O'Brien v. Union Cent. Life Ins. Co.

• Decision Date: 31 December 1912
• Citation: 100 N.E. 702,207 N.Y. 180
• Parties: O'BRIEN v. UNION CENT. LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

207 N.Y. 180

100 N.E. 702

O'BRIEN

v.UNION CENT. LIFE INS. CO.

Court of Appeals of New York.

Dec. 31, 1912.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Virginia O'Brien against the Union Central Life Insurance Company. From an order of the Appellate Division (140 App. Div. 362,125 N. Y. Supp. 470) granting defendant a new trial, the plaintiff appeals, stipulating for judgment absolute against her in case of affirmance. Judgment rendered for defendant.

John E. Roeser, of New York City, for appellant.

John N. Blair, of New York City, for respondent.

CHASE, J.

On June 8, 1905, the defendant delivered to John C. O'Brien a policy insuring his life in the amount of $3,000, with participation in profits for the term of his natural life. On the delivery of the policy he paid to the defendant the prescribed premium of $133.56. The policy provided for the payment of a like premium thereafter on the 15th day of June, at noon, in every year, during the continuance of the contract, ‘and of the payment when due of any and all notes given for premiums or parts of the same.’ The policy, among other things, contained a condition as follows: ‘The failure to pay any of the first three years' premiums, or any notes, or interest upon notes given to the company therefor on or before the days upon which such premiums, notes, or interest become due, shall avoid and nullify this policy without action on the part of the company of notice to the insured or beneficiary, and all payments made upon this policy shall be deemed earned as premiums during its currency. Any and all notes, with their conditions, which may be given for premiums or loans upon the security of this policy, are hereby made a part of this contract of insurance.’ On the 15th day of June, 1906, instead of paying the premium in cash, the insured gave to the defendant four notes for $33.39 each, payable, respectively, in three, six, nine, and eleven months after the date thereof, with interest. Each of said notes referred to said policy and contained a provision as follows: ‘Said policy, including all conditions therein for surrender, or continuance as a paid-up term policy, shall, without notice to any party or parties interested therein, be null and void on the failure to pay this note at maturity with interest at six per cent per annum.’ When said notes were given, the defendant gave to the insured a receipt, as follows: ‘Received by this company settlement as per margin of the annual premium due June 15, 1906, on policy No . 303337 upon the life of John C. O'Brien, New York, N. Y. This receipt is given subject to the conditions of any and all notes which may be given for the amount of said premium, or any part thereof, and the nonpayment of said note or notes at maturity will void the policy.’ On the margin of the receipt was a memorandum of the four notes referred to and a statement at the bottom thereof, ‘Settled as above this 15 day of June, 1906,’ and such statement was signed by an agent of the defendant. On the 15th day of June, 1907, plaintiff did not pay the premium, but made a similar settlement by a note. The notes so given for the 1906 and 1907 premiums were, with one exception, never paid. The three unpaid notes given for the premium of 1906 were renewed from time to time. The last renewal was by one note due December 31, 1907, and was not paid. The note given for the premium of 1907 was not paid, but was renewed by a note due December 31, 1907, and was not paid. Prior to the premium becoming due on the 15th day of June, 1906, and also on the 15th day of June, 1907, notice was give to said O'Brien, as provided by section 92 of the Insurance Law (Laws 1892, c. 690, as amended by Laws 1906, c. 326, now Consolidated Laws, c. 28). No notice was given by the defendant under said statute prior to said notes, or either of them, becoming due. O'Brien died on February 20, 1908, and the plaintiff, who is named as the beneficiary in said policy, brought this action to recover thereon, claiming that under said statute the defendant could not declare the policy forfeited or lapsed until one year after December 31, 1907, the date when said notes became due.

[1] The only question involved on this appeal is whether under said statute the defendant, after having given notice as prescribed thereby, prior to the premiums failling due as provided by the terms of the policy, was required to give a further notice pursuant thereto prior to said notes severally becoming due. Section 92 of the Insurance Law, as far as material, is as follows: ‘No life insurance corporation doing business in this state shall within one year after the default in payment of any premium, installment or interest declare forfeited, or lapsed, any policy hereafter issued or renewed, and not issued upon the payment of monthly or weekly premiums, or unless the same is a term insurance contract for one year or less, nor shall any such policy be forfeited, or lapsed, by reason of nonpayment when due of any premium, interest or installment or any portion thereof required by the terms of the policy to be paid, within one year from the failure to pay such premium, interest or installment, unless a written or printed notice stating the amount of such premium, interest, installment, or portion thereof, 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, or the assignee of the policy, if notice of the assignment has been given to the corporation, at his last known post-office address in this state, postage paid by the corporation, or by any officer thereof, or person appointed by it to collect such premium, 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, interest, installment or portion thereof, 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. If the payment demanded by such notice shall be made within its time limited therefor, it shall be taken to be in full compliance with the requirements of the policy in respect to the time of such payment; and no such policy shall in any case be forfeited or declared forfeited, or lapsed, until the expiration of thirty days after the mailing of such notice. * * *’

The defendant, having given the notice required by the statute, could have canceled the policy when the premium became due in 1906 and again in 1907. It did not do so, but each time gave the insured an extension of time to pay the...