GREAT SOUTHWESTERN LIFE INS. CO. v. GIBSON

GREAT SOUTHWESTERN LIFE INS. CO. v. GIBSON
1937 OK 175
66 P.2d 500
179 Okla. 410
Case Number: 26570
Decided: 03/16/1937
Supreme Court of Oklahoma

GREAT SOUTHWESTERN LIFE INS. CO.
v.
GIBSON

Syllabus

¶0 1. INSURANCE - Demand by Insurer Prior to Death of Insured for Payment of Past Due Installments of Premium Note Held not Alone to Constitute Waiver of Forfeiture Clause of Policy.
Where a note, payable in four installments, is given by the insured in payment of the annual premium upon a policy of life insurance, no one of which is paid prior to the death of the insured, and such policy provides: "Upon default in payment of any premium, or any note or interest thereon, whether such note is given for the first or subsequent premiums, this policy shall be null and void, * * *" and where such note provides: "If default is made in the payment of any installment when due, then all the remaining installments shall become due and playable, at the option of the holder" held, that demand by the insurer, prior to the death of the insured, for the payment of the past due installments of said note does not, alone, constitute a waiver of the forfeiture clause of said policy.
2. SAME - Insurer Held not Estopped to Cancel Policy or to Plead Lapse Thereof Because It Failed to Return Premium Note to Insured in His Lifetime.
Insured died April 3, 1934, not having paid any part of his premium note installments due January 1st, February 1st, and March 1st, respectively. March 3, 1934, insurer elected to cancel said policy and notified the insured thereof. Held, insurer was not estopped to cancel said policy or to plead a lapse thereof merely because it had not returned said note to the insured in his lifetime.
3. SAME - Action on Life Policy - Evidence Held not to Warrant Judgment for Plaintiff.
The evidence showing no other act upon the part of the insurer than sending to the insured notices of past due installments of said premium note, and failing to show any act of the insurer from which it could be said that it recognized said policy as being in full force and effect, after its lapse, such evidence is insufficient to warrant a judgment for the plaintiff.
4. SAME - Evidence Held Insufficient to Support Plaintiff's Plea of Estoppel Against Defendant's Plea of Lapse of Policy.
The evidence in this case examined, and held, the same is insufficient to support plaintiff's plea of estoppel against defendant's plea of lapse of the policy in suit, and the court erred in overruling defendant's demurrer thereto.

Appeal from District Court, Oklahoma County; Ben Arnold, Judge.

Action by Charles P. Gibson against the Great Southwestern Life Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed, with directions.

A.R. Thompson and Robt. Burns, for plaintiff in error.
Leonard H. Savage, J.I. Gibson, A.P. Murrah, and Luther Bohanon, for defendant in error.

PER CURIAM.

¶1 Action upon a policy of life insurance issued November 15, 1933, for $1,000 upon the life of Clyde W. Gibson. The premium upon said policy was paid by insured's note for $39.71, due in installments as follows: $1.71 on January 1, 1934, and $10 on the first days of February, March, and April, 1964. The note provides: "If default is made in the payment of any installment when due, then all the remaining installments shall become due, and payable, at the option of the holder hereof without notice or demand, said notice and demand being hereby expressly waived." The policy contained the usual forfeiture clause for nonpayment of premium, and is set forth in the syllabus.

¶2 No part of said note was ever paid, and the insured died April 3, 1934. Prior to the date of death, notices of the due date of the first three installments were mailed by the insurer to the insured, both before and after the date the same were due March 3, 1934, none of said installments having been paid, the insurer notified the insured of the cancellation of said policy because of the failure to pay any installment of premium upon said policy.

¶3 The defendant pleaded the forfeiture of said policy by reason of the nonpayment of the premium or any part thereof, and the plaintiff, by his reply, admits that the premium note had not been paid and pleaded a waiver by the insurer of the right to forfeit said policy because of the efforts of the insurer to collect the past due installments of said note, and that said note was never returned to the insured or tendered to him during his lifetime, and that said insurer at all times considered the policy in force and effect until the death of the insured.

¶4 The case was tried to the court, and at the conclusion of plaintiff's evidence the insurance company demurred thereto for the reason that the same was insufficient to sustain a judgment against the defendant, and this demurrer was overruled by the court, exceptions saved, and upon final hearing judgment was rendered for the plaintiff.

¶5 Plaintiff's petition alleged a prima facie case upon the policy; the defendant pleaded forfeiture; and plaintiff's reply pleaded a waiver of the forfeiture. Under this state of the pleadings, the burden of proof of forfeiture was, therefore, upon the defendant. This it carried by the undisputed evidence. The burden, then, of proving waiver or estoppel was upon the plaintiff, and the evidence of plaintiff did not sustain the allegations of the reply.

¶6 We have carefully read the record in this cause, and the evidence fails to disclose any act of the insurer which was, or might be claimed to be, the basis of a waiver of the forfeiture clause of the policy, other than the sending of the notices above referred to, and possibly a personal effort to collect the same by a person alleged to be the agent of the insurance company. Upon this latter claim the evidence negatives plaintiff's contention.

¶7 The demand by the insurer for the payment of the past due installments of a premium note does not, alone, constitute a waiver of the forfeiture of said policy because of nonpayment of any premium thereon. Under the facts as disclosed by the evidence in this case, the insurer was not estopped to cancel said policy, nor to plead a forfeiture thereof. Neither does the evidence disclose any act or conduct upon the part of the insurer after the cancellation of the policy, which, in any way, recognized this policy as being in force, or which would estop it from pleading such forfeiture. Under the facts shown, the failure to return the premium note to the insured in his lifetime cannot be material or controlling, especially in view of the previous cancellation of the policy. Retention of such a note is only circumstantial evidence of an intent, which in this instance is overcome by the positive act of the insured when it canceled the policy, and by the other facts appearing in evidence.

¶8 Upon the authority of Great Southern Life Insurance Co. v. Brooks, 166 Okla. 123, 26 P.2d 430, and General American Life Insurance Co. v. Brown, 176 Okla. 500, 56 P.2d 809, the cause is reversed and remanded, with directions to enter judgment for the defendant below, at the cost of the defendant in error.

¶9 The Supreme Court acknowledges the aid of Attorneys T.A. Higgins, J.W. Reece, and John P. Vaughn in the preparation of this opinion. These attorneys constituted an advisory committee selected by the State Bar, appointed by the Judicial Council, and approved by the Supreme Court. After the analysis of law and facts was prepared by Mr. Higgins and approved by Mr. Reece and Mr. Vaughn, the cause was assigned to a Justice of this court for examination and report to the court. Thereafter, upon consideration by a majority of the court, this opinion was adopted.