O'Reilly v. Guardian Mutual Life Insurance — 8 N.Y. Sup. Ct. 460

Majority

p. 460

ELLEN O’REILLY, Respondent, v. THE GUARDIAN MUTUAL LIFE INS. CO., Appellant.

Headnote

Policy of Ufe mmramce— PFotice amd proof of death—when warned—Premiums— where payable—Agent—cmthomty of.

A policy of insurance was issued by the defendant upon the lives of the plaintiff and her husband, payable to the survivor. The plaintiff’s husband died, May 15th, 1873. On June 3d, 1873, a letter was written by the plaintiff to the defendant, informing it of the death of her husband, which letter the defendant retained and never demanded any further notice or proof of death. Held, that by so doing the defendant waived any insufficiency or informality in the notice.

The clause in policies, providing for preliminary proofs, is intended to furnish reasonable notice to the company, and is to be expounded liberally in favor of the assured.

The policy, which was delivered in Rhode Island, by one Rockwell, an agent of the defendant, provided, that, in case the premiums should not be paid when

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due, it should be forfeited and cease and determine. No place for the payment of the premiums was prescribed in it, and the agent, at the time of delivering it, said that he would come around regularly and collect them. He did call and collect the first two half-yearly premiums, but failed to call for the one payable January 7th, 1878, which the plaintiff was ready to pay, but did not send to the company in New York, because she was waiting for the agent to call for it. Rockwell ceased to he the agent of the company, in August, 1871, of which the plaintiff had no notice. The policy provided that “ agents of the company are authorized to receive premiums when due * * . * but not to make, alter or discharge contracts or waive forfeitures.” -5eld, that the agent, acting as he w'as for a foreign insurance company, had an implied authority to direct the assured how, when and where, the premiums were to be paid, and that the company, having received the benefit of the collections thus made by him, and having never required the plaintiff to pay the premium in New York, was bound by his acts.

Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury.

Wm. Peet, for the appellant.

The proof of death was insufficient. (Bliss on Life Ins., 412; Woodfin v. Asheville, 1 Bigelow Life and Ac. R., 626; Hincken v. The Mut. Ben. L. Ins. Co., 50 N. Y., 657 ; Owen v. Farmers' Ins. Co., 57 Barb., 520 ; Davis v. Niagara Ins. Co., 49 Me., 282 ; Taylor v. Ætna Life Ins. Co., 13 Gray, 434 ; Mason v. Harvey, 8 Exch., 819.) Rockwell had no authority to make the arrangement as to the payment of premiums. (Mechanics’ Bk. v. N. Y. & N. H. R. R., 3 Kern., 632; Robertson v. Ketchum, 11 Barb., 655 ; Clark v. Metropolitan Bank, 3 Duer, 249 ; Story on Agency, §§ 442, 443; Wall v. Home Ins. Co., 36 N. Y., 157 ; Mayor v. Brooklyn Fire Ins. Co., 3 Abb. App. Dec., 251; Bouton v. Am. Mut. Life Ins. Co., 25 Conn., 542 .)

James Troy, for the respondent.

The proof of death was sufficient ; if not, any informality was waived. (Miller v. Eagle Life and Health Ins. Co., 2 E. D. Smith, 269; Walsh v. Washington Ins. Co., 32 N. Y., 442 ; Talcot v. Marine Ins. Co., 2 John., 136 .)

The defendants issued a policy for $5,000, upon the lives of plaintiff and her husband Michael, payable to the survivor, etc.

And the defendants’ liability being questioned on the death of

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Michael, this action was brought, which resulted in a judgment for the plaintiff. The questions presented on the appeal are, first, whether the plaintiff gave defendants sufficient notice and proof of death within the terms of the policy; and second, whether an omission to pay the last half-yearly premium, which accrued before the death of Michael, operated.to forfeit the policy.

The policy contained a clause, providing for payment of the money, in sixty days after due notice and proof of death, after deducting from the amount of the policy any indebtedness to the company, on account of premiums.

The plaintiff gave the defendants the following notice:

Providence, June 3 d, 1812.

The Guardian Mutual Life Insurance Company, New 7orJ&:

I hereby inform you that my husband Michael O’Reilly, whose life was insured in your office by policy 22,016, died in this city, on the 15th of May last, after a short illness.

Yours, respectfully,

ELLEN O’REILLY.

The defendants were silent after receiving this notice. They retained it as notice, and did not claim from plaintiff any further notice or proof of death. The policy does not prescribe any form of proof, and the plaintiff would seem to have relied upon the paper as being sufficient “ proof ” of death, and as satisfactory to the company. ' The clause in policies, providing for preliminary proofs, is to be expounded liberally in favor of the assured.^[4]

The object of preliminary proofs is to furnish reasonable information, and the clause has been liberally expounded.^[5] The defendants might have required some other kind of proof of the death of Michael O’Reilly. They failed to do so, and must be held to have waived it.^[3] The policy contained the following clause: “ In case the premium shall not be paid to the company, on or before the time prescribed for the payment of the same, the policy shall thereupon be forfeited, and cease and determine.”

‡ ‡ Vos v. Robinson, 9 Johns. R., 195.

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The contract was made in Rhode Island, the defendants acting there by their agent, one Rockwell. No place for the payment of premiums is prescribed in the policy. At the time of effecting insurance, or of delivering the policy, the agent said that he would come around regularly and take up the premiums, and otherwise to the effect that he might sometimes be out west, “but you hold it till I come.” He did call and collect the two half-yearly premiums, but did not call for the premium due January, 1872. The plaintiff was ready to pay, but did not send it to the company’s office in New York, because she was waiting for Rockwell to call for it, as he had instructed her. At the foot of the policy is this clause: “Agents of the company are authorized to receive premiums when due, upon the receipt of an authorized officer of the company, but not to make, alter or discharge contracts or waive forfeitures.” The defendants claim that the promise of their agent to call for the premiums, was a violation of this clause, and not binding on them, and not available to the plaintiff as a legal excuse for delay in payment of premiums.

As the policy did not prescribe any place of payment, and was made in Rhode Island, and the company had no office there, and the plaintiff had been in the habit of waiting for, and paying the-agent when he called, the company should have given the plaintiff notice of any change in their mode of doing business in this respect.

It was shown on the tidal that they revoked Rockwell’s agency in August, 1871, but, although it was claimed that notice of such revocation had been sent to the plaintiff, the proof fails in that respect, and there is no proof that such notice was sent, as claimed, while the plaintiff testifies that she never received it.

The question is, whether the plaintiff shall be prejudiced by the act of the agent. He did say he would call for the premiums, and he did call regularly, up to a certain time. A custom of the company would seem to be thus established, and I doubt whether either the act or the language of the agent, is to be considered a modification of the contract according to its terms; and this conclusion is placed on two grounds: First, it is in harmony with the general features of the business of a foreign insurance corporation, that the premiums should be collected by its agent at the

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place of the making of the contract, and that the agent was, therefore, exercising an implied authority, in saying to the assured how and where he would collect them, or where they should be paid; and, secondly, the company is presumed to have had the benefit of collections thus made, for the period of a year or more. They never exacted of the plaintiff, that she should pay them the premiums in Hew York.^[4]

The half-yearly premium of $157, became due the 7th of January, 1872.

O’Reilly died 15th May, 1872. Rockwell’s agency was discontinued in August, 1871. It was not proved that the plaintiff had notice of this discontinuance, or that any other agent was appointed to represent the company. The court left it to the jury to say whether the plaintiff was chargeable with laches, in "not seeking out a person to pay the premium to; and if they found her negligent in this respect, after Rockwell’s failure to call, then that the policy had lapsed, and she could not recover.^[5] Ho exception was taken to the charge.

The jury found for the plaintiff. The exceptions to the testimony do not appear to be tenable. The judgment should be affirmed, with costs.

Present—Talcott and Tappen, JJ.

Judgment affirmed, with costs.

* Bohner v. Williamsburgh Ins. Co. 35 N. Y., 733 .

† † Sheldon v. Fire Ins. Co., 26 N. Y., 460 .

Footnotes

* Walsh v. Washington Ins. Co., 32 N. Y., 442 ; Talcot v. Marine Ins. Co., 2 Johns., 136 .
† † 5 Johns., 317 and 11 Johns., 259 .