Thompson v. Travelers' Ins. Co.

• Decision Date: 21 May 1902
• Docket Number: 6731
• Citation: 91 N.W. 75,11 N.D. 274
• Court: North Dakota Supreme Court

91 N.W. 75

11 N.D. 274

MAY V. THOMPSON v. TRAVELERS' INSURANCE COMPANY

No. 6731

Supreme Court of North Dakota

May 21, 1902

Appeal from District Court, Barnes County; Glaspell, J.

Action by May V. Thompson against the Travelers' Insurance Company. Judgment for plaintiff. Defendant appeals. Reversed.

Judgment reversed, a new trial granted and case remanded.

John E Greene, for appellant.

Winterer & Winterer, for respondent.

OPINION

MORGAN, J.

On the 23d day of August, 1900, the plaintiff's husband, Horace S. Thompson, made an application for a policy of life insurance in the defendant company for the sum of $ 2,000. On the 4th day of September following the policy was issued to said Horace S. Thompson pursuant to such application, and sent to the local agent of the company at Valley City, N.D and received by said agent on September 11th. On the 15th day of September the policy was delivered to one Tracy for said Thompson, upon payment by him on that day, through said Tracy, of the premium, amounting to the sum of $ 53.24. The policy was made payable to plaintiff in the event of the death of said Thompson. He died on September 28, 1900. Proofs of death were made on October 15, 1900. Payment under the policy was refused by the company, and this suit followed. The complaint states a cause of action against said defendant for the recovery of $ 2,000 by virtue of said policy and the death of said Thompson while such policy was in force. The answer to said complaint alleges as a defense the following facts, viz.: "That the said policy of insurance so delivered to and accepted by, said Horace S. Thompson contained a provision in the following words: 'This policy shall not take effect unless the first premium is actually paid while the insured is in good health.' That in truth and in fact the said Horace S. Thompson was not in good health on the date of the payment of said premium, but, on the contrary, he was at that time suffering from bodily injuries sustained, and with disease contracted, subsequent to the date of his application for the policy aforesaid, from which he did not thereafter recover, and from which, one or both, on the 28th day of September, 1900, he died. That this defendant had no notice or knowledge of the fact of said Thompson being so in ill health until the proofs of death above mentioned were submitted to it, to-wit, on or about the 15th day of October, 1900." A trial resulted in a verdict in favor of the plaintiff. A motion for a new trial was made upon a statement of the case duly settled, and the motion was denied. Judgment was duly entered on said verdict. The defendant has appealed to this court from such judgment, and assigns errors, in substance, as follows: Errors in the admission of evidence; in refusing to direct a verdict for the defendant at the close of the evidence; the insufficiency of the evidence to justify the verdict; and the refusal to grant the motion for a new trial.

On the trial the issues that were contested were (1) whether said Thompson was in good health on September 15th, when the premium was paid by, and the policy delivered to, the said Thompson; (2) whether the retention of the premium by the company was a waiver of its right to assert that the policy of insurance was never in force by reason of that condition in the policy set forth in the answer.

We will consider the last-mentioned question first, and to do so will require a further statement of the facts to be given in addition to those already recited. About September 1st the insured was injured in a runaway accident, resulting in a broken rib. A doctor treated him for such injury by applying bandages on two occasions when the insured visited the doctor's office. The insured made a trip to St. Paul between the dates of these two treatments, and remained there three or four days, returning on September 10th. On September 13th he was suffering from a dull headache, and was in bed a part of the time only. On the evening of that day he made arrangements with his friend Tracy to pay the insurance premium and procure his policy on the following Saturday, in case his health or the weather prevented his going to Valley City, as he then intended to do. He did not go to Valley City, and Mr. Tracy did as requested. On Sunday night his headache became very severe, and a doctor was sent for in the morning of Monday the 17th and visited him on the same day. He thereafter had the insured under his care as a physician, and visited him at times until his death, on the 28th. The agent of the defendant received the premium on the 15th of September, and sent it to the St. Paul office, and in due course of business it was received at the main office of the company at Hartford, Conn., on October 12, 1900. It is beyond dispute that neither the agent of the company at Valley City nor any of the officers of the company had any knowledge of the insured's health on September 15th, except such as was communicated to said agent or officers of the company by the application for insurance of August 23d. Neither the agent nor the company had any knowledge of the broken rib, or of any sickness of the insured, when the premium was paid, on September 15th. The proof of death was made out in Valley City on October 15th, and sent to the company at Hartford, and on receipt of such certificate of death the company first learned of any change in insured's health from that indicated in his application for insurance. It is apparent, therefore, that neither the company nor its agent had any knowledge that there had been any change in the condition of insured's health from that as represented in the application at the time the premium was paid to or received at the main office at Hartford. At the time of receiving such knowledge of change of health it also received knowledge that the insured had died. So that the question of the waiver of defenses by virtue of receiving premiums with knowledge of facts that the policy is void or has never been a binding contract with the company for any cause is not involved in this case, as the company accepted such premium in ignorance of any change in the physical condition of Thompson since August 23d. The authorities uniformly hold that the acceptance of the premium under such circumstances does not constitute a waiver of a forfeiture or other defense, and the same may be pleaded in avoidance of all claims under the policy when suit is brought upon it. Joyce, Ins. § 1369; Insurance Co., v. Wolff, 95 U.S. 326, 24 L.Ed. 387; Bingler v. Insurance Co., (Kan.) 10 Kan.App. 6, 61 P. 673.

In this case the premium was not accepted with knowledge that the conditions of the policy as to the health of the insured at that time were not true. The...