Napier v. Bankers' Life Ins.

On the 13th day of December, 1897, the defendant issued a policy dated and purporting to be signed by its president and secretary, in the city of New York, by which, in consideration of the payment of the sum of $74.50, the first premium on said policy, and the further payment of $74.50 on the 13th' day of December in each and every year, for a period of five years, and in consideration of the application and various statements and agreements referred to in the said policy, the defendant promised to pay to the executors or administrators of James A. Webb, of the city of Chicago and state of. Illinois, the"sum of $5,000 within 90 days after the receipt, at the home office of the cotnpany in the city of New York, of satisfactory proofs of the death of the said Webb during the continuance of the policy. Subsequently, and on the 25th day of July, 1898, at the request of the in

On the 22d day of February, 1902, the said James A. Webb died at the city of Chicago. On the 1st day of May, 1902, the said Annie S. Webb filed at the home office of the defendant company in the city of New York certain papers, purporting to be proofs of the death of the said James A. Webb, which the defendant company retained. More than 90 days having elapsed since the delivery at the office of the said defendant of the said papers and the amount claimed to be due under the said policy remaining unpaid, on the 5th day of June, 1902, the said Annie S. Webb assigned her interest in the said policy to the plaintiff, who brings this action to enforce the payment thereof. Under the terms of the said policy, a premium became due and payable on the 13th day of December, 1901. That premium was not paid, nor was any tender made of the amount thereof until the 20th day of March, 1902. Inasmuch as payment to the beneficiary named in the policy was conditional upon the payment of the annual premiums as they became due, and the policy also provided that, in default of payment, the contract should terminate, and inasmuch as the premium last referred to was not paid when due the contract of insurance by its terms had ceased to exist at the time of the death of the said James A. Webb, and was not enforceable. The plaintiff claims that the provisions of the contract of insurance providing for its termination were inoperative because, by virtue of a statute of the state of New York (Laws 1892, p. 1972, c. 690, § 92, as amended by Laws 1897, p. 91, c. 218), the defendant was prohibited from declaring forfeited or lapsed the policy in question, unless a written or printed notice in the form prescribed by this statute had been served upon the assured in the manner therein prescribed.

The first question for consideration is whether this statute is applicable to this contract of insurance, and the answer to this question depends in the first instance upon what the place of the contract is. The statutory provision above referred to has no extraterritorial effect and does no apply to contracts made by a New York company out of the state; and there is no evidence in this case of any agreement to incorporate into the contract of insurance the laws of this state, and make its provisions controlling on the parties thereto. The policy was issued upon the life of a man residing, at the date of the issuiqg thereof, in the city of Chicago, in the state of Illinois; and, so far as the evidence in this case shows, that continued to be his place of residence up to the date of his death. If this policy is to be construed as an Illinois contract, the statute above referred to would not apply. Mutual Life Ins. Co. v. Hill, 193 U. S. 551 , 24 Sup. Ct. 538 , 48 L. Ed. 788 ; Mutual Life Ins. Co. of New York v. Cohen, 179 U. S. 262 , 21 Sup. Ct. 106 , 45 L. Ed. 181 . Notwithstanding the fact that the policy was written upon the life of a person residing out of the state of New York, I am of the opinion that, upon the evidence in this case, the contract must be deemed to be a New York contract. The policy purports to be signed and delivered at the city of New York. The consent to the assignment of the policy purports to be executed and delivered at the

Whenever the contract is silent on the subject of place of performance, the place of making the contract is presumed to be the place of performance, and the interpretation and validity of the contract must be determined by the law of the place where the contract is made. 9 Cyc. 669; Union National Bank of Chicago v. Chapman, 169 N. Y. 538 , 62 N. E. 672 , 57 L. R. A. 513 , 88 Am. St. Rep. 614 ; Grand v. Livingston, 4 App. Div. 589 , 38 N. Y. Supp. 490 , affirmed 158 N. Y. 688 , 53 N. E. 1125 ; Mutual Life Ins. Co. of New York v. Dingley, 100 Fed. 408 , 40 C. C. A. 459 , 49 L. R. A. 132 . In the absence of other evidence, the state where the application is made, the first premium paid by, and the policy delivered to, the insured, is the place of the contract. Mutual Life Ins. Co. v. Hill, 193 U. S. 551 , 24 Sup. Ct. 538 , 48 L. Ed. 788 . This seems to have been in New York. The contract being subject then to the provisions of the New York statute, it becomes important to ascertain how far, if at all, such statute prevents the forfeiture of' the policy in suit by reason of the nonpayment of the premium due on the 13th day of December, 1901. The language of the statute in force when the policy was issued is as follows:

“No life insurance company doing business in this state shall within one year after the default in payment of any premium, instalment or interest declare forfeited or lapsed, any policy hereafter issued * * * unless a written or printed notice stating the amount of such premium * * * due on such policy, the place where it shall be paid, and the person to whom the same is payable, shall have been' duly addressed and mailed to the person whose life is insured * * * at his or her last known post office address in this state. * * * The notice shall also state that unless such premium * * * shall be paid * * * by or before the day it falls due, the policy and all payments thereon will become forfeited and void.” Laws 1892, p. 1972, c. 690, § 92, as amended by Laws 1897, p. 91, c. 218.

Although a notice was sent to James A. Webb, the insured, at Chicago, 111., it was not in the form required by the statute; and, if the sending of the statutory notice was necessary, it was ineffective to enable the defendant to declare the policy forfeited or lapsed. Schad v. Security Mutual Life Ass’n, 11 App. Div. 487 , 42 N. Y. Supp. 314 , affirmed, 155 N. Y. 640 , 49 N. E. 1104 ; Baxter v. Brooklyn Life Ins. Co., 44 Hun, 184 ; Phelan v. Northwestern Mutual Life Ins. Co., 113 N. Y. 147 , 20 N. E. 827 , 10. Am. St. Rep. 441.

The language employed in the statute is that such notice must be addressed and mailed to the person whose life is insured “at his or her last known post office address in this state.” Inasmuch as the words “in this state” were added by amendment to the statute in 1897, the statute up to that time providing for the sending of a notice to the person insured at his or her last known post-office address, wherever that might be, it is necessary to determine the meaning of the statute as amended. Four possible constructions have been suggested: First, that no life insurance company doing business within this state could, under any circumstances, forfeit or declare lapsed a policy issued up

Again, the Legislature of the state may be deemed to have intended to provide only for the protection of the rights of policyholders within this state, leaving to other states to impose such restrictions with regard to forfeiture upon companies organized in this state, but doing business in those states, as their Legislatures might elect. Again, the time prescribed for the giving of the notice (15 days prior to the daté when the premium is payable) would be efficient and reasonable in the case of persons residing in the state of New York, while it might not be efficient or reasonable with regard to persons residing elsewhere. When it is remembered that some, at least, of the New York insurance companies are doing business in all quarters of the globe, it is obvious that such a notice in many cases would be of little value. Mutual Life Ins. Co. v. Cohen, 179 U. S. 262 , 21 Sup. Ct. 106 , 45 L. Ed. 181 . I am of the opinion, therefore, that the defendant company was under no obligations by reason of the provisions of the statute to serve any notice upon the insured, and, in the absence of such statutory obligation, the company had the right to declare the policy forfeited and lapsed when the premium was not paid in accordance with the terms thereof.

The plaintiff claims that the practical construction put upon the statute by the defendant is controlling as to the meaning thereof. In other words, because the defendant did send a premium notice to the assured in this case, and, as appears from the evidence, sent a great many such notices to all states in the Union where it had policyholders,therefore it has conceded the application of this statute to a policy upon the life of one who has not and never has had a post-office address within this state. The answer to that is that the notice sent was not the notice prescribed by the statute. It would not be reasonable to conclude that the failure of the defendant to comply with the statute as to the form of the notice was an admission on its part that it was bound to comply with the same. The notice sent was a mere act of courtesy.

The plaintiff, also insists that because in 1898 the Legislature of the state of New York added an entirely new article to the insurance law, to be known as “article 10” (Laws 1898, p. 160, c. 85), which article contained a section (312) providing for the serving of a notice upon all policyholders irrespective of their place of residence, as this is a law “in pari materia,” it may be referred to in determining the legislative intent in adopting the amendment of 1897. It is sufficient to say that the amendment of 1898 only relates to a particular class of insurance

It is also claimed that the amendment of 1898, and particularly section 313 of the insurance law, as amended by that act, which contained a provision substantially in form as the law was in 1893, and provided for a notice to all policyholders wherever resident, is applicable to this defendant. It is sufficient to say that the provisions of that act are expressly limited to companies incorporated under its provisions. The defendant was incorporated long prior to the passage of this act, and has not availed itself of the provisions of the said act (section 303) permitting it to reincorporate under said act as a stipulated premium company. Nor does the evidence in this case satisfy me that the company is doing business as such company in accordance with the definition thereof contained in the said statute.

There is no evidence in this case from which it could be found that prompt payment of the premium had been waived by the defendant. The complaint alleges the due performance of all of the conditions of the policy on the part of the insured. Under such an allegation evidence of waiver of such performance is incompetent. La Chicotte v. Richmond R. & El. Co., 15 App. Div. 380 , 44 N. Y. Supp. 75 . Even if the immediate payment of the premium had been waived, such waiver terminated on the 30th day of January, 1903, and the tender of the premium was not made until long after that date. I think that the plaintiff has failed to establish his right to recover in this action, and that there should be judgment for the defendant, dismissing the complaint upon the merits, with costs.

Complaint dismissed upon "the merits, with costs.