Crutchfield v. Union Cent. Life Ins.

Opinion op the court by JUDGE PAYNTER Reversing. In March, 1885, the appellee issued to Charles M. Boulden on his life a 10 annual payment policy for $10,000. The premiums were payable on the 30th of March, 1885, and on — 56 — that date each year thereafter. He paid the premiums for 1885, 1886, 1887, 1S88 and 1889, and gave his notes for the premiums due in 1S90 and 1891. He defaulted on the premium due March 30, 1892. The notes were past'due. Thus the matter stood until November 22, 1892, at which time C. C. Early, State agent of appellee, wrote J. W. Poor, father-in-law of insured, that if he would arrange for the payment of the notes 'past (due and the premium due for the year 1892, total $1,406.10, and “Mr. Boulden would furnish a certificate of health,” the company would reinstate the policy. Accordingly Poor and Boulden met Early at his office at Louisville on December 5, 1892, when Boulden submitted to a medical examination, and Poor gave his check •to Early for the amount of the notes and premium. Poor requested the agent to draw upon him for the premiums to become due on the policy. As an inducement to Poor to agree to pay the sum stated, the policy was assigned to his-daughter, Mrs. Boulden, and her children. Poor left the office believing that the matter had been satisfactorily arranged. The appellee was not satisfied with the certificate of health, and refused to accept the money, so on the 17th of' December the money was returned to Poor. Boulden never paid the notes or premiqms that matured on the policy, nor did Poor do so for him. Neither one of them even offered to do so. Boulden died in June, 1897. In December of that year a payment of the amount of the policy was demanded. The appellants introduced evidence conducing to prove the facts stated above. The court gave peremptory instructions to the jury to find for the appellee. It is claimed rliat the effect of the transaction was to keep the policy alive. Among others, the policy contained the following provisions and conditions: “If, after three or more years’ premiums have been paid, any premium falling due — 57 — thereafter be not paid when due, this company will, on surrender of this contract, issue a paid-up life policy (without participating in profits) for the following named amounts, payable at death only: After three annual payments, $1,280; after four annual payments, $1,700: after five annual payments, $2,120; after six annual payments, $2,510; after seven annual payments, $2,960;'after eight annual payments, $3,380; after nine annual payments, $3,800, — provided such surrender be made while this policy is in force. Or, if no such surrender be made, it is agreed that this policy shall (after three or more years’ premiums have been paid), without surrender, become a paid-up term policy, upon the same terms and conditions as specified herein, except as to the payment of premiums and participation in profits, and continue in force for such time as" one annual premium upon this policy is contained in its reserve value according to the .American Experience Table of Mortality, with interest at four per cent, per annum, at the end of which time this contract shall be null and void.” “Third. That the premiums shall be paid on or before the days on which'they become due, at the office of said company, in the city of Cincinnati, or to the authorized agent of the company holding a receipt therefor and producing same, signed by the president, vice-president or secretary, and that all motes given for premiums, or part premiums, or interest upon notes given for premiums, shall be paid at maturity.” “Tenth. That upon violation of the foregoing conditions, or any of them, this policy shall be null and Amid, without action on the part of the company, or notification to the insured or beneficiary,” etc. “Eleventh. That the contract between the parties hereto is completely set forth in this policy and the application therefor, and none of its terms can be modified, nor any forfeit58 are under it waived, except by an agreement in writing signed by the president, vice president or secretary, whose authority for this purpose shalL not be delegated.” Each premium note contained similar matter, thus: “Said policy, including all conditions therein for surrender or continuance as a paid-up or term policy shall, without notice to any party or parties in interest therein, bo null and void on the failure to pay this note at maturity, with interest at six per cent, per annum, payable annually.” The theory of the appellants is that the effect of the trans-ad ion with Early, on December 5th, was a waiver of the forfeiture; that the return of the money was, m effect, a notification of the appellant; that the other premiums to become due would not be received. Therefore the necessity of tendering them was waived, and the policy was in force at the time the insured died. This court had under consideration the first clause quoted from the policy in the case of the same parties appellant against the appellee. The opinion was delivered by this court on March 11th, 23 R., 2265 (07 S. 1Y., 8). It was decided in that case that the paid-up term policy was not in force at the time the insured died. The transaction with Poor and Early was not pleaded in that case. Ho the only questions involved in this case are those stated above, arising out of the transaction of December otli. Poor does not testify that the report of the medical examination was not to be passed upon by some authority other than Early, nor does he testify that Early claimed to be authorized to pass upon the certificate1 of health, or that he said it was satisfactory. The letter which Early wrote to Poor shows that the policy was not to be reinstated unless a satisfactory certificate of health was furnished. Poor did- not testify that Early agreed to waive a presentation of a satisfactory — 59 — certificate of health. On the contrary, the fact that Boulden was compelled to submit to' a medical examination show's that the panties understood that a certificate of health vras to be furnished. Under the eleventh condition in the policy, it is expressly provided that a forfeiture cannot be waived “except by an agreement in writing, signed by the president, vice president, or secretary, whose authority for this purpose shall not be delegated.” The manager of a foreign insurance company in the State is presumed, in absence of evidence to the contrary, to have the authority of an executive officer. If there is a limitation of his authority, notice thereof must be given to the contracting party in a clear and certain manner. In this case it was expressly agreed and 'understood that the State agent had no such authority, as is evidenced by the provision in -the policy which we have quoted. Insurance Co. v. Hayden’s Adm’r, 90 Ky., 39 (11 R., 993) (13 S. W., 585), does not enunciate a different doctrine. . In that case it w7as held that a clause in a policy limiting' the authority of “agents” did not apply to general agents, but that the insured might rely upon his implied powers, notwithstanding the provision limiting the authority- of. agents. In this c;ase the policy expressly provided- that no one except certain named officers had power to w7aive a forfeiture. Poor represented the appellants, and w7as acting for them. The money which he had paid was returned to him. There was an acquiescence in the appellee’s interpretation of the policy and the transaction of December 5th for five years. The company had no notice that the appellants, were claiming any rights in virtue of the policy. Under the terms of the policy} the company had the right to forfeit it for nonpayment of premiums or notes executed therefor. If stood forfeited for such failure wuthout “notification, to the in — 60 — sured or beneficiary.” Besides, this court has held in Insurance Co. v. Duvall (20 R., 441) (46 S. W., 518), in construing- the similar provision of a policy, that a notification of the forfeiture was unnecessary. On December 5, 1802, the right to continue the policy in force ceased. We do not think that' Early had authority to waive the forfeiture or that he represented that the company would accept the $1,100.10, and waive it, unless a satisfactory certificate of health was furnished. It is our opinion that the transaction of Poor was subject to the approval of the appellee. Having reached this conclusion, it obviates the necessity of determining as to what would have been the effect of the failure- to draw upon Boor for the premiums which were thereafter to mature, if -the transaction; with him had amounted to reinstatement of the policy. The cases of Insurance Co. v. Montague, 81 Ky., 653 (8 R., 579) (2 R. W., 443, Am. Rt. Rep., 218), and Montgomery v. Insurance Co., 14 Bush, 51, do not, in our opinion, apply to the questions involved in this case, as the question is not as to the right; of Boulden to have had a paid-up policy after having paid three or more annual payments. He had the right to surrender his policy after paying three or more annual premiums, and take a paid-nii policy. Failing to surrender the policy or demand a paid-up policy, the terms of the contract entitled him to a paid-up term policy. 1 A failure to Surrender the policy and demand a paid-up policy was an election, under the contract, to take a “paid-up term policy.” The appellants claim that the court erred1 in compelling them to elect which cause of action they would prosecute. The additional cause or causes of action set out were the same as those attempted to be pleaded in the appellant’s action against appellee in which the opinion was delivered — 61 — on the 11 tli day of this month. If there were no other reasons to sustain the action, the ones given in that opinion would be sufficient for declining to reverse this case for that ruling. The paid-up term- policy did not continue in force for the period covering the death of the insured, and as we have said above, having failed to surrender the policy and demand a paid-up policy, he elected to take a paid-up term policy; hence no cause of action existed on a paid-up policy. The judgment is affirmed.