This case involves the liability of the defendant insurance company under a policy for $12,000, issued upon the life of Henry H. Bryant, payable to his wife, Mary L. Bryant. The case has been submitted to the court without the intervention of a jury, principally upon an agreed statement of facts. The plaintiff is the wife of the insured, Ilenry H. Bryant, and is a citizen of the state of Tennessee. The defendant is an insurance company organized on the mutual plan under the laws of the state of New Jersey. The policy in suit was issued April 18, 1894. The annual premium agreed to be paid was $584.40. Among other things, the policy provided “that, in case the said premium shall not be paid on or before the several days hereinbefore mentioned for the payment thereof at the office of the company in the city of Newark, or to agents when they produce receipts signed by the president or treasurer, then, and in every such case, this policy shall cease and determine, subject to the provisions of the company’s nonforfeiture system as indorsed hereon, with accompanying table.” The nonforfeiture provisions of the policy read as follows:
“When, after two full annual premiums shall have been paid on this policy, it shall cease or become void solely by the nonpayment of any premium when due, its entire net reserve by the American Experience Mortality, and interest at four per cent, yearly, less any indebtedness to the company on this policy, shall be applied by the company as single premium at the company’s rates published and in force at this date, either: First, to the purchase of nonparticipating term insurance for the full amount insured by this policy; or, second, upon the written application by the owner of this policy, and the surrender thereof to the company at Newark within three months from such nonpayment of premium, to the purchase of a nonparticipating paid-up policy, payable at the time this policy would be payable if continued in force. Both kinds of insurance aforesaid will be subject to the same conditions, except as to payment of premiums, as those of this policy. No part, however, of such term insurance shall be due or payable unless satisfactory proofs of death be furnished to the company within one year after death; and, if death shall occur within three years after such nonpayment of premium,' and during such term of insurance, there shall be deducted from the amount payable the sum of all the premiums that would have become due on this policy if it had continued in force.”
In accordance with the rules of the company permitting it, Henry H. Bryant only paid 80 per cent, of the first premium, and borrowed upon the policy the remaining 20 per cent. When the premium due April 18, 1895, matured, Mr. Bryant again paid 80 per cent, in cash, and borrowed the 20 per cent, from the company, less the dividend allowed for that year, amounting to $107.16. Just prior to the maturity of the premium due April 18, 1896, application was made to the company for an additional loan upon the policy, equal to the maturing premium, which would increase the premium loan
“When, after two full annual premiums shall have been paid on this policy, it shall cease or become void solely by the nonpayment of any premium when due, its entire net reserve by the American Experience Mortality, and interest at four per cent, yearly (provided there be no loan on the policy), shall be applied by the company as a single premium at the company’s rates published and in force at this date, either: First, to the. purchase of nonparticipating term insurance for the full amount insured by this policy; or, second, upon the written application by the owner of this policy, and the surrender thereof to the company at Newark within three months from such nonpayment of premium, to the purchase of a nonparticipating paid-up policy payable at the time this policy would be payable if continued in force. Both kinds of insurance aforesaid will be subject- to the same conditions, except as to payment of premiums, as those of this policy. Third. If preferred, the company will, on surrender of the policy, fully receipted, within the said three months, pay as a cash surrender value its entire net reserve by the American Experience Mortality, and interest at four and one-half per cent, yearly, less a surrender charge equal to one per cent, of the sum insured by the policy. If there be any loan on the policy, such indebtedness shall be paid off out of the cash surrender value, and the remainder paid in cash by the company; or a value will be allowed by the company in the form of extended or paid-up insurance as above provided, the amount to be applied to the purchase of such insurance being correspondingly reduced in the ratio of the indebtedness to the full cash surrender value.”
Appended thereto, and forming a. part of, the new nonforfeiture provision, is á table giving-in figures the cash surrender value and the loan value at the end of each. year from the time the policy was issued. The loan value under the original nonforfeiture provisions was only one-half the 4 per cent, reserve. Under the new or modified nonforfeiture provisions the loan value was exactly equal to the “cash surrender value.” At the end of the fifth policy year the loan value under the original nonforfeiture provisions was only $696, and under the new nonforfeiture provisions was $1,214.88. After the substitution of the nonforfeiture provisions, as above set out, the company loaned upon the policy the entire premium maturing April 18, 1896, which increased the loan on the policy to $615.-03,. after, crediting all dividends allowed to that date, and Mr. Bryant executed therefor a certificate of loan, reading as follows:
“?615.03. Newark, N. X, April 18, 189G.
“This certifies that the Mutual Benefit Life Insurance Company has loaned on policy No. 202,500 six hundred and fifteen and os/ioo dollars, being a part of the premiums on said policy, which, with any additional loan, shall be a lien on the policy until paid; legal interest on the same to be payable annually, the amount of the existing loan to be indorsed hereon, and stated also on the renewal receipt. It is understood and agreed that, if interest shall not be paid when due, éither in cash or. by dividend, it shall be added to the principal of the loan, and that if, owing to the nonpayment of interest, the principal of the loan shail ever equal or exceed the then net reserve value of the policy, computed according to the American*751 Experience Table of Mortality, and 4 per cent, interest, the policy shall thereupon become null, void, and be surrendered to the company in consideration of the cancellation of the loan.
“¡Signed] Henry TL Bryant.”
When flie premium due April 18, 1897, matured, Hr. Bryant paid to the company in cash the sum of §236.44, and increased his premium loan to §885.05; and on April 18,1898, Mr. Bryant paid qn the premium then maturing the sum of §257.64 in cash, and increased his premium loan, to §1,146.13. Each time the loan on the policy was increased, the amount of llie increase was stated on the back of the certificate of loan. Dividends were allowed upon the policy each year, beginning April 18, 3893, and ending April 18, 1898, and amounting in the aggregate to §451.80. And, while the policy called for the payment of §2,922 in the aggregate for premiums maturing from April 38, 1894, to April 18, 1899, there was only paid the sum of §1,429.12, or an average of §285.82 per annum, the remainder of the premiums for those years being paid in dividends and loans upon the policy. On January 23, 3.899, the board of directors of the defendant company passed the following resolution:
“Besolved, that the sum of $1,959,880.98 be, and hereby is, appropriated to the payment of dividends for the year 3898-1899 to participating policies as the same shall be continued in force after their policy anniversaries by payment of renewal premium, or by their being paid-up policies. No dividend shall be payable to policies not continued in force after their anniversaries in 3899, except post mortem dividends, as heretofore.”
Prior to April 18, 1899, the date upon which the next annual premium matured, Henry H. Bryant was given notice of the maturity of the premium, which also stated that a dividend of §123 would be allowed, provided the premium then maturing was paid. On March 15, 3899, Mr. Bryant wrote to the company as follows:
“Mr. Amzi Bodd, Newark, N. ,T.: Please write me an exact statement of my indebtedness to your company after being credited with all dividends to date.
“Yours, respectfully, Henry H. Bryant.”
And in reply received the following letter:
“March 18, 1899.
“Mr. Henry II. Bryant, 216 Main St., Clarksville, Tcnn.: In reply to
yours of the 15th Inst, we would say that in case of your policy No. 202,500 premiums are paid up to April 18th prox., and the policy is subject to a premium loan indebtedness of $1,346.11, with interest from April 18th, 3898.
“Yours, truly, B. J. Miller, Mathematician.”
And on April 15, 1899, he again wrote the company as follows:
“Mr. B. ,T. Miller, Mathematician: I mail to you under separate «over my policy No. 202,500, properly signed, for which idease mail me as soon as possible check for my full surrender value In cash, $1,896.08, less my Ioan and interest, $.1,214.87, which, according to the policy and your letter of March 38th, leaves a balance due me of $181.21. Enrlher correspondence over this matter will be entirely unnecessary, as I have fully decided to drop policy, so by complying with the above request you will greatly oblige me. Thanking you kindly for past favors, • 1 am
“Yours, very truly,
Henry H. Bryant.’
“Newark, N. X, April 21, 1899.
“Mr. Henry H. Bryant, Clarksville, Tenn.: Yours of the 15th inst. is received, together with policy No. 202,500 on your life, forwarded by you for its cash surrender value. The premium due the 18th inst. not having been paid, the present cash surrender value of the policy as ■ given in the non-forfeiture statement appended thereto is $1,214.88. As stated in ours of 18th .ult., the policy is subject to a premium loan of $1,146.11, with interest from April 18, 1898. It requires the entire cash surrender value of the policy as above, $1,214.88, to pay off this premium loan with accrued interest, and the policy has, therefore, no net value for surrender of any kind. We return the policy herewith. If you should choose to forward the policy to this office, with the inclosed receipt signed by you and Mrs. Mary B. Bryant, we will return your premium loan certificate.
“B. X Miller, Mathematician.”
No part of the premium maturing April 18, 1899, was paid, and no premium upon the policy was paid after April 18, 1898. There was no correspondence or other communication between Mr. Bryant and the company after the letter of April 21, 1899. He was accidentally killed on November 25, 1899, or 222 days after the nonpayment of the premium maturing on April 18, 1899. The net reserve on the policy in suit on April 18, 1899, according to the American Experience Mortality, with 4 per cent, interest, was §1,-396.08; and, according to the American Experience Mortality, with interest at 4£ per cent., was $1,334.88. Mr. Bryant’s age on April 18, 1899, was 56 years, and any extended insurance to which he would have been entitled — if any, at that date — under the company’s published rates would have been purchasable at the rate of $22.94 per $1,000 per annum, and $0.7536 would have extended the $12,000 policy one day. The loan on the policy April 18, 1899, was $1,214.88, including interest, and its cash surrender .value on that date was exactly the same amount. On April 10, 1899, Mr. Bryant procured to be issued upon his life a policy of insurance for the sum of $10,000 in another company, and just prior to the acceptance of the policy in suit he allowed a policy of $10,000 in still another company to become forfeited for nonpayment of premiums. The plaintiff’s suit is for the full amount of the policy, with interest from the time of the insured’s death, the company having declined to recognize any liability under the policy. The defenses are the general issue and special pleas setting up the nonpayment of the premium and the forfeiture of the policy therefor prior to the death of Mr. Bryant.
1. The first contention of the plaintiff is that the policy sued on was changed or modified by language found in the last premium loan certificate, which reads as follows:
“ft is understood and agreed that, if interest shall not be paid when due, either in cash or by dividend, it shall be added to the principal of the loan; and that if, owing to the nonpayment of interest, the principal of the loan shall equal or exceed the then net reserve value of the policy, computed according to' the American Experience Table of Mortality, and four per cent, interest, the policy shall thereupon become null, void, and be surrendered to the company in consideration of the cancellation of the loan.”
2. The next contention of the plaintiff is that under the terms -of the nonforfeiture provisions as found in the policy, without reference to the certificate of loan, the insurance contract was extended beyond the death of Mr. Bryant, and that this was done automatically, so to speak, without any direction from the assured in that regard, or the expression of any choice from him. In considering this view of the case, it is necessary to bear in mind that the failure to pay the annual premium due in April, 1899, was deliberate and intentional upon the part of the assured, as he had distinctly declared his purpose to drop the policy just before that premium matured, and gave the company notice that it would be useless to argue the question with him; and his unalterable determination to do so is probably explained by the fact that he had just procured upon his life a policy of insurance for the sum of |10,000 in another company. It is not necessary to refer to the original nonforfeiture provisions in the policy, since they were, by
“If there be any loan on the policy, such indebtedness shall be paid off out of the cash surrender value, and the remainder "paid in cash by the company; or a value will be allowed by the company in the form of extended or paid-up insurance as above provided, the amount to be applied to the purchase of such insurance being correspondingly reduced in the ratio of the indebtedness to the full cash surrender value.”
There is here n,o reference to any reserve, either on a 4 per cent, or 4J per cent, basis, but only to a cash surrender value, which has been definitely computed and fixed for the end of each policy year in the table appended to and forming part of the nonforfeiture provisions. It must also be observed that under this clause in the policy the assured is given the choice of three modes of settlement when the policy ceases or becomes void solely for the nonpayment of a premium, in case there is a loan on the policy: First, the assured may accept the cash surrender value, after deducting therefrom the amount of the loan; or, second, the company will issue a policy for paid-up insurance upon application; and, -third, the policy will be automatically extended in the form of extended insurance if neither of the other two settlements is requested by the policy holder. In the event the policy holder desires the remainder of the cash surrender value paid in cash, or desires a policy for paid-up insurance, he must, within thre,e months from the nonpayment of the premium, surrender his policy, and receive in cash the remainder of the cash surrender value, or receive a paid-up policy. In the event he does neither, then the original policy is extended for such a length of time as is provided for' in the policy. In this case there is no pretense (leaving out of view the letter of Mr. Bryant to the company just after the nonpayment of the April, 1899, premium, in which he demanded the cash surrender value) that the policy was surrendered, and the remainder of the cash surrender value, after the payment of the indebtedness, paid to Mr. Bryant, nor that he surrendered Ms policy, and procured in lieu thereof a policy of paid-up insurance. The contention of the plaintiff is that the original policy was extended automatically for such length of time as the amount allowed by the company for the purchase of extended insurance under the terms of the policy would purchase; and it is only this feature of, the nonforfeiture provision above quoted which need be considered. For the plaintiff it is conceded that the amount to be applied to the purchase of extended insurance should be reduced in the ratio of the indebtedness to the full cash surrender value, but it is’ insisted that the “full cash surrender value” means the full reserve at 4¿ per cent, interest, in contradistinction to what is meant by. “cash surrender value,” estimated on-the basis of the 4¿' per* cent, reserve, less 1 per cent, oft the-face of the policy;
3. The plaintiff insists that she is entitled to have the condition
The result is that the plaintiff cannot succeed in her contentions, namely, a different cash surrender value from that stated in the policy, nor in her claim to the dividend conditionally declared by the directors of the defendant company. I have been quite willing to see the plaintiff recover in this case, provided it could be done consistently with a fair and just interpretation and enforcement of the contract; but, after a careful study of it in all of its provisions, I am unable to see that the policy was continued in force beyond April 18, 1899, the date upon which the insured deliberately and intentionally refused to pay his premium upon the policy; and I therefore conclude that the plaintiff is not entitled to recover upon the policy, either for the full amount insured or for any other sum.
The testimony of Mrs. Bryant, in so far as it undertakes to give the intention of Mr. Bryant in respect to the policy, confided to her alone, and after the lapse of the policy, is not competent, and I therefore exclude it; but, if it were admitted, it would not change my view of the contract, nor the result of this suit. According to her testimony, Mr. Bryant, in a private conversation with her, did not insist or assume that his policy was continued in force after April 18, 1899, nor that, in the event of his death before the following spring, she would be entitled to recover the amount of the policy. All he said to her, in substance, was that the policy would be worth a great deal to her. It would probably be strictly correct to hold, on the stipulation and correspondence in this case, that the deceased simply dropped his policy, and called for a cash surrender settlement, and, when confronted with the fact that there was no cash remainder to be paid to him under such settlement, that the contract was thereafter treated as abandoned and ended by both the contracting parties. In ruling on the case, however, I have treated the policy as one forfeited by the nonpayment of the April, 1899, premium. I have said that the plaintiff is not entitled to recover upon the policy on the theory that it was not extended and in force at the time of the death of the assured, since any value or amount which would have been coming to the plaintiff would not have been sufficient to have extended the policy until the date of his death, without the addition of the dividend, even upon the plaintiff’s own interpretation of the policy, and upon the plaintiff’s own figures. Assuming that there was any sum coming to the plaintiff, it was exhausted by an automatic extension of the policy to a date prior to the date of Mr. Bryant’s death, and it is not necessary for me to definitely decide how long it was extended, if at all, as I do not regard the question as here involved; nor do I decide whether or not any sum was due the plaintiff, since she has clearly failed to establish that the policy was in force at the