Mobile Life Insurance v. Pruett, 74 Ala. 487

74 Ala. 487 | Ala. | 1883

BRICKELL, O. J.

— The demurrers to the pleas in abatement were properly sustained. A suit against a corporation, foreign or domestic, may be maintained, when in its nature the cause of action is transitory, founded upon a matter or transaction which might have taken place anywhere, in any county in which the corporation transacts business by agents, without regard to its proprietorship of real estate, or its principal place of business. — Sess. Acts 1878-9, p. 197; Home Protection Ins. Co. v. Richards, ante, p. 466.

The policy of life-assurance, upon which the action is founded,. “ is not an assurance for a single year, with a privilege of renewal from year to year, by paying the annual premium, but it is an entire contract of assurance for life, subject to discontinance and forfeiture for the non-payment of any of the stipulated premiums. Such is the form of the contract, and such is its character.” — New York Life Insurance Co. v. Statham, 93 U. S. 24. Speaking of a similar policy, it was said in Brooklyn Life Ins. Co. v. Bledsoe, 52 Ala. 551: “The policy, by its terms, is forfeitable- — -is to cease and determine, and the insurer to be freed from all liability — if the annual premiums were not paid when they became due and payable. The continuance of the policy as a contract — its life — depended on the prompt payment of the premiums. The payment was manifestly the conditionprecedent, on which the parties respectively stipulated for its continuance, and on the non-performance of which they assented to its extinction.” There -are many authorities holding that, by the payment of the first premium, an insurance for one year is obtained, with a right to its continuance from year to year during life, upon the payment of the stipulated premiums. The subsequent payments rest in the option of the assured, and payment ad diem is therefore a-condition precedent to continuous liability of the insurers. In the case first referred to, and in subsequent cases, the Supreme Court of the United States have rejected the theory, that the condition is precedent, declaring it subsequent; and we prefer to follow its decisions upon this point. All the authorities-agree, that the time for payment is material — is of the essence-of the contract; and non-payment at the day appointed involves absolute forfeiture, when, as in the present case, such are the express terms of the contract. — New York Life Ins. Co. v. Statham, supra.

The stipulation of the policy is not only for the payment of the premiums at times stated, but the place of payment (the office of the company in the city of Mobile) is appointed", unless-payment is made to an agent of the company, producing a receipt signed by the president, vice-president, or secretary. The verbal agreement, of which the Circuit Court received evidence, made with Fowler, the agent of the company soliciting the insurance, through whom the application for the policy was forwarded, is in direct variation and contradiction of these clearly expressed terms of the policy, and, if it is of any validity, changes the legal effect of the contract, and the duties and obligations of the insurer and the assured. The premiums are not payable at stated times, but on the demand of the company ; the assured is not bound to take notice- when the premium is payable, but can await notice of the fact from the insurer; the place of payment is not that appointed in the policy, but is transferred to a point at or near the domicile of the assured ; and payment may be inade to an agent, upon any receipt the assured chooses to take, though he does not obtain a receipt signed by either of the designated officers of the com-, pany.

When a contract is reduced to writing, the written memorial becomes the sole expositor of its terms; all antecedent negotiations, agreements, or understandings, are merged in it; and to vary or contradict it, evidence of them is not admissible, unless it be clearly shown that a party was by fraud induced to enter into the contract, or that .by mistake the intention of the parties is not expressed. — Mead v. Steger, 5 Port. 498; Paysant v. Ware, 1 Ala. 160; Hair v. La Brouse, 10 Ala. 548. A policy of life-insurance is within the influence and operation of this conservative principle, and the presumption is conclusive, that in it all prior verbal negotiations, agreements, or arrangements are merged. It is usually prepared with much care, for the purpose of embodying the entire agreement of the parties — to withdraw from the uncertainty of parol evidence all the terms and conditions of the contract, and the rights, duties and obligations of the respective parties, that future controversy may be avoided. The amount of the premium, when and where it is payable, the consequence of default in payment, the event upon which the principal sum is payable, and its amount, are all expressed clearly in the policy. It was issued after the verbal agreement of which evidence was received, and was without objection accepted and retained by the assured. The most painful uncertainty would attend such contracts, if it was not taken and accepted as the entire engagement of the parties, and all mere parol evidence of prior agreements or negotiations was not excluded. — Ins. Co. v. Mowry, 96 U. S. 547; Thompson v. Ins. Co., 104 U. S. 259. The evidence of the parol agreement imputed to the agent Fowler, before the issue and delivery of the policy, ought to have been excluded.

A contract in writing can not be varied or contradicted by evidence of prior or contemporaneous inconsistent verbal agreements, but it may, by parol agreements made subsequently, be rescinded or modified; and to support the rescission or modification, no other consideration is necessary, than the nrutual agreement of the parties. The condition for the payment of the premiums at the times stated, and the place appointed, was inserted for the benefit of the company; and if a breach of the condition occurred, upon its election it depended whether advantage of it would be taken, or whether it would be waived ; or, before forfeiture, by a new agreement, express or implied, payment at the time and place fixed could be waived or dispensed with, and some other mode of payment substituted. There is often much of difficulty; in the absence of written evidence of a new agreement — when the agreement is to be inferred or implied from circumstances, or dispensing or waiving a forfeiture is matter of deduction from the acts or declarations of the parties —in determining whether there has been a new agreement made, or there has been a dispensation or waiver of the forfeiture, because of the failure to comply strictly with the requirements of the policy. The true test is, whether the insurer, by the course of dealing with .the assured, or by his acts or declarations, or by the acts or declarations of his authorized agents, has induced the honest belief in the mind of the assured, that the terms and condition of the policy providing for a forfeiture, if payment of the premiums is not made at the time, and in the manner appointed, will not be enforced, but that payment will be accepted, if made at another time, or in another manner. Having induced such belief, if the assured in good faith relies upon it, intending to make payment in accordance with it, justice and morals forbid that the insurer should take advantage of a forfeiture that would not have occurred, if he had not induced it. — Ins. Co. v. Wolff, 95 U. S. 326; Thompson v. Ins. Co., 104 U. S. 252; Ins. Co. v. Norton, 95 U. S. 234; Ins. Co. v. Mowry, Ib. 544; Ins. Co. v. Eggleston, Ib. 572; Phoenix Ins. Co. v. Doster, 106 U. S. 30.

Excluding from consideration, as we must, the antecedent verbal agreement, imputed to the agent Fowler, no fact’ or eiicnmstance is shown, calculated to induce in the mind of the assured a reasonable belief that payment of the premiums in .any other mode, of at any other time, than that stated in the policy, would be accepted by the company. The acceptance of a note for the first premium, and the subsequent extension of the day of its payment, was an arrangement in reference to that premium only; and unless a similar note had been taken for a subsequent premium, it afforded no room for a belief that a like indulgence would be given as to the payment of such premium.

A receipt of a premium, after a breach of the condition for its payment has occurred, is, doubtless, a waiver of the forfeiture. The payment must, however, be made to the insurer, or to an agent having authority to receive it. And it must be made fairly and honestly; there must be no misrepresentation or concealment of material facts known to the party making the payment, of which the insurer can not reasonably be presumed to have knowledge. Passing all consideration of the fact, that there is not, probably, legitimate evidence that Jemigan had authority to receive payments of past-due premiums, waiving consequent forfeitures, the payment made to him was subsequent to the death of Mrs. Pruett, and after the assured had been informed that the policy was forfeited by the failure to pay the premiums according to its terms. This fact, and the death of Mrs. Pruett,, were not communicated to Jeraigan, when he received the premium. It is not too much, probably, to say the inference is irresistible, that they were purposely concealed from him. When the death of the assured occurs, after a failure to pay a premium, according to the terms and conditions of the policy, acts of an agent of the insurer done in ignorance of the death, which might otherwise constitute a waiver of the consequence resulting from the failure to pay the premium, are not of any effect. — Bliss on Life Ins. § 190.

We have not deemed it necessary to pass upon the numerous questions arising from the rather voluminous pleading's found in the record; there is no necessity for it, and no practical benefit could result from it. What has been said, will enable the Circuit Court, on another trial, to make a just and legal disposition of the case.

Peversed and remanded.