Opinion
6 Div. 833.
October 7, 1930. Rehearing Denied November 11, 1930.
Appeal from Circuit Court, Walker County; R. L. Blanton, Judge.
Action on a promissory note by the Hartford Fire Insurance Company against R. F. Guthrie. From a judgment for defendant, plaintiff appeals.
Affirmed.
Certiorari denied by Supreme Court in Hartford Fire Ins. Co. v. Guthrie, 222 Ala. 146, 131 So. 248.
Defendant's pleas G and H are as follows:
"G. That the demand sued upon in this case was given as installments on two insurance policies to settle the premiums therefor; that to-wit in August, 1927, when said policies were in full force and effect, and when all premiums due thereon had been fully paid, the plaintiff acting through its authorized agent wrongfully suspended the operation of said policies, and the defendant since said time has had no protection under said policies. Defendant says that the plaintiff breached its said contract in suspending the operation of said policies, and that as a proximate result of said wrongful suspension of said policies constituting a wrongful breach of its contract, this defendant was damaged in the sum of $107.79, which said damage was the premiums on said policies now sought to be enforced by the plaintiff while this defendant has no protection thereunder, and he hereby offers to set said damages off against the demand sued upon in this case.
"H. For further plea this defendant says that the note sued upon was secured by fraud and false representations of the authorized agent of the plaintiff while he was acting within the line of his duty and within the scope of his authority as such agent, which said false and fraudulent representations consisted in this; that the defendant had agreed to take two certain insurance policies one fire and one tornado covering certain property owned by the defendant; that he was then and there to pay one installment and was to make a note for four other installments which would carry the policies for the full five years agreed to be taken for. The defendant says that the said agent of the plaintiff as aforesaid, while acting as aforesaid, falsely and fraudulently represented to this defendant that the amount due on each installment of said policies was $43.13, when said agent at the time knew that this was false and untrue and was made to deceive this defendant and did deceive this defendant. The said agent at the said time further falsely and fraudulently represented to this defendant that the fine print in said note reading as follows: 'And it is hereby agreed that in case of any one of the installments herein named shall not be paid at maturity, or if any single payment, promissory note (acknowledged as cash otherwise) given for the whole or any portion of the premium for said policy shall not be paid promptly when due this company shall not be liable for loss during such default, and said policy shall lapse until said payment is made to this company at their Southern Farm Department at Atlanta, Ga., and the whole amount of installments or notes remaining unpaid may be declared earned, due and payable and may be collected by law,' was in truth and in fact a waiver of his claim of exemptions under the law; that at said time said agent knew what said clause was, and that he made said false representations to this defendant to deceive him into signing said note without reading the same, and that said agent at said time further represented to this defendant, which representation was false and fraudulently made and with the intent and purpose of deceiving this defendant and defrauding him out of his money and did deceive and defraud him, that if the defendant would sign the note that he would thereafter receive two insurance policies which would insure his property for the full period of five years, and that there would be no clause in said policy whereby said company could cancel said policy during said period of five years. Defendant alleges that all of said representations were false; that all of them were fraudulent; that all of them were made to deceive and defraud this defendant; that all of them were known to said authorized agent at the time to be false and to be fraudulent, and were made to deceive and defraud this defendant; that this defendant acted upon said false and fraudulent representations, that he was induced to so act by said false and fraudulent representations, which were known by the said agent while so acting as aforesaid to be false and fraudulent and which were not known by this defendant, and which said false and fraudulent representations deceived this defendant into acting as he did act on said occasion. Defendant avers that the representations made by said agent that the annual premium on said policies was $43.13 was false and fraudulent, and the said agent so acting at the time knew the same was false and fraudulent; that said agent also knew at the time that his representation of the fact to the defendant that the fine print in said note was a clause waiving his exemptions was false, and knew that it was a fraud upon the defendant and he made the same to deceive this defendant into signing said note without reading the same and this defendant relied on all of said representations, all of which were false and fraudulent, and by so relying on the same the said agent, while acting as aforesaid, through his scheme and artifice of fraud and false representations, deceived this defendant and procured his signature to the note sued upon without his reading the same; and this defendant says that the representations of said agent that this defendant would receive a policy or policies insuring his property for a full period of five years without the right of the plaintiff to cancel the same was false and fraudulent and was made to deceive the defendant into signing the same said note, and did enter into said inducement. The defendant says that said false and fraudulent representations were of facts known to the agent and unknown to the defendant; that they were made before he signed the note sued upon, and were made for the purpose of inducing him to sign the same, and that he relied upon them in good faith, and he pleads these facts in avoidance of a liability on said note."
The following charges were refused to plaintiff.
"2. The court charges the jury that under the terms of the instrument sued on and under the law the fact that the policy was suspended during default in payment of the premium does not constitute any defense to this action.
"3. The court charges the jury that a partial payment of the premium does not prevent the policy being suspended for nonpayment of premiums. Unless all the premium was paid when due the contract of insurance would be suspended, and suspension of liability for such nonpayment of the premium would not be a defense to this action.
"4. The court charges the jury that when any installment of the premium note is due and any part thereof remains unpaid, then the insurance company would have the right to suspend the policy for such non-payment, and such suspension would constitute no defense to this action."
R. A. Cooner, of Jasper, for appellant.
Defendant cannot avoid payment of the premiums by attempting to rescind for alleged breach of contract by the plaintiff after the insurance went into effect, and he enjoyed to some extent the benefit of the insurance, for there was not an entire failure of consideration. The form of insurance contract is for one period and a single premium which by special agreement is provided to be paid in part after the risk is assumed, upon installment terms. Plea G was demurrable. 33 C. J. 65; Franklin Life Ins. Co. v. Cardwell, 65 Ind. 138; Robinson v. German Ins. Co., 51 Ark. 441, 11 S.W. 686, 4 L.R.A. 251. Plea H is lacking in essential averments, as a plea of fraud. Cunyus v. Guenther, 96 Ala. 564, 11 So. 649; Beck Pauli L. Co. v. Houppert, 104 Ala. 503, 16 So. 522, 53 Am. St. Rep. 77; Bank of Guntersville v. Webb, 108 Ala. 132, 19 So. 14. Suspension of liability for default in payment of premium is no defense to the action. Charge 2 should have been given. Rose v. Citizens' Ins. Co., 210 Ala. 72, 97 So. 81; Hartford Fire Ins. Co. v. Jones, 215 Ala. 107, 110 So. 30; 26 C. J. 120. Part payment of a premium would not prevent a suspension. It was error to refuse charges 3 and 4. 5 Elliott on Contr. § 4133; Willcuts v. North Western Mut. L. I. Co., 81 Ind. 300; Robinson v. German Ins. Co., supra; German-Amer. Ins. Co. v. Divilbiss, 67 Mo. App. 500; McCullough v. Home Ins. Co., 118 Tenn. 263, 100 S.W. 104, 12 Ann. Cas. 626.
Davis Curtis, of Jasper, for appellee.
Plea G was a plea of "no consideration," was in proper form, and not demurrable. Ragsdale v. Gresham, 141 Ala. 308, 37 So. 367; Armstrong v. Walker, 200 Ala. 365, 76 So. 280; Cochran v. Burdick Bros., 7 Ala. App. 277, 61 So. 29. Plea H contains every element of fraud and false representation by an agent in securing the execution of the instrument sued on. Code 1923, §§ 5676, 5677; 6 Mayfield's Dig. 409. Charge 2 ignores the fact that fraud and false representations were set up as a defense to the note, the question as to which was for the jury. Amerson v. Corona Coal Co., 194 Ala. 175, 69 So. 601; Standard Cooperage Co. v. Dearman, 204 Ala. 553, 86 So. 537. Charges 3 and 4 were invasive of the province of the jury and ignored phases of the evidence.
This was a suit on a promissory note. There was a verdict and judgment for defendant, and plaintiff appeals.
The case was tried on a complaint consisting of but a single count, and on issue joined on pleas numbered 1, 2, 4, C, D, G, H, and I. To pleas 1, 2, C, D, and I, there were no demurrers interposed. The actions of the court in overruling demurrers to pleas G and H are separately made the basis of assignments of error which are argued and insisted upon here; the demurrers to plea 4, and the court's action thereon, being waived by appellant.
If there was anything wrong with the form of plea G, we do not think the demurrers properly pointed it out. Its substance was matter that constituted a good defense to the action. So we are of the opinion, and hold, that overruling the demurrers to this plea did not constitute error prejudicial to any rights of appellant.
Plea H was in our opinion sufficient, and the demurrers thereto were overruled without error. Leonard v. Roebuck et al., 152 Ala. 312, 44 So. 390.
We think, and hold, that appellant's written charge 2 was refused without error, in that it assumes as a fact that there was "default in payment of the premium" — a disputed question.
Appellant's written charges 3 and 4, the refusals to give which are argued as one assignment of error, were, in our opinion, in view of the issues and the evidence, misleading and confusing; hence, properly refused.
The representations of the agent taking the application for policies of insurance and receiving the cash premium are binding upon the insurer. Code 1923, § 9534.
The issues in this case were, it seemed to us, clearly defined. They were fairly submitted to a jury, which found against appellant. There appears no sufficient reason for ordering a retrial.
The judgment is affirmed.
Affirmed.