Krause v. Equitable Life Assurance Society of United States

McGrath, O. J.

Plaintiff, as administrator of the estate of Benjamin S. Krause, sues. upon a policy of insurance issued September 12, 1889.

Plaintiff’s evidence tended to show that the policy was actually issued; that defendant’s solicitor accepted the assured’s note at 60 days for the amount of the premium, and receipted for such premium; that the note so accepted was turned over to the general agent of the company, who held it, and paid the full premium to the company; that the note was not paid at maturity; that the assured then requested the general agent to make the premium payable quarterly, instead of annually, and delivered the policy to such agent for the purpose of the change; that on March 6, 18903 defendant’s general agent wrote to a brother of the assured, who was then acting for the assured, as follows:

“ Your favor of the 5th received. Your demand for the policy, if the full annual premium is paid, is reasonable and right. There has been a misunderstanding in regard to this matter. Will explain briefly. Your brother applied for a policy with annual payments. The policy was issued and delivered. I paid the full premium to the company, and the agent his commissions, accepting your brother’s note. He was unable to pay the full premium, and requested policy changed to quarterly premiums, and promised he would pay the quarterly premiums as they matured. The policy has been at this office ever since, uncalled for. The policy forfeited after his refusal to pay the second quarter. The company is ready to reinstate the policy if health certificate is furnished. Until that is done, we cannot deliver the renewal. The policy is of no value until the second quarterly premium is accepted by the company. As the matter now stands, if your brother refuses to furnish health certificate, we can only demand *464 payment of the first quarterly premium of $12.91, as he was only insured for three months.”

That in March, 1890, the note was sent on for collection, and paid in full on March 13, 1890; that, when the second annual premium became "due, the amount thereof was tendered to defendant; that the assured died December 15, 1890, and proofs of death were furnished to the company.

Upon these facts the case should have gone to thé jury. There was no competent testimony that the policy was delivered up for the purpose of cancellation, and that another and different contract of a’ later date was to be substituted, and a health certificate required. The change from an annual to a quarterly premium did not necessitate a new policy. So far as appears, the contract was to be a continuing one. The delivery of the policy to the company was conditional, and the condition was not complied with. The note was not surrendered, nor was the unearned premium refunded. It is true that the assured was in default upon the note, but it was retained, and afterwards collected. It is insisted that the compariy did not collect the note. But it was collected by the agent of the company, without notice to the assured that it was being collected on individual, and not on company, account. The company had received the premium in full. In Home Insurance Co. v. Curtis, 32 Mich. 402 , it was understood when the insurance was effected that credit was to be given for the premium, and the agents received a note from the assured, and themselves paid the premium, There, as. here, there was testimony tending to show that before the loss the policy had been canceled. The trial court instructed the jury that if the agents, acting for themselves, advanced the premium to the company, and. afterwards, took the note of the assured for the amount as their own, this was a sufficient compliance with the condition requir *465 ing the premium to be actually paid before the company should be liable, and that the company could not cancel the policy without notifying the assured, and returning the unearned premium. This Court held that there was no error in the instructions, adding that, if the 'company actually received the premium, it was a matter of no sort of consequence who paid it, and the company could not afterwards cancel the policy without notifying the assured, and refunding, or offering to refund, the unearned premium. In the present case the premium receipt recited the giving of the note, and the general agent of the company received the note. The company, therefore, had ample notice of the situation. It did not either refund the unearned premium or deliver up the note.

The testimony of the witness Heffron, so far as it related to matters equally within the knowledge of the decedent, was inadmissible. Singer Manufacturing Co. v. Benjamin, 55 Mich. 330 . Heffron solicited the insurance, and signed the premium receipt as agent, upon a blank furnished by the company. He was under a contract with the general agent of the company as such. He was to procure applications for assurance, and forward the same to the general agent or the company. He was to receive as compensation a brokerage on the premiums. He was to remit to the general agent or the company. He was not to be entitled to commission on assurances, unless, in the opinion of the president of the society, he had been instrumental in securing the same. He agreed to devote his whole time and energies to the service of the society, etc. It is true that his powers were limited, but the application of the rule does not depend upon the extent of the authority conferred, but upon the relation existing.

The judgment is reversed, and a new trial ordered.

The other Justices concurred.