Banholzer v. New York Life Ins. Co.

Decision Date02 December 1898
Citation77 N.W. 295,74 Minn. 387
PartiesBANHOLZER v. NEW YORK LIFE INS. CO.
CourtMinnesota Supreme Court

OPINION TEXT STARTS HERE

Appeal from district court, Ramsey county; Hascal R. Brill, Judge.

Action by Louisa Banholzer agaisnt the New York Life Insurance Company. Action dismissed. From an order denying a new trial, plaintiff appeals. Affirmed.

Syllabus by the Court

On September 16, 1895, the defendant issued a policy of insurance on the life of plaintiff's husband, of which she was the beneficiary, the premium being payable yearly in advance. It was provided in the policy that, ‘if any premium is not paid on or before the day when due, this policy shall become void, and all payments previously made shall remain the property of the company’; also that the policy should be deemed a New York contract, and be construed according to the laws of that state. At that time there was, and still is, in force a statute of that state, providing that no policy should be forfeited or lapsed by reason of nonpayment, when due, of any premium, interest, or installment, or any failure thereof, unless a prescribed notice is served on the insured at least 15 and not more than 45 days prior to the day when the same is payable. When the second year's premium became due, on September 16, 1896, the insured paid a part in cash, and for the balance gave the defendant his note at six months, which expressly stated that it was given in part payment of the premium, with the understanding that all claims to further insurance, and all benefits whatever, which full payment of the premium in cash would have secured, should be immediately void and forfeited if the note was not paid at maturity; and as a part of the same transaction the defendant gave the insured a receipt for the note, which stated that the policy is in force until September 16, 1897, in accordance with its terms and conditions, provided the above note is paid at maturity. At the maturity of this note on March 16, 1897, the insured paid a further sum in cash on the premium, and for the balance still remaining gave his note at 60 days, containing the same terms and conditions as the first note, and received a similar receipt therefor. This note was not paid at maturity, and the insured never tendered payment until June 18th, when the defendant declined to accept it. Prior to the time the annual premium became due in September, 1896, the defendant seasonably gave the notice required by the New York statute, but it did not give any such notice prior to the maturity of either of the notes referred to. On May 26, 1897, the defendant, by letter, referring to the failure of the insured to pay his note which had matured on the 16th of the month, suggested to the insured the expediency of his taking steps to have the policy put in force again, and to have himself reinstated, and expressed its willingness to do so on easy terms. The defendant has never returned the note of the insured which fell due May 16th, but it has never attempted to enforce its payment, or asserted any rights under it, nor has its return ever been demanded. Held, construing the contract according to the laws of New York, as interpreted by the highest court of that state, the ‘premium notice’ required by the statute of that state did not apply to the notes; that, having given the notice prior to the time the annual premium became payable in September, 1896, the defendant was not required to give any other notice. Also that, upon the failure of the insured to pay his note at maturity, the policy was forfeited, and became absolutely void, unless such ground of forfeiture was waived by the defendant either by its prior course of conduct or by its subsequent conduct. No declaration of forfeiture was necessary. Also that, upon the facts, there was no such waiver. C. D. & Thos. D. O'Brien, for appellant.

Flandrau, Squires & Cutcheon, for respondent.

On September 16, 1895, the defendant issued a policy of insurance on the life of William Banholzer for $20,000, payable, in the alternative, either to himself in the year 1915, or, in case of his death prior to that time, to his wife, Louisa Banholzer, the plaintiff and appellant herein. The consideration for the policy is the sum of $1,146 to be paid in advance, and the payment of a like sum on the 16th day of every September of each year thereafter during the continuance of the policy until full 20 years' premiums were paid. Among the conditions contained in the policy and made a part of the contract of insurance, the following are necessary to be considered upon this appeal: ‘If any premium is not paid on or before the day when due, this policy shall become void, and all payments previously made shall remain the property of the company, except as hereinafter provided.’‘A grace of one month may be allowed in payment of subsequent premiums after this policy shall have been in force three months, subject to an interest charge at the rate of five per cent. per annum for the number of days during which the premium remains due and unpaid. During the month of grace this policy remains in force, and the unpaid premium, with interest, is or remains an indebtedness to the company, which will be deducted from the amount payable under this policy if the death of the insured shall occur during the month.’ The first premium was paid in advance, but when the second became due, and during the one month's grace allowed for its payment, Mr. Banholzer paid $286 in cash, and for the balance gave a note in terms as follows: ‘St. Paul, Minn., 9-16-96. Without grace, six months after date, I promise to pay to the New York Life Insurance Company, eight hundred and sixty dollars, at the Second National Bank, St. Paul, Minn. Value received, with interest at the rate of five per cent. per annum. This note is given in part payment of the premium due 9-16-96, on the above policy, with the understanding that all claims to further insurance, all benefits whatever which full payment in cash of said premium would have secured, shall be immediately void and forfeited to the New York Life Insurance Co. if this note is not paid at maturity, except as otherwise provided in the policy itself. Wm. Banholzer.’ Contemporaneously with the execution of the foregoing note, and as a part of the same transaction, the respondent gave Mr. Banholzer the following receipt: ‘St. Paul, Minn., 10-6-96. Note six months, after date 9-16-96, due 3-16-97, without grace, made by William Banholzer, payable at Second National Bank of St. Paul, Minn. Received from the owner of policy No. 692,465, $286 in cash, and his note at six months for $860, which said policy is in force until the 16th day of September, 1897, at noon, in accordance with its terms and conditions, provided the above note is paid at maturity, and this receipt signed by J. A. Campbell, Cashier.’ At the maturity of the note it was delivered up to Mr. Banholzer, who then paid $241.50 in cash, and gave a new note for $639, in terms similar to the preceding note, except that it was payable in 60 days from date. This note was not paid. Mr. Banholzer was taken sick on the 28th of May, 1897, of a fever, which continued from that time, with intervals of delirium, until the 5th of July following, when he died; and about two hours after he ‘had laid down,’ as stated by Mrs. Banholzer at the trial in the court below, the following letter came: ‘New York Life Insurance Company. New York, May 26,...

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