The Union Casualty and Surety Company v. Bragg

• Decision Date: 08 June 1901
• Docket Number: 12,499
• Citation: 65 P. 272,63 Kan. 291
• Parties: THE UNION CASUALTY AND SURETY COMPANY v. SILAS W. BRAGG
• Court: Kansas Supreme Court

65 P. 272

63 Kan. 291

THE UNION CASUALTY AND SURETY COMPANY v. SILAS W. BRAGG

No. 12,499

Supreme Court of Kansas

June 8, 1901

Decided January, 1901.

Error from Lyon district court; W. A. RANDOLPH, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. LIFE-INSURANCE POLICY -- Departure in Pleading. In an action on an insurance policy, it was alleged in the petition that the insured had done and performed all of the requirements of the policy on his part. The condition required prompt payment of premiums as they became due. The insurance company answered, averring that the policy had lapsed by reason of a failure to pay the last premium. In reply, the plaintiff alleged that the company had waived such payment, and, further, that by its conduct it was estopped from claiming that the premium was not paid. Held that the allegations of the reply constituted a departure from the averments of the petition.

2. LIFE-INSURANCE POLICY -- Authority of Clerk of General Agent -- Company Estopped. A clerk of the general agent of an accident insurance company wrote to the insured that he (the clerk) had been charged with the last instalment of premium due from the insured on the policy, and requested a remittance of the same to him. In fact, the clerk had not paid the premium, but was liable to the company therefor by reason of his failure to deduct it from the amount of the indemnity paid to the insured, under the policy, as the result of a previous accident. After the insured had sustained another injury within the time limit of the policy, he was informed that the premium mentioned had not been charged to, or paid by, the clerk, and that his insurance had lapsed. Held, that the clerk had authority to give information of a thing which, if done, would bind the company, and that the insurance company cannot be heard to assert a forfeiture after a liability has arisen on the policy, when, by its course of dealing, it has induced the insured to believe that the premium was paid.

W. T. McCarty, and Madden Bros., for plaintiff in error.

Chas. B. Graves, for defendant in error.

SMITH J. DOSTER, C. J., POLLOCK, J., concurring.

OPINION

SMITH, J.:

On the 30th day of January, 1895, the defendant in error, a locomotive fireman, took out a policy of insurance against accidents in the plaintiff in error company. It recites that it is issued in consideration of the warranties in the application and of an order for certain moneys drawn on the Atchison, Topeka & Santa Fe Railway Company by the insured. The policy is divided into four periods: (1) Two months; (2) two months; (3) three months; (4) five months. The amount of the premium for each period was eight dollars, payable in February, March, April, and May, respectively. The application contained the following clause: "All claims for injuries effected during any period for which its respective premium has not been actually paid shall be forfeited to the company."

It is conceded that three instalments of premium were collected from the railroad company by the accident company, which carried the policy to August 30, 1895. The controversy is whether the eight-dollar payment due in May, 1895, was paid to the insurance company, either by the insured or the railway company, or the payment waived. If so, the policy was kept in force until January 30, 1896; if not, then the policy had lapsed when Bragg was injured, on January 10, 1896, indemnity for which he seeks to recover in this action.

On April 13, 1895, during the second payment period of the policy, the defendant in error was accidentally injured, and later presented a claim, which was acknowledged by the company, for twenty-six weeks' indemnity, amounting to $ 260. This amount was paid to the insured on December 2, 1895. One Libby, who was in the employ of the company as a bookkeeper, whose duty it was to check up claims ready for payment, through an oversight neglected to deduct the eight-dollar premium, payable in May, from the $ 260 indemnity paid for the injury caused by the accident in April. This, Libby testifies, it was his duty to do. On January 2, 1896, Libby wrote to Bragg the following letter:

"DEAR SIR -- On December 2 last you were paid a claim from this office for $ 260. Same was for twenty-six weeks' indemnity, at ten dollars per week. You are probably aware that the premium on your policy No. 344,035 was thirty-two dollars. Twenty-four dollars only of this has been paid leaving a balance due of eight dollars.

"The undersigned is the unfortunate clerk in Mr. Brooks's office who checked up this claim, inasmuch that when doing so neglected to collect from the draft sent you the amount due as above stated. Now this eight dollars has been charged against his monthly salary, and he respectfully refers the matter to you, that you may help him out by appreciating the situation and remit the amount. I have reason to think that your claim was satisfactorily settled, and have no reason to doubt but that you intend to pay for this policy, on...