Majority
Headnote
Insurance (Lufe)—Notice—Laws 1877, chap. 331.This action is to enforce the payment of the sum. secured in a policy of insurance, issued by the defendant to-the plaintiffs’ intestate on July 23, 1884. By its terms the defendant promised to pay to the assured, or to his legal representatives, the sum of $10,000, within ninety days after satisfactory proof of his death, “ provided such death shall occur before twelve o’clock noon on the 23d day of July, 1885.” Defendant further promised “to renew and extend this insurance-during each successive year from' the date thereof, upon condition that the assured shall pay on or before the 23d day of July, in each successive year during the continuance of the contract, the mortuary premium * * * and also an expense-charge of three dollars on each $1,000 insured therein; the payment of said annual mortuary premium and the annual expense charge being the consideration for the continuance of the insurance in each successive year, etc.”
It is plain that this policy was a contract for an insurance for the term of one year only; providing, however, by its terms for its renewal for successive years, upon compliance by the assured - with the conditions named. Eenewals were effected during the years 1885, 1886 and 1887, but the assured failed to make those payments on July 23, 1888, which were required in order to extend his policy over another year, and he died in-November following. His administrators have rested, and must rest, their right to a recovery upon the proposition that the defendant did not give to the assured the form of notice prescribed by a statute of this state as a prerequisite to the right to declare a policy of life insurance forfeited.
Upon the construction of this statute the appellants’ counsel 'has made an elaborate argument to the effect that it cannot be applicable to this kind of a contract. With much ability he has analyzed its provisions and insists that they must refer, by force of the language used, to the ordinary policy of insurance, which is to be kept in force until the happening of the event assured against, by regular payments, annually, or at shorter stated periods. In the continuance of such a policy the assured has a vested inter■est; by reason of the fact that his annual payments are calculated •and fixed at amounts to cover more than a risk from year to year and go to form a reserve, or accumulated fund, to be offset against •insurance in after years, and which will enable the insurer to make eventual payments. The learned counsel argues that the mischief to be remedied by this statute is the forfeiture of such a vested interest; whereas, in this policy, the insurance agreement is for a term of one year; the payment was for such a risk and it constituted no consideration for any insurance beyond the expiration of the term.
The question is an interesting one and its solution might not be free from difficulty; but, inasmuch as the appellant must succeed upon the second ground advanced, we do not think it necessary to pass upon the question. We should hesitate to call in question the applicability of the statute to any class of life insurance poli-cies. It was intended to and, undoubtedly, does subserve a useful purpose, in throwing about the contract between the insurer and the assured reasonable safeguards against a forfeiture or the lapsing of the interest of the assured, but we fail to perceive that
In support of this they cite Phelan v. The Northwestern Mutual Life Insurance Co., 113 N. Y., 147 ; 22 St. Rep., 305 , where this iourt held a notice insufficient. The notice there was that “ the conditions of your policy are that payment must be made on or before the day the premium is due, and members neglecting so to pay are carrying their own risk and what was condemned was the use of language not intelligible to all. To say that persons are “ carrying their own risk ” is not plainly embodying the notice which the statute requires, and might be incomprehensible to those unlearned in insurance phraseology. But in this case, as the appellant’s counsel has clearly shown, the notice to be given could not closely conform to the statute; inasmuch as the yearly method of insurance was of a special character. The notice was to remind-the assured of the privilege he possessed of electing to have the contract continued and extended over the ensuing year and of the conditions of its exercise. It could not state that if the “ premium ” was not paid the policy and all payments thereon will become forfeited and void; for that would not be accurate. Something more than a premium was to be paid to extend the contract of insurance, and, therefore, the company notified him that certain “ payments ” were necessary for that purpose. The obligation of the statute must not be unreasonably insisted upon. It provides for the giving of a notice which shall be unambiguous and intelligible to all When applied to an insurance contract out of the ordinary form, it secures to the .assured such a notice as will contain statements reminding him of when and where be is to make any' payments pursuant to the terms of the contract, their amount and the effect of non-payment. The statute was not meant to operate harshly upon the insurer, but to afford a protection,,to the assured by the reasonable requirement of a notice couched in plain terms from the insurer before the interest of the assured Could be forfeited. To hold that where every essential fact required to be known is intelligibly stated in the notice it may be disregarded, if, not literally following the words of the statutory provision, would be a 'most harsh and unwarrantable construction.
Its words are readily capable of being used in the ordinary
For these reasons we conclude that it was error for the court below to order judgment for the plaintiffs on the verdict.
The order of the general term and the judgment entered thereon should be reversed and a new trial ordered, with costs to abide the event.
All concur, except Andrews, J., absent.