Fidelity Mutual Life Insurance v. Satterfield

MAYFIELD, J. This was an action on a life insurance policy. The real issue litigated was whether or [293] not the policy was forfeited under its terms, for failure to pay premiums, before the death of the insured. The beneficiary produced in evidence a receipt from the insurance company, which on its face showed payment by-the insured of the premiums within the terms of the policy. The. insurance company claimed that the premiums were not paid in fact, but that the insured executed his notes for the premiums, payable at subsequent dates, with condition in the notes that the policy should be forfeited if the notes were not paid at maturity, and that the policy provided for such notes and condition therein; that the notes were not paid at maturity, and had never been paid by the insured, or by any other person. These notes were introduced in evidence by, the insurance company. The real issue being whether or not the premiums had been paid, the trial court'allowed the plaintiff, over the objection of defendant, to prove that the insured, on the day he received the policy and on the day the receipt was issued by the company to him, had $100, besides some change, in his pocket. This ivas error. As was well said by the Supreme Court of Massachusetts, in the case of Atwood v. Scott, 99 Mass. 177, 96 Am. Dec. 728: “Experience is not sufficiently uniform to raise the presumption that one who has the means of paying a debt will actually pay it.” The fact- that a debtor had means with which to pay is not evidence tending to show he did pay; but the fact that a party had no means might tend to show that he did not or could not pay. The same court, in the case of Hilton v. Scarbrough, 5 Cray, 422, said: “The fact of the reputed worth of a, defendant, and his supposed ability to pay, and his dealings with third parties,, are incompetent to prove payment of a note in question.” The same rule is announced in 1 Wigmor.e on Evidence, § 99, and we think it the correct one. [294] There is a dictum in the case of Insurance Co. v. Bledsoe, 52 Ala. 550, to the effect that “the ability of the insured to make payment of the premiums would be admissible in connection with legal- evidence of an excuse for the nonpayment.” In that case the insurance company undertook to prove by letters from the insured his inability to pay, and hence this would have rendered such evidence competent in that case to rebut the evidence offered by the other party. But the evidence offered by the plaintiff in that case was held to be inadmissible, though the inadmissibility was put upon the ground that it was a mere declaration of the insured in his own behalf, capable of being manufactured by himself for the express purpose; and, after holding it inadmissible, the court added that a part of the evidence as to the insured’s ability to pay would be admissible in connection with legal evidence of an excuse for the nonpayment. So in that case the dictum was correct, and it- is probably a correct proposition of law; but that case is clearly distinguishable from this, in that the defendant’s ability to pay, and the excuse for nonpayment, were the disputed issues there, and not, as in this case, payment vel non. We have a number of other decisions in this state to the effect that such evidence as this in question is proper and admissible when the financial standing of a party, or the question as to whether or not he owns certain property, or his solvency or insolvency, is an issue in the trial; but we find none holding that evidence that a man had means with which to pay is admissible to prove that he did pay. This error was not cured by the charge of the court to the effect that the evidence did not go to show that the premium was paid; that it- was only a circumstance showing, that he could have paid it. We cannot know that the effect.of-this, evidence did not influence the jury [295] in finding their verdict.' Its natural tendency was to do so. For this- error the judgment must- be reversed, and the cause remanded. Reversed and remanded. Simpson, Denson, and McClellan, JJ., concur.