146 N.Y.S. 613 | N.Y. App. Div. | 1914
Lead Opinion
In 1901 the Security Mutual Life Insurance Company wrote a policy for $2,000 on the life of John Á. McCormack. He was then a sound and healthy man; afterwards he was stricken with a fatal malady with which he suffered for several years and then died. On December 12, 1910, a quarter yearly premium became due and payable with thirty days’ grace. On November 12, 1910, a notice was sent out by the company and received by the assured whereby the company undertook to apprise the assured of his obligation to make a premium payment on December twelfth. Mrs. McCormack, the wife of the assured, the plaintiff herein, wrote a check on December fifth, for the amount due, put it in an envelope and directed the envelope to the company but omitted to mail it. On February 13, 1911, the company notified the assured by letter of his default and suggested that he arrange for a reinstatement of his policy. Mrs. McCormack visited the office of the local
The defense to this action, brought on the policy, is that the policy was forfeited by the non-payment of the premium due December 12, 1910, and that the reinstatement was procured by fraud and false statements. And so we must first inquire whether there was a forfeiture.
Section 92 of the Insurance Law requires life insurance companies to send out to policyholders a notice that premiums are due. This section provides that no life insurance company shall declare any policy forfeited “unless a written or printed notice stating the amount of such premium, * * * due on such policy, the place where it shall be paid, and the person to whom the same is payable, shall have been duly addressed and mailed to the person whose life is insured * * * at least fifteen and not more than forty-five days prior to the day when the same is payable. The notice shall also state that unless such premium, * * - then due, shall be paid to the corporation, or to the duly appointed agent or person authorized to collect such premium by or before the day it falls due, the policy and all payments thereon will become forfeited and void except as to the right to a surrender value or paid-up policy as in this chapter provided.”
The notice which the company sent to the assured in this case reads:
“Security Mutual Life Insurance Company, Binghamton, N. Y.
“Dear Sir.— On or before Dec. 12th, 1910, A premium payment of Sixteen & Dollars, for the regular % yearly payment required to renew Policy No. 34629 on the life of John A. McCormack in this Company, will, if such policy be in force on that day, but not otherwise, become due and payable
“ The acceptance of any premium by the Company after the date when due is subject to the condition that the insured is in good health, and an expressed warranty upon the part of the holder of the policy to that effect, and shall not be construed as a waiver of the conditions of the policy as to future payments, nor as establishing a course of dealing between the Company and the holder of the Policy.
“The sending of this notice shall not be held to waive any forfeiture or lapse of the policy, if any previous payment has not been made.
“No agent, collector, or other person, except the President, Vice-President, Comptroller, or Secretary, has authority to receive payment of a premium after it becomes due, or to extend the time for- the payment of a premium, or to grant permits, or to make, alter, restore, or discharge policy contracts, or to waive any condition thereof.
“ Dated Binghamton, N. Y., Nov. 12th, 1910.
“ Eeturn this receipt with your remittance.
“CHAS. A. LaDUE, Secretary.
“ All premiums are due at the Office of the Company in the City of Binghamton, N. Y., but for the convenience of Policyholders payments may be made on or before the date when due to an authorized Collector in exchange for the company’s receipt therefor, signed by the Secretary, and countersigned by the Collector.
“ Payment may be made to M. F. Hearley, 80 State street, Albany, N. Y., Authorized Collector.
“ Pay now and Avoid Overlooking It.
“ M. F. H.”
It is unnecessary to analyze this notice. , It is sufficient to say that in our judgment it does not comply with the statute
Having reached the conclusion that the policy was never forfeited, it is not strictly necessary to make further examination of this case. It may not be unprofitable, however, to do so. Although the adjudicated cases in this State are by no means harmonious on the subject, the weight of authority is to the effect that agents of insurance companies cannot, by any statements which they may make, waive or alter the written conditions of policies. But that rule is not controlling here for the situation before us presents a different question. We are now to determine whether knowledge on the part of agents becomes
And there is still another feature of this case worthy of consideration. The process of reinstatement here consisted of the acceptance by the company of the original check drawn by the plaintiff for the payment of the premium and the delivery by the company of the original receipt to the plaintiff. No new written contract was executed. The “reinstatement” was a reissuance of the old policy. That is, the policy having ceased to exist as the company claimed, on December 12, 1910, it did not make out a new policy when it resumed relations with the plaintiff but issued the old policy over again and dated it, in effect, December 12, 1910. This must be so, otherwise the amount received by the company in premiums between December 12,1910, and about February 18, 1911, was money accepted and retained by .the company when there was no policy in existence. The' old policy, issued anew, was-to bear date December 12, 1910. This plan avoided all gaps and interims. That
The judgment of the Trial Term should be reversed and judgment for the relief demanded in the complaint rendered for the plaintiff, with costs.
We disapprove of the finding of fact made by the trial court to the effect that the defendant duly rescinded the contract of insurance and reinstatement.
Woodward, J., concurred; Smith, P. J., dissented in opinion; Lyon, J., not sitting.
Concurrence Opinion
The jury has found that the general field superintendent, at the interview in February, 1911, and the cashier at and prior to that time, understood the condition of the health of the insured. The trial justice has not disturbed those findings, but, upon the theory that they had such knowledge, says the fact is immaterial under the authorities. The jury has believed the plaintiff rather than those officials. The plaintiff says the petition for reinstatement was made after the cashier knew of the ill health of the assured and after plaintiff had informed her that she could not truthfully make the petition, and that when she explained that the check had been put in the envelope, and she was surprised' to find that it was not mailed, the cashier said she was very sorry about it, and “ she knew the company would do what was right.” After the petition had been forwarded the cashier called the plaintiff to her office and introduced her to the general field superintendent, and said that .he had brought the reinstatement paper to her from Binghamton, the home of the company," He delivered it to her and said “knowing .the condition of affairs, and knowing how very sick my husband was, that the company had done me a very great favor in reinstating him.”
At the time of the default the policy had a surrender value of $900; there was a note against it of $282. The husband was in a hopeless condition and clearly could survive hut a short time. If the company had refused reinstatement it would have been easy for her, in his condition of health, to borrow the amount of the loan upon the strength of the paid-up policy, which would have resulted at the worst in her receiving $618. The plaintiff had no intention to defraud the company. She was acting with its representatives who knew the facts as well as she did; she believed they were honestly representing the company and in fact were the company.
The cases relied upon by the respondent indicate that the cashier had not the power to bind the company by knowledge which she had and did not communicate to the company. We need not quarrel with them, for the fair inference is that the company had the knowledge. If the general field superintendent can bring from the home office and deliver a reinstatement to a dying man, under circumstances which render such delivery just and reasonable, and the company can avoid the effect of it after the assured, relying upon it, has allowed the time to obtain the surrender value on the policy to lapse, then technicality prevails over justice. I think the verdict of the jury, and the inferences fairly coming from it, indicate that the company had knowledge of the condition of the insured at the time it received the check for the premium in dispute, and that it is, therefore, liable on the policy.
The company received the check which had been drawn in December and signed the receipt prepared for the December payment, giving it the date of December 10, 1910, and marking it “reinstated.” It was practically ignoring the fact that there had been a default and was treating the matter as if the check had been received in due course of mail. It is not going too far, under all the circumstances, to say that the reinstatement was dated back as of December 10, 1910, and under the terms of the policy was incontestable.
In addition to the criticisms on the notice made by Justice Howard, it should be stated that the notice is condi
The notice requires payment to the comptroller at Binghamton and is signed by the secretary. A postscript with the initials “M. F. H.” authorized the payment to any authorized collecting agent having a receipt. We do not know how many such agents there are. It also states that payment may be made to M. F. Hearley, authorized collector, at Albany. This was confusing. A technical effect is sought to be given to the notice; it, therefore, should comply with the law. The court cannot be called upon to help it out. I, therefore, favor a reversal and judgment for the plaintiff.
Woodward, J., concurred; Smith, P. J., dissented.
Dissenting Opinion
Whatever may be the hardship of this particular case this judgment cannot be reversed without revolutionizing the law of contracts. If the statute had required a notice for the payment of premiums to be in any particular form it would só have prescribed. That the notice required by the statute is embodied
ISTor do I think the plaintiff is saved by the non-forfeiture clause in the contract. The reinstatement was in fact made in February of 1911. He died in January of the year following, so that one full year had not in fact passed since the reinstatement. There is not one particle of evidence to show that the company intended to make the reinstatement effectual as of any prior date. The check which was received was dated before the forfeiture. The check, of course, did not bear interest and it might have been dated back. In any event its date is immaterial. The fact that the reinstatement involved the payment of premiums as upon the original contract cannot date back the renewal contract for the purpose only of making applicable the non-forfeiture clause without facts author
1, therefore, vote for an affirmance of this judgment.
Judgment reversed on law and facts and new trial granted, with costs to appellant to abide event. The court disapproves of the finding of fact made by the trial court to the effect that the defendant duly rescinded the contract of insurance and reinstatement.