U.S. Life Ins. Co. v. Lesser

• Decision Date: 05 June 1900
• Citation: 28 So. 646,126 Ala. 568
• Parties: UNITED STATES LIFE INS. CO. v. LESSER.
• Court: Alabama Supreme Court

28 So. 646

126 Ala. 568

UNITED STATES LIFE INS. CO. v. LESSER.

Supreme Court of Alabama

June 5, 1900

Appeal from city court of Birmingham; H. A. Sharpe, Judge.

Action by Emil Lesser against the United States Life Insurance Company. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

This action was brought by Emil Lesser against the United States Life Insurance Company to recover $3,000 alleged to be due on a policy of insurance which was issued by the defendant on March 8, 1893, upon the life of one Henry Silberman, and was made payable to Emil Lesser, the plaintiff. Silberman died on October 24, 1893. The defendant pleaded four pleas. The first and second pleas were the general issue. The third plea was a special plea, in which the defendant set up that the policy went into effect on April 5, 1893; that under the provisions of the contract of insurance the premiums were due semiannually, on, to wit, April 5th and October 5th or within 10 days thereafter; that the premium due October 5, 1893, was never paid, and that said policy, therefore, became forfeited under its terms; that in the application for said insurance there was an agreement signed by said Silberman that no person other than the president, together with the secretary or actuary, should have the power to alter or waive any contract or condition on behalf of the company, and that neither the president, nor the secretary, nor the actuary, or either of them, waived or altered any condition or contract contained in said policy. The fourth plea was substantially the same as the third, except that it omitted reference to that part of the contract as to president, secretary, and actuary. To the defendant's third and fourth pleas the plaintiff filed seven replications. In the first replication the plaintiff averred that on October 11, 1893, he made a tender of the premium due on said policy of October 5, 1893 that this tender was in lawful currency of the United States and was made payable to one I. L. Fraleigh, and agent of the company, who was duly authorized to receive said premium on behalf of said company, and who, at the time of said tender failed and declined to accept the same. In the second replication the plaintiff averred that defendant waived the payment of said premium payable on or before October 15 1893, by averring a certain agreement between plaintiff and company, and certain acts, conduct, and course of dealings and declaration of the agents of said company, as follows: That on, to wit, October 11, 1893, the premium due on October 15, 1893, was tendered or offered to its agents; that on said date said agent, Fraleigh, and plaintiff mutually agreed that the said policy sued on should be rewritten in New York City into two policies, of one and two thousand dollars, respectively; that said policy was then delivered to said agent, with the understanding and agreement that said policy should remain in full force and effect until the return of said two policies from New York, rewritten as aforesaid; that upon the premium due October 15, 1898, being tendered said agent as aforesaid, said agent stated it could be paid said agent on the return of said policies rewritten as aforesaid; that said two policies, rewritten as agreed, have never been returned to the plaintiff, and no demand made by said company or its agents for said premium of October 15, 1893; that, by a course of dealing between the said company and plaintiff premiums due said defendant on said policy were payable to said Fraleigh, its agent at the city of Birmingham, a great distance from New York City; that one Shepherd was the manager for defendant in Alabama and Birmingham, and on October 21, 1893, consented to such policy being rewritten into two policies. Replication 3 was substantially the same as the second just quoted. Replication 4 amplified the second and third replications, and, among other things, averred additionally that the policy to be rewritten reached the home office in New York prior to the death of Silberman, and a sufficient time prior to his death within which to disaffirm the agreement and understanding of its agents, of which it had full knowledge, and that the defendant failed to disaffirm said understanding during the life of Silberman, although it had a reasonable time within which to do so. The fifth and sixth replications were joinders of issue upon the pleas filed by the defendant. The seventh replication was in word and figures as follows: "(7) And, for further replication to the said defendant's third and fourth pleas, the said plaintiff says that prior to the 15th day of October, 1893, to wit, on the 11th day of October, 1893, the agent of the said defendant in the city of Birmingham, in the state of Alabama, where the said plaintiff then lived, agreed with the said plaintiff to extend the time for payment of said premium payable on, to wit, the 15th day of October, 1893, until the return to the said plaintiff of two policies of insurance which the said agent then and there agreed that the said defendant would issue in lieu of, and to take the place of, the said policy sued on, one for one thousand dollars, and the other for two thousand dollars; that said agent of said defendant in the said city of Birmingham notified F. B. Shepherd, the manager and agent of said defendant at Atlanta, in the state of Georgia, of the fact of such extension, and that the said Shepherd, who then and there had authority to bind the said defendant in respect to such extension, did, on, to wit, the 21st day of October, 1893, and before the death of the said Silberman, ratify the extension so made as aforesaid for the payment of the aforesaid premium. Wherefore the said plaintiff says that the said defendant waived the payment of the said premium which became payable on or before the said 15th day of October, 1893." There were demurrers filed to each of these replications, which were overruled, but the opinion on the present appeal renders it unnecessary to set these demurrers out in detail. To the replications of the plaintiff, the defendant filed the following rejoinder: "The defendant, for further rejoinder to said special replications numbers 1, 2, 3, and 4, says that the plaintiff spoke of paying the premium on or about the 11th day of October, 1893, and said he would pay the same to one Fraleigh, who claimed to be an agent of the defendant, and at the same time remarked that he would like to have the said policy sued on rewritten into two policies, one for $2,000 and one for $1,000, and said Fraleigh said to the said plaintiff he need not pay the premium until the policies were rewritten and returned, and that that would be all right, and thereupon said plaintiff withdrew his offer to pay said premium or tender. This defendant says that it had no notice of such an agreement until after the death of said assured, Silberman, and that it never did ratify or confirm said agreement, and that said Fraleigh had no authority to enter into any such agreement, or to extend the payment of said premium, and the defendant denies that said Shepherd had any notice of said agreement, except a request from said Fraleigh to forward said policy sued on to the office of said defendant in New York, with request to rewrite the same into two policies as aforesaid; and the defendant denies that said Shepherd had any notice whatever that said Fraleigh had agreed to extend the time of payment of said premium until said rewritten policies should be returned." The demurrers to this rejoinder were overruled, and thereupon issue was joined upon the pleadings as filed.

On the trial of the case the following facts were shown: A policy of insurance was issued by the defendant upon the life of one Henry Silberman, on March 8, 1893, and made payable to the plaintiff. Henry Silberman died October 24, 1893. This policy was taken out through I. L. Fraleigh, in the city of Birmingham. Fraleigh had been for years prior to the taking out of the policy, and up to say November, 1893, the agent of the defendant company in the city of Birmingham. Fraleigh was known to be acting for the company by the home office at New York. He had been appointed to such position by F. B Shepherd, the manager of the company in Atlanta, who had control and management of the company in Alabama up to 1894. Fraleigh had established an agency in the city of Birmingham, and had appointed subagents, and published advertising matter, used letter heads of his agency in letters to Shepherd and the company, distributed literature, and did other acts as such agent. The first premium, due April 5, 1893, according to the undisputed testimony, was paid. The next premium became due on October 5, 1893, or within 10 days thereafter. According to the testimony, on or about October 11, 1893, Lesser, desiring to have the policy sued on changed into two policies of $1,000 and $2,000, respectively, handed the same to Fraleigh, with an agreement and understanding on the part of Fraleigh and Lesser that the policy was to be changed, not in substance, but merely in form, as stated, and to remain in full force and effect until the return of the two policies as aforesaid, to be rewritten in New York. And on the same day, and about the same time, B. Steiner, acting for Lesser, offered to pay Fraleigh, who was the agent for the company in Birmingham to receive said premium, the amount due October 15, 1893. Fraleigh answered that he need not mind, then, but to pay it on the return of the two policies from New York. Fraleigh was a tenant of Steiner's, and defendant's office was in Steiner's bank. The conversation between Steiner and Fraleigh as to the premium occurred in office hours and in Steiner's bank in Birmingham. Fraleigh, on October 20, 1893, sent the...