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Bracher v. Equitable Life Assurance Society of the United States

86 N.Y.S. 557 Court N.Y. Sup. Ct. English

Delivered by ROGERS, J.

Contents

Majority

p. 557
(42 Misc. Rep. 290.)
BRACHER v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES.
(Supreme Court, Trial Term, New York County.
December, 1903.)

Headnote

1. Life Insurance—Premiums Unpaid—Deduction.
A life insurance policy issued August 10, 1898, required payment of premiums in advance, and the payment of like premiums on the 9th day of February and August in every year, and provided that, in case future installments were necessary to complete the full year’s premium at the
p. 558
time of the death of the insured, the amount due should be deducted from the amount of the claim. Held, that the company was entitled, where the ■ assured died November 16, 1902, having paid premiums to August 9, 1902, to deduct from the face of the policy the payment due February 9, 1903.
Action by Evelina Bracher against the Equitable Life Assurance Society of the United States. Judgment for plaintiff.
James A. Hudson, for plaintiff.
Alexander & Green (Charles W. Pierson, of counsel), for defendant.

On the ioth day of August, 1898, the defendant issued its policy of insurance, whereby it insured the life of George S. Bracher for the sum of $10,000, the loss payable to Evelina Bracher, if living. The consideration was the payment, in advance, of $383.90, and the like amount on or before the 9th day of February and August in each year thereafter during the lifetime of the assured. He died November 16, 1902, having paid said premiums as they fell due down to and including the 9th day of August of that year. On the 6th of December thereafter the proofs of death required by the policy were delivered to the defendant. Defendant admits its liability to pay the said $10,000, but claims there should be deducted therefrom the premium, which, had the assured lived, would have accrued February 9, 1903. Whether this deduction can be made is the only question to be determined. The language of the policy essential to an understanding of the controversy is as follows:

The defendant “on receipt of satisfactory proofs of the death of the said assured, providing this policy is then in force, agrees to pay ten thousand dollars. * * * to Evelina Bracher. * * * This assurance is granted in consideration of the written and printed application for this policy, which is hereby made a part of this contract; and of the payment in advance of Three Hundred' and Eighty-three and 90/ioo Dollars, and of the payment of Three Hundred' and Eighty-three and "Aoo Dollars, on or before the Ninth day of February and August in every year thereafter during the lifetime of the assured.
“The Loans, Surrender Values, Bonus Guarantee, Options, Privileges. and Conditions stated on the second and third pages hereof form a part of this contract as. fully as if recited at length over the signatures hereto affixed.”

The quotations here made'are from the first page or face of the policy, under which are the signatures of the president and registrar. On the third page, under the heading, “Facility in Making Payments” is the following:

“All premiums are due in the City of New York, but at the pleasure of the Society suitable persons may be authorized to receive such payments at other places on or before the due dates, but only on production of the Society’s receipt therefor, signed by its Secretary and countersigned by the authorized person to whom the payment is made. Although the contract is based on the receipt of premiums annually in advance, the premium may be made payable in semi-annual or quarterly installments in advance, but in such case any future installments which, at maturity of the contract, are necessary to complete the full year’s premium shall be deducted from the amount of the claim.”

The words underscored are written; the remainder is printed.

A contract of insurance is to be interpreted so as to give effect to the intent of the parties as indicated by the language employed, and the

p. 559
words used are to be taken in their ordinary and proper sense, unless they appear to have been otherwise used. Savage v. Howard Insurance Co., 52 N. Y. 502 , 504, 11 Am. Rep. 741 ; Schoonmaker v. Hoyt, 148 N. Y. 425 , 431, 42 N. E. 1059 . The written must prevail over the printed part. Harper v. New York City Ins. Co., 22 N. Y. 442 ; Kratzenstein v. Western Assurance Co., 116 N. Y. 54 , 57, 22 N. E. 221 , 5 L. R. A. 799 . But where the policy “contains a promise to pay a certain specified sum, and this is followed by obscure clauses, difficult to be understood, or requiring expert knowledge for their comprehension, they will not be construed as intended to impair the promise, but should receive the construction the insurer had reason to suppose was put upon them by the insured. To effect an impairment of the original obligation, the language of the subsequent clauses must be clear and unambiguous.” Wadsworth v. Jewelers’ & T. Co. of New York, 132 N. Y. 540 , 29 N. E. 1104 . In case of doubt or uncertainty as to the meaning of the policy, it must be- resolved in favor of the assured, for the reason that it was the society who prepared it; and, if any doubt exists as to the meaning of the terms employed, the society is responsible for it, it being its own language. Janneck v. Met. Life Ins. Co., 162 N. Y. 574 , 57 N. E. 182 ; Marshall v. Commercial Travelers’ M. A. Assn., 170 N. Y. 434 , 63 N. E. 446 . “The reason of the rule that the language of an instrument is to be construed against the person who proposes it rather than against the person who is invited to accept it is that men are supposed to take care of themselves, and that he who chooses the words by which a right is given, ought to be held to the strict interpretation of them, rather than he who only accepts them.” Gillet v. Bank of America, 160 N. Y. 549 , 555, 55 N. E. 292 . On the face of the policy in question the words to which allusion has already been made, and by which the assured is referred to the second and third pages, are in bold type, and as follows: “The Loans, Surrender Values, Bonus Guarantee, Options, Privileges and Conditions.” Turning to the second page there is found (1) a heading “Table of Loans and of Surrender Values”; another (2) “Bonus”; then (3) “Options”; leaving for the third page, as a heading, only “Privileges and Conditions.” Under these words are nine subheadings, the. first three being as follows: (1) “Incontestability”; (2) “Freedom of Travel and Occupation”; (3) “Facility in Making Payments.” As already observed, the first sentence of this provides for the method by which payment of premiums may be made, and then, in the same paragraph, follows another sentence, quite foreign to the title under which the defendant claims the deduction. At the outset is the promise to pay $10,000 on proof of death, “providing this policy is then in force.” There is no other condition. The promise, on' its fulfillment, becomes absolute. Olmstead v. Keyes, 85 N. Y. 593 , 598. Would the casual, or even careful, reader of the first page of the policy, notwithstanding he is there referred to the “Privileges and Conditions,” to be found on the third page, be likely to understand that the “Privileges and Conditions” and “Facility in Making Payments” thus given him would scale down his policy the amount of a half year’s premium ? If not, and the defendant was cognizant of the fact, the assured would not be bound, because “when the language used in a policy may be understood in more senses
p. 560
than one, it is to be understood in the sense in which the insurer had reason to suppose it was understood by the assured.” Per Earl, J., Dilleber v. Home Life Ins. Co., 69 N. Y. 256 , 263, 25 Am. Rep. 182 . Returning to the face of the policy, no reference is made to “premiums annually in advance,” to “semiannual or quarterly installments,” nor to “full year’s premium”—terms employed in the “Facility” paragraph. Nevertheless, it is stated in the paragraph mentioned, in words not to be misunderstood, that the premium is based on the receipt of an annual premium in advance. This must be paid, viz., $767.80, to require the insurer to pay the full sum of $10,000; that result is attained by deducting the installment payable February 9, 1903. If I am correct in these views, the plaintiff is not entitled to recover beyond the amount tendered and paid.

Judgment is directed accordingly, with costs to the defendant from April 28, 1903.

Upon the trial the defendant, .by its witness, Mr. Van Cise, gave certain evidence, subject to objection, regarding the manner in which life insurance calculations are made, and the custom of life insurance companies. The rights of the parties here are fixed by contract, and may not be varied by mathematical calculations, conducted by the defendant alone or by other insurance companies, particularly when knowledge of the custom was not brought home to the assured. The evidence thus objected to is stricken out, with exception to defendant.

Judgment accordingly.

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