Opinion
4 Div. 137.
March 14, 1940. Rehearing Denied April 11, 1940.
Appeal from Circuit Court, Houston County; D.C. Halstead, Judge.
W. Perry Calhoun and Emmet S. Thigpen, both of Dothan, for appellant.
The receipt and retention of an overdue premium by an insurance company will constitute a waiver of forfeiture for nonpayment of premium. United States Ins. Co. v. Lesser, 126 Ala. 568, 28 So. 646; Security Mut. L. I. Co. v. Riley, 157 Ala. 553, 47 So. 735; American L. I. Co. v. Renfroe, 232 Ala. 619, 168 So. 871; Hanover Fire Ins. Co. v. Wood, 209 Ala. 380, 96 So. 250; Pacific Mut. L. I. Co. v. Hayes, 202 Ala. 450, 80 So. 834; Southern Indemnity Ass'n v. Hoffman, 16 Ala. App. 274, 77 So. 424; Sovereign Camp, W. O. W. v. Graham, 214 Ala. 239, 107 So. 98. The rejoinder must so answer the replication as to support the plea, and the surrejoinder must support the replication. Brookside-Pratt Mining Co. v. Booth, 211 Ala. 268, 100 So. 240, 33 A.L.R. 417. Rejoinders to replications should confess and avoid them, as is proper with replications to pleas which they profess to answer. Hightower v. Ogletree, 114 Ala. 94, 21 So. 934, 935. Motion to strike rejoinders which were no more than the pleas was proper. Hightower v. Ogletree, supra; Code 1923, § 9458. If there had been no forfeiture of the policy on account of non-payment of premium, because defendant had waived such forfeiture, then the question of the illness of insured and whether or not defendant had knowledge of such illness became immaterial; the issues not concerning reinstatement but forfeiture only. Jones v. Sovereign Camp, W. O. W., 233 Ala. 216, 171 So. 359.
Farmer, Merrill Harrison, of Dothan, for appellee.
Where premiums on a life policy are retained upon condition that insured fill out and return an application for reinstatement for consideration, there is no waiver where the condition is not fulfilled by acceptance and allowance of the application for reinstatement. 37 C.J. 538, § 270; Aetna L. I. Co. v. Smith, 8 Cir., 88 F. 440; Mutual Reserve, c. Co. v. Tuchfeld, 6 Cir., 159 F. 833, 838; Hartford Ins. Co. v. Unsell, 144 U.S. 439, 12 S.Ct. 671, 36 L.Ed. 496; Miles v. Mutual Reserve Ass'n, 108 Wis. 421, 84 N.W. 159; Nelson v. Mutual L. I. Co., 58 Mont. 153, 190 P. 927; Clifton v. Mutual L. I. Co., 168 N.C. 499, 84 S.E. 817. Where company first obtains knowledge of fact that insured was on his deathbed at the time it received overdue premium, a waiver of forfeiture for non-payment when due cannot be based upon the fact that insurer retained the premium. 32 C.J. 1352, § 631; Security Ins. Co. v. Laird, 182 Ala. 121, 62 So. 182; Robinson v. Aetna Ins. Co., 135 Ala. 650, 34 So. 18; Benanti v. Delaware Ins. Co., 86 Conn. 15, 84 A. 109, Ann.Cas.1913D, 826. Retention of premium does not work a waiver of forfeiture where before death of insured the insurer advised insured that premium was received conditionally and after death of insured advised attorney for beneficiary that liability was denied for non-payment of premium. 32 C.J. 1352, § 631; Fraser v. Aetna L. I. Co., 114 Wis. 510, 90 N.W. 476. Payment of premium by insured to insurer after grace period on policy has expired must be fairly and honestly made, and if insured is in bad health — on his deathbed — and this fact is not known to insurer, acceptance of premium, especially upon condition of application for reinstatement showing insured to be in good health, would not effect a waiver of forfeiture. Brown v. Supreme Lodge, K. P., 225 Ala. 114, 142 So. 388; National L. A. Ins. Co. v. Propst, 219 Ala. 437, 122 So. 656; Prestwood v. Carlton, 162 Ala. 327, 50 So. 254; Lost Creek Coal Co. v. Hendon, 215 Ala. 212, 110 So. 308; 14 R.C.L. 1193; United Order of the Golden Cross v. Hooser, 160 Ala. 334, 49 So. 354; Mobile L. I. Co. v. Pruett, 74 Ala. 487.
Special assumpsit by the beneficiary on a policy of life insurance covering the life of the plaintiff's husband, Martin D. Franklin. The complaint consists of a single count in form prescribed by the statute, Code 1923, § 9531, Form 12.
The defendant pleaded what the court and the parties treated as the general issue, which in actions of assumpsit is "an averment that the allegations of the complaint are untrue," Code 1923, § 9470; and special pleas 2, 3 and 4, asserting in slightly varying phraseology that said policy lapsed for the nonpayment of a quarterly premium of $11.08, due November 13, 1938.
From the filing of these pleas the parties plead down to surrejoinders. The defendant thereupon filed pleas A and B, and the process of pleading down to surrejoinders was repeated, finally resulting in voluntary nonsuit, because of the court's rulings adverse to the plaintiff, from which she appealed.
The plaintiff's answer asserted, first by replication to the special pleas, was that although the insured failed to pay one of the quarterly premiums within the grace period, that it was afterwards paid by check; that the defendant "with knowledge" indorsed and cashed the check and retained the proceeds thereof for several months, and did not offer to return the same until after the death of the insured.
The defendant's rejoinders to the plaintiff's first set of replications surviving the defendant's demurrers are but a repetition, as to the material facts, of the averments of said special pleas, and the court erred in overruling the plaintiff's motion to strike the rejoinders. Hightower et al. v. Ogletree, 114 Ala. 94, 21 So. 934. For this error the judgment will be reversed.
In view of the trial to follow we deem it not improper to say that defendant's first set of special pleas assert the forfeiture merely by pleader's conclusion, but their sufficiency was not tested by demurrer.
Pleas A and B are not subject to that defect. The plaintiff's replications surviving demurrer were also defective in not averring that the defendant with knowledge of the insured's illness indorsed and collected said check and retained the proceeds thereof. Those defects probably led to the long drawn out course of pleading and to prolixity.
Notice or knowledge of the increased risk arising from the then illness of the insured was an essential fact in determining whether or not the acts of the defendant constituted a waiver. A waiver once effected can not be recalled. Washburn, Adm'r v. Union Central Life Insurance Co., 143 Ala. 485, 38 So. 1011.
The other questions argued may not arise on another trial.
Reversed and remanded.
ANDERSON, C. J., and THOMAS and KNIGHT, J., concur.