Fidelity Mutual Life Insurance v. Click

Hart, J. This is an appeal by the Fidelity Mutual Life Insurance Company from a judgment rendered against it in favor of Mary E. Click for $2,000 on a life insurance policy. The case turns on the payment of the third annual premium. If this premium was not paid, it is conceded that the policy sued on was void, and that appellee should not recover. On the other hand, if this premium was paid, the policy was in force at the death of the assured, and the appellee should recover. To show payment, the appellee relied upon the following receipt: “The Fidelity Mutual Life Insurance Company of Philadelphia received $62.16 for annual premium due September 18, 1905, subject to conditions indorsed hereon, under policy of life insurance indicated by number and name. “L. G. Fouse, President. “O. C. Bosbyshell, Treasurer. “David E. Click, Mineral Springs, Howard County, Ark. ELP 140593. Countersigned at Little Rock, Ark, on the 23d day of October, 1905. “R. C. Bright, Cashier.” The above was the receipt for the third annual premium. The policy provided that after three years premiums had been paid it could be automatically extended for four years and seven months without any further payment. The assured died in August, 1908. The defendants thereupon introduced the following testimony to sustain their defense: O. C. Bosbyshell: “I was the treasurer of the defendant Fidelity Mutual Fife Insurance Company during the years 1903 to 1906, inclusive. My duties were to receive and receipt for all premiums paid upon policies of insurance issued by said defendant. The third annual premium upon the said policy in suit in this action was never paid to de-' fendant, Fidelity Mutual Fife Insurance Company. Although said premium was never paid to said defendant, I wrote and mailed to the cashier at said defendant’s office in the city of Fittle Rock, Ark., a letter directing said cashier to countersign and deliver to the insured under said policy a receipt for such third annual premium; said letter ¡was so sent -because of a clerical error made by one of the employees of -the defendant insurance company in mistaking the record of the payment of the premium on another policy which had been paid for the premium on the policy in controversy, this record being on a line of the books immediately next to the record of the policy in controversy; and the mistake was made in losing the proper line when running it out for any payments, and thereby a payment on another policy was mistaken for the third annual payment on the policy sued on. Said letter was erroneous, and said receipt should not have been countersigned and delivered by said cashier, as said premium had not been received by defendant insurance company, as stated in said receipt.” William F. Hunter: “I am the employee of the defendant, the Fidelity Mutual Fife Insurance Company, who made the clerical error referred to in the testimony of O. C. Bosbyshell. The third annual premium was not paid to the defendant insurance company.” Francis V. Shannon: “I was the bookkeeper employed by the defendant, Fidelity Mutual Fife Insurance Company, at its Little Rock office, at the time the letter referred .to in the testimony of O. C. Bosbyshell was written and mailed to the Little Rock office by him. Said letter was received by me, and, as instructed therein, I countersigned and mailed'to David E. Click the official receipt for the third annual premium upon the policy in suit. Said premium was not paid to or received by me at any time. Said receipt was not issued because the said premium was paid, but was so countersigned and mailed by witness because of the letter mentioned from O. C. Bosbyshell, and for no other reason.” It is not contended that the third annual premium was paid unless the receipt itself is sufficient to establish that fact. It is conceded that the receipt only makes a prima facie case, which may be overcome by testimony of witnesses, unimpeached, uncontradicted, reasonable and consistent in itself; and such is the rule recognized and followed by this court. Industrial Mutual Indemnity Co. v. Perkins, 87 Ark. 70; Southern Express Co. v. Hill, 84 Ark. 368, and cases cited. We think the evidence on the part of the appellant overthrew the prima facie case made by t’he delivery of the receipt. The receipt was countersigned at Little Rock- and mailed to the assured because the officers of the company there received an express order to that effect. That order was given because a clerk in the ’home office, whose duty it was to make up from the record’s of the company a list of premiums paid, by mistake reported the books as showing that this premium was paid when in fact such was not the case. The testimony plainly showed that the receipt was issued and delivered by mistake. Counsel for appellee insists that the explanation is not reasonable and consistent, because the mistake was made in October, 1905, and no attempt was made to show why it was not discovered before the death of the assured, which did not occur until nearly three years later. But it is not shown that the appellant would have been likely to have discovered the mistake. Indeed; it seems unlikely that the company, considering the magnitude of its business, should have discovered it unless there had -been occasion for further examination of the records of payment of premiums in regard to this policy, which does not appear to have been necessary. Opinion delivered December 20, 1909. Under the testimony as disclosed by the record, the court should have directed a verdict for the defendant. Therefore the judgment is reversed, and the cause remanded for a new trial.