Washington Nat. Ins. Co. v. Scott
| Decision Date | 17 October 1935 |
| Docket Number | 6 Div. 807 |
| Citation | 231 Ala. 131,164 So. 303 |
| Parties | WASHINGTON NAT. INS. CO. v. SCOTT. |
| Court | Alabama Supreme Court |
Certiorari to Court of Appeals.
Petition of the Washington National Insurance Company for certiorari to the Court of Appeals to review and revise the judgment and decision of that court in Washington National Insurance Co. v. Peter Scott, 164 So. 301.
Writ granted. Reversed and remanded to Court of Appeals.
Wm. A Jacobs, of Birmingham, for petitioner.
David J. Davis, of Birmingham, for respondent.
Action by the insured under a health and accident policy to recover from a reinsurer the premiums paid thereon after passing the age limit named in the policy.
For a full statement of facts, we refer to the opinion of the Court of Appeals. Washington National Insurance Company v. Scott, 164 So. 301.
We approve the holding of the Court of Appeals in the original opinion to the effect that the stipulation for return of premiums imposed a contractual obligation, which became binding under the reinsurance indorsements issued to the insured, and not to be limited by stipulations in the contract between insurer and reinsurer, to which the insured was not a party. Code, § 8371.
We need not consider whether, in the absence of such statute, the insured would be chargeable, by reference merely, with notice of provisions in conflict with the natural import of the indorsements mentioned.
Dealing with the extended opinion on rehearing, we think the following observations clearly sound: The contract provision is one and indivisible. The obligation to return premiums is expressly limited to any premium paid for a period not covered by the policy. If, therefore, under the doctrine of waiver and estoppel, the age limit was stricken from the policy, and the policy continued in force during the period for which the premiums sued for were paid, the provision for return of premiums has no application. This, by its own terms, as well as by general principles of law. Southern Mutual Aid Association v. Watson, 154 Ala 325, 45 So. 649; 45 C.J. p. 62, § 51.
On rehearing the Court of Appeals (164 So. 302) says: "Perhaps we ought to here set down--as we do--that both appellant (and its predecessor in interest) and appellee were well aware of the date upon which appellee reached the age of sixty-five years." By this we understand all parties had knowledge that the age limit had passed at the time all these premiums were paid by the insured and received and retained by the insurer and the reinsurer.
Probably there is no principle of insurance law more firmly settled, nor better grounded in justice and reason, than that an insurer, who receives and retains premiums, the very consideration for carrying the insurance risk, with knowledge of facts which, under stipulations for his benefit, would, in the absence of such knowledge, empower him to treat the policy as having never been in force, or as being no longer in force, will be held to have waived such stipulations. Waiver, strictly speaking, is a matter of intent. But, in such case, no proof of actual intent is required. Any other intent, in such case, would work a positive wrong or fraud on the insured. The law charges the insurer with the intent to waive under the doctrine of estoppel.
In the absence of statute, or charter provisions, rendering unlawful insurance risks beyond a prescribed age limit, this doctrine of waiver or estoppel applies to age-limit stipulations in policies. Nor can the insurer, under stipulations here involved, answer that he received and held the monies under express contract to refund on request.
The money, as received, is earmarked as premium payments tendered to...
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