Court Opinion

ID: 6886698
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:30:19.548442+00
Date Added: 2024-06-11T16:05:43.960636
License: Public Domain

HANEY, Circuit Judge
(dissenting).
The only vital issue in this case is whether or not the premiums on the policies had been paid. It is asserted, and the majority hold, that the post-dated check could be treated as payment. Such a holding appears to me to have little, if any foundation in reason or in fact.
The question as to whether delivery of a check constitutes payment of a premium is treated in an annotation in 40 A.L.R. 419, 423, where it is said: “The general rule appears to be that the mere receipt of a check will not prevent a forfeiture of the policy for non-payment of premium, but if the check is accepted as payment of the premium, even though it turns out to be worthless, there is payment which will prevent a forfeiture. The crux of the citation appears to be the question of acceptance.”
Later cases are collected in 109 A.L.R. 781, 783. While the question has not been determined in Oregon, I think the Oregon courts would apply that rule. See Seaman v. Muir, 72 Or. 583, 589, 144 P. 121.
We should, therefore, look to see what the circumstances were, under which the check was accepted. It was given to a soliciting agent — one who concededly had no authority to collect premiums at all. He gave it to the properly authorized person who could accept premiums. That person held the check until the date thereof, then deposited it in the bank, and at the same time sent receipts to the insured by mail. They contained the following:
“Received, with thanks, the payment specified below * * *
“Premium $28.62 * * *
“If remittance otherwise than in cash has been made, this receipt shall be void if payment of such remittance is not actually received by the company.”
The intention of the insurer is thus made quite clear, no matter what the insured’s intention was. Had it been the intention of the insurer to consider the premium as paid, and to look to the check as an obligation, there would have been no reason for saying that a receipt for the same premium was to be void in case the check was not paid. After return of the check, the insurer made its action coincide with its original position, by stating that the policies had lapsed, and it would be necessary for the insured to apply for reinstatement of the policies. At the time this letter was written, the insured had not been injured, so that it is clear that the *553insurer was not actuated by a motive to exonerate itself of liability.
The majority find some intention on the part of the insurer to accept the check as payment of the premium, from the fact that it did not return the check to the insured on the same day it was returned to the insurer. That fact is purely a negative one so far as showing any intention is concerned. It shows, if anything, only that the press of business was great. However, of more importance is the fact that the policies had already lapsed before the check was returned to the insurer, by the bank, so it is of little importance whether the returned check reached the insured eight days after the premiums were due, or whether it was nine days before the insured got the check.
While the majority mention also that the delay of the insurer in returning the money order, which was procured still later, shows an intention of the insurer to treat the check as payment, I see no basis for treating that fact any differently than the delay mentioned above, because the policies had then lapsed.
I think the judgment should be reversed.