New York Life Ins. v. Miller

This is a suit for the recovery of death benefits under two policies of insurance written by appellant, one in July 1939 and the other in February 1940. Appellees, the widow and children of the insured, were the beneficiaries. From a judgment in favor of the beneficiaries, entered on the verdict of a jury, the insurer appeals.

Quarter annual premiums on the policies became due October 17, 1940, in the total sum of $48.72, but were not then paid. The grace period of thirty-one days expired November 17 following. On November 13 Yount, a soliciting agent of appellant, called on insured at his ranch near McMinnville, Oregon, for the purpose of delivering a policy on the life of the insured’s son. At that time Yount reminded the insured of his own policies, stating that a check for the premiums must be mailed by the 17th. The insured then wrote a check for the two premiums and delivered it to Yount, the check being postdated November 17, 1940, and being made payable to the company. There is evidence that the insured believed he had a sufficient balance in the bank at all times to take care of the obligation. On the afternoon of November 13 Yount delivered the check to Durham,…

(dissenting).

The only vital issue in this case is whether or not the premiums on the policies had been paid. It is asserted, and the majority hold, that the post-dated check could be treated as payment. Such a holding appears to me to have little, if any foundation in reason or in fact.

The question as to whether delivery of a check constitutes payment of a premium is treated in an annotation in 40 A.L.R. 419 , 423, where it is said: “The general rule appears to be that the mere receipt of a check will not prevent a forfeiture of the policy for non-payment of premium, but if the check is accepted as payment of the premium, even though it turns out to be worthless, there is payment which will prevent a forfeiture. The crux of the citation appears to be the question of acceptance.”

Later cases are collected in 109 A.L.R. 781 , 783. While the question has not been determined in Oregon, I think the Oregon courts would apply that rule. See Seaman v. Muir, 72 Or. 583, 589 , 144 P. 121 .

We should, therefore, look to see what the circumstances were, under which the check was accepted. It was given to a soliciting agent — one who concededly had no authority to collect premiums at…