Continental Casualty Co. v. Jasper

Opinion by Judge O’Rear Reversing. This was an action upon a policy of accident insurance. The policy provided that, if the premium or any installment was not paid when due, the policy was to lapse. It was a form of industrial insurance used among patrons of the insurer, who were railroad employes. The policy contains these clauses relative to the premiums: “The consideration for this policy is the warranties contained in the application therefor (which is made part hereof) and the payment of the premium therefor when due, payment of which when due is a condition precedent to a recovery hereunder. * * * This company shall not be liable for any loss occurring hereunder while the insured .shall be in default in the payment of any premium.” "What the sum was to be that should constitute the premium is not stated in the policy. It is stated in the application, and the notes given therefor are shown in the record. But it is argued that under secs. 656, 679, Ky. Stats. 1903, as applied and construed in Provident Saving Life Assurance Society of New York v. Beyer, 67 S. W., 827, 23 Ky. Law Rep., 2460, and other cases, the application and notes can not be treated as part of the contract; nor can their statement be considered, unless they are attached to, or copies thereof are attached to, the policy. No case adjudicated so far has held that the consideration for an insurance policy may not be proved or disproved, however it may be stated in the policy. Under sec. 470, Ky. Stats. 1903, [80] the consideration of a written contract need not be expressed in the writing. “It may be proved when necessary, or disproved by parol or other evidence.” If a policy of insurance in writing fail to state the consideration therefor, the contract would not be deemed nudum pactum on that account. The law of this State presumes there is a consideration for all written engagements to pay money. And by section 472, Ky. Stats. 1903, it is provided: “The consideration of any writing, with or without seal, may be impeached or denied by pleading verified by oath.” Secs. 470, 472, 656, 679, Ky. Stats. 1903, all being in force, must be" read together in construing written contracts of insurance. Evidence is therefore receivable to show what the true consideration of a policy of insurance was, and likewise to show that’ it was not paid. Where, however, any part of the consideration is a statement of the insured made in a written application, under the statute (sec. 656) it must be stated in the policy, or a copy thereof endorsed on the policy. To this extent, sec. 656, Ky. Stats. 1903, imposes an additional condition to the validity of such contracts, under a consideration of a public policy to guard against deception and overreaching of insurers. In the case at bar, the money consideration for the policy of insurance sued on was an annual premium of $10, to be paid in four equal installments, the first of $2.50, to be paid out of the insured’s.January wages to become due from the railroad company for which he was working, and like sums to be paid out of the January, March and April wages of the same year. Orders were given appellant by the insured upon the paymaster of the railroad company accordingly. Owing to the fact that insured gave his name to appellant as Benjamin E. Jasper, and [81] was known on the payrolls of the railroad company as Prank Jasper, the installment due out of the January wages was not retained by the paymaster for remittance to appellant. It was all paid to the insured instead, who was notified promptly that liis policy had lapsed in consequence. Before any further payment became due, insured was accidentally killed by a railroad train. A few days after-wards his widow, appellee, who was the beneficiary named in the policy, paid to the paymaster of the railroad company for transmission to the appellant, the $2.50 due in January past, and was delivered by the paymaster a receipt therefor, which had been issued and sent to him before the January installment became due, so that it could be delivered to insured when that amount was deducted from his wages. The paymaster was without authority to receive this payment on behalf of appellant,- after the death of the insured; nor was he the agent of appellant in that transaction. On the contrary, in the absence of such an agreement, he was the agent of both parties in such matter. He was the agent of the insured to pay over from his wages the agreed amount as it became due on his premium. He was the agent of the insurer in remitting it to the home office of appellant. It was clearly shown that insured paid nothing whatever for his contract. It was lapsed by its express terms when the accident occurred. A peremptory instruction should have been given to the jury upon this showing. Judgment reversed, and cause remanded, for proceedings not inconsistent herewith,