185 Iowa 1008 | Iowa | 1918
“Agents are not authorized to modify, or, in event of lapse, to reinstate • this policy, or to extend the time for payment of any premium or installment thereof.”
Samuel C. McKee died on September 10, 1916. Very soon after the death of the insured, the widoAV, by her counsel, notified defendant of his death, called upon it to furnish blanks for the formal proof thereof, and demanded payment, according to the terms of the contract. The defendant acknowledged ceceipt of these communications, but alleged that the policy had been forfeited by the failure of the insured to pay the second annual premium, and for this reason, it refused to make payment or to acknowledge any
I. The vital inquiry in this case is whether, as a matter of law,, the plaintiff failed to make a case on which she was entitled to the verdict of a jury. The plaintiff denies that there was any default in the payment of the second annual premium. Her testimony tends to show that she and her husband were residents of Des Moines, Iowa; that the policy was originally issued upon an application obtained from McKee at Des Moines by one J. A. Blum, an alleged general agent of the defendant’s, to whom the first premium was paid; that, about the time the second premium payment fell due, and before the contract days of grace had expired, McKee being away from home, Mrs. McKee, the beneficiary in the policy, saw Blum, and told him of the absence of her husband and of her expectation of his early return, and said to the agent that, if he wanted the payment then, she would go to the bank and get the money -for him, and he replied that it was not necessary, and he would wait until Mr. McKee came home. This conversation she says was repeated several times. She further says that Blum informed her that, after applying the first dividend on the premium, it would leave a remainder due thereon of about $101, and that she made a memorandum of it. Soon thereafter, and about the expiration of the 31 days of grace, she went to her husband, who was sick at St. Paul, Minnesota, and reported to him her understanding had with Blum, when he undertook to make payment of the premium in the following manner: On March lá, 1916, 33 days 'after the due date of the premium, he wrote a letter to Blum, and enclosed to him a check for $101. The letter and check were in the following form:
“J. A. Blum: Please find enclosed check for $101.00. I know there is a small amount over this, but whatever it is, will pay when I come home. Mrs. McKee said you would let the matter rest until I came home, or I would have mailed check sooner.
“Yours truly,
“S. C. McKee.”
“Dallas Center, Iowa, March 13, 1916.
“Bank of Dallas Center, 72-759
“Pay to Equitable Life Assurance Company, or. order, $101.00 one hundred and one and no/100 Dollars.
“[Signed] Samuel C. McKee.”
“Insurance premium due February, 1916, $2,000.00 policy.”
This check was received by Blum and passed over, with McKee’s letter, to the company’s cashier at Des Moines, by whom it was endorsed, and deposited to the credit of the company, and; through the usual course of banking business, was collected from the bank at Dallas Center, on March 21, 1916. In this connection, the agency cashier, who received the check from Blum, testifies that, on the same day, he wrote and mailed a letter to McKee, enclosing therein a conditional receipt for the money so remitted. The letter and receipt, he says, were in the following form:
“March 18, 1916.
“Samuel C. McKee, St. Paul, Minn.
“Dear Sir: Your letter of the 14th written to our Mr. J. A. Blum, enclosing a check for $101.00, in connection with the premium due February 9, 1916, on policy No. 1948164, has been referred to the undersigned for attention, and in this regard you should be advised that the amount of your check has been placed in escrow, for which I enclose a proper receipt. I desire to request that you kindly sign the attached declaration of health, which must be at this office
“In reference to your remittance of $101.00, kindly be advised that it is sixty-eight (68) cents short. This is made up as follows:
“Premium .....................: $116.40
Less dividend ................... 15.30
$101.10
Int. on premium ......... .58
$101.68
Credit by check ................ 101.00
Short .68
“Receipt.
“The Equitable Life Assurance Society of the United States.
“165 Broadway, New York City.
“Receipt No. 66051.
“Agency at Des Moines, la., 3/18/1916.
“Received from Samuel C. McKee one hundred one & 00/100 dollars ($101.00), offered for on account annual prem. less dividend due Feb. 9th; 1916, policy No. 1,948,164 — reinstatement pending.
“Said sum is received only for transmission to the home office of the society in New York, for the account of the depositor, and the society is in no way committed thereby to the acceptance thereof for the purpose offered nor to any action in the premises, and nothing herein or connected with the receipt of said sum shall be held to waive any default in payment of any premium, interest or other sum due, or to extend the time for payment of any premium, interest or other sum, or in >any manner to affect the rights of the society under any policy or contract of insurance or otherwise. If the said amount be not accepted by the so
“C. H. Nicolet,
“D. S. Agency Cashier.”
There is also the copy of another letter, of same date and of similar import, directed to McKee at “508 Observatory Building, Des Moines, Iowa,” which the cashier testifies he wrote and mailed. Still other communications put in the record were mailed to McKee, he says, at different dates during the spring and summer of 1916, urging and advising him to take the necessary steps for the reinstatement of his insurance. The same witness further says that, on April 26th, 42 days after the receipt of the money, he sent McKee another letter, as follows:
“April 26, 1916.
“Samuel C. McKee,
“508 Observatory Building, City.
“Dear Sir:
“Re Policy No. 1,948,164.
“We are refunding herewith your deposit of $101.00, in connection with the- premium due February 9, 1916, on this policy, and beg to state that in your not furnishing us with a medical certificate of your good health, we have been unable to consider the re-instatement of this policy, which lapsed February 9, 1916, for the nonpayment of the premium then due. Therefore, we are making the return of this deposit.
“We will be glad to open this matter up again on receiving the requirements as set forth above, or in arranging a reinstatement, and trust you will make such application at once.
“Yours truly,
“C. H. Nicolet, Cashier.”
This letter enclosed a check for $101, payable to the order of Samuel McKee, “for return deposit a/c policy No.
“Received of the Equitable Life Assurance Society of the United States the within amount in settlement of account as stated.”
It appears to have been the opinion of the trial court
Is-there any evidence from which we can say that the insured was justified in relying upon the authority of Blum to accept payment of the premium after it became due?
It may be said at the outset that the precedents, though numerous, fall into two more or less widely diverging lines. In some of the older states, the courts early construed policy limitations and conditions with respect to the authority and acts of the insurer’s agents quite strictly, and policy holders and beneficiaries seeking to establish waivers thereof found little encouragement in the decisions. It was not long, however,' before the disinclination to allow forfeitures of insurance save for clearly good cause led to a more liberal policy, which is now observed by practically all the courts of the country. In our own state, the question had its first thorough examination in Viele v. Germania Ins. Co., 26 Iowa 9, where it was held, in substance, that, no matter how strict the conditions of the policy, they are made by the insurer, for its own protection and benefit, and may be waived or disregarded if it so elects; and, as a corporation can act only by or through its officers and agents, a waiver by them may, under some circumstances, become binding upon the corporation which they represent. To quote from the decision in the cited case:
“Circumstances proving that the party treated the contract as subsisting, and not forfeited, a course of dealing consistent only with that hypothesis, and acts and declarations whereby the other party was induced to believe that the condition was dispensed with, or forfeiture waived, will be sufficient to preclude the setting up of the breaches of the condition as a defense.”
And without further multiplying citations upon this
“Courts are always prompt to seize hold of any circumstances that indicate an election to waive a forfeiture, or an agreement to do so, on which the party has relied and acted. Any agreement, declaration, or course of action on the part of an insurance company which leads a party insured honestly to believe that, by conforming thereto, a forfeiture of his policy will not be incurred, * * * will and ought to estop the company from insisting upon the forfeiture, though it might be claimed under the express letter of the contract.” Insurance Co. v. Eggleston, 96 U. S. 572.
This is not saying that the mere promise or agreement of the agent, contrary to the express terms or limitations of the policy, will operate to estop or prevent the company from insisting upon a forfeiture; but if the insured,- to the knowledge of the company, relies and acts upon such promise or agreement, and in such reliance pays his money to the company, or if the company so acts in the premises that the insured, as an ordinarily reasonable person, is led to believe that it waives the condition or waives the forfeiture, the courts will be prompt to declare the waiver effectual. We quote again from the opinion of this court in the Viele case, where it says that, although the policy explicitly declares that, upon the breach of certain conditions, the policy will become void, yet this means no more than that, upon the violation of such condition, the policy will become void at the option of the insurer; and if the company waives the breach, “the contract stands as if no such breach had occurred.” Or, as said by the Minnesota court:
“A contracting party cannot so tie his own hands, so restrict his own legal capacity for future action, that he has not the power, even with the assent of the other party, to bind or obligate himself by his further action or agreement,
Speaking of a policy provision providing that no waiver of its terms could be made except by the insurer’s president or secretary, and then to be endorsed in writing upon the policy, the Wisconsin court has said: ■
“We must hold, however, that such attempted restrictions upon the power of the company or its general officers or agents, acting within the scope of their general authority, to subsequently modify the contract and bind the company in a manner contrary to such previous conditions in the policy, are ineffectual. Especially is this true in respect to a foreign insurance company, whose officers are practically inaccessible to the assured.” Renier v. Dwelling House Ins. Co., 74 Wis. 89 (42 N. W. 208); Dick v. Equitable F. & M. Ins. Co., 92 Wis. 46 (65 N. W. 742).
Acts and conduct which are insufficient to constitute a technical estoppel against a forfeiture may yet be sufficient to effect a waiver. Hollis v. State Ins. Co., 65 Iowa 454; Corson v. Anchor Mut. F. Ins. Co., 113 Iowa 641; Bloom v. State Ins. Co., 94 Iowa 359. In King v. Council Bluffs Ins. Co., 72 Iowa 310, 315, this court reaffirms the Viele case, saying:
“It has become the settled law of this state, and no one now questions its binding authority upon this court. Under the doctrine of that case, any conditions of a contract of insurance may be waived by the insurance company. The only question about which any question can arise is whether the company had notice, and thereby waived the conditions. This is a question of fact; and if the evidence warrants the finding that it did have such notice, it is an end of the case. And this depends upon the relation Ayers (the alleged agent) sustained to the company.”
Without further reference to the precedents, of which there are many, upon this phase of the case, let us now turn
“These terms, had the company so chosen, it could have insisted on. But a party always has the option to waive a condition or stipulation made in his own favor. The company was not bound to insist upon a forfeiture, though incurred, but might waive it. * * And whether it did exercise such option' or not was a fact provable by parol evidence, as well as by writing.”
In a subsequent case, Phoenix Ins. Co. v. Doster, 106 U. S. 30 (27 L. Ed. 65), the cases already cited are reaffirmed; and it was there held that, where the policy permits the insured to apply his dividends as a payment upon his annual premiums, a forfeiture would not take place until the insured had been notified of the applicable dividend, and of the remainder necessary for him to pay in addition thereto. See also, to the same general effect, Hartford L. & Ann. Ins. Co. v. Unsell, 144 U. S. 439 (36 L. Ed. 496). It has been held by the Tennessee court that, where the insured had
“The money was tendered unconditionally; and, if the company should retain it without objection, it would be held to assent to the terms of the payor. One who receives and retains money which is sent to him to be kept on certain terms must be deemed to assent to those terms if he keeps the money, unless he makes it known to the sender that he will only keep the money on some other and different terms; and, if he seeks to establish different terms, while keeping the money, it rests upon him to make that fact known. If the defendant would establish different terms from those upon which the money was sent, it must do something to make it known that its acceptance and retention of the money were conditional. It could not impose a condition binding upon Shea, merely by determining in its own mind to do so. A secret vote of the directors that they would keep the money, but that the payment should be deemed valid only in case Shea was then in good health, would be of no avail. An uncommunicated condition is no condition. The company must certainly take some step to inform Shea or his agents that the money, though retained, would not be
The same rule is recognized in Rockwell v. Mutual L. Ins. Co., 20 Wis. 356. Such, also, is the effect of the holding in the Eggleston case, supra, and in McQuillan v. Mutual Reserve F. L. Assn., 112 Wis. 665, 671.
It follows that, under the evidence in this case, questions of fact arose whether the company did or did not, in truth, elect to insist upon the forfeiture of the insurance; whether its retention of the money of the insured was or was not conditional upon the production of a satisfactory health certificate and the re-instatement of his insurance; whether notice of such condition was or was not given to the insured; and if so, whether it was given with reasonable promptness. If, upon these questions, the findings were in plaintiff’s favor, then a further finding that the company waived the alleged forfeiture could not properly have been set aside, as being without support in the record.
The motion of the defendant for a directed verdict should have been denied.
For the reasons stated, the judgment of the district court will be reversed, and cause remanded for a new trial. —Reversed and remanded.