Iowa Life Insurance Company v. Lula Lewis

• Decision Date: 08 December 1902
• Docket Number: No. 53,53
• Citation: 23 S.Ct. 126,47 L.Ed. 204,187 U.S. 335
• Parties: IOWA LIFE INSURANCE COMPANY, Plff. in Err. , v. LULA T. LEWIS
• Court: U.S. Supreme Court

187 U.S. 335

23 S.Ct. 126

47 L.Ed. 204

IOWA LIFE INSURANCE COMPANY, Plff. in Err.,

v LULA T. LEWIS.

No. 53.

Argued October 21, 22, 1902.

Decided December 8, 1902.

This is an action upon a life insurance policy, and was originally brought in the district court of Tarrant county, Texas, and removed by the defendant, plaintiff in error here, to the circuit court of the United States for the northern district of Texas on the ground of diversity of citizenship.

The action was to recover $3,000, alleged to have become due upon a life insurance policy issued by plaintiff in error to Thomas M. Lewis, the husband of the defendant in error. The defendant in error also, under the laws of Texas (Tex. Rev. Stat. art. 3071), prayed judgment for interest on the said $3,000 from the date of the death of the said Thomas M. Lewis, together with a penalty of 12 per cent on the amount due, and for an attorney's fee of $750.

The case was tried to a jury and resulted in a verdict for the defendant in error for $3,000, the principal of the policy, with interest from January 1, 1900, $300 damages, and an attorney's fee of $500. Judgment was entered in accordance with the verdict.

The statute of the state of Texas, allowing interest and attorney fees, was attacked by plaintiff in error as being in contravention of the Constitution of the United States. The statute was sustained, and the case was brought here under § 5 of the judiciary act of 1891. [26 Stat. at L. 826, chap. 517, U. S. Comp. Stat. 1901, p. 549.]

By the policy the plaintiff in error promised to pay defendant in error the sum of $3,000 upon the death of Thomas M. Lewis, if death should occur on or before the 4th day of March, 1900, and to pay the sum within sixty days after the receipt by plaintiff in error of satisfactory proofs of death and its cause. Lewis died on the 7th of October, 1899.

The issues in the case besides the constitutionality of the Texas statute are (1) whether the insurance company waived proof of death; (2) whether the policy had ceased and determined before the death of the insured by nonpayment of the premium. The evidence bearing upon the issues is as follows:

'The first sentence of the policy sued upon, appearing upon the face thereof, reads as follows: 'The Iowa Life Insurance Company, in consideration of the stipulations and agreements in the application herefor (a copy of which is hereto attached), and of the provisions and requirements upon the next page of this policy, all of which are a part of this contract; and in consideration, also, of the payment of seventy-four dollars and sixty-one cents, being the premium hereon for the first year, hereby promises to pay the sum of three thousand dollars to Lula T. Lewis (wife of the insured) if living; if not living, to the insured's executors, administrators, or assigns (less any indebtedness of the insured or beneficiary to this company, together with the balance of any year's premium remaining unpaid), within sixty days after receipt and acceptance, at the company's office in Chicago, Illinois, of satisfactory proofs of the fact and cause of death, within the terms of this policy, of the said Thomas M. Lewis, of Fort Worth, county of Tarrant, state of Texas (the insured under this policy), provided such death shall occur on or before 12 o'clock noon of the fourth day of March, A. D. 1900.'

'Upon the second page of the policy is a provision reading as follows, it being one of the provisions referred to in the sentence above quoted from the face of the policy: 'This policy is a contract made and to be performed in accordance with the laws of the state of Iowa, and shall be construed only in accordance with the charter of said company and the laws of said state, and shall not go into effect until the premium hereunder, or a semi-annual or quarterly instalment thereof, shall have been actually paid during the lifetime and continuance in good health of the insured. Upon payment of the premium there shall be delivered a receipt signed by the president or secretary, and countersigned by an authorized agent.'

'Another provision appearing upon the second page of the policy reads as follows: 'All agreements made by this company are signed by the president or secretary. This power will not be delegated. No other person can alter or waive any of the conditions of this policy, or issue permits of any kind, or make an agreement binding upon said company.'

'The policy sued upon is of the kind designated by the defendant as a 'ten-year convertible term stock' policy. It is dated March 13, 1899. The annual premium thereon is $74.61.

'The policy sued upon was issued in pursuance of a written and printed application therefor made by the insured under date of March 4, 1899. Said application requests the issuance of a 'ten-year convertible term stock' policy, and states that the premium of $74.61 is to be paid annually. It concludes with a recital as follows: 'A note for premium of $74.61 has been paid under this application, to make the insurance binding from the date hereof, on condition that if the risk is not assumed by the company this sum is to be returned, in accordance with the receipt given as voucher for said payment.'

'On March 4, 1899, the insured executed and delivered to S. E. Starn, as agent of the defendant, in partial settlement of his premium, his note, reading as follows:

'$37.30.

March 4th, 1899.

'Six months after date I promise to pay to the order of myself thirty-seven 30-100 dollars, at Ft. Worth, Texas, value received, with interest at 6 per cent per annum.

'T. M. Lewis, M. D.

'Which he indorsed in blank as follows:

'T. M. Lewis, M. D.'

'On March 5, 1899, S. E. Starn transmitted to the defendant the insured's said application and note with a letter, which, in so far as it is material to this bill of exceptions, reads as follows: 'I herewith hand you application of Thomas M. Lewis for $3,000.00, 10-year term con. stock. Also his note to cover settlement.' These papers were received by the defendant March 8, 1899, at its office in Chicago.

'The application was accepted by the defendant March 13, 1899. The defendant did not signify to Thomas M. Lewis its acceptance of his application in any way other than by making out and forwarding to its agent, S. E. Starn, for delivery, the policy sued upon, and the premium receipt hereinafter mentioned, which it did on March 16, 1899.

'On March 18, 1899, S. E. Starn countersigned the premium receipt, and delivered it and the policy sued upon to the insured. The policy and receipt were delivered at the same time and were received by the insured

'Said premium receipt reads as follows.

'Iowa Life Insurance Company.

'Chicago office.

'Received $74.61, being the first annual premium due March 4, 1899, under policy No. 30,140, on the life of Thomas M. Lewis, subject to the terms of the contract and the conditions on the back hereof.

'Read the notice to policy holders on the back of this receipt.

'This receipt is not binding unless it is countersigned by

'(Signed) C. E. Mabie, President.

'S. E. Starn, Ag't, Ft. Worth, Tex.

'Countersigned this 18th day of March, 1899.

S. E. Starn.

(On back of receipt.)

'For terms of mutual agreement, see application and policy.

'Notice to Policy holders.

'This receipt, to be valid, must be signed by the president or secretary of the company, and in exchange therefor, cash or its equivalent, be given by the holder of the policy, on or before date payment is due, and when payment hereon is made to an authorized agent or collector, such agent or collector must countersign at the date of payment to him.

'If note be given for the payment of the premium hereon or any part thereof, and same is not paid at maturity, the said policy shall cease and determine.

'For the first annual premium, the insured gave the above-described note for $37.30, and agreed to perform professional services for S. E. Starn to the value of the remaining $37.31. Starn was to furnish professional work to be done by Dr. Lewis in the examination of applicants for insurance and otherwise, and Dr. Lewis was to do it and let Starn have the fees. No work ever was done, and no money ever was paid to S. E. Starn or the defendant in pursuance of this verbal arrangement. Except that the note was given and the verbal agreement made, as just above stated, the defendant never received, and the insured never paid, anything upon account of the premium for the policy sued upon. S. E. Starn testified that before the issuance of the policy he reported to the defendant his agreement with Dr. Lewis concerning the payment of the premium.

'The policy sued upon is in the form always used by the defendant in making contracts of insurance of the kind designated by its 'ten-year convertible term stock' contracts. At the time of issuing said policy it was the defendant's universal practice to issue with its policies premium receipts in form like the one delivered to the insured in this case.

'The defendant never sold or transferred the note received by it from the insured, but continued to be the owner thereof until the time of the trial. Some time before its maturity the defendant sent said note to S. E. Starn for collection. S. E. Starn deposited it for collection with the Farmers' & Mechanics' National Bank of Fort Worth, Texas, on August 24, 1899. The bank held the note until September 25, 1899, when it returned it unpaid to S. E. Starn. The manager of its collection department testified that it would have accepted payment of the note at any time before its return to S. E. Starn, and that it had received no instructions from S. E. Starn with reference to the acceptance of payment after maturity.

'S. E. Starn made no effort to collect the note before its maturity, except that he deposited it in the bank for that purpose, nor had he, up to that time, furnished any professional work for the insured to do, in pursuance of the verbal agreement,...