, for appellant.

C. N Pollard and C. Bull, for appellee.

OPINION

Olds, J.

This is an action by the appellee against the appellant upon a policy of insurance for the value of a barn and contents insured by the appellant and owned by the appellee, which policy of insurance was issued August 30th, 1883, and the property was destroyed by fire on the 8th day of December, 1883, in Howard county, Indiana, and this suit was brought to recover on the policy in 1888, nearly five years after the property was destroyed.

There was a trial by jury, and a special verdict, upon which the court rendered judgment for appellee, and from the judgment this appeal is prosecuted.

The appellant assigns numerous errors, viz.: That the court erred in overruling the demurrers to the several paragraphs of the complaint; that the court erred in sustaining the demurrer to the third paragraph of appellant's answer; that the court erred in overruling appellant's demurrer to the appellee's reply to the second paragraph of appellant's answer; that the court erred in overruling the appellant's motion for judgment in its favor upon the special verdict, and that the court erred in sustaining the motion of the appellee for judgment in his favor upon the special verdict.

The rulings of the court in overruling appellant's demurrer to the appellee's reply to the appellant's second paragraph of answer, and overruling appellant's motion for judgment on the special verdict, present virtually the same question.

So much of the fifth clause in the policy of insurance as it is material to consider reads as follows:

"If a note is taken for the premium, or any part thereof, it shall be accepted as payment thereof only until the maturity of such note, and if the same be not paid at maturity according to its terms, this policy shall be void so long as the same remains unpaid, unless the time of payment has been duly extended by consent of the superintendent of this company in writing: Provided, however, That on payment to the company in New York, or to the western department in Chicago by the assured, or assigns, of all premiums due under this policy, and the note given thereon, the liability of this company on this policy shall again attach, and this policy be in force from and after such payment, unless this policy shall be void and inoperative from 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," etc.

The remainder of this clause relates to the liability in case an effort is made to collect by suit or otherwise, but it is not contended that any effort was made to collect, and therefore this part is immaterial.

The second paragraph of answer alleges that no part of the premium was paid in money; that the sole consideration for the insurance was a note executed by the appellee to the appellant at the time the policy was issued, August 30th, 1883, and payable on the 1st day of November, 1883, for thirteen dollars; that the note also contained a stipulation, the same, in substance, as the policy, in regard to the non-liability of the appellant during default of payment; that the note had been lost, but setting out its terms and conditions, and averring that the note was due on November 1st, 1883, and that there was a default in the payment, and that the note never had been paid.

To this paragraph of answer the appellee replied, admitting the execution of the note in August, 1883, for thirteen dollars, due on the 1st day of November, 1883, to be paid to the defendant by mail if requested, and that the note was taken as an absolute payment of the premium mentioned in the insurance policy sued upon, and was the true and only consideration for the insurance; that the payment of the note was not at any time demanded by the appellant; that after the maturity of the note the appellant did not return, or offer to return, said note, or give notice to the appellee that it intended to treat the policy as void or inoperative because of the non-payment of the note at the maturity thereof, but allowed the appellee to hold said policy under the belief and with the understanding that he was insured thereby, and that the same was in full force and effect until after the loss; that, on the 11th day of December, 1883, the appellee offered to pay the appellant the note and interest in full, which the appellant refused to accept.

The plaintiff sustained a substantial loss. It was unfortunate for him, and is to be regretted, but such loss is in no way attributable to the appellant, and so far as the case of the appellee against the appellant for such loss, as presented by the record in this case, is concerned, there seems to be but little merit in it.

The appellee never paid anything for the risk assumed by the appellant; he never offered to pay anything until after the loss occurred, then he at once, or within three days thereafter, on the 11th day of December, 1883, forwarded the money for the premium to the Chicago office. At that time the loss had occurred, and he was not slow in offering the appellant thirteen dollars, as a consideration for which it should pay to him one thousand dollars. If the money had been paid prior to the loss, and no loss had occurred, it would probably have seemed to the appellee to have been paid without receiving money consideration in return, though it would have made the policy valid and in force if loss had occurred.

With this brief statement we will proceed to consider the case in relation to its legal aspect. The policy of insurance which the appellee received and held in his possession provided, in express terms, that if a note was given for a premium, it should only operate as a payment, and keep the policy in force until the note matured, but during the period in which a default of payment existed after the note matured the policy should be void, and there should be no liability upon it; but should the assured pay the note at any time to the company in New York or its western department in Chicago, the policy should again be in force, and the company liable for loss from the time of the payment. This stipulation was a part of the contract of insurance by which the parties were bound, and it being in writing, took the place of all verbal agreements between them.

It was pleaded and set out with each paragraph of the complaint, and it showed what the written agreement was between the parties in case a note was given for the premium. The appellant answered, alleging that a note was given for the premium, and that no money consideration was paid for the assumption of the risk. The appellee replied to this paragraph of answer admitting the fact that the sole and only consideration for the insurance was the note, and that it was not paid, or payment offered, until December 11th, 1883, after the loss, but alleges a different contract from that stipulated in the policy, alleging that the note was to be an absolute...