Watts v. Metropolitan Life Ins. Co.

The suit was on a policy of insurance, and the defense was a lapse for the nonpayment of premiums. At the conclusion of the evidence the bill of exceptions recites:

"At the request of the defendant in the case, the following charge, which was in writing, was given to the jury by the court: 'If you believe the evidence your verdict must be for the defendant.' Thereupon the plaintiff, in open court, and in the presence of the jury, duly and legally excepted to the charge as given.

"The court further charged the jury as follows: 'And in accordance with that charge, your verdict will be, "We, the jury find in favor of the defendant" — one of your number signing the verdict as foreman.' Thereupon plaintiff, in open court, and in the presence of the jury, duly and legally excepted to that charge of the court."

This was in effect an affirmative charge for defendant without hypothesis. Scott v. State, 110 Ala. 48, 20 So. 468; Davidson v. State ex rel. Woodruff, 63 Ala. 432; Shipp v. Shelton, 193 Ala. 659, 69 So. 102.

The prima facie proof of the issue and possession of the policy by plaintiff, and of the loss or death, as required and within the period covered by the policy, being made (Sov. Camp v. Ballard [Ala. App.] 97 So. 895¹), the burden was imposed on the insurer to have pleaded and proven the forfeiture, if such there was, per the provisions of the policy, and on which the defense was rested. Norwich Union Fire Ins. Society v. Prude, 156 Ala. 565, 571, 46 So. 974.

The lapse of an insurance contract for nonpayment of premiums is such a condition for forfeiture as must be pleaded under a given statement in the policy, which must be strictly construed. Equitable Life Assur. Soc. of U.S. v. Golson,159 Ala. 508, 48 So. 1034; Union Mut. Aid Ass'n of Mobile v. Carroway, 201 Ala. 414, 78 So. 792; Cherokee Life Ins. Co. v. Brannum, 203 Ala. 145, 82 So. 175; Continental Casualty Co. v. Ogburn, 175 Ala. 357, 57 So. 852, Ann. Cas. 1914D, 377. And such conditions for the benefit of the insurer may be waived, or there may be an estoppel to such insistence by reason of the acts of an officer or agent of the insurer having such authority. Woodmen of the World v. Alford, 206 Ala. 18,89 So. 528; Sov. Camp, W. O. W., v. Eastis, 210 Ala. 29,96 So. 866; U. O. of G. C. v. Hooser, 160 Ala. 334, 49 So. 354; Mutual L. I. Co. v. Lovejoy, 201 Ala. 337, 78 So. 299, L.R.A. 1918D, 860, 870, note.

An insurance company, having denied liability on the sole ground of a forfeiture for nonpayment of premiums, is held thereby to have waived all other grounds of forfeiture. Georgia Home Ins. Co. v. Allen, 128 Ala. 451, 30 So. 537; Fidelity-Phoenix Fire Ins. Co. v. Ray, 196 Ala. 425, 427,72 So. 98. It follows that the burden of proof as to the issue of fact of forfeiture for nonpayment of premiums is upon the defendant so pleading. This fact of payment vel non resting in parol (Shipp v. Shelton, 193 Ala. 658, 69 So. 102), is disputed — that is, there is conflict in the evidence as to the fact of payment of the premium installment due and payable for November, 1918. The testimony of the plaintiff was that she and her daughter met, on the streets of Talladega, the manager or agent of defendant's business or branch, and paid him the amount of that premium, which was accepted by him for the company as the full amount thereof.

This fact of payment was denied by Mr. Thornton, defendant's said manager at Anniston, though he admitted that he was frequently in Talladega, covering the time of the alleged payment. Thus an issue of fact, as to the timely payment of the premium, was presented by contradictory parol evidence, making a jury question. Sov. Camp, W. O. W., v. Adams, 204 Ala. 667,672, 86 So. 737. The general affirmative charge, with hypothesis, should not be given when there is such a conflict in evidence. McMillan v. Aiken, 205 Ala. 35, 88 So. 135. And this is the rule, though the conflict in evidence be presented in the testimony (direct and cross) of the same witness. Jones v. Bell, 201 Ala. 336, 77 So. 998.

It has been declared that, where the facts warrant the giving of the general affirmative charge, and the burden of proof is upon the party requesting that charge, if that burden of proof is sought to be discharged by parol evidence of which there is no dispute, the general affirmative charge should nevertheless be upon the hypothesis that the jury believe the evidence, since the witnesses were seen and heard by the jury, and their manner and demeanor observed. The court should not peremptorily instruct the jury and direct their verdict, or draw conclusions as to credibility, or decide which of conflicting tendencies of the evidence should be adopted; this must be left to the jury. Brown v. Mobile Elec. Co., 207 Ala. 61, 91 So. 802; Penticost v. Massey, 201 Ala. 261, 77 So. 675; Burgess v. Burgess, 201 Ala. 631, 79 So. 193; Allen v. Standard Ins. Co., 198 Ala. 522, 73 So. 897; Jones v. Bell, 201 Ala. 336,77 So. 998; Ex parte Penticost, 202 Ala. 682, 81 So. 638; Shipp v. Shelton, 193 Ala. 658, 69 So. 102; Amerson v. Corona Coal Iron Co., 194 Ala. 175, 69 So. 601; Lawson v. Mobile Elec. Co., 204 Ala. 318, 85 So. 257; Sherrill v. M. M. T. S. Bank, 195 Ala. 175, 70 So. 723; Bowen v. Hamilton, 197 Ala. 418, 73 So. 5; Dorough v. Ala. Power Co.,200 Ala. 605, 76 So. 963.

The rule as to when the general affirmative charge should not be given is well established. It is pertinent to inquire if such general charge may be given without hypothesis, when there is no evidence and whenever the court would sustain a demurrer to the evidence interposed by the party requesting the instruction. Such charge, without hypothesis, may not be given for a plaintiff having a burden of proof to discharge, and which is sought to be shown by parol testimony; its credibility is for the jury. When the plaintiff has introduced his evidence, and it does not tend to prove his cause of action, the court may refuse to hear evidence by the defendant, and if duly requested, may direct the verdict. Stowers v. Dwight Mfg. Co., 202 Ala. 252, 80 So. 90; Crim v. L. N. R. R. Co.,206 Ala. 110, 121, 89 So. 376, and authorities; L. N. R. R. Co. v. Jenkins, 196 Ala. 136, 138, 72 So. 68; McMillan v. Aiken, 205 Ala. 35, 40, 88 So. 135; Tobler v. Pioneer Min. Mfg. Co., 166 Ala. 482, 517, 52 So. 86; Warren v. State,197 Ala. 313, 326, 72 So. 624; Western Union T. Co. v. Louisell, 161 Ala. 231, 50 So. 87; A. G. S. Ry. Co. v. Brock, 161 Ala. 351, 49 So. 453; Smoot v. M. M. Ry. Co.,67 Ala. 17; Tabler, Crudup Co. v. Sheffield L., I. C. Co.,87 Ala. 305, 309, 6 So. 196; Cent. R. B. Co. v. Roquemore,96 Ala. 236, 11 So. 475; Sov. Camp, W. O. W., v. Burrell,204 Ala. 210, 85 So. 762. In the cases of Scott v. State,110 Ala. 48, 20 So. 468, Davidson v. State ex rel. Woodruff,63 Ala. 432, Wolf v. Delage, 150 Ala. 445, 43 So. 856, and Crutcher v. M. C. R. R. Co., 38 Ala. 579, such charges were without hypothesis, and held to be error. The affirmative instruction given at defendant's request, and the qualification thereof by the court, amounted to an affirmative instruction without hypothesis. Shipp v. Shelton, 193 Ala. 658, 69 So. 102; Davidson v. State ex rel. Woodruff, 63 Ala. 432; Scott v. State, 110 Ala. 48, 20 So. 468. Is this a case for general affirmative instruction, without hypothesis, in defendant's behalf?

The evidence was uncontradicted that at the time of the alleged payment of the November, 1918, premium, the same was payable through the agent, Thornton, and the Anniston agency. Evidence that said premium was never received in that office was not res inter alios acta. The fact that plaintiff's evidence showed payment to Thornton, the manager of the Anniston office of defendant, when that agent was in Talladega, and which was denied by him, did not deprive the defendant of that tendency of evidence or inference deducible by the jury in corroboration of Thornton's denial of payment.

It is not contended by plaintiff that other premiums were paid. Justifications for further nonpayment urged are, viz. (1) physical inability within the disability provisions of the policy, and (2) that the notice by the insurer to the insured that the policy was forfeited for nonpayment of premiums was sufficient to inform insured that further premiums would not be received, if tendered.

Pertinent provisions of the policy are:

"Payment of Premiums. — Except as herein provided the payment of a premium or installment thereof shall not maintain the policy in force beyond the date when the next premium or installment thereof is payable.

"All premiums are payable in advance at said home office or to any agent of the company upon delivery, on or before date due, of a receipt signed by the president, vice president, secretary or actuary of the company and countersigned by said agent.

"A grace of thirty-one days shall be granted for the payment of every premium after the first during which time the insurance shall continue in force."

"Upon failure to pay any premium or any part thereof when due, this policy, except as otherwise provided herein, shall immediately lapse."

The reinstatement clause is:

"Reinstatement. — Unless the cash value has been paid or the extension period has expired, this policy, upon evidence of insurability satisfactory to the company, may at any time be reinstated by payment of arrears of premiums with interest at six per centum per annum; any loan which existed at date of default, together with interest at the same rate to the date of reinstatement, to be, at the option of the owner on application for such reinstatement, either repaid in cash or continued as an indebtedness against the policy."

The total and permanent disability provisions of the policy are, in part, as follows:

"If the insured hereunder, before attaining the age of sixty years, and after payment of the premium hereon for at least one year, and before default in the payment of any subsequent premium, shall furnish the company with due proof that he has become wholly and permanently disabled by bodily injury or disease so that he is and will be permanently, continuously and wholly prevented thereby from performing any work for compensation or profit, the company will waive payment of the premiums becoming due on and after the next anniversary of date of issue of this policy."

We will consider the last insistence, as to notice of forfeiture, etc., under the rule declared in N.Y. Life Ins. Co. v. Norris, 206 Ala. 656, 91 So. 595. An effect of this decision was:

"Where the insured or some person acting for him seasonably tenders payment of the premium due on a policy, which tender was refused by the insurance company, such refusal relieves the insured of the duty of tendering payment of future premiums, unless the insurer recants its refusal and advises the insured of that fact, manifesting a willingness to accept the tender as of the time it was seasonably made."

The letter received by assured from the president of defendant company informed him that (1) there had been "the nonpayment of the premiums last due" on the policy, causing it to "lapse"; (2) that inquiry was being made as to the reason why assured had "discontinued paying * * * premiums"; (3) that it was desired that assured re-establish his "former relations" as a policy holder; (4) asked reply on the reverse side of the letter; (5) stated that if the "response is favorable to the revival of the policy" assured would be instructed "how to proceed"; and (7) concluded by asking "when and to whom you (assured) paid * * * premiums, or if your (assured's) agent is attending to the case." (Italics supplied.) The letter is carefully worded, from the standpoint of the assurer, and may be subject to inferences by the jury to which we will advert.

It is pertinent that the matter left open by the letter for negotiation was the reinstatement of the lapsed policy according to its conditions, dependent upon the "evidence of insurabilitysatisfactory to the company," which was to accompany the application for reinstatement, and to be obtained otherwise by the company. (Italics supplied.)

The matter foreclosed by the letter was the lapse of the policy for the nonpayment of past-due premiums. The willingness on the company's part to negotiate with the assured, as to "when and to whom" payment was made of the installment or part of premiums on which the forfeiture was rested, presented a phase of the letter from which the jury might have drawn an inference adverse to defendant, as to whether future payment of premiums would be received from assured, without a reinstatement of the lapsed policy for nonpayment of premiums. This is in line with announcements contained in Brooklyn Life Ins. Co. v. Bledsoe, 52 Ala. 538. Such were the facts, or the reasonable inferences of fact, that confronted assured when he received the letter, and at a time when his physical condition may have (as the jury might find) precluded an application and evidence of his insurability that would be "satisfactory to the company," as required by the reinstatement clause of the policy. That is to say, the letter was equivocal as to the receipt of other or future premiums without reinstatement of the policy according to its terms, and was open to adverse inference. This could only be drawn by the jury. N.Y. Life Ins. Co. v. Norris, 206 Ala. 656, 91 So. 595.

It was improper to give the general affirmative instruction for defendant, even with hypothesis. McMillan v. Aiken,205 Ala. 35, 88 So. 135; Shipp v. Shelton, 193 Ala. 658,69 So. 102. The law of this last stated phase of the evidence is declared, respectively, in N.Y. Life Ins. Co. v. Norris,206 Ala. 656, 91 So. 595, and Brooklyn Life Ins. Co. v. Bledsoe,52 Ala. 538.

It is the application of these principles of law to the facts, or to the inferences that might be drawn from the disputed and equivocal evidence indicated, that must be left to the jury to find and declare — whether or not the declaring of a forfeiture of the policy, for nonpayment of premiums, and the letter written in relation thereto, were a sufficient excuse for failing to pay or tender the subsequent premiums when the same fell due, although the declared lapse of his policy became known to the assured at the time and under the circumstances indicated by the evidence.

There was no attempt on the part of assured to show that he was totally and permanently disabled and thereby prevented from performing any work for compensation or profit, within the terms of the policy; that is to say, the facts do not bring this phase of the case within the influence of Pope v. Glens Falls Ins. Co., 130 Ala. 356, 30 So. 496, for the reason that the notice of the disability was not given according to the terms of the insurance contract. N.Y. Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93, 15 A.L.R. 314.

There was also error in giving the affirmative charge for defendant in the present state of the evidence. The burden of showing nonpayment of premiums (and forfeiture therefor) was upon defendant, and this it was sought to do by the oral testimony of Thornton, defendant's manager or agent at its Anniston agency, which was contradicted by the oral testimony for plaintiff.

The judgment of the circuit court is reversed, and the cause is remanded.

Reversed and remanded.

ANDERSON, C. J., and SOMERVILLE and BOULDIN, JJ., concur.

¹ 19 Ala. App. 411.