Court Opinion

ID: 3682365
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:27:54.564383+00
Date Added: 2024-06-11T09:36:07.677937
License: Public Domain

I concur in the disposition which has been made of this case in the opinion filed by Judge Grimson. I am of the opinion, however, that the reinstatement of the policy sued on was accomplished by a new contract. Under the terms of the original policy, the insurance contract could be reinstated after lapse, only in its original amount. Here the reinstatement was for one half of the amount of the original policy. In order to accomplish this result it was essential that there be an agreement between the parties in addition to that contained in the original policy or in other words a new contract.
The new contract was made and there is no dispute between the parties as to the terms of that contract. The lapsed policy in the sum of $11,700 would be surrendered. As to half the policy and half the premiums paid thereon the forfeiture was to be confirmed. A new policy in the sum of $5,850 identical with the old policy in number, date, policy provisions and rate of premium per $1,000 of *Page 765 
insurance was to be issued. The insured were to be credited with half the premiums they had paid upon the lapsed policy to pay the premiums upon the new policy and were to pay, in addition, such sum as would be necessary to carry the new or reinstated policy until September 27, 1929. Under this agreement the total amount which it was necessary for the insured to have paid, to pay the premiums upon the new policy from September 27, 1926 to September 27, 1929 was the sum of four semiannual premiums of $143.01 each, and one annual payment of $275.01 or $847.05.
In the performance of this contract, according to the findings of the jury, the defendant gave the insured credit for half of the premiums paid on the lapsed policy or three semiannual premiums of $143.01 each and a partial payment of $43 for the fourth semiannual period. The balance of the premium for the fourth semiannual period was paid by crediting thereto $100.01, which the insured had paid to the defendant in June, 1928, but which had never been applied to the payment of premiums upon the lapsed policy. To pay the premium of $275.01 for the third policy year, the insured paid $170.04 in cash and gave a note in the sum of $104.96 for the balance, under a premium extension agreement.
In this action the plaintiff contended, and the jury found the contention to be correct, that in the performance of the contract of reinstatement, the parties overlooked $278 which the insured had paid to the defendant in December 1928, after the original policy had lapsed.
At the trial, the defendant objected to the introduction of any evidence of payments made by the insured prior to the date of reinstatement upon the ground that such evidence tended to vary the terms of the contract of reinstatement. I think that the objection was properly overruled. The evidence did not tend to vary the terms of that contract. In fact there never has been any dispute between the parties at any time during the whole course of this litigation as to what the terms of the contract were. The dispute has not been over the contract but over what was done in the performance of the contract.
According to the jury's verdict, when plaintiff's note in the sum of $104.96 became due, the defendant had in its possession $278 of the insured's money for application upon the premiums due on this policy. *Page 766 
It was the defendant's duty to apply that money to the payment of premiums in order to prevent a forfeiture. 29 Am. Jur. pp. 351, 352, Insurance. The amount in defendant's hands was suffcient to pay the premium note and leave more than enough to pay another semiannual premium. And with respect to this policy the defendant had made a practice of accepting premiums either on an annual or semiannual basis. The policy therefore should be considered to have been in force until March 27th, 1930. So considered the automatic extended term insurance which became effective upon the policy's lapse would have extended well beyond the date of the death of Lydia Rott. Plaintiff was therefore entitled to recover.