Case ID: ad_58/html/0602-01.html
Source: Caselaw Access Project
Author: {"author": "Woodward, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sarah Cross, Respondent, v. The Security Trust and Life Insurance Company, Appellant.
    
      Insurance—delay-in paying the first premium on a life insurance policy—what acts of the company constitute a waiver thereof.
    
    In an action upon a policy of life insurance it appeared that on January 81, 1899, George W, Cross made an application to the defendant fora policy of life insurance upon blanks furnished by one Hartough, an insurance agent. February 23, 1899, the policy was delivered to Hartough, who, with the knowledge and consent of the defendant’s general agent, mailed the same to Cross, accompanied by a letter, in which he asked him to “ kindly send me a draft either on if. Y. or a money order for the premium, $97.00, payable to the order of the Security Trust .& Life Ins. Co. (the defendant), as soon as possible, and I will send you receipt for same.” Cross died of pneumonia in Chicago on March 21, 1899, without having paid the first premium. March 22 or 28, 1899, Cross’ employer received a telegram ■ announcing that Cross was ill and was not expected to live. At the time of receiving the telegram Cross’ employer had in his possession a letter written by Hartough to Cross, dated March 21, 1899, and, noticing that the letter related to insurance, he opened it, and, finding that it contained a request for the payment of the premium, on the policy of insurance, stating that “the Security Trust & Life Ins. Co. allow me only thirty days in which to place a policy,” he drew his check for the amount of the premium and sent it to the defendant.
    The application for the policy provided that no “insurance shall be in force until the delivery of the policy to and the payment of the-first premium by the party whose life is insured while' in good health.” The policy itself contained an indorsement “ that the terms and conditions of this policy can be added to, changed or waived only by one of its executive officers in writing.” May ■ 17,-1899, proofs of death, showing the time and circumstances thereof, were delivered to the defendant, and July 15, 1899, the latter sent a check for the amount of the policy and took a receipt in full of all claims, but subsequently stopped payment on the check.
    In an action brought to recover-on this check,
    
      
      Held, that the jury might properly find that Cross was given thirty days within which to pay the first premium or, at all events, that the defendant sent its check for the amount of the policy with knowledge of all the facts relied on as a defense.
    Appeal by the defendant, The Security Trust and Life Insurance Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Westchester on the 23d day of December, 1899, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 17th day of January; 1900, denying the defendant’s motion for a new trial made upon the minutes.
    
      John, W. Drcmisby, for the appellant.
    
      Charles M. Demand, for the respondent.
   Woodward, J.:

Clarence B. Hartough was a special agent of the Prudential Insurance Company in January, 1899. He had been in negotiation with George W- Cross for the purpose of writing a policy on his life. The latter had made an application to the Prudential Company and had been rejected upon the medical examination. Hartough then represented to Cross that he could have the policy written by the defendant upon the medical examination which had been rejected by the Prudential Company, the latter negotiation taking place through the medium of letters, Cross, a traveling salesman, being upon the road. Cross made an application to the defendant upon blanks furnished by Hartough on the 31st day of January, 1899, and on the twenty-third day of February the policy was delivered to Hartough, who mailed the same to Cross at Chicago, accompanied by a letter in which Hartough asked Cross to “ kindly send me a draft either on N. Y. or a money order for the premium, $97.00, payable to the order of the Security Trust & Life Ins. Co. as soon as possible and I will send you receipt for same,” indicating on the part of Hartough that a reasonable term of credit was extended to Cross. Cross died of pneumonia in Chicago on the 21st day of March, 1899, at about six o’clock in the afternoon, without having paid the first premium, the application for the policy providing that no “ insurance shall be in force until the delivery of the policy to, and the payment of the first premium by, the party whose

life-is insured while in good health.” On the 22d or 23d (probably the former) of March, 1899, a telegram was received by Mr. Hopper, the employer of Cross, announcing the serious illness of ■ the latter, and that he was not expected to live. At the time of receiving this telegram Mr. Hopper had in his possession a letter written by Hartough to Cross, dated March 21, 1899, hereafter referred to specifically, and noticing that it was in relation to insurance Hopper opened this letter, and finding that it contained a request for the payment of the premium on the policy sent to Cross, Hopper drew his check for the amount of the, first'premium, which was subsequently delivered to the defendant at the home office in Philadelphia. . Proofs of death, showing the time and circumstances, were received at the office of the defendant on the seventeenth day of May ; and on the 15th day of July, 1899, almost two months after the receipt of the certificate of death, the defendant sent the plain■tiff its check ■ for $4,667, being the net amount of the policy of insurance upon her husband’s life. Subsequently the defendant stopped payment upon this check, and this action was brought to recover the amount represented by the check. Upon the trial of the action the court submitted to the jury the question whether the sending of the policy to Cross, under the circumstances disclosed by the evidence, and with the knowledge and consent of the defendant’s general agent, Kell, operated to waive the provision for cash payment, and amounted to the granting of a reasonable term of credit. The jury found a verdict in favor of the plaintiff, and defendant’s exceptions to the denial by the court of the motion to direct a verdict, as well as to the refusal of the court to charge as requested, brings the question here for review.

There is indorsed on the back of the policy the provision that the terms and conditions of this policy can be added to, changed or waived, only by one of its executive officers in writing,” but the courts have been reluctant to give full, force to provisions of this character where the conduct of the company and its agents was such as to mislead the insured (Lamb v. Prudential Ins. Co., 22 App.Div. 552); and the defendant having accepted and used the check of Hopper in payment of the first premium, when it had in its possession proofs of death showing that Cross was dead before the.. premium was paid, and with .the knowledge that the premium was so paid by Hopper, taken in connection with the statement of Hartough, in his letter of March twenty-first, that “ The Security Trust & Life Ins. Co. allow me only thirty days in which to place a policy,” made a question for the jury to determine. The defendant, with all of the facts in its possession for a period of nearly two months, issued its check to the plaintiff and took from her a receipt in full for all claims, and it was proper for the jury to determine whether the facts did not warrant the contention of the plaintiff that a reasonable term of credit had been extended to Cross, this period being the thirty days mentioned by the agent of the defendant as the period allowed him for placing the policy. If the policy was delivered to Cross on credit, and the fact that the company received the check of Hopper and made use of it, with full knowledge, or •the means of knowledge, that it was paid after the death of the insured, and the other facts disclosed by the evidence may be considered in this connection by the jury, there is no doubt of the liability of the defendant to this plaintiff. The case appears to have been fairly tried, and while the evidence in support of the contract is not very convincing, the defendant’s counsel does not appear to have seriously questioned that Cross accepted the policy and became liable for the payment of the premium. Payment could have been enforced against his estate. The fact of his death did not deprive the defendant of the legal right to waive a default during his life, assuming that there was such default. (Shay v. National Benefit Society, 54 Hun, 109 ; Magner v. Mutual Life Assn., 17 App. Div. 13 ; Lamb v. Prudential Ins. Co., supra.) No exception was taken to the charge of the court upon this point, and the defense seems to have relied upon the stipulations in the policy and the application. We are of opinion that the jury might properly say, upon the evidence, that Cross received the policy and was given a reasonable time in which to make the payment, and that this time was thirty days, within which period the defendant received the check of Hopper for the amount of the premium; or at all events that the defendant ultimately paid the policy with knowledge of all the facts now relied upon for a defense.

The judgment and order appealed from should be affirmed.

All concurred, except Sewell, J., taking no part.

Judgment- and order affirmed on law and facts, with costs.