Thelen v. Metropolitan Life Ins. Co., 8390.

• Decision Date: 15 April 1932
• Docket Number: No. 8390.,8390.
• Citation: 2 F. Supp. 404
• Parties: THELEN v. METROPOLITAN LIFE INS. CO.
• Court: U.S. District Court — Western District of Missouri

2 F. Supp. 404

THELEN v. METROPOLITAN LIFE INS. CO.

No. 8390.

District Court, W. D. Missouri, W. D.

April 15, 1932.

Henry M. Beardsley and Martin J. Ostergard, both of Kansas City, Mo., for plaintiff.

Meservey, Michaels, Blackmar, Newkirk & Eager, of Kansas City, Mo., for defendant.

OTIS, District Judge.

Defendant has demurred to the plaintiff's petition in this case on the ground that it does not state facts sufficient to constitute a cause of action.

The petition purports to state a cause of action for recovery on a policy of life insurance. It alleges the execution of the policy on May 13, 1929, the payment of the first premium on that date, the failure of the insured or of any one for him to pay the second premium which was due May 13, 1930. It is alleged that the insured, who was the plaintiff's husband, died May 3, 1931, or nearly twelve months after the failure to pay the second premium.

By the terms of the policy it lapsed for nonpayment of premium on May 13, 1930, but continued to be in effect for a grace period of thirty days thereafter. The facts pleaded, as so far stated, of course, show that the plaintiff has no cause of action unless the effect of other facts pleaded is to estop, upon the part of the defendant, assertion of forfeiture.

To support the theory of estoppel plaintiff alleges:

First, that the agent of the defendant who solicited the application of the insured and collected the first premium, having been notified by the insured and the plaintiff, who was beneficiary in the policy, that because of the insured's illness and the plaintiff's engagements the premium could not be delivered to him in person, promised that he would call at the home of the insured to collect the premium. It is alleged that the insured had the money on hand with which to pay the premium, but that the defendant's agent did not call for the premium.

Second, it is alleged that the rules and regulations of the defendant require its agent to call at the residence of the insured to collect premiums and deliver receipts therefor when or before premiums become due.

Third, it is alleged that before the due date of the second annual premium defendant's agent procured from the insured the policy and represented that he would obtain a loan on the policy in amounts sufficient to continue it in effect for three months; the agent at the same time agreeing that he would have changed the basis of the premium payments from annual to quarterly payments.

The Supreme Court of the United States in New York Life Insurance Company v. Eggleston, 96 U. S. 572, 577, 24 L. Ed 841, said: "We have recently, in the case of Insurance Company v. Norton 96 U. S. 234, 24 L. Ed. 689, shown that forfeitures are not favored in the law; and that courts are always prompt to seize hold of any circumstances that indicate an election to waive a forfeiture, or an agreement to do so on which the party has relied and acted. Any agreement, declaration, or course of action, on the part of an insurance company, which leads a party insured honestly to believe that by conforming thereto a forfeiture of his policy will not be incurred, followed by due conformity on his part, will and ought to estop the company from insisting upon the forfeiture, though it might be claimed under the express letter of the contract. The company is thereby estopped from enforcing the forfeiture. The representations, declarations, or acts of an agent, contrary to the terms of the policy, of course will not be sufficient, unless sanctioned by the company itself."

It is the rule of law thus declared upon which plaintiff in this case r...