Worden v. Guardian Mutual Life Insurance — 39 N.Y. Super. Ct. 317

Majority

p. 317

EDWARD M. WORDEN, Plaintiff, v. THE GUARDIAN MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Defendant.

Headnote

The policy of insurance in this case, designated the first days of March and September as the time for the payment of the semi-annual premiums, and then proceeds to declare that the premiums shall be paid on or before the days upon which they become due, or within thirty-five days thereafter. It then provided that in case of a violation of any of its provisions, it should become null and, void. It also contained a provision, that from the amount paid in case of death, there should be deducted the balance of the year’s premium, and all indebtedness of the assured.

It also contained a provision for the issue to the assured of a paid-up policy, for a pro rata amount of the whole amount insured, in case the assured discontinued payments of premiums after the payment of the first annual premium. The policy also had printed prominently on its face the words, “Non-forfeiting life policy.”

The assured paid two semi-annual premiums on this policy that became due, to and including the 1st day of September, 1873.

The premium due on the 1st of March, 1874, was not paid on that day, but was paid on or about the 24th day of March, 1874, by the plaintiff, brother of the assured, under the following circumstances.

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On the 31st or 33nd day of March, 1874, the brother of the assured received a letter from him (then residing in Virginia) requesting him to send to the company the amount of the semi-annual premium due on the 1st of March, 1874, before the, expiration of the thvrty-fime days from the 1st of March,, 1874. Before the premium was paid in pursuance of said letter, and after the said brother had received a telegram announcing the death of the assured, and on the 34th day of March, 1874, the said brother in pursuance of the request in said letter, sent by mail to the company, the semi-annual premium, due March 1, 1874, but without notifying the company of the death of the assured, and the company gave a receipt for the same without knowledge or information of the death of the assured; but afterwards and on the 31st of March, 1874, the company wrote to the said brother that “the death having occurred while the premium was unpaid, the policy is not binding on the company, and the premium remitted on the 34th is held subject to your order, or of the legal representatives of George P. Worden ” (the deceased and assured).

The court held in this case, that an omission to pay the premium on this policy at the day provided therein, violated no condition of the policy, until thwlyy-fhe days thereafter had elapsed.

The insurance was in full force and effect for six months and thirty-five days after the 1st of September, 1873, without the payment of any further or additional premiums than had been paid, and the assured was protected during that time, and the defendant would have been liable on the policy if the premiums had not been paid at all (the assured died before the expiration of this time).

That the payment was made in accordance with the instructions of the assured, during his life-time, and there was no bad faith on the party acting for the assured, in complying with his request, and no undue delay in the payment in view of the time in which he had to comply with the terms of the policy.

The right to pay in this case was not personal to the assured, and could be delegated by him to, and paid by another. On this last point (Want v. Blunt, 13 East. 183 ; Howell @. The Knickerbocker Life Ins. Go., 44 K T. 381; and Tarleton e>. Stanforth, reviewed and considered).

Judgment rendered against the company defendant for the amount of insurance provided in the policy.

Before Monell, Ch. J., and Curtis and Speir, JJ.

Decided May 3, 1875.

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The controversy is presented in a case agreed upon, and submitted without action, pursuant to § 372 of the code, and which is as follows :

Edward M. Worden claims to recover of the Guardian Mutual Life Insurance Company of Mew York the sum of two thousand dollars and interest thereon from the 2d day of August, 1874.

The following are the facts upon which the said controversy depends:

I. That on the 17th day of October, 1872, the said company, which then was, and still is, a corporation duly organized under the laws of the State of Mew York, for the purpose of carrying on the business of life insurance, and has a place of business in the cir,y of Mew York, issued to one George P. Worden a policy of insurance on his life, of which the following is a copy :

“THE GÜAED1AM.

“Mo. 33.435 Age 25.

“Mutual Life Insurance Company,

“Amount, $2,000. of Mew York.

“ Mon-forfeiting Life Policy.

“ This policy of insurance, witnesseth that the Guardian Mutual Life Insurance Company of the City of Mew York, in the State of Mew York, in consideration of the surrender of policy Mo. 1711 in the Mew York State Life Insurance Company of Syracuse, M. Y., and of the representations and agreements made in the application of George P. Worden for said policy of insurance on the life of himself, and of the sum of thirty dollars and twenty-four cents paid said first mentioned company, and of the semi-annual payment of a Hice amoxint on or before the first days of March and September in every year for the term of five years, or during the continuance of this policy, at the office of said first mentioned company in the city of Mew York, or to their agents as hereinafter provided,

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do insure the life of George P. Worden, of Fulton, in the county of Oswego, and State of Mew York, in the sum of two thousand dollars, for the term of 'Ms-natural life.

“ And the said company do hereby promise and agree to pay the amount of the said insurance at their office, in the city of New York, in lawful money of the United States, to the assured under this policy, his-executors, administrators or assigns, in sixty days-after due notice and proof of death of the said person whose life is hereby insured, the balance of the year’s premium, if any, also the amount due on all notes-given for premiums hereon, and all indebtedness of the insured to said company, or said Mew York State Life-Insurance Company, being first deducted therefrom.

“And it is agreed by said company that in case the assured shall elect, after the payment of the first annual premium stipulated to be paid hereon, to discontinue further payments, then said company will issue a paid-up policy for a. pro rata amount of the-whole sum insured upon a surrender of this policy while in force, to wit: two hundred dollars, for each and every annual premium paid hereon during the-life of the person hereby insured to this company, and to the Mew York State Life Insurance Company upon-said policy No. 1711, for which this is substituted.

“This policy is issued, and is accepted by the insured, and by the holder hereof on the following express

“ Conditions and Agreements.

“First. That these statements, declarations and answers made in the application for policy Mo. 1711. issued by the Mew York State Life Insurance Company, and in the faith of which it is issued, which application is made a part of this contract, are warranted to be in all respects true, and without the suppression or concealment, of any facts directly or indirectly relating to the health of the insured.

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“ Second. That the premiums shall be paid on or before the days upon which they become due, or within thirty-five days thereafter, at the office of said company in the city of Mew York, or to their duly authorized agents, only when they produce receipts signed by the president or secretary.

“ Third. That the said insured shall not, without the consent of said company previously obtained in writing, personally engage in the production of highly inflammable or explosive substances, or in the manufacture of gunpowder or fireworks, or as engineer, fireman or brakeman upon any railroad, or as engineer or fireman upon any steamboat, or enter into any active military or naval service, whatever.

“ Fourth. That agents of the company can not alter or waive any of the conditions of this policy, nor change the time for the payment of premiums or notes, nor grant permits.

“Fifth. That if this policy shall be assigned or held as security, written notice shall be given to said company, and due proof of interest submitted with the proofs of death.

“ Sixth. That in case of the violation of any of the foregoing conditions, or of any of the conditions or agreements contained in the application aforesaid, or of the assured dying by his or her own hand, or by delirium tremens, or in consequence of a duel, or in violation of the laws of the United States, or of any ¡Nation, State or Province, or in case the insured shall be convicted of a felony, this policy shall become null and void.

“ Seventh. That should this policy become null and void by reason of the violation of any of the said conditions or agreements, all payments made thereon shall be forfeited to said company.

“In witness whereof the said (Guardian Mutual Life Insurance Company have, by their president and

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secretary, signed and executed this contract, this seventeenth day of October, one thousand eight hundred and seventy-two, but the same shall not be binding until countersigned by Adin W. Davis, agent at Syracuse, N. T.

“Lucius McAdam, And. W. Gill,

“ Secretary. President.

“ Countersigned at Syracuse this 24th day of October, 1872.

“A. W. Da vis. Agent.

“ Note.—All endorsements on this policy, to be valid, must be signed by the president or secretary.

“ Special Notice to Policy Holders.

‘■'•Payments of Premiums.—Premiums may be paid to an agent, bub only on the production of a receipt signed by the president or secretary, who are alone authorized to sign receipts on the part of the company. When receipts are delivered to a policy holder by an agent, such agent should countersign the same as an «evidence of payment to him.

“Agents are not authorized to receive any premium on the part of the company, unless they shall have been furnished with a receipt therefor, signed by the president or secretary, as no payment made to an agent without such receipt being given in return by him, is considered valid by the company.

“ Should any policy holder tender payment of a premium to an agent, for which no receipt has been furnished, the following conditional receipt may be given by the agent, and no other:

“Conditional Receipt.

“ Received 187 from $ stated to be the amount of a premium due this day on Policy No. issued by the Guardian Mutual Life Insurance Company upon the life of for the sum of $ and in the favor of Said alleged premium is to be held by the undersigned until application can be made

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to the company to accept the same, and forward their receipt. If such receipt be forwarded, this conditional receipt is to be exchanged therefor; if the company’s receipt be not forwarded, the money is to be returned and this conditional receipt cancelled.

“(Signed) J. D., Agent.

“ Powers of Agents.—Agents are not authorized to make, alter or discharge contracts, waive forfeitures, name an extra rate for special risks, or bind the company in any way ; their duties being simply the reception and transmission of applications for policies and premiums, under the rules and instructions laid down in their letters of appointment.

“Agents of the company are not, under any circumstances, authorized to write the receipt of premiums, or make any indorsement whatever on the policy.

“ Restoration of Forfeited Policies.—The company may, but solely as an act of grace or courtesy, and when the interest of the company will not be impaired in any way thereby, restore a forfeited policy. When a restoration is applied for, the application must invariably be accompanied by a certificate as to the health of the person whose life was insured, and at his expense, from a physician acceptable to the company The agent forwarding such application will then be notified of the decision made in the case.

“In all cases of restorations of forfeited policies, and in all cases where the premium is received after the day on which it becomes due, although the policy may not have been formally cancelled on the company’s books, the renewal or the revival of' the policy, in whatever form made, will be in accordance with the decision of the commissioners of internal revenue, subject to stamp tax, the same as if a new policy had been issued.

Alteration of Policies.— Changes in the manner of

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paying, premiums (as from yearly to half yearly or quarterly, or the reverse) can only be made at the end of ay ear, dating from the commencement of the policy ; and when such a change is desired by a policy holder, the policy must be forwarded to the office of the company for the requisite indorsement.

“A change of interest in a policy, can only be made on the written request of the legal owner of the policy, and with the consent of the company.

“ Assignments.—A wife can not legally assign a policy drawn in her favor.

“ When a policy is issued to a person on his own life, and afterward assigned by him for a ‘ valuable consideration,’ written notice of such assignment must be given to the company for registration on its books.

“All assignments, to be valid, require a revenue stamp, equal in value to that on the policy, and the cost of such stamp must be borne by the policy holder.”

IT. That thereafter the plaintiff, at the request and for the benefit of the insured, paid the semi-annual premiums thereon as follows :

The semi-annual premium due thereon on the first day of March, 1873, and payable as therein provided, was paid and accepted on the third day of April, 1873, and the semi-annual premium due thereon on the first day of September, 1873, and payable as therein provided, was paid and accepted on the 25th day of September, 1873; that the semi-annual premium due on the first day of March, 1874, and payable as therein provided, wms not paid on said first day of March, 1874, but that on the 21st or 22d day of March, 1874, the plaintiff, who resides at Fulton, New York, received a letter from the insured, his brother, who was then at Saltville, Virginia, requesting him to send the company the amount of the semi-annual premium due on the first of March, 1874, and payable as in said policy pro

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vided, before the expiration of the thirty-five days from the first of March, 1874.

III. That on the 24th day of March, 1874, said plaintiff received a telegram, informing him of the death of the insured.

And that on the same day, being the day on which the assured died, but after his death, and after the reception by said plaintiff of the said telegram announcing the death of the insured, the said plaintiff, pursuant to the previous request, sent by mail to the company the amount of the semi-annual premium due •on March 1st, 1874, and payable as therein provided, without notifying or informing the company of the ■death of the insured, and that thereupon the company gave a receipt for the same, without knowledge or information of the death of the insured, or anything to put them on inquiry.

That on March 31st, 1874, and after the payment of the premium as above stated, the company wrote the plaintiff, that “the death having occurred while the premium was unpaid, the policy is not binding on the company, and the premium remitted on the 24th is held subject to your order or of the legal representatives of Geo. P. Worden.”

IV. That the insured died intestate at Saltville, Virginia, March 24th, 1874, from causes other than those excepted by the terms of the policy.

V. That on April 28th, 1874, W. A. Stuart was “at a circuit court held in and for Smyth county, Virginia,” duly appointed administrator of the goods and chattels of the said George P. Worden, deceased, and duly qualified as such.

That on June 2, 1874, due notice and proof of the death of said insured was given to said company .

VI. That on November 16th, 1874, W. A. Stuart, as administrator aforesaid, for value duly assigned and transferred to plaintiff, of Fulton, New York, said

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policy of insurance, together with all causes of action thereunder, and that said Edward M. Worden now owns and holds the same.

VII. That the company has not paid the sum of two thousand dollars, agreed to be paid by the terms of said company’s policy, and that they refuse to pay the same or any part thereof. .

The question submitted to the court upon the case is as follows:

Is the company under this policy liable for the amount of the insurance ?

If this question is answered in the affirmative, the judgment is to be rendered in favor of the plaintiff, and against said company, for the sum of two thousand dollars ($2,000),- and interest from August 20th, 1874, with his costs.

If answered in the negative, judgment is to be rendered in favor of said company for their costs.

None of these admissions herein contained are in any wise to affect either party, or to be regarded -as made except for the purpose of this submission of this controversy.

Childs & Hull, attorneys for plaintiff, and Daniel B. Childs, of counsel.

Miller, Peet & Opdyke, attorneys for defendant, and Livingston K. Miller, of counsel.

It will be observed that the policy in question differs in its phraseology and provisions from those that have usually been before the courts for consideration. It insures the deceased in the sum of two thousand dollars, for the term of his natural life, in consideration of the surrender of a pre-existing policy, and of the semi-annual payments of thirty dollars and twenty-four cents for the term of five, years. It

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also contains a provision for the issuing to the assured of a paid-up policy for a pro rata amount of the whole sum insured, in case he discontinues payments after the payment of the first annual premium.

The principal question presented, by the ease, agreed upon and submitted by the parties, is whether the policy was in force on the day when the assured died. The policy designates the first days of March and September as the time when the payments of premiums are to be made. It then proceeds to declare that the policy is issued, and is accepted by the assured upon the express condition and agreement “ that the premiums shall be paid on or before the days upon which they become due, or within thirty-five days thereafter.” The policy then provides that in case of a violation of any of its conditions it shall become null and void. The policy also contains a provision that from the amount to be paid in case of the death of the assured, there shall be first deducted the balance of the year’s premium and all indebtedness of the assured.

These provisions and clauses of the policy have to be considered and construed together to ascertain and give effect to the real intentions of the parties. There is no provision that the policy shall become void, if the payment of the semi annual premiums is not made on the first days of March and September, but it is provided that it shall become void if the premium is not paid within thirty-five days thereafter. An omission to pay the premium violates no condition of the policy until the thirty-five days have elapsed. There could be no forfeiture of the rights of the assured except in accordance with the terms of the policy. The defendants saw fit to issue a policy by the terms of which the insurance was in effect for six months and thirty-five days after September 1st, 1873, and containing no clause or intimation that the policy was to be annulled or made void by an omission to pay the premium before

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the expiration of that time. Under such circumstances it is but reasonable to suppose that the assured was to be protected during the thirty-five days. He had reason to consider that to be the true meaning and intent of this policy, and if the defendants desired a different ■construction, they should have inserted in their policy the provision that a failure to pay on the first day of September or of March forfeited the policy.

Forfeitures are only enforced when it is clearly shown that they were meant by the actual agreement of the parties. Nothing in the present case shows that the parties agreed that there was to be any forfeiture "before the expiration of the thirty-five days. If a life insurance company, with a view of attracting the public and promoting its own business, chooses to extend the period for the payment of semi-annual premiums through a period of thirty-five days, and to employ language tending to indicate that the risk is extended through the same period, or which might bear that construction, it is not just that its reasonable intendment should be defeated by an interpretation in favor of the insurers. When still further the insurers, as in the present instance, place prominently upon the face of the policy at its head the words "non-forfeiting life policy,” it is difficult for the courts to enforce harsh forfeitures, into which the unwary may have been innocently lured. Verba ambigua fortius accipiuntur contra proferentum, (Jackson v. Topping, 1 Wend. 394 ; Linden v. Hepburn, 3 Sand. 670; Baxter v. Lansing, 7 Paige, 353; Marvin v. Stone, 2 Cow. 781 ).

In this aspect of the case, the defendants would have been liable if the premium payable within thirty-five days from March 1st. 1874, had not been paid. It was, however, paid to the defendants on the twenty-fourth day of March following, by the brother of the deceased, under written instructions from the deceased conveyed to him from Virginia two or three days pre

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vious. The brother paid it on the twenty-fourth of March, the same day after he received by telegraph the intelligence of the decease of the assured.

The case as submitted shows no undue delay on the part of the person who made the payment, in view of the time in which he bad to comply with the terms of the policy.

It is claimed on the part of the defendants that this payment under the circumstances was unfair, and that the right to make it was personal to the assured, and could not be delegated, and that it ceased with his death.

The payment was by the instruction of the deceased, and reached the insurers after his death, as it might have done if the deceased had forwarded it by post or by a public carrier. There was no bad faith in complying with his request.

There is not much force in the claim that the right to make the payment was personal, and could not be delegated, and closed with his death. The language of the policy imposes no restriction as to who may make the payment, and is entitled to the same construction in favor of the assured as has been applied to the thirty-five days clause, and comes within the same principle. In the case of Want v. Blunt (12 East, 183) Lord Eilenborough based his ruling that the right to pay was personal to the assured on the provision of [the policy that the party whose life is insured should \himself pay during Ms life. But the present policy ban not be affected by decisions which, though apparently adverse to the plaintiff, will upon a careful examination be found to turn upon different language and restrictions. In Howell v. The Knickerbocker Life Ins. Co. ( 44 N. Y., 281 ) it is said in reference to a policy providing that the assured shall duly pay ” the premium, that such act could have been performed by any other person as well, and that “its payment did

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not. necessarily depend upon his continued capacity or existence.”

The case of Tarleton v. Stanforth (5 T. R., 695) cited by the defendants on the argument, as well as various other cases, and some of them seemingly favoring the defendants’ position, will be found on examination to turn upon admissions or policies differing from the one before us.

In view of the form of the policy, and the construction put upon that class of instruments by our courts, the language of which is that of the insurers, I think the defendants are liable for the amount of the insurance, and the plaintiff is entitled to a judgment therefor, with his costs.

Monell, Ch. J., and Speir, J., concurred.

Cases cited

Marvin v. Stone 2 Cow. 781 N.Y. Sup. Ct. p. 328