Life Casualty Co. of Tennessee v. Street , 213 Ala. 588 ( 1925 )

The complaint in this case is an exact duplication of the complaint in Commonwealth Life Ins. Co. v. Roy, 17 Ala. App. 434,86 So. 590, which, on review, we held to be in substantial compliance with form No. 12 of the Code, and not subject to the demurrer interposed. The additional grounds of demurrer here presented are clearly without merit.

During the trial of the cause, after plaintiff's testimony was closed and one of defendant's chief witnesses had been examined, defendant offered to file a special plea, setting up a special provision of the insurance contract rendering it invalid if the insured was not in sound health at the time of the delivery of the policy, and alleging that the insured was not at that time in sound health, but was afflicted with tuberculosis from which she soon afterwards died. Plaintiff objected to the filing of the plea at that stage of the trial, on the ground that it opened up new matter, and plaintiff's testimony was already in. Counsel for defendant then stated that the plea was to meet plaintiff's testimony, and that they expected to rely on that testimony to prove the plea. The trial court assented to the filing of this plea, on the conditions that the trial should be continued and that defendant should pay the costs of the term. Defendant declined to accept these conditions, and excepted to the ruling of the court.

The plea thus offered by defendant was not for the amendment of any imperfection or defect of form, but asserted a new and substantive defense. It was therefore not within the purview of sections 9513 and 9516 of the Code (sections 5367 and 5369, Code 1907), and its allowance, vel non, was a matter within the sound discretion of the trial court. Cahaba Southern Mining Co. v. Pratt, 146 Ala. 245, 40 So. 943. But even if it were within the statutes, when there is nothing in the judgment entry or the bill of exceptions to negative the fact that the amendment would operate to cause a delay or injustice to the opposite party, the appellate court will presume that conditions existed which justified the trial court in the imposition of conditions as to continuance and costs of court. Hanchey v. Brunson,181 Ala. 453, 61 So. 258.

The policy sued on is a combination "sick and accident" and "endowment" policy; the endowment feature being a provision for the payment of $115 to the beneficiary upon the death of the insured. It was issued on October 11, 1920, and it is without dispute that the policy lapsed by reason of the nonpayment of premium dues after August 22, 1921.

Plaintiff's contention is that the policy was thereafter revived and treated as being in force by the defendant company; that she duly paid or tendered to defendant's local agent each and every premium installment that became due; and that thereby the policy was kept alive and in full force until the death of the insured in June, 1922. Defendant's contention is that the policy was never revived by the company, and that the money paid by plaintiff to the company's agent to cover the cost of the revival was returned to plaintiff, and the policy was regarded as lapsed. The real question at issue, therefore, was whether the policy had been effectively revived by the company; the inquiry involving the acts and conduct of the local agent, Macon, and his authority to bind the company in the premises. Pertinent to this inquiry, paragraph 10 of the policy stipulates:

"Agents (which term includes superintendents and assistant superintendents) are not authorized and have no power to make, alter or discharge contracts, or waive forfeitures, or to receive premiums on policies in arrears more than four weeks, or to receipt for same on the premium receipt book, and all such arrears given to an agent shall be at the risk of those who pay them, and shall not be credited to the policy, whether entered in the premium receipt book or not. Policies having lapsed may be revived by the company at its option, upon written application of the insured, provided that the company's consent to such a revival shall appear by indorsement upon the face of the policy, and there shall be no liability whatever under this contract for any disability or death resulting from an accident occurring or illness contracted or commencing prior to the date of the revival indorsement hereon as aforesaid."

It is clear that, upon the application of the insured, revival is at the option of the company. The stipulations as to the mode of revival, and the limitation upon its effect, are, however, for the protection of the insurer, and may be waived either expressly or by implication. U.S. Life Ins. Co. v. Lesser, 126 Ala. 568, 28 So. 646; 37 Corpus Juris, 499, § 241. The revival contemplated by the provision quoted does not require action by an executive officer at the home office of the company. Construing it more strongly against the insurer, it reasonably means that the application may be made to the local agent, and that he may receive it on behalf of the company. Certainly, soliciting the revival of a lapsed policy must be placed in the same category as soliciting original business.

"Insurer may be bound by the acts of its agents with respect to waiver or estoppel as to conditions for reinstatement even, in some jurisdictions, where the policy contains an express limitation on the power of agents in this respect, and, notwithstanding such limitation, insurer may by its acts extend the authority of its agents." 37 Corp. Jur. 499, § 241.

It was evidently contemplated that applications for revival of lapsed policies should be made to the company through the medium of its local agents, and an application to the agent is in legal effect an application to the company. Hence the authorities have soundly held that undue delay in acting upon the application, or failure to communicate to the insured the fact of the rejection of his application, may amount to a waiver of formal requirements, and operate as an effective revival. Rome Ind. Ins. Co. v. Eidson, 142 Ga. 253,82 S.E. 641; Mettner v. N.W. Nat. Life Ins. Co., 127 Iowa, 205,103 N.W. 112; Lechler v. Montana Life Ins. Co., 48 N.D. 644,186 N.W. 271, 23 A.L.R. 1193; 37 Corp. Jur. 500.

The evidence offered for the plaintiff, especially her own testimony, brings this case within the operation of these principles, and made the question of revival vel non one for the jury to determine. If this court had been sitting as a jury, we might well have found against the plaintiff on all the evidence, but we cannot apply that test.

The trial judge properly refused to charge the jury at defendant's request that there could be no revival of the policy, unless it was stamped to that effect, or unless it was so stamped at the home office. So a charge that the mere fact that the policy had once lapsed, ignoring the question of revival, would defeat recovery, was properly refused.

The charge that under the terms of the policy no agent of the defendant company had the right to revive it would have been an unwarranted construction of its terms, and would, moreover, have been misleading in its tendency in view of the evidence.

There was no evidence that the assured had tuberculosis at the time the policy sued on was delivered; but, in any case, there was no defensive plea presenting that issue, and hence a charge denying recovery on that hypothesis was not proper.

Under the terms of the policy, its revival was at the option of the company. One of the defendant's refused charges asserted that proposition, but it was clearly covered by one of the given charges, and its refusal was not prejudicial error.

At plaintiff's request the following charge was given to the jury:

"If you are reasonably satisfied by the evidence that the plaintiff tendered the defendant all that it was due under the policy, which is made the basis of this suit, and such tender was made after such policy was revived, if the same was revived, and defendant refused to accept such tender, then the plaintiff was not under any duty to continue to remake such tender."

Appellant's criticism of this charge is that it improperly and erroneously submits to the jury two questions of law, viz.: What facts may constitute a revival of the policy; and what facts show a sufficient tender of premium dues. This criticism is, we think, well-founded. The trial judge should have explained to the jury what facts would constitute a revival of the policy, and also should have explained the requirements for a sufficient tender. The effect of the charge was to leave both questions to the determination of the jury, unaided by definition or explanation. Numerous authorities condemn such charges: Riley v. Riley, 36 Ala. 496; Drake v. State, 60 Ala. 62; Chambers v. Morris, 149 Ala. 674, 42 So. 549;^* City Council v. Bradley, 159 Ala. 230, 234, 48 So. 809; Whitsett v. Belue, 172 Ala. 256, 54 So. 677; Jeffries v. Pitts, 200 Ala. 201,75 So. 959; Greenwood Café v. Walsh, 15 Ala. App. 519,74 So. 82.

If the record showed that the jury were properly enlightened as to the facts which would constitute a tender and a revival of the policy, either in the oral charge or in any other written charge, the charge in question would not be erroneous; but nothing of that sort appears.

For this error, which was probably prejudicial as we view the evidence, the judgment must be reversed, and the cause remanded.

Reversed and remanded.

ANDERSON, C. J., and GARDNER and MILLER, JJ., concur.

^* Reported in full in the Southern Reporter; not reported in full in Alabama Reports.