#### Henry et al., Appellants, *v.*Reich, Appellee.

(No. 3942

— Decided February 11, 1947.)

*Mr. Charles J. Ghastang,*for appellants.

*Mr. Dale D. Rapp*and *Mr. George T. Tarbubton,*for appellee.

By the Court.

This is an appeal on questions of law from the Court of Common Pleas of Franklin qounty. The action is on a cognovit note and was instituted by H. E. Henry and IT. J. Loechler, plaintiffs,appellants herein, against P. F. Reich, defendant, appellee herein.

The record discloses that on July 12,1945, a cognovit judgment was entered iñ favor of the plaintiffs in the amount of $489.02. Thereafter the defendant filed a motion to vacate the judgment, which motion was sustained and the defendant was permitted to file an answer setting up two defenses, (1) failure of considera*186tion for the note upon which the judgment was based and (2) the note upon which-the judgment was based was secured from the defendant by fraud and deceit of the plaintiffs.

Upon the trial of the cause, the jury returned a verdict for the defendant and a judgment was entered by the court on such verdict.

The record discloses that on or about May 31, 1944, the defendant submitted a written application to the plaintiffs, who are life insurance underwriters, for life insurance, the amount being left in blank. Some difficulty was encountered in passing the medical examination and, as a result of this, the policies were not issued until November 14, 1944. On that date three policies of insurance on the life of the defendant, in the total amount of, $25,000, were delivered to the defendant and accepted by him. .The premiums due The New York Life Insurance Company for the policies totaled $1,011.25, and in consideration of the delivery of the policies the defendant gave the plaintiffs a check in the sum of $511.25 and a cognovit note to the order of the plaintiffs in the principal amount of $500. The defendant at that time decided that he desired double indemnity clauses in the policies and for this reason they were given back to the plaintiffs to have the changes made ip the policies by the insurance company. The changes were made as requested on two of the policies and \they were again delivered to the defendant on January 19, 1945. The first note given was' then duo and a new cognovit note was given in the sum of $486.59 instead of in the original sum of $500, due to some adjustment in the total premiums. This note was to become due on March 15, 1945. When it became due another cognovit note was issued for the same amount and was to be due on April 15, 1945, which note is the subject of this action. 1

*187At the close of all the evidence the plaintiffs moved for a directed verdict, which motion was overruled, and after the verdict was returned the plaintiffs moved for a judgment notwithstanding the Verdict, which motion was also overruled. The plaintiffs, being content to rely on those two motions, did not file a motion for a new trial.

The first assignment of error is that the trial court committed prejudicial error in overruling plaintiffs? motion for a directed verdict. The plaintiffs contend that there was no evidence to support either of the defendant’s affirmative defenses.

We shall consider first whether there was a failure of consideration. Failure of consideration, in law, is just what the plain meaning of the words implies, that is to say, it is the neglect, refusal and failure of one of the contracting parties to perform or furnish, after making and entering into the contract, the consideration in substance and in fact agreed upon. 29 Ohio Jurisprudence, 922, Section 139.

The record discloses that these policies were issued upon the application of the defendant, which was dated May 31, 1944. This application, signed by the defendant, contained, among other things, the following statements: “Age nearest birthday, 43; Write policy to take effect as of March 15, 1944.”

Each of the policies issued has on the cover the following: “Payable on the 15th day of March.”

On the first page of each of the three policies is the following, with the exception of differing amounts:

“This contract is made in consideration of the application therefor and of the payment in advance of the sum of $404.30, the receipt of which is hereby acknowledged, constituting the first premium and maintaining this policy for the period terminating on the 15th day of March, 1945, and of a like sum on said *188date and every twelve calendar months thereafter during the lifetime of the insured. ’ ’ *.*

Now, the record discloses that these policies were delivered to the defendant on November 14, 1944; that the premiums were paid on the same date; and that the life of the defendant was not insured until the premium was paid.

It is the contention of the defendant that, since he was not insured from the 15th day of March 1944, but only from the 14th day of November 1944, there was a failure of consideration for the note. The record discloses that the reason the policies were to become effective on March 15, 1944, was that after such date the defendant’s age changed and he would become one year older and the rate would be higher. Henry testified that there was an increase in policy rates effective June 1, 1944, and that by taking advantage of this and also of the age change on March 15,1944, the defendant would save approximately $3,000 in premiums during the life of the policies. In view of those facts, we believe it cannot be said that there was a failure of consideration. There is no evidence whatsoever to support such a failure of consideration. The policies were issued in accordance with the defendant’s application and he testified that he read the first pages of the policies when they were delivered to him on November 14, 1944. He, therefore, knew when the premiums became due and accordingly accepted the policies and paid the first annual premiums. He is bound by the terms of the policies which he accepted. These policies state that the premiums he paid would maintain them for the period terminating on the 15th day of March 1945. Prom those facts we are of the opinion also that there is no evidence whatsoever to support the claimed defense of fraud and deceit.

In 19 Ohio Jurisprudence, 335, Section 24, the essentials of fraud and deceit are set forth as follows: ■

*189“In order to maintain an action for damages for deceit, certain elements must be present. First of all, there must be actual or implied representations or concealment of a matter of fact which relates to the present or past, and which is material to the transaction; secondly, the representation must be false; thirdly, the representation must be made with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred; fourthly, it must be made with the intent of misleading another into relying upon it; fifthly, this other person must have relied upon it with a right to so rely; and lastly, injury must have resulted as the consequence of such reliance. All of these ingredients must be found to exist, and the absence of any one of them is fatal to a recovery. «The grounds of the action of deceit are fraud and damage, and when both concur the action will lie. Moreover, both" must concur to constitute actionable fraud.”

The defendant contends that the fraud and deceit of the plaintiffs are found in the facts that were withheld from the defendant, and that no thought of fraud and deceit was ever expressed until all the facts had been revealed and defendant discovered that his insurance policies had been dated back and that he was liable to .the insurance company for additional premiums. The ■defendant testified that he thought the premiums would start to run on November 14, 1944, and contends that the failure of the plaintiffs to advise him-that the premiums started to run from the effective date of the policy constitutes a fraud and deceit. He testified that he did not know of anything they said leading up .to the matter of all these things, that was false exactly. In the light of this testimony and the fact that the defendant applied for insurance to be effective on March 15,1944, that the policies issued to him conformed with *190the application, and that they stated on their covers and on the first ppges that the premiums became due on March 15, we cannot find there was any evidence of fraud or 'misrepresentation concerning the premiums on .these policies. Such being the fact, there was no question for the jury to pass upon, it became'the mandatory duty of the trial court to sustain plaintiffs ’ motion for a directed verdict, and the trial court’s failure to sustain such motion constitutes reversible error.

The judgment is reversed and the cause is ordered remanded with instructions that judgment be rendered for plaintiffs as prayed for in the petition.

*Judgment reversed.*

Wiseman, P. J., Miller and Hornbeck, JJ., concur.