Conway v. Phoenix Mut. Life Ins. Co.

• Decision Date: 28 November 1893
• Citation: 140 N.Y. 79,35 N.E. 420
• Parties: CONWAY v. PHOENIX MUT. LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

140 N.Y. 79

35 N.E. 420

CONWAY

v.PHOENIX MUT. LIFE INS. CO.

Court of Appeals of New York.

Nov. 28, 1893.

Appeal from supreme court, general term, third department.

Action by Anna V. Conway, as administratrix of the estate of William F. Conway, deceased, against the Phoenix Mutual Life Insurance Company, on a life insurance policy issued to plaintiff's intestate. From a judgment of the general term (25 N. Y. Supp. 1148) affirming a judgment entered on a verdict in favor of plaintiff, defendant appeals. Reversed.

The other facts fully appear in the following statement by GRAY, J.:

The policy of insurance in this case was issued to the plaintiff's intestate, and was payable to his legal representatives upon his death, or in 20 years to him, if then living. When three or more full years' premiums should have been paid upon it, then, upon any default thereafter occurring in the payment of any premium, the company became liable for a sum of paid-up insurance at death, or the due date of the policy, equal to as many twentieths of the amount of the policy as there should have been paid full years' premiums thereon. The policy contained provisions ‘that no agent or other person can alter, modify, or waive any of the terms or conditions of this policy,’ and ‘that if any subsequent premium hereon be not paid when due, and a separate receipt, signed by the president or secretary of this company in each case, given therefor, then this policy shall cease.’ A clause equally restrictive upon an agent's power to waive or postpone payment of premiums, or to accept them after due date, was contained in each renewal receipt. Four full years' premiums had been paid by the deceased upon his policy, but on October 24, 1891, when the fifth year's premium was due, he failed to pay it. For its amount he gave to the general agents of the company his promissory note, payable six months after date, which they took, withholding, however, a renewal receipt. A few days prior to its maturity, he wrote to these agents, expressing his inability to meet it, and requesting its renewal for a period of time. To this they at once replied, saying: ‘Your renewal has remained unpaid since October last, pending the maturity of your note, and we do not feel at liberty to accept a note extending the time any further. We will, if you so request, recall your note from the bank, * * * and hold your renewal at this office as long as it may be possible to do so. You will understand that we are likely, any day, to be required to return it to the home office for cancellation. * * *’ The note was recalled. It was not paid at maturity, and on May 8th, some days after its due date, the assured died, without a payment of the premium having been made. The company conceded its liability to the plaintiff for four-twentieths of the sum insured, to wit: $1,000, and moved for such a direction to the jury; but the court granted the plaintiff's motion for the direction of a verdict for the full amount of the policy, and the judgment thereupon entered has been affirmed at the general term.

O'Brien and Maynard, JJ., dissenting.

Hale & Bulkeley, (Matthew Hale, of counsel,) for appellant.

Smith & Wellington, (George B. Wellington, of counsel,) for respondent.

GRAY, J., (after stating the facts.)

The evidence in this case was given by one witness, called for the plaintiff, who was the cashier and accountant in the office of the general agents through whom this policy was issued, and the facts are not in dispute. It was thought by the learned trial judge, and it is the basis of the respondent's contention here, that the facts proved warranted an inference, either that the powers of general agents were such as to authorize them to extend the time for the payment of the premium, or that there had been such knowledge and acquiescenceon the part of their principal, the company, with respect to a general custom to extend the time for the payment of premiums, and frequently to accept notes for the amounts, and with respect to the particular extension of time in question, as to amount to a ratification of the acts of these agents in such respects. It is difficult to understand how the powers of agents could have been more restricted than they were by the provisions of this policy, or what other language could have been resorted to by the company in the endeavor to guard itself against unauthorized acts of all agents. The fact that these were general agents does not take the case out of the comprehensive language in the instrument, which denies to any agent or other person authority to alter, modify, or waive any terms or conditions. Of this restriction upon the powers of all agents, the assured is deemed to have had knowledge when he accepted his policy. There is no reason for relaxing the rules of law with respect to the construction and enforcement of a contract of insurance, any more than there would...