INSURANCE DISPUTE

Taranaki Daily News, 27 November 1934, Page 12

INSURANCE DISPUTE

CLAIM FOR PREMIUMS. COMPANY WINS ITS CASE. Wanganui, Nov. 20. Reserved judgment in favour of the Standard ' Insurance Company, which claimed £3 7s, representing the balance of premiums owing in respect of two policies taken out by a salesman, was delivered in tire Magistrate’s Court by Mr. J. H. Salmon, S.M., to-day. Counsel for defendant was granted leave to appeal. ■ ‘ It was stated that defendant took out the first policy in November, 1931, and from time to time madei certain payments on account of premium. In June, 1932, white the policy was still in force, defendant, having changed his occupation from that of butcher to that of an itinerant drapery salesman, called . upon the plaintiff company and signed a proposal for a fresh policy against accident and dipease. This fresh policy was of a different class and designed to meet the altered circumstances of his occupation. NEW POLICY EXECUTED. The proposal was accepted by the company. The old policy was cancelled and a fresh policy executed on the same date. The company gave to defendant credit for portion of the premium on the unexpired term of the old policy, leaving a balance due to the company of 19s 6d. Again nothing was paid in respect of the premium of £2 7s 6d on the new 'policy, and defendant never paid either the balance of 19s 6d on the first policy or any portion of the premium on the second policy. The second policy expired on June 28, 1933. For the defence it was contended that because of certain words at the foot of the printed forms of the proposal, and because of a certain condition endorsed upon the policies, the contract of insurance was never completed; that in effect the policies never commenced to run and were never operative; and that defendant could not be held liable for the premiums. The words relied upon by defendant were at the foot of each proposal, and were as follows: “N.B. The liability of the company does not commence until the proposal has been accepted by the company in writing and the premium paid.” GENERAL PRACTICE OF COMPANIES In his judgment, Mr. Salmon said that the local manager of the plaintiff company had referred to the general custom or practice of insurance companies of issuing policies without having received the premiums. It was obviously world-wide, since one found it mentioned in English . and American cases. There seemed to be no reason, therefore, why an insurance company should not conclude a contract of insurance and leave the question of payment of premium a matter as between debtor and creditor. A difficulty in the present case, and which had arisen in other, cases, was that the policy recited that the insured had paid the premium due thereof and the conditions, endorsed on- the policy contained this inconsistent. provision that “the insurance shall not commence until the premium has been actually paid and accepted by the company.” The magistrate said he thought there was authority to show that in view of the circumstances that credit for the premium was given on the one side and taken on the other, the condition was waived.