Court Opinion

ID: 7913694
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:08:28.120625+00
Date Added: 2024-06-11T16:32:42.099792
License: Public Domain

Smith, J.
(dissenting): I find myself unable to agree with the conclusion reached by a majority of the court in ordering judgment for defendant. I agree that the testimony of the plaintiff as to the statement of insured should not have been admitted. This ruling, however, would only require a new trial. I cannot agree that the representations pleaded and proved do not constitute actionable fraud. In the first place, the letter which plaintiff testified she received from defendant cannot be divorced from the conversations had by plaintiff with the agents of defendant at her home along in the early part of October nor from the conversations had by plaintiff with the agents of defendant at the district office of defendant in December. I do not suppose the board of directors of the insurance company knew about these conversations, but it cannot be said that the company was not bound by them. At that time the plaintiff could have paid the monthly premium and have kept the *534policy in force. The agent of the company knew this — hence, the company knew it. • Obviously it was to her interest to do so. The agent of defendant told her, however, that she could not do that on October 2; that the policy had lapsed. Here an examination of the policy is interesting. The premium was due on the first day of each month. Everybody admits that. Everybody admits that the premium that was not paid was the one that was due in the first place on September 1. Insured had all day September 1 to pay this premium. The provision as to the grace period in the policy is as follows:
“A grace period of thirty-one days, without interest charge, will be granted for the payment of every premium after the first, during which grace period the insurance shall continue in force, but if the insured dies during such period the portion of the unpaid premium for insurance for the current policy month shall be considered as an indebtedness to the company for which this policy is security.”
Clearly, under that provision, insured had thirty-one days from the 1st day of September to pay the premium before it lapsed. G. S. 1935, 60-3819, provides as follows:
“The time within which an act is to be done shall be computed by excluding the first day and including the last; if the last day be Sunday, it shall be excluded.”
Following the provisions of that statute thirty-one days from September 1 would be October 2, and the tender was in time even had October 1 not fallen on Sunday. It is clear, then, that the plaintiff was in time when she tendered the premium on October 2. It seems idle to suggest that a company such as defendant, with policies such as the one in question being held all over the state and with premiums in many of them coming due on the first of each month, did not know of the above provision of the statute and of its application to policies such as this one. At least it had a better opportunity to know the facts than did this plaintiff and insured. The argument that the representations made here were as to matters of law and not of fact, and hence were not actionable, is too technical to appeal to my sense of justice. Moreover, some misstatements as to matters of law are actionable. In Madison Trust Co. v. Helleckson, 216 Wis. 443, 257 N. W. 691, the fifth paragraph of the headnote, as shown in the last citation, is as follows:
“Representations as to matters of law, while not ordinarily basis for action for fraud, are fraudulent if they are made by one who has superior means of information and professes knowledge of law, and thereby obtains unconscion*535able advantage of another who is ignorant and has not been in situation to become informed.”
In Security Sav. Bank v. Kellems, (Mo.) 274 S. W. 112, paragraph 6 of the headnote states:
“Though generally misrepresentation as to matter of law cannot constitute remedial fraud, where there is a relation of trust and confidence or where one with superior knowledge of law deceives another ignorant of the law by misrepresenting it to him, relief may be granted.”
This rule is based on good reasoning and common justice. Why should not a company which has every reason and opportunity in the world to know the law be held liable for a misrepresentation of the legal effect of certain actions to one who is not in nearly as good a position to know? A better occasion for invoking that rule can hardly be imagined than this case. Here was a widow out in a mining camp of Crawford county, doing laundry work for money to pay these premiums. All she ever saw or heard of the company was the agent who came out there, to sell the policy and.the agent who came to collect. Probably she never heard of the statute for computing time. On the other hand, the company through its agents and employees were in the business of figuring when policies would lapse, and no doubt had considered this very question many times. The train of events which resulted in plaintiff’s being defrauded was started when the agent refused to accept the premium on October 2. It was accelerated when the people in the district office refused to accept the premiums and it was finally brought to a conclusion when the letter containing the check was mailed to insured and plaintiff. The statements made by the agent of the company at the home of plaintiff were not part of the fraud pleaded in the petition. Knowledge on the part of defendant that the statements contained in the letter were false was pleaded; also, it was pleaded that the statement of the agent of the company that the policy lapsed on October 1 was wrongful. I insist that the knowledge gained by that agent was knowledge gained by defendant, and with that knowledge in its possession the letter was sent by it, and this letter misstated a fact, the falsity of which was particularly within the knowledge of the defendant, and that this false statement induced plaintiff and insured to sign the release. Even accepting the carbon copy of the letter which defendant admits it mailed to plaintiff as the letter, and the only letter that was mailed, the skirts of defendant are not entirely clean. Let us look at that letter. The letter refers to *536premium due September 1, 1933. It then contains this sentence: “Your policy lapsed for nonpayment of the above premium.” The defendant, through the knowledge of its agent, who had talked to plaintiff and insured, knew that this policy had not lapsed on September 1, 1933. It knew it did not lapse until October 2, 1933, and it knew that plaintiff had tendered the premium due before the policy lapsed because its agent knew it. I maintain a person unlearned in the law and not skilled in the use of business terms would be justified in concluding that the letter meant that September 1, 1933, was the last date on which the premium could be paid. Nor is this all. If there ever was a case where the knowledge of an agent should be held to be the knowledge of the corporation whose agent he is, it is in the case of an insurance company, with its agents reaching into the home of every policyholder. The letter then contains the following:
“We have not received an application for reinstatement nor an expression from you as to your intentions, and acting on the belief that you would prefer the balance of cash value due, we are enclosing check herewith. Please send the policy to us. If, however, it is your intention to revive this insurance, return the check and we will inform you of our requirements for reinstatement.”
•The policy provided that the cash-surrender value of the policy would be paid upon presentation of the policy for legal surrender, together with a written request therefor. No request for cash-surrender value was made here and the policy had not been surrendered. It looks a little bit as though the.company was in a hurry to get this check into the hands of plaintiff and insured so that they might endorse it and thereby be in the position of having executed the release printed on the back.
Do all these things constitute actionable fraud? It must be remembered that the element that makes misrepresentation actionable is the false impression created in the mind of the person defrauded. In Stewart v. Wyoming Ranche Co., 128 U. S. 383, 9 S. Ct. 201, the supreme court of the United States said:
“The gist of the action is fraudulently producing a false impression upon the mind of the other party.” (p. 388.)
The rule is also laid down in 26 C. J. 1100. Section 31 is as follows :
“Fraudulent misrepresentation may be effected by half truths calculated to deceive. Thus a representation literally true is actionable if used to create an impression substantially false, as where it is accompanied by conduct calculated to deceive.”
*537In Henry v. Collier, 69 Okla. 24, 169 Pac. 626, the court said:
“The gist of a fraudulent misrepresentation is the producing of a false impression upon the mind of the other party, and if this result is actually accomplished, the means of producing it are immaterial.” (Syl. ¶ 1.)
In Wolfe v. A. E. Kusterer & Co., 269 Mich. 424, 428, 257 N. W. 729, the court quoted from an English case, as follows:
“If by a number of statements you intentionally give a false impression and induce a person to act upon it, it is none the less false although if one takes each statement by itself, there may be difficulty in showing that any specific statement is untrue. (Aarons' Reefs v. Twiss, 1896 App. Cas. [L. R.] 273.)”
Here the plaintiff had an interest in keeping the policy on her son’s life in force. Through statements and conduct of agents of defendant she was caused to release her interest in this policy. She says she would not have released this interest had it not been for these statements and this conduct. The jury had a right to believe her. I maintain that conduct and statements that create a false impression in the mind of a person, thus causing that person to release a right of action or to part with some other valuable thing, is fraudulent, whether it be part of an elaborate scheme or a single statement or act.
It will be noted that the insured did not die until nearly a year after the claimed lapse of the policy. No tender of the premium was made after October 2, 1933, unless the visit to the office during December of that year should be treated as a tender. However, the agent of defendant had said to plaintiff that it would be useless for her to tender the premiums without an application for reinstatement. The rule is stated in 3 Couch on Insurance, page 2057, as follows:
“Although under ordinary circumstances a tender must be made on each occasion when a premium or assessment falls due, and notwithstanding the fact that it has been held (that a tender, after refusal, necessitates tenders thereafter, it undoubtedly is true that the law does not require that a party should persist in the doing of a futile act, in consequence of which the general rule is that, if an insurance company or benefit society or association refuses to accept a sum properly tendered in payment of a premium or assessment, no formal tenders of subsequent premiums or assessments need be made in order to keep the contract of insurance in force, at least, unless the insurer revives the duty of the insured by notice that they will be received, or are due, or in some manner manifests a willingness to accept payment.”
The case of Scotten v. Metropolitan Life Ins. Co., (Mo.) 68 S. W. 2d 60, was a great deal like this case. There the com*538pany claimed that the policy had lapsed on a certain day and would be reinstated upon insured furnishing the company with evidence of insurability. This was not done, and after the death of insured the beneficiary claimed the policy was still in force because the company had made a misstatement of when the premium was due. On the question of the necessity for a tender to keep the policy in force it was said:
“(3) ‘The obligation of the contract being created, a denial of its existence is equivalent to a repudiation or renunciation of liability under it.’ (13 C. J. 655; Laswell v. National Handle Co., 147 Mo. App. 497, 536, 538, 126 S. W. 969.)
“The conduct of the defendant throughout the transaction, as well as in the trial, conclusively shows that it would not have accepted a premium at any time after May 16, 1927, unless insurability was shown. Therefore, the mere tender of premium at any time after May 16 would have been a vain, thing.
“(4) ‘A tender is waived where the tenderee makes any declaration which amounts to a repudiation of the contract, or takes any position which would render a tender, so long as the position taken by him is maintained, a vain and idle ceremony.’ 62 C. J. 658, 659; Smith v. Means, 170 Mo. App. 158, 171, 155 S. W. 454.” (p. 62.)
To the same effect is Klinkhardt v. Crescent Ins. Co., (Mo. App.) 47 S. W. 2d 210. (See, also, Newman v. John Hancock Mut. Life Ins. Co., [Mo. App.] 7 S. W. 2d 1015.) In Saunders v. Independent Nat. Life Ins. Co., (La. App.) 133 So. 451, it was said:
“The plaintiff, a beneficiary under a policy of industrial life insurance, brings this suit for $126, the face value of the policy. The case is defended upon the ground that the policy had lapsed because of the failure to pay premiums. Answering this contention, plaintiff claims that an attempt was made to pay the premiums, but that the defendant insurance company refused' to accept further payments because of the fact that someone living in the same house with her had contracted tubérculosis and the officials- of the company were unwilling to take the risk of infection, which further transactions with her might- involve.
“(1, 2). Of course, if the premiums were tendered and arbitrarily refused, the policy did not lapse. (Newton v. National Life Ins. Co., 161 La. 357, 108 So. 769.)”
In Kenyon v. National Life Ass’n, 57 N. Y. Supp. 60, it was said, in substance:
“Where a policy has been illegally lapsed by an insurer, it is not incumbent on assured to tender subsequent premiums according to the terms of the policy, which were uncertain in amount and to be fixed by the insurer, of which she was given no notice, in order to preserve her rights under the *539policy notwithstanding it provided that, in case of failure to receive notice, she should pay the amount of the last premium, since such clause should be construed to relate to a case of accident or mistake only. . . . Where a policy was illegally lapsed by an insurer, assured may sue in equity to have it continued, or he may elect to consider it at an end and recover its just value, .or wait until it becomes payable according to its terms, and then try the question of forfeiture.”
In Baumann v. Metropolitan Life Ins. Co., 144 Wis. 206, 128 N. W. 864, the court said in substance:
“Where a life policy is improperly canceled by insurer and the beneficiary has knowledge thereof, no duty devolves on her to tender subsequent premiums.” (Headnote 4.)
It should be noted that these were actions on the insurance policies. The reason for this rule springs from a well-recognized rule that it is never necessary that a person do a futile thing. There can be no doubt in this case but that defendant would have refused to accept the monthly premiums had insured and plaintiff tendered them to defendant on the first of every month. Hence, under the authorities just cited, it was not necessary that this tender should have been made. There can be no doubt in my mind but that plaintiff and insured had a valuable interest in that policy at the time the check was received. There is no doubt but that there was substantial evidence that what the agents of defendants said and did caused plaintiff and insured to endorse this check and thereby release defendant from liability. There is no doubt in my mind but that there was substantial circumstantial evidence that defendant, with the knowledge of the rights of plaintiff not known to plaintiff or insured, intended the statements in the letter to mislead plaintiff. For all these reasons I maintain that the judgment should be reversed for a new trial, rather than that judgment should be ordered for defendant.