                 United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT

                                _____________

                                No. 96-2655EM
                                _____________

St. Louis Trimming, Inc.,          *
                                   *
           Appellant,              *
                                   * On Appeal from the United
      v.                           * States District Court
                                   * for the Eastern District
                                   * of Missouri.
American Credit Indemnity          *
Company, a company of the          * [To Be Published]
Dun & Bradstreet Corporation,      *
                                   *
           Appellee.               *
                              ___________

                   Submitted:     April 17, 1997

                       Filed: May 20, 1997
                               ___________

Before RICHARD S. ARNOLD, Chief Judge, FLOYD R. GIBSON and FAGG, Circuit
      Judges.
                              ___________


PER CURIAM.


     The question presented is whether a certain loss is covered by a
policy of credit insurance issued by the defendant, American Credit
Indemnity Company, to the plaintiff, St. Louis Trimming, Inc.    The loss
occurred before the premium applicable to the risk in question was paid.
The District Court1 construed a provision of the policy to bar coverage
under these circumstances.    The District




     1
      The Hon. Donald J. Stohr, United States District Judge for
the Eastern District of Missouri.
Court has filed a thorough published opinion.    St. Louis Trimming, Inc. v.
American Credit Indem. Co., 924 F. Supp. 99 (E.D. Mo. 1996).         We have
nothing of significance to add.      We agree with the well-reasoned opinion
of the District Court.


        The dissenting opinion argues that American Credit's conduct in
accepting late payments of premiums amounts to a waiver of the policy
provision in question, or estops American Credit to rely on the provision.
For the reasons given at some length in the opinion of the District Court,
we agree that the doctrines of waiver and estoppel are not available here,
because their use would allow the creation of coverage where, under the
clear language of the policy, none exists.    We point out, in addition, that
the conduct of the insurer that is relied upon does not, in any event,
amount to a waiver or estoppel.    There is no past instance of the insurer's
paying a loss with respect to which the premium had not been paid at the
time the loss occurred.      Late payments of premiums were accepted, but in
no case did the insurance company pay a loss that had occurred before the
relevant premium payment.
        The insurance company is instructed to return to St. Louis Trimming,
Inc., the premiums attributable to the loss that occurred in this case.
On this understanding, the judgment is


        Affirmed.


Floyd    R.   Gibson,   Circuit Judge, concurring in part and dissenting
        in part.


        I respectfully dissent.   Unlike the majority, I am unable to agree
with the district court that, as a matter of law, the insurance policy
issued by American Credit Indemnity Company ("American Credit") to St.
Louis Trimming ("SLT") provided no




                                      -2-
coverage for the loss in question.          Consequently, I would reverse the
district court's entry of summary judgment dismissing counts one through
three of SLT's Complaint.   Nonetheless, because I am satisfied that SLT did
not plead a viable cause of action for conversion, I concur in the portion
of the majority's opinion that affirms the dismissal of count four.
     Although I write this dissent in the spirit of brevity exemplified
by the majority's decision, I do find it necessary to succinctly elaborate
upon certain facts supported by the record.     In the course of its business,
SLT regularly extends credit to its clientele.      To protect itself against
the inevitable risk of a customer's default, the company on a yearly basis
procures credit insurance coverage.    From 1985 until 1996, SLT insured its
risk through policies sold by American Credit.
     American Credit required SLT to tender both yearly and monthly
premiums for its credit insurance.    The yearly premiums were due annually
on July 31, the day on which coverage under the previous policy expired,
but the record shows that SLT was typically late in making these payments.
Between 1989 and 1994, SLT did not remit a timely premium, and on only one
occasion during that span of time did the company tender payment prior to
August 25.   In fact, the average period of delinquency was 58 days, with
the longest lapse being a payment in 1990 that was 108 days overdue.
Notwithstanding a clause in the relevant policies which granted American
Credit the right to avoid coverage for "any loss occurring prior to the
payment of the premium," the insurer never objected to SLT's delinquency,
and it never threatened to cancel a policy due to late payments.


     The monthly premium fluctuated, and it was factored on the basis of
a report submitted by SLT showing the amount of credit it




                                      -3-
had advanced in the previous month.         American Credit would arrive at a base
price for the premium by multiplying these total monthly sales by a
variable rate.     The company would then calculate the total amount due by
adding   an   extra    $2.50   for   each    $1,000   of   coverage   applicable   to
"extraordinary coverage," or high risk, accounts.


     By check dated November 2, 1994, which was 94 days after the July 31
due date, SLT remitted the yearly premium for the 1994-1995 policy.                On
that same day, House of Fabrics, Inc., one of SLT's debtors, filed for
voluntary bankruptcy protection in the United States Bankruptcy Court for
the Central District of California.            One day later, John Gorsuch, an
American Credit official, notified SLT of this event, which triggered
coverage for the high risk House of Fabrics account.          On November 8, 1994,
American Credit deposited SLT's yearly premium check, and on November 14
of that year SLT filed a claim for $100,000 of covered loss caused by the
House of Fabrics insolvency.


     Meanwhile, American Credit, in the periodic invoices mandated by the
policy, continued to charge $250 per month for insurance on the House of
Fabrics account.      The insurer, however, denied SLT's claim on January 18,
1995; according to American Credit, there could be no indemnity because SLT
sustained the House of Fabrics loss prior to payment of the premium due
under the terms of the contract.      Still, American Credit proceeded to bill
SLT for monthly premiums on the insolvent debtor's account.                 In all,
American Credit charged at least $1,500 in premiums for the House of
Fabrics account after the loss occurred, $1,000 of which was demanded after
the insurer's denial of the claim.             To date, American Credit has not
refunded these amounts to SLT.




                                        -4-
     In my view, these facts present a most egregious example of an
insurance company's obstinate refusal to pay benefits despite its blissful
willingness to accept and retain premiums directly attributable to the loss
suffered by the insured.     As I see it, American Credit, by consistently
accepting yearly premium payments that were seriously overdue, with nary
a word to SLT about its intention to deny any losses occurring before the
remittance date, waived its right to rely on the policy provisions it
invokes in this case.   Alternatively, we should hold that American Credit
is estopped from relying on those provisions.


     I fully recognize that the principles of waiver and estoppel "are not
available to bring risks within the coverage of an insurance policy that
are not covered by its terms or are excluded from that policy."1   Holland
Corp. v. Maryland Cas. Co., 775 S.W.2d 531, 534-35 (Mo. Ct. App. 1989).
Thus, under Missouri law, "although waiver and estoppel may prevent an
insurer from asserting a defense to coverage otherwise provided by a
policy, waiver or estoppel cannot establish coverage where none existed
before."   State ex rel. Shelter Mut. Ins. Co. v. Crouch, 714 S.W.2d 827,
829 (Mo. Ct. App. 1986).   The critical distinction, as correctly noted by
the district court, is between "waiver of premium payment provisions, which
may occur, and waiver of substantive coverage provisions, which may not."
St. Louis Trimming, Inc. v. American Credit Indem. Co., 924 F. Supp. 99,
101 (E.D. Mo. 1996).       While the district court, and the majority by
acquiescence, acknowledged that




     1
      This precept has been described "as a 'majority rule' that
is eroding." 16B John Alan Appleman & Jean Appleman, Insurance
Law and Practice § 9090 (Supp. 1996-97). "[D]espite the lip
service given to [this rule], . . . the courts, in fact,
frequently do extend the coverage of a policy by the application
of [waiver or estoppel]." Id. § 9090, at 576 n.* (1981), quoted
in State ex rel. Shelter Mut. Ins. Co. v. Crouch, 714 S.W.2d 827,
829 n.* (Mo. Ct. App. 1986).

                                    -5-
the policy language presently in dispute "admittedly sits close to the
intersection of these concepts," id. it decided that the pertinent clauses
should be likened to substantive coverage provisions that cannot be waived,
see id.   It is on this point that I part ways with the reasoning of the
district court and the majority.


     A    credit   insurance   policy,   virtually   by   definition,   provides
protection against financial injury occasioned by the insolvency of an
insured's debtor.    Bearing this in mind, it seems to me fundamental that
the loss claimed by SLT, which was precipitated by the bankruptcy of a
company to which SLT had advanced credit, stands as a grand example of the
exact sort of risk American Credit's policy was designed to cover.       Indeed,
as far as I can tell, American Credit admits that the policy would have
compelled reimbursement for this loss had SLT paid the yearly premium on
July 31 (or, for that matter, on any date prior to the House of Fabrics
bankruptcy).   Given these facts, I am at a loss to discern how waiver of
the provisions trumpeted by American Credit, which merely afforded the
insurance company an opportunity to escape liability for already insured
losses, can be construed to "establish coverage where none existed before."
Crouch, 714 S.W.2d at 829.     The language at issue does nothing more than
provide a defense against claims that are otherwise properly payable under
the policy, and it is thus amenable to the principles of waiver and
estoppel.2


     With the availability of waiver or estoppel established, I would
hold, under both of these doctrines, that American Credit,




     2
      I might note that a decision consistent with these
observations would prevent legally savvy insurance companies from
forever avoiding application of waiver and estoppel by
"incorporat[ing] premium payment into an exclusion from
coverage." St. Louis Trimming, 924 F. Supp. at 101.

                                     -6-
through   its    longstanding    acceptance      of    delinquent   payments    and   its
indefensible practice of charging premiums on the House of Fabrics account
even after it had denied SLT's claim, is foreclosed from relying upon the
forfeiture provisions under discussion.               I understand, however, that my
analysis has failed to carry the day.              That being so, I concur in the
majority's decision to require reimbursement of the premiums attributable
to the House of Fabrics account.               To be sure, these premiums must be
returned to SLT because, under the majority's formulation of the case, they
were not in any way earned.


     As   a     matter   of   fairness   and    conscience,   an    insurance   company
following this practice of proceeding to accept late premium payments
should, at least, insert in bold type in its policies that there is no
coverage unless premiums are paid on time or until after premiums are paid
and accepted.


     A true copy.


              Attest:


                    CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




                                          -7-
