Wagener v. Old Colony Life Insurance

— 5 — The following opinions were filed May 27, 1919: Siebecker, J. The defendant contends that there is no evidence in the case sustaining the finding of the jury to the effect that the defendant extended credit to Nicholas Z. Wagener for the first premium, due September 9, 1914, on the insurance policy in question. The plaintiff asserts that such credit was extended to Wagener by acceptance, of his note by the agent, Hocks, under the facts and circumstances shown by the evidence. It is an accepted and well established rule of law in this state that the taking of a promissory note, either for a preceding liability or a debt incurred at the time, is not payment unless expressly agreed to by both parties. Aultman & Co. v. Jett, 42 Wis. 488; Ford v. Mitchell, 15 Wis. 304; Paine v. Voorhees, 26 Wis. 522; Willow River L. Co. v. Luger F. Co. 102 Wis. 636, 78 N. W. 762. Credit for the first premium due on a life insurance policy may be extended to an insured, and may be shown by the facts and circumstances under which the application for insurance and delivery of the policy was carried out and the general course of business as conducted by the insurance company through its agent. Hartwig v. Ætna L. Ins. Co. 164 Wis. 20, 158 N. W. 280. A note given for a premium does not operate as a payment in the absence of an express agreement to that effect. Kinne v. Mich. Mut. L. Ins. Co. 92 Wis. 335, 66 N. W. 359; McDonald v. Provident S. L. Assur. Soc. 108 Wis. 213, 84 N. W. 154. The question arises, Do’ the facts and circumstances shown by the evidence in this case permit of the inference that it was agreed by Wagener and the local agent, Hocks, that the note of Wagener, payable to Hocks, was given and accepted as a payment of the first annual premium, due September 9, 1914, on the policy in question, or that the — 6 — company extended Wagener credit for the payment of the premium? A search of the record fails to disclose any evidence tending to show that the note in question was given and accepted in payment of the premium due on this policy on September 9, 1914. We are not confined to oral statements of the agent, Hocks, for determination of this question. Aside from Hocks’s testimony we have the evidence of' the transactions pertaining to the application and delivery of the policy in so far as the general agent, Waldman, acted in the matter, and the writings signed by Wagener, which throw light on the subject. True, the application recites that the premium of $85.50 immediately due under the application as originally submitted to the defendant on a term policy for ten years had been paid in cash, but con-cededly no such cash payment was made, hence such recital has no evidentiary weight on the issue presented. The policy provides that the policy was not “to take effect until the first premium thereon shall have been actually paid in cash, during the lifetime and good health of the insured.” This provision must be viewed in the light of the whole transaction, including the preliminary term insurance from the time it was issued to September 9, 1914. Without question Wagener paid and defendant accepted the $29.89 as payment of the premium of the preliminary term insurance and this, insurance was in effect for that period. The policy as delivered contained the condition that the ten-year term insurance was to begin September 9, 1914, and that premiums were to be paid annually in advance, and “if any premium ... or note therefor or any indebtedness secured by this policy shall not be paid when due, this policy shall thereupon cease.” As shown by the foregoing statement, Wagener, on May 14, 1914, at the request of the insurance company, signed and delivered to defendant the writing whereby he agreed, for himself and his legal representatives, that in event he — 7 — failed to pay the first annual premium on the ten-year term policy on September 9, 1914, tQ deliver back such policy and that all his rights under the policy should cease. The significance of this act by Wagener tends directly to show that he understood that payment of this premium was to be made as specified in the policy, namely, in cash on September 9th, and negatives the idea that he had an arrangement -with Hocks by which he was to have an extension of credit up to October 9th following. The testimony of Waldman, the general agent, is clearly to the effect that he made no arrangement, nor did he understand that Hocks had made one, for an extension of credit of the payment of the premium on September 9th. As we have above indicated, the note is not in law evidence in itself that it was accepted as payment of the premium due September 9th. The course of conducting this business by the insurance company and by Wagener subsequent to his dealing with Hocks tends to show that no. credit was extended. Does the evidence of Hocks permit of an inference that the note was given and accepted by him as payment of the premium due September 9, 1914, or that it was taken as part of an arrangement to extend credit for the first premium? It is to be noted that the note and original application bear the same date, April 9,1914; that the original application is for a ten-year term policy, to become effective immediately upon delivery; that the note is not made payable to the insurance company, but is payablé to Hocks individually; that he held and treated it as an individual note and did not claim after Wagener’s death that it was the company’s note; that on October 9th,' when it became due, he treated it as his individual note, and that on October 9th he offered to pay defendant $60 in cash on the premium of $85.50, which under the terms of the policy became due on September 9th. True, Hocks testifies that he took the note to cover a year’s premium, but explains that payment of the first premium — 8 — was to be made in cash, and if Wagener could not pay it he (Hocks) would pay it for him; that he thought Wagener would pay Waldman and leave him out of it; that he accepted Wagener’s note as a personal matter between him and Wagener. He also testified that he had property dealings with Wagener and held other notes from him. It is shown beyond dispute by the testimony of Hocks that he and Wagener had a private arrangement to the effect that the first premium on the policy was to be paid in cash when due, and that in the event Wagener could not pay it Hocks would pay it for him, and that the note in cpiestion was given to Hocks individually. It is therefore clear that there is no evidence in the case tending to show that the insurance company, through its agent, accepted the note as payment of the premium nor extended credit to Wagener for payment of the premium due September 9, 1914, and that there is no basis in the evidence supporting the finding of the jury that the company extended credit to Wagener for the first premium. Tomsecek v. Travelers’ Ins. Co. 113 Wis. 114, 88 N. W. 1013; McDonald v. Provident S. L. Assur. Soc. 108 Wis. 213, 84 N. W. 154. It follows that the court erred in refusing to direct a verdict on this issue in the defendant’s favor. It necessarily follows that under the terms of the policy it was not in force and operative from September 9, 1914, by reason of the default in payment of the first annual premium due on that date. There is no groundHor the claim that the letter of Waldman to Wagener dated September 24, 1914, calling to his attention the fact that the first premium was due September 9th, and asking him to give the matter his immediate attention if the premium had not already been paid, is binding as a declaration that the policy was then in force. The letter, as Waldman testifies, was sent as a friendly admonition to Wagener. Its contents do not indicate that the policy was treated as in force, nor do they constitute a — 9 — waiver of the condition that the policy'was not to be effective if the premium due on September 9, 1914, was not paid as specified in the policy. The trial court erred.in holding that the evidence in the case presented an issue of fact for determination by a jury and in awarding a judgment in plaintiff’s favor for recovery on the policy. By the Court. — The judgment appealed from is reversed, and the cause remanded with direction to award judgment. dismissing the plaintiff’s complaint.