Ferguson v. Union Mut. Life Ins. Co.
| Decision Date | 22 November 1904 |
| Citation | 187 Mass. 8,72 N.E. 358 |
| Parties | FERGUSON v. UNION MUT. LIFE INS. CO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Elva H. Young, for plaintiff.
E. H Lathrop, for defendant.
The policy of insurance upon which suit is brought contains provisions not generally found combined in such contracts, in the form presented. In the first paragraph it purports, in full-faced capital letters, to be a 'nonforfeiture whole life' policy, issued upon application of the wife of the insured for her separate use and benefit, and after reciting the amount of the annual premium, and receipt of its first payment, and the amount of insurance secured, expressly provides 'that after two or more of said annual premiums have been fully paid, this policy becomes a 'paid-up nonforfeiture policy,' for an amount equal to the sum of one-tenth of that hereby insured, for each and every premium which shall have been so paid, requiring no further payments of premiums, subject to no assessments, and entitled to its apportionment of the surplus accumulation in the ratio of its contribution thereto.' This is immediately followed by the company's promise to pay 'the said sum insured' upon notice and proof of death during 'the continuance and before the termination of the policy,' and also 'the just claim of the assured * * * under this policy.' It also contained these subsequent provisions
These clauses should not be construed as repugnant, unless irreconcilable with any reasonable interpretation which incorporates them as forming a harmonious plan for insuring the life of the plaintiff's husband; and a construction is to be adopted which, if possible, will give force and effect to each of them. Campbell v. New England Mutual Life Insurance Co., 98 Mass. 381, 394; Morrill & Whiton Construction Co. v. Boston, 186 Mass. 217, 71 N.E. 550; Thissell v. Schillinger, 186 Mass. 180, 184, 71 N.E. 300.
The clause of nonforfeiture was devised to work automatically, and, in order to become entitled to paid-up insurance, no affirmative action on the part of the assured or the insured became necessary, for as soon as two premiums, at least, had been paid, if the policy lapsed by reason of a failure to pay any annual premium thereafter due, she had a 'paid up, nonforfeiture policy,' for two-tenths of the whole amount; and, so long as the annual premium continued to be paid, each year added one-tenth more to the amount of insurance already secured.
As the only condition required to give life to this part of the contract was the payment of premiums, we proceed to inquire whether there was any evidence to support the finding made in favor of the plaintiff that six annual premiums had been paid in the lifetime of the insured. It is implied not only from the last two provisions already quoted, but from the further stipulation in the policy that 'said company shall have the right to set off any demand it shall have against either said assured or insured, their assigns or representatives, arising incidentally to, or in connection with, this insurance, against any claim for which the company shall be liable thereon,' that the annual premium might be paid in whole or in part by the promissory note of either the assured or insured. Beginning with the first payment, the annual premium was adjusted partly by a payment of money, and partly by the acceptance of the nonnegotiable promissory note of the insured, and after the first premium a statement of subsequent premiums was sent to him yearly by the secretary of the defendant. Each statement, after stating the amount of the annual premium, designated in detail the part to be paid in money, the amount of interest due on the 'regular premium note' given the year before in part payment of the premium then due, and the amount of the 'former note herewith returned'; and the balance showed the 'total amount of the new note,' and then directed that payment in this manner could be made to its 'authorized agent,' and when so made the policy would be continued 'in force for one year.' The agent, each year, on receiving the note and payment of the money, delivered the premium receipt, with the statement, 'I have received the above payment in cash and notes;' and this course of dealing between the parties was uniform, and continued through several years. The last settlement was made February 17, 1875, when the insured paid the whole premium by two notes; one called a 'cash note,' and representing the percentage of the premium which should have been paid in money, and the other the 'premium note,' representing the part payable by such a note. This last note also included the amount of all notes previously given, for the insured, while paying the interest annually due thereon, had not paid any part of the principal of the six preceding notes. When the cash note became due, and remained unpaid, the secretary of the company wrote three indorsements on it, each extending the time of payment, and providing that, if then paid, 'the payment of the within note * * * will hold the company liable under this policy,' and thus by implication recognized the premium note as being part payment of premiums within the terms of the policy.
It is to be observed that, after the first note had been given each new note not only included the amount of the former note which was returned and surrendered, but was increased by the note part of the yearly premium then due; and a possible argument that the last premium note given was only the last renewal of the first and succeeding notes, and hence the premiums had not been paid,...
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