Stewart v. Union Mut. Life Ins. Co.

• Decision Date: 08 March 1898
• Parties: STEWART v. UNION MUT. LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

155 N.Y. 257

49 N.E. 876

STEWART

v.UNION MUT. LIFE INS. CO.

Court of Appeals of New York.

March 8, 1898.

Appeal from supreme court, general term, First department.

Action by Anna B. Stewart against the Union Mutual Life Insurance Company. From a judgment of the general term (27 N. Y. Supp. 724) affirming a judgment on a nonsuit, plaintiff appeals. Reversed.

Gray and O'Brien, JJ., dissenting.

Frederick H. Kellogg, for appellant.

E. V. B. Getty and Charles F. Moody, for respondent.

HAIGHT, J.

This action was brought to recover the amount of an insurance policy issued by the defendant upon the life of Joe H. Stewart, in which the defendant undertook to pay $5,000 to Anna B. Stewart, his wife, if living; if not, to his executors, administrators, or assigns, upon satisfactory proof of death. The policy is numbered 93.094, and bears date the 19th day of April, 1890. It was issued subject to the following conditions, printed upon the policy: ‘That the first year's premium of $123.10 shall be paid at the home office on the delivery of this policy, and that thereafter, and before the 15th day of April, in each subsequent year, the premium stated in the premium schedule in the margin hereof, as the premium for the said year, shall be paid at said office.’ And, further: ‘No agent, nor any other person, except the president or secretary, in writing, has power to alter or change, in any way, the terms of this contract, or to waive forfeiture, or to write anything on this policy.’ By the terms of the policy the application was made a part of the contract, in which it was provided that ‘it will constitute no contract of insurance until a policy shall first have been issued and delivered by the company, the first premium thereon paid during the life of the party proposed for insurance in the same condition of health as described in the application.’ Stewart died on the 14th day of August, 1890. The defense interposed is that the first year's premium had never been paid, and that the policy never had a legal inception. The evidence is very meager. As we have seen, Stewart is dead, and, consequently, the plaintiff could not avail herself of his statement. What appears in the case is substantially as follows: Under date of November 2, 1889, John M. Crane, as manager of the defendant, writes Stewart, saying: ‘Will you drop in and see me, or shall I call upon you some day between now and the 10th inst. I shall be pleased to fix up the insurance for you next week, and arrange for the premium payment, so as to be mutually satisfactory.’ This was followed by a written application signed by Stewart, dated the 1st day of April, 1890. The policy, as we have seen, bears date on the 19th day of April thereafter, and in the defendant's answer it is alleged that upon the delivery of the policy to Stewart he, ‘at the time of such delivery and in connection therewith, made and delivered to such agent a premium loan note on said policy for the full amount of the first year's premium, $123.10, by which he undertook and agreed to pay said amount of $123.10 three months thereafter, which said note recited, among other things, that it was given in connection with the policy mentioned in the complaint.’ The next we hear of the note is from a letter written by J. H. Simonton, cashier, dated ‘5/26,’ and addressed to Stewart, and is as follows: ‘Your note for $123.10 given in set tlement of premium due on pol. No. 93,094 will be due and payable on the 31st inst. at your office, where it will be presented at that date.’ It will be observed that there appears to be some confusion with reference to dates. As we have seen, the policy bears date the 19th day of April, 1890. If issued at the company's office in Portland, Me., on that date, and transmitted to its agent in New York, it naturally would be some days thereafter when received and delivered to Stewart by the agent. The note was for three months, and consequently it would not fall due until the latter part of July, and yet this letter notifying Stewart that it will become due and payable on the 31st inst. is dated ‘5/26,’ which would indicate May 26th instead of July. Possibly there was an error in the numbering of the month, or that it is a misprint. We do not, however, regard it as material. The next evidence that we have upon the subject is a letter written by John M. Crane, the manager, to Stewart under date of August 7, 1890, in which he states: ‘My Dear Stewart: I deposited your check for $123.10 to-day for collection. Kindly see that it is protected. I am about used up with the hot weather, and intend to leave the city for a week's rest.’ This was followed by another letter from Crane dated two days thereafter, in which he states: ‘The bank has returned your check marked ‘Not good.’ I am sorry for this, as it places me in a somewhat unpleasant position. I feel sure you must have overlooked the matter, and will fix it up as soon as your attention is drawn to it.' On August 12, 1890, Stewart replies to Crane as follows: ‘Have been very sick and at home in bed since last Wednesday. Will be able from present indications to attend to business by the last of the week. Will at once on being able to get around provide for that check. It would have been paid and had ample funds to meet it on last Thursday a. m. if I had not been stricken down the day before, Wednesday.’ On the next day, August 13th, Crane replies to Stewart, saying: ‘I am in receipt of yours of the 12th, and am sorry to hear of your having been ill and trust that you are now feeling better. As regards that check would say that you know just how I am placed in the matter, and I hope that you will fix the matter up next week.’ Stewart died at 1 o'clock the next morning. He was stricken 10 days before with a disease which caused his death.

The note is not printed in the case. The evidence does not disclose what became of it. The inference, perhaps, is permissible that it was presented on the 31st day of July, when it fell due, and that Stewart gave a check therefor, which was deposited by Crane on the 7th day of August thereafter, as alluded to in his letter of that date, and that this check was not paid at the time of Stewart's death. We do not understand, however, that the failure to pay the check operated as a forfeiture of the policy, for the reason that Crane, in his letter of August 13th, gave him to understand that it would be satisfactory if the check was paid the next week, and no notice was given that the company intended to insist upon any forfeiture. It is true that the defendant was a Maine corporation, and that its contracts were to be construed under the laws of that state, but no evidence was given tending to show that the laws of that state were, or are, different from our own, and, in the absence of such evidence, we may properly assume that they were the same. Monroe v. Douglass, 5 N. Y. 447;Savage v. O'Neil, 44 N. Y. 298;Chapin v. Dobson, 78 N. Y. 74.

It is contended that Crane had no authority to waive the payment of the premium in cash, to accept a promissory note, or to extend the time of such payment, and this becomes not only the important question in this case, but one largely affecting the public interests. The giving of promissory notes in payment for premiums on insurance is a common occurrence. Numerous cases in which that has been done are to be found in the books. Especially is this true with reference to fire insurance, in which the custom is quite prevalent among insurance agents to deliver insurance policies, taking promissory notes for the premium, or of leaving the premiums to be paid at some future date, when called for by the agent or a collector of the company. If in all these cases the insurance is void, and has no legal inception, it is time that that fact was understood; for many, doubtless, are under the impression that they have insurance who have not the means at hand to show that the agent with whom they contracted had special authority to extend the time of the payment of the premium. Insurance companies have a right to have their contracts construed under the rules recognized in...