Kelly v. National Casualty Co.

DUFQUE, J.’ The plaintiff, beneficiary of an accident policy of insurance issued to her brother who was killed by an automobile on November 4th, 1910, sued to recover the amount of the policy, $400.00, and additional sum of $400.00 allowed as a penalty by Article No. 310 and attorney’s fees. The defense was that the policy had lapsed and been forfeited after November 1st, 1910, because of non-payment of premium under the following clause in the policy, which was monthly in its duration. “If the payment of any renewal premium shall be made after the expiration of this policy, or if the [194] last renewal receipt, neither the assured nor the beneficiary will be entitled to indemnity. * * * The acceptance of any renewal premium shall be optional with the company.” The evidence as the course of dealings between the insurer and the insured herein shows that the former for several months did not insist on the payment of the premium on the exact day upon which it was due. For five months, the premium due on the first was accepted by the company at a date from five to twenty seven days later than that upon which it was due. ' No renewal receipt was ever issued by the company, and it is quite clear that if, under the clause cited, the risk was not covered in the interim, between the date the premium was due and that on which it was paid, the insurer was charging and receiving a premium without the corresponding obligation of furnishing indemnity. The contract of insurance is one of good faith and this consideration forbids so unfair and unequitable a view. It is more consonant with fair dealing to assume that the insurer waived" the forfeiture, particularly when we consider the following notice sent by the company to Kelly on October 17th, 1910, in reference to the premium due October 1st. “We do not believe that it was your intention to allow the policy to lapse and would ‘ suggest your giving it immediate attention * # *” This language unmistakably shows the company’s own construction to be that the policy had not lapsed by the failure to pay the premium on the exact day. Without resorting to the jurisprudence of other jurisdictions, we have had no difficulty in reaching the conclusion, under our own, that the insurer by its conduct [195] led the insured to believe that the letter of the policy had been waived, and that it cannot now be allowed to “mend' its hole” to plaintiff’s detriment. November 20th, 1911. December 18th, 1911, Rehearing granted. 40 An., 776; 52 An., 1740; 121 La., 939. Counsel urges that Act 310 of 1910 is intended to provide the time for idemnifying the assured in case of illness and accident and does not refer to any payment to be made to a beneficiary under an accident policy. The policy provides that Mary Kelly shall be the beneficiary in case of the accidental death of the assured. Under the contract she stands in his shoes and her rights are co-extensive with his. To say that in case of accident without death the insurer is liable and that, in case of death, it is not, is to do violence to the purpose of a law intended to enforce-prompt discharge by a corporation of a contractional obligation. The statute the validity of which is not attacked, provides a penalty equal to the amount due under the terms of the policy, for delaying payment for more than thirty days without just and reasonable grounds, and also of reasonable attorney’s fees. We think this a proper case for the infliction of the penalty. The judgment was in favor of plaintiff as prayed for. Judgment affirmed. i.. An estoppel cannot be predicated upon facts showing- a course of conduct strictly within the express terms of the contract. 2, The penalties prescribed by Act 510 of 1910 will only be imposed where the'insurer resists payment without just and reasonable-grounds ; and such a case -is not presented when it is- shown that the- insurer resisted the claim solely Because it misapprehended the-law applicable to the case and that the insured shared in- and was primarily responsible for such misapprehension.