Court Opinion

ID: 9811008
Source: CourtListenerOpinion
Date Created: 2023-08-31 22:06:01.239625+00
Date Added: 2024-06-11T13:40:23.732626
License: Public Domain

OlaeksoN, J.,
dissenting: This is a civil action brought by plaintiff against defendant to recover on a policy of life insurance for one thousand dollars, the judgment of nonsuit or dismissal being upon an agreed statement of facts by the court below. On 22 November, 1923, the Eeserve Loan Life Insurance Company, defendant in this action, issued to John Elverson Owens a contract or policy of life insurance by the terms of which it agreed to pay Hazel Gray Owens, the insured’s young daughter and the plaintiff in this action, one thousand dollars, upon receipt of due proof of the death of said .John Elverson Owens, subject to the conditions set forth in said insurance policy. Said policy was issued in consideration of the payment in advance of $23.63 annually, or if paid quarterly the quarterly premium was $7.71. The premiums for the years 1923 to 1930, both inclusive, were paid to said company, but the premium due and payable on 22 November, 1931, being the ninth annual premium, was not paid either on its due date or within the days of grace allowed by the policy, but on 21 December, 1931, within the period of the thirty-one days of grace, the said John Elverson Owens ivrote a letter to the defendant wherein he stated: “It will be impossible to pay amount due on my policy at present. Please make arrangements for me to have ninety more days in which to pay this.”
In response to said letter from said Owens, the defendant, on 29 December, 1931, wrote a letter in which it stated that it would be glad to extend the time for the payment of the premium, upon his signing an extension agreement and enclosing ten cents cash for payment of interest. At the time of the writing of said letter by said defendant company, the said John Elverson Owens, unknown to the defendant, was dead and the form of the extension agreement was never executed, nor was the item of 10 cents for interest ever paid.
On 13 November, 1930, the said John Elverson Owens had obtained a loan on said policy, pursuant to the provisions thereof, from the defendant in the sum of $86.32, the interest on said loan being paid to *87022 November, 1931, the said loan being unpaid at the time of the death of said John Elverson Owens. According to the terms of the policy, its cash or loan value at the time the loan was executed, was $93.00, the difference between the loan and its cash or loan value being $6.68. The defendant wrote the clerk of Wilson Superior Court, on 21 January, 1932, that this was the cash value due on the policy.
The said policy of insurance issued by said defendant to the said John Elverson Owens contained provisions by which at any time after two years from its date, while the policy was in force, the insured might upon written request borrow certain sums upon the sole security of the policy, the loan value of said policy according to the number of years as set forth in a table of guaranteed values contained therein, being $93.00 the policy also contained a provision by which at any time after three annual premiums had been paid the insured might request a full and valid surrender of the policy and in exchange therefor obtain cash in the amount set forth in said policy in table of guaranteed values, according to the number of years for which the policy had been carried, the cash value, as thus set forth, being $93.00 at the time the said loan was made. It was further provided that the said company, upon written request, after three annual premiums had been paid, might convert the said policy into paid-up nonparticipating insurance for the amount shown in the table of guaranteed values opposite the years for which annual premiums had been paid. It was further provided that at the expiration of three years, if any subsequent premium be not paid when due, the company would without action on the part of the insured, extend the policy as nonparticipating term insurance, without loan value, for the term provided in the table of guaranteed values opposite the number of years for which annual premiums had been paid.
From a judgment of nonsuit in the court below, the plaintiff through her general guardian, A. C. Owens, appealed to the Supreme Court.
I think there was error in the judgment of the court below, upon the findings of fact “that the plaintiff take nothing by her action and the defendant go without day and recover the cost.”
Within the period of thirty-one days grace set forth in the policy of insurance during which it would remain in force, the insured wrote the defendant a letter in which he requested that arrangements be made for him to have ninety more days in which to pay the premium then due on said policy. At the time he wrote the letter, there was a cash or loan value of $6.68 to the credit of the policy in the hands of the defendant. This distinguishes the present case from that of Sexton v. Insurance Co., 160 N. C., 597, as in that case the insured had borrowed the full amount. In the instant case, he lacked $6.68 of borrowing the full cash or loan value.
*871While the policy carried a provision for extending the policy as nonparticipating term insurance, in the event of failure to pay the premium when due, this was to be done “without action on the part of the insured.” The other provisions as to the loan or cash value or paid-up insurance were optional with the insured, and were not to become effective without a written request from the insured. This written request was given. It is clear from the agreed statement of facts that the insured did not make a request to exercise any of these options nor was it his intention to permit the defendant to put into operation the provision relative to extended term insurance.
The defendant recognized the intention of the insured to continue his insurance by replying that it would be glad to extend the time for payment of premium, “as you requested.” However, the insured had died in the meantime, and the defendant contends that the status of the parties was determined at that time. I think not.
It appears from the finding of facts in this case that the insured undertook in good faith to prevent a forfeiture of his policy. It is well said in Lincoln National Life Insurance Co. v. Bastian, 31 Fed. (2d), 859, at p. 861: “Courts never favor forfeitures. This rule applies in a ease where the insurer attempts to escape liability, upon the theory of a forfeiture for nonpayment of premium. ' So that, very slight evidence will suffice to support a finding that a waiver of a right of forfeiture was made.”
The fact that the insured had to his credit with the defendant a cash or loan value of $6.68, the further fact that within the thirty-one days of grace allowed by the policy of insurance he requested that arrangements be made to give ninety more days in which to pay his premium, and the further fact that, although the letter was written after the death of the deceased, the defendant acquiesced in the request that arrangements be made to extend the time for payment of the premium, all of these facts bring the instant fact situation within the principle stated in Hollowell v. Insurance Co., 126 N. C., 398, and approved in Coile v. Commercial Travelers, 161 N. C., 104, 47 A. L. R., at p. 886.
In Hollowell v. Insurance Co., supra, the plaintiff (the insured) had been .in the habit for several years of paying his premiums by mail, and the insurer had been in the habit of accepting payments so made, the deposit in the mail of a letter containing a check for the amount of a premium addressed to the insurer, in time to have, reached the insurer by the date it was due, is a payment sufficient to prevent forfeiture, notwithstanding it was not received until the day after it was due, the Court saying: “By this it is not meant that if. the money is lost in the mail, or if the drawee becomes insolvent before presentation of the check or draft, the insurer is discharged from making good *872the loss on notice, but simply that it is so far a payment that it prevents a forfeiture.” 47 A. L. R., at p. 888.
While in the instant case it does not appear that the custom of paying premiums by mail had extended over a period of years, it does appear that the defendant acquiesced in the request that arrangements be made for the 'insured to have ninety days in which to make payment. Therefore, the status between the insured and the insurer, at the time of the death of the former, was fixed by the submission of the request for extension of the time in which to make payments, and the subsequent acquiescence by the defendant, it being estopped by its dealings with the insured from insisting on a forfeiture of the policy. I think its course of dealings with the insured brings it within the principle approved in Insurance Co. v. Eggleston, 96 U. S., at p. 577, quoted with approval in IIoTlowell v. Insurance Co., supra, the quotation is as follows: “We have recently, in the case of Insurance Co. v. Norton, 96 U. S., 234, shown that forfeitures are not favored in law; and that 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, followed by due conformity on his part, will and ought to estop the company from insisting upon the forfeiture, though it might be claimed under the express letter of the contract. The company is thereby estopped from enforcing the forfeiture.”
A court will not look with favor on the forfeiture of $1,000 when the defendant had $6.68 on hand sufficient to purchase extended insurance beyond the death of the policyholder who in accordance with the terms of the policy made the request for extension before his death. Although the letter from the company after his death says, “we shall be glad to extend the time for payment of your premium as you requested,” etc., it is presumed that when the company received the letter of the policyholder it would extend the time and acquiesced in the extension and did subsequently grant the extension.
While, as we have said, the status between the insured and the insurer was fixed by the death of the former, the subsequent conduct of the defendant also estops it from denying that there was to the credit of the insured with the defendant, a cash or loan value, for the defendant, upon learning of his death, wrote the clerk of the Superior Court in Wilson County, offering to remit $6.68, which was said to be the cash surrender value. This, as we have said, would have been more than enough to pay the premium on the policy to extend its validity until 22 February, 1932, beyond the time of the death of the deceased.
*873Tbis case is distinguishable from Williams v. Union Central Life Ins. Co., U. S. Supreme Court Law Edition, Advance Opinions, Yol. 78, No. 6, published 5 February, 1934. In the present case, the insured made the request and the $6.68 loan value was applied by the insurer on the extension period and the insurer acquiesced in the request. This case is unlike Sellars v. Insurance Co., 205 N. C., 355; Harden v. Insurance Co., ante, 230. Succinctly, the cash loan value of the policy was $93.00. The amount borrowed was $86.32, leaving the defendant owing John Elverson Owens $6.68 on the borrowing value sufficiently admitted by defendant to extend the insurance which it was requested to do and did do in its letter. $1,000 is forfeited with defendant having sufficient money in its pocket to pay the premium. Defendant says it has the money, but in the wrong pocket.
It is just such technical forfeitures as this that have enriched certain insurance companies and in many cases confiscated the earnings of the poor. The courts should sooner or later under the general welfare clause and its equitable jurisdiction wipe out such technical forfeitures as contrary to good morals.
“That for ways that are dark
And for tricks that are vain,
The heathen Chinee is peculiar.”
—Bret Harte.
For the reasons given I think the judgment in the court below should be reversed.