I concur in the conclusions of Mr. Justice Purdy so far as policy No. 14986 is concerned, but dissent as to policy No. 16613, which alone I will discuss.
This policy was issued on December 30, 1918, for $1,000; the annual premium was $56.17. The premium due at the time the policy was issued, carrying the insurance from December 30, 1918, to December 30, 1919, was paid, as was also the premium due December 30, 1919, carrying the policy from that date to December 30, 1920. The premium due on December 30, 1920, was paid by cash $20, and the execution of a premium loan note for $36.17, carrying the insurance from that date to December 30, 1921. The note for $36.17 was payable April 15, 1921, upon which the insured paid on April 30, 1921, $15; it was extended to May 15, 1921, later to April *Page 56 15, 1922, and to December 30, 1922, leaving a balance unpaid on December 30, 1922, of $21.17, which has never been paid except 80 cents received by the company from the insured under the circumstances hereinafter detailed, and applied to the interest upon this note. The premium due on December 30, 1921, has never in any way been paid. From the testimony of the officers of the company, this default appears to have been overlooked entirely, due to an error in the books. The Circuit Judge found as a fact that "the testimony clearly shows that on December 30, 1921, the premium was not paid," from which conclusion there is no exception.
The premium due on December 30, 1922, was not paid. Before its maturity, on November 28, 1922, the insured wrote to the company asking it to lend him the money with which to pay the premium which was to become due on December 30, 1922. The company replied on December 13, 1922, offering him a loan of $84 upon his policy, out of which would be paid the $21.17 extended loan note due December 30, 1922, interest $2.42 upon it and interest, in advance $5.04 upon the new note of $84 and the premium $56.17 due December 30, 1922. The premium loan note of $84 would lack 80 cents of liquidating these several items, thus:
Premium ........................................ $ 56.17
Loan note outstanding .......................... 21.17
Interest on same ............................... 2.42
Interest in advance on $84 note ................ 5.04
________
$ 84.80
New loan ....................................... 84.00
________
Deficiency .................................. $ .80
The company accordingly transmitted to the insured a blank loan note or certificate for $84, and directed him to "sign with ink in the presence of a witness and return, together *Page 57
with a post office money order for 80 cents," and that upon its receipt the company would "grant the loan, return the note (for $21.17, interpolated), to you properly canceled, which has earned $2.42 interest, receipt for your premium due December 30th, and a receipt for your policy, which will indicate that the interest of $5.04 has been paid on the new loan to maturity. You would then be due nothing more on your policy until the next annual premium falls due on December 30, 1923." The insured did nothing until January 22, 1923, when he wrote asking for an extension of 15 or 20 days. To this request the company replied on January 24, 1923, stating:
"The settlement offered in our letter of December 13th, is the very best that the value in your policy will permit. If you will send us a post office money order for 80 centsand sign the loan certificate for $84 as requested, and send to reach this office not later than January 30th, we will complete the settlement which will protect your policy until December 30, 1923."
I cannot conceive of a plainer business proposition than this. It was made first on December 13, 1922, and repeated on January 24, 1923, in terms that any one of common understanding must have appreciated.
On January 29th, the insured, without returning the signedloan certificate or the policy, remitted a post office money order to the company for 80 cents "for interest on policy No. 16613." It appears to have been received by the company on January 31, 1923, cashed on February 2d, and applied as a credit upon the interest due on the outstanding $21.17 note.
The insured died on March 5, 1923, and thereafter the company, acting upon the contention that the policy had lapsed for nonpayment of the premium due on December 30, 1922, and upon its policy right to apply the cash surrender value of the policy, $114, less all indebtedness of the insured, to paid-up insurance, tendered to the plaintiff $30 *Page 58 as the amount of such paid-up insurance, calculated as follows, which was refused:
Cash surrender value ................................$ 114.00 Less premium of December 30, 1921,Upon the trial, the presiding Judge directed a verdict in favor of the plaintiff for $93.30, which he ascertained to be the amount of paid-up insurance to which the insured was entitled, calculated as follows:which had not been paid ................$ 56.17 Interest to March 5, 1923 ................. 3.99 Loan note December 30, 1922 ............... 21.17 Interest to December 30, 1922 ............. 2.42 Interest to March 5, 1923 ................. .25 84.00 __________________ Balance ..........................................$ 30.00
Cash surrender value ...............................$ 114.00 Unpaid loan note ................................... 21.70 _________ Paid-up insurance ............................... $ 93.30
Assuming the correctness of the figures, the balance should have been $92.30 and not $93.30. But the note was for $21.17 and not $21.70, and the statement omits the interest on the $21.17 note, $2.42 and 25 cents, and the unpaid premium of December 30, 1921, $56.17, with interest, $3.99.
The total of the omitted items:
$ 2.42
.25
56.17
3.99
_______
$ 62.83
Less difference balance $21.70 and $21.17 ...... .53
_______
$ 62.30
Error in subtraction ........................... 1.00
________
$ 63.30
*Page 59
— deducted from the amount found by the Circuit Judge, $93.30, leaves $30, the exact amount tendered to the plaintiff, and all that she was entitled to. These errors are, however, now beyond the power of this Court to correct, as the defendant has entered no exception thereto.
It is contended by the plaintiff-appellant that there was some evidence of a waiver by the company which should have been submitted to the jury, and that is the conclusion of Mr. Justice Purdy; the idea being that, as the insured was endeavoring to comply with the proposition of the company, in remitting the 80 cents, the company had no right to apply that sum to the interest on the $21.17 note, and that its receipt and retention of it was some evidence that it intended to waive the requirement of a loan certificate. At that time, January 31, 1923, the insured owed the company:
The outstanding loan note ............................$ 21.17
Interest up to December 30, 1922 ..................... 2.42
Interest up to January 31, 1923 ...................... .12
Premium due December 30, 1922 ........................ 56.17
Interest up to January 31, 1923 ...................... .28
_______
Total .............................................$ 80.16
— (not to speak of the premium due on December 30, 1921, no part of which had been paid). For this indebtedness the company had no other showing than the outstanding loan note of $21.17. Is it conceivable that the company, for 80 cents, intended that it should have no security at all for the difference, $56.45? The object in requiring the loan certificate was to acquire a lien upon the proceeds of the policy as security for:
The loan note .......................................$ 21.17
Interest ............................................ 2.42
Premium due December 30, 1922 ....................... 56.17
Advance interest .................................... 5.04
________
$ 84.80
*Page 60
Did the company intend by accepting the 80 cents to waive this requirement which it had made on December 13, 1922, and repeated in January, 1923? I do not think that there is the remotest inference to be drawn of such intention. Whether it had the right to credit the 80 cents on the $21.17 note or not, the fact that it did so is a conclusive negation of its intention to waive the execution and return of the loan certificate with the policy. If the company had made no application of the 80 cents, had simply received and retained it, there might have been the shadow (not more) of an inference of a waiver, but, in view of its ultimatum twice communicated and the application of it to the note, I do not think that there is even the "shade of a shadow" of waiver.
If it should be found by the triers of fact that the company, by its receipt and retention of the 80 cents, waived the execution and return of the loan certificate with the policy, a result not inconceivable in a jury trial, the conclusion would inevitably follow that it had for 80 cents agreed to keep alive the policy, which had lapsed, until December 30, 1923, with no lien whatever upon the proceeds of insurance for the premium which had been past due since December 30, 1922, in face of the fact that it had specifically and emphatically refused to grant an extension and twice required the execution of the loan certificate.
The modern conception of waiver stubbornly opposes the sound principle that it is the "voluntary relinquishment ofa known right," and insists, regardless of the intention of the party whose right is in question, to a juridical construction of his conduct upon the disclosure of some fact a little out of the ordinary and open to question.
Here is a case where the insured has made default in the payment of his premium; he notified the company beforehand that he had to do so unless he received assistance; he was offered as fair terms as he could ask. This was on December 13th, nearly three weeks before his premium was *Page 61 due; he did nothing, absolutely nothing, until January 22d, when he asked for an extension. This was denied, and the proposition of December was renewed. He waited until one day before the month of grace was out, when he repudiated all of the proposition except the 80 cents remittance. The company had no notice whatever that when he remitted the 80 cents he meant to do anything more than his communication indicated to pay "interest on policy No. 16613." Could the insured have possibly thought that he was complying with the proposition twice submitted to him in the plainest terms? I do not think so. He said that it was "for interest," and the company so applied it. What right has he or his beneficiary now to complain, or to insist that for the 80 cents the company was obligated to carry his insurance for another year? That is what the waiver contended for means.
Implied waiver is essentially a matter of intention, and to establish it there must be some declaration or act from which the insured might reasonably infer that the insurer did not mean to insist upon a right which, because of a change of position induced thereby, it would be inequitable to enforce; it is essential that there be a recognition of the continued validity of the policy after a knowledge of the forfeiture. See the long list of authorities cited by the writer in his dissenting opinion in the case of Whaley v. InsuranceCo., 124 S.C. 173; 117 S.E., 209, sustaining this proposition. Also 32 C.J., 1341.
Applying this principle to the facts of the case at bar, I do not think that there is a single circumstance tending to show that the company intended to recede from its proposition twice submitted and emphatically insisted upon, or that it in any way led the insured to believe that his policy was still in force.
The question is really one of contract, whether the minds of the parties have met upon the terms of a completed contract, rather than one of waiver. The insured had defaulted *Page 62 in the payment of the premium due on December 30, 1922; he had until January 30, 1923, either to pay the defaulted premium or to enter into some agreement with the company relieving him of that obligation. The company made him a proposition which as a matter of fact he never accepted, but in effect made a counter proposition that the company would recede from its proposition and carry his policy for an additional year for 80 cents. There is not a particle of evidence that this modification was accepted by the company; in fact, the only evidence is to the contrary, as shown by the application of the 80 cents to the $21.17 note.
I think, therefore, that the judgment of the Circuit Court should be affirmed as to both policies.