Darby v. Northwestern Mut. Life Ins. Co.

between one A. V. Bayley, Jr., as the agent and representative of defendant, and Samuel E. Darby, the insured, the said Darby executed and delivered to the said Bayley, as the agent and representative of defendant, his promissory note for $70.20 to cover the payment of a quarterly premium on said policy and certain other charges of defendant, and to renew and continue in force the said policy until January 27, 1919, and thirty-one days thereafter. The reply further alleges that said Samuel E. Darby, at the request of the said Bayley, went with the said Bayley on January 3, 1919, to the office of defendant's medical examiner at Essex, Missouri, to submit to a medical examination, but that the said doctor was not at his office and the examination could not be had that day, and thereupon the said Bayley retained said note and went away from Essex without having obtained such examination; that on said day the insured was in good health, but that on January 6, 1919, he was seized with an acute attack of influenza and pneumonia and died on January 12, 1919, leaving sufficient property to pay all demands against the estate; that said Bayley turned the note aforesaid over to defendant in payment of the quarterly premium, and that defendant retained possession of said note and was in possession. thereof at the time of the death of the insured; that plaintiff has offered, and now renews his offer, to pay the amount of said note, but that defendant has refused to accept payment thereof; that by the acts of defendant, and by the giving of said note, defendant waived the prompt payment of the semi-annual premium aforesaid, and the said policy was thereby renewed and continued in full force and effect, and was in force and effect at the time of the death of the insured.

The policy, which was filed with the petition, provides that premiums may be paid semi-annually or quarterly, in advance; that no premium after the first will be considered paid (except it be charged as a premium loan) unless a receipt, signed by the president or secretary of the company, and countersigned by an agent au

Darby v. Northwestern Mut. Life Ins. Co.

thorized to receive such premium, shall have been given therefor; that "upon default in the payment of any premium this policy shall cease and determine except as hereinafter provided;" that a grace of thirty-one days shall be allowed for the payment of every premium except the first; and that the policy "may be reinstated at any time within five years succeeding default in premium payment, upon evidence satisfactory to the company of the insurability of the insured and payment of all premium arrears with interest at the rate of five per cent per annum." (Italics ours).

Iva E. Darby, widow of Samuel E. Darby, testified that she remembered the circumstances of her husband taking out the policy sued on; that A. V. Bayley, Jr., represented defendant when the policy was written; that on January 3, 1919, Mr. Bayley "came there to get my husband to renew his insurance;" that on that day her husband gave Bayley a note which was returned to her after her husband's death; that on January 3, 1919, her husband's health was good; that on January 4th he went to Bloomfield where he spent most of the day, and on January 5th he was at home until in the afternoon, and that during that day he left the house for the purpose of going to Dr. Brandon's office to see the doctor; that her husband had no dealings with anyone except Mr. Bayley about the insurance in question; and that she did not know the scope of Bayley's powers.

Dr. J. P. Brandon testified on behalf of plaintiff that in January, 1919, and for several years prior thereto he was the medical examiner of defendant at Essex, Missouri; that he had been the family physician of Samuel E. Darby, the deceased; that along about the first or second of January A. V. Bayley, Jr., came into his office alone, bringing a short form examination blank, and asked him if he would examine Mr. Darby; that it was late in the afternoon and Mr. Bayley "seemed to be in a hurry and wanted to get away on the train, I suppose;" that witness never made a medical examination of Mr. Darby after that time and never saw him at his office,

Darby v. Northwestern Mut. Life Ins. Co.

but was called on the morning of January 6th to attend him in his last illness; that after Bayley had requested him to examine Darby, witness met the latter on the street on Saturday at noon and Darby said: "I'm coming up to have that blank filled out;" that witness told him to come up the next morning, which was Sunday, and that witness was in his office at nine o'clock that day and most of the day thereafter; that on Saturday when witness saw Darby he seemed to be in perfect health. On cross-examination witness stated that on the first or second day that Darby was sick "he was asking me what about the insurance, and I told him, 'We can't do anything with that now, because you have got to be in sound health.'"

Plaintiff then offered in evidence a note signed by Samuel E. Darby, dated Essex, Missouri, January 3, 1919, due February 1, 1919, for the sum of $70.20, payable to the order of A. V. Bayley, Jr., at the office of the Farmers Bank of Essex, Missouri, with interest from date at the rate of six per cent per annum.

Plaintiff also offered in evidence a letter dated St. Louis, Mo., January 21, 1919, addressed to Mrs. Samuel E. Darby, and signed by W. J. Fischer, general agent of defendant, returning the note in question and stating in. part:

"This note is doubtless what Mr. Bayley referred to in his letter of January 10th to Dr. Brandon, urging the execution of the medical certificate which was necessary for the reinstatement. I found this note attached to copies of two letters, one addressed to Dr. Brandon, above referred to, and another addressed to Mr. Darby under date of January 10th, both dictated from this office, doubtless because Mr. Bayley was disappointed that the examiner's certificate had not reached this office. Mr. Bayley left this office (without leaving any specific address), for the Pacific Coast, to be gone a month or six weeks, and I am sure that he will regret that his attempt to be of service to you and your family in this instance failed in its purpose."

Darby v. Northwestern Mut. Life Ins. Co.

Over the objection of counsel for defendant, Charles M. Darby, the plaintiff, testified that the deceased was apparently in good health on January 3rd, 4th and 5th; that he "left plenty of assets to have paid this note," and that witness had authorized the payment of the note if defendant would pay the policy. The witness also testified that he had made out proofs of death and sent them to defendant, and that he knew nothing of the scope of Mr. Bayley's authority as agent of defendant.

On behalf of plaintiff there was further offered in evidence a letter to S. E. Darby, dated St. Louis, Mo., November 22, 1918, signed by W. J. Fischer, General Agent, advising that the period of grace allowed for the payment of the semi-annual premium of $133.10 due on the policy would expire November 27th, and "if the premium is not paid within the grace period, it will be necessary to furnish a short form medical examination at your expense to reinstate the policy." There was also introduced a note for $60, dated St. Louis, Mo., April 27, 1918, signed by S. E. Darby, and payable to the order of A. V. Bayley, Jr.

On behalf of defendant, A. V. Bayley, Jr., testified that in 1918 he was district agent for defendant in southeast Missouri; that in 1916 he sold Mr. Darby a policy which lapsed and was reinstated once or twice, and that on these reinstatements the usual short form for medical examination was gone through; that in April, 1918, he sold Mr. Darby the policy sued on and at that time the premium was paid for six months; that the next semiannual premium was not paid when due; that he was not authorized to receive any notes on behalf of the company except a special form of premium note that is usuable after two years, when the policy has a loan value; that in taking the note of January 3, 1919, "I did not accept that on behalf of the company. After I got that note I took it to my office and held it among other notes that I owned until I went west on a trip. I then took the note to St. Louis to the St. Louis office and placed it in the hands of a stenographer there with certain in

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Darby v. Northwestern Mut. Life Ins. Co.

structions. I never transferred, sold or indorsed this note. It was my property at all times. The company had no interest in this note at all. When the

agent accepts a note from an applicant he is responsible to the company for the premium, regardless of the kind of settlement he makes with the applicant. I take the note and receipt to the company in cash, either carrying the note myself or having some bank assist me in carrying it." The witness further testified that in case of a reinstatement of the policy no agent of the company is authorized to waive a medical examination.

William J. Fischer testified that for fifteen years he had been general agent for defendant in eastern Missouri, having fifty-two counties under his jurisdiction, including Stoddard County; that defendant never receives payment of premiums in notes other than on policies more than two years old; that neither he nor his office is authorized to waive any provisions of a policy regarding reinstatement, and that no provision was waived with respect to the policy sued on; that when notes are taken from sub-agents "I accept the notes as cash where the policy has been issued, and sometimes discount them at the bank and sometimes carry them in my office if I can. If the notes are not paid I charge them to the agent's account after maturity, and I remit net to the home office in cash. In doing that I act as an individual and not as an agent of the company. I did not carry for Mr. Bayley the two premium notes in connection with the policy sued on in this action. I never saw the note taken in payment of the first semi-annual premium. As to the note taken for the reinstatement, Mr. Bayley was en route to San Francisco and he wrote two letters, one to Dr. Brandon and one to Mr. Darby from my office, and left the note attached to these letters so that when the short form of examination was received and passed upon by the home office, the note would become effective at that time and I would have charged it to his account. The short form for medical examination was never received in my office."