Washburn v. Union Cent. Life Ins. Co.

• Decision Date: 16 May 1905
• Citation: 143 Ala. 485,38 So. 1011
• Parties: WASHBURN v. UNION CENT. LIFE INS. CO. a1
• Court: Alabama Supreme Court

38 So. 1011

143 Ala. 485

WASHBURN v. UNION CENT. LIFE INS. CO. a1

Supreme Court of Alabama

May 16, 1905

Appeal from City Court of Gadsden; John H. Disque, Judge.

Action by T. S. Washburn, administrator, etc., against the Union Central Life Insurance Company. From a judgment sustaining demurrers to the replications, plaintiff appeals. Reversed.

Culli &amp Martin, for appellant.

Burnett Hood & Murphree, for appellee.

DENSON J.

This is an action on a life insurance policy. The complaint is in Code form. The defendant, in pleas numbered 2 and 3 filed to the complaint, set up as a defense a forfeiture of the policy sued on. To these pleas the plaintiff filed replications from 17 to 24, inclusive, in all of which it was claimed that the forfeiture set up in the pleas was waived by the defendant and setting forth the facts constituting the alleged waiver. Demurrers were sustained to the replications, and under the practice act for the city court of Gadsden (Acts 1900-01, p. 1288) the present appeal is taken from the judgment of the court on the demurrers.

The following facts are shown by the pleadings: The defendant issued to plaintiff's intestate the policy sued on on November 30, 1901, when the first annual premium was paid. The second annual premium became due November 30, 1902. Three days prior thereto, on the 27th of November, the plaintiff's intestate gave the defendant company his promissory note payable October 30, 1902, for this second annual premium, which covered the period of insurance in the policy from November 30, 1902, to November 30, 1903. The policy and the note both contained a forfeiture clause, which provided that a failure to pay the note at maturity would work a forfeiture of the policy. The insured, plaintiff's intestate, defaulted in the payment of the note at its maturity on October 30th, and died on the 18th of November afterwards. After said default in the payment of the note, the defendant company's general agent wrote to the insured, calling his attention to his default, and requesting him to remit; and still later on again wrote the insured, on the 14th of November, four days before the insured died, asking him to pay the note, and not to let his policy lapse, or at least to that effect; and also inclosing to him a dividend receipt for a dividend which had been declared on his policy, to be signed and returned, and which would be applied by the company on his third premium that would become due on November 30, 1903. After the death of the insured on the 18th of November, the defendant denied all liability, claiming that the policy had been forfeited by reason of the default in the payment of the said note at its maturity.

No question is raised as to the authority of the general agent as averred in the replication to the pleas to bind the defendant company by his acts and conduct. The vital question, and we might say the only one, is, did the facts averred in the replications constitute a waiver by the defendant of the forfeiture occasioned by the failure of the insured to promptly pay the premium note at maturity. As may be seen from the many cases cited in briefs of counsel for appellant, no principle of law is more firmly established than the one that forfeitures are not regarded with favor by the courts. The forfeiture condition in the contract was for the benefit of the insurer, and, when the forfeiture occurred, to be claimed or waived at its option. The option to waive may be express, or it may be implied from...