McLaughlin v. Equitable Life Assurance Society
| Decision Date | 04 January 1894 |
| Docket Number | 5424 |
| Citation | 57 N.W. 557,38 Neb. 725 |
| Parties | ELMA R. MCLAUGHLIN, APPELLANT, v. EQUITABLE LIFE ASSURANCE SOCIETY, APPELLEE |
| Court | Nebraska Supreme Court |
APPEAL from the district court of Douglas county. Heard below before SCOTT, J.
AFFIRMED.
Isaac Adams, for appellant:
Appellant did not forfeit her right to paid-up insurance through failure to surrender to appellee her original policy within six months from date of default. Time was not made essential by the terms of the policy. (Waterman, Specific Performance sec. 462; May, Insurance, secs. 342, 343; Mutual Life Ins. Co. v. French, 30 Ohio St. 240; Tutt v Covenant Mutual Life Ins. Co., 19 Mo. App., 677; Northwestern Mutual Life Ins. Co. v. Little, 56 Ind 504; Ohde v. Northwestern Life Ins. Co., 40 Iowa 357; Symonds v. Northwestern Mutual Life Ins. Co., 23 Minn. 491; Hull v. Northwestern Mutual Life Ins. Co., 39 Wis. 397; Franklin Life Ins. Co. v. Wallace, 93 Ind. 17; Northwestern Mutual Life Ins. Co. v. Fort's Admr., 82 Ky. 269; St. Louis Mutual Life Ins. Co. v. Grigsby, 19 Bush [Ky.], 310; Eddy v. Phoenix Mutual Life Ins. Co., 65 N. H., 27.)
Appellant's default was not long continued. It is explained. It did not occasion any damage to appellee. The default does not therefore constitute laches. (May, Insurance, sec. 469; Barnes v. McMurtry, 29 Neb. 178; Symonds v. Northwestern Mutual Life Ins. Co., 23 Minn. 499.)
Upon the payment of the third annual premium the contract for paid-up insurance became mutual and should be enforced. (Chase v. Phoenix Mutual Life Ins. Co., 67 Me. 85; Montgomery v. Phoenix Mutual Life Ins. Co., 14 Bush [Ky.], 51; Johnson v. Southern Mutual Life Ins. Co., 79 Ky. 403; Southern Mutual Life Ins. Co. v. Montague, 84 Ky. 653; Smith v. National Life Ins. Co., 103 Pa. 177; Hexter v. United States Life Ins. Co., 15 S.W. [Ky.], 863; Attorney General v. Continental Life Ins. Co., 93 N.Y. 70; Waterman, Specific Performance, sec. 465; Barnes v. McMurtry, 29 Neb. 178; 2 Story, Equity, secs. 1314-1316.)
Isaac E. Congdon, contra:
The written contract supersedes prior statements made by the insurer. (Ruse v. Mutual Benefit Life Ins. Co., 23 N.Y. 516; Mutual Benefit Life Ins. Co. v. Ruse, 8 Ga., 534; Fowler v. Metropolitan Life Ins. Co., 116 N.Y. 389; Smith v. National Life Ins. Co., 103 Pa. 177; Knickerbocker Life Ins. Co. v. Heidel, 8 Lea [Tenn.], 488; Mutual Life Ins. Co. v. Bratt, 55 Md. 200; Continental Life Ins. Co. v. Hamilton, 41 Ohio St. 274; Union Mutual Life Ins. Co. v. Mowry, 96 U.S. 544; Thompson v. Knickerbocker Life Ins. Co., 104 U.S. 252; Mobile Life Ins. Co. v. Pruett, 74 Ala. 487.)
The time of the surrender of the policy is of the essence of the contract. (Sheerer v. Manhattan Life Ins. Co., 20 F. 886; Attorney General v. Continental Life Ins. Co., 93 N.Y. 74; Hudson v. Knickerbocker Life Ins. Co., 28 N.J.Eq. 168; Bussing's Executors v. Union Mutual Life Ins. Co., 34 Ohio St. 222; Coffey v. Universal Life Ins. Co., 10 Ins. L. J. [Wis.], 525; Smith v. National Life Ins. Co., 13 Ins. L. J. [Pa.], 330; Hanthorne v. Brooklyn Life Ins. Co., 5 Mo. App., 73; Michigan Mutual Life Ins. Co. v. Bowes, 42 Mich. 19; Wheeler v. Connecticut Mutual Life Ins. Co., 82 N.Y. 543; Dorr v. Phoenix Mutual Life Ins. Co., 67 Me. 438; Universal Life Ins. Co. v. Whitehead, 58 Miss. 226; Cooke, Life Ins., sec. 84; Union Central Life Ins. Co. v. McHugh, 7 Neb. 68.)
Joseph R. Clarkson, also for appellee.
The opinion contains a statement of the case.
This was an action by the plaintiff in the district court of Douglas county to enforce the specific performance of an agreement by the defendant to issue a paid up policy of insurance. There was a finding for the defendant, and a decree dismissing the petition, from which the plaintiff has prosecuted an appeal to this court. There is no controversy with respect to the material facts, which are as follows:
In the year 1884 the defendant company issued a policy of insurance on the life of Andrew W. McLaughlin in favor of his wife, the plaintiff herein. Said policy was for $ 5,000 current insurance, upon the payment of an annual premium of $ 314.90 on the 26th day of August of each year, to be fully paid up after fifteen of such payments. It was stipulated in said policy that in case of default by the insured after the payment of not less than three of such annual premiums, the defendant company would issue a paid up policy in favor of the plaintiff for as many fifteenth parts of the sum of $ 5,000 as equaled the number of premiums so paid, provided said policy should be surrendered duly receipted within six months from the date of such default. The provisions of the policy with respect to paid up insurance are as follows:
"And further, that if premiums upon this policy, for not less than three complete years, of assurance shall have been duly received by said society, and this policy should thereafter become void in consequence of default in payment of a subsequent premium, said society will issue, in lieu of such policy, a new paid up policy, without participation in profits, in favor of said Elma R. McLaughlin, if living, and if not living to the children of said Andrew W. McLaughlin or their guardian for their use, or if there be no children surviving, then to the executors, administrators, or assigns of said Andrew W. McLaughlin, for as many fifteenth parts of the original amount hereby assured as there shall have been complete annual premiums received in cash by said society upon this policy at the date when such default shall first be made; provided, however, that this policy shall be surrendered duly receipted within six months of the date of default in payment of premium as mentioned above."
In case of default in payments of premiums by the assured the contract contained the following provision:
"And if any premium or installment of a premium on this policy shall not be paid when due, this policy shall be void; and no credit for surplus accumulated on this policy shall be deemed applicable to the payment of any premium; nevertheless nothing herein contained shall be construed to deprive the holder of this policy of the privilege to demand and receive paid up insurance in accordance with the agreement contained in this policy."
It is conceded that three of the annual payments were made by Mr. McLaughlin, to-wit, those for the years 1884, 1885, and 1886, but that he failed to make the payment due in August, 1887. It is further admitted that said policy was not surrendered within six months thereafter, nor was a demand made for paid up insurance until the month of July, 1888, when the insured addressed a communication to the defendant company, in which he inquired what steps were necessary in order to preserve his rights under the contract. In reply to that inquiry he received a communication from the defendant informing him that his policy had been forfeited for the non-payment of the premium, and had then no surrender value. It is shown by the testimony of Mr. McLaughlin that he was, at the dates of both the applications and the policy, cashier of the First National Bank of Plattsmouth, and that Mr. Guyon, the agent who wrote his application, had his headquarters in the same bank. He testifies that he was informed by Guyon, in whom he had great confidence, that after the payment of three premiums his policy would be absolutely non-forfeitable, and that he could not lose the money thus paid. It also appears that he held a second policy for a like amount issued by the defendant company; that, being pressed for money to pay the premiums as they matured, he requested an extension of payments on the last named policy, which request was granted, but after making one or two payments thereon, it was suffered to lapse. This witness, in answer to questions by counsel for the plaintiff and the court, testified as follows:
Q. If I understand you, the payment that lapsed was due in August, 1887?
A. Yes, sir.
Q. You wrote them in July, 1888.
A. Yes.
Q. And they answered saying that your policies had lapsed?
A. Yes, sir.
Q. That they had no surrender value and were forfeited?
A. Yes, sir; that is what they said.
Q. You may state, Mr. McLaughlin, if you have not already, whether you knew of the clause, the proviso, in the policy respecting the surrender of it within six months after failure to pay. Why did you not know it?
A. Well, I suppose because I hadn't read it is the only particular reason. I took the word of the agent. I know I made a pretty strong effort to raise the third annual premium.
Q. Did you make any effort to raise this money within six months?
A. Yes, sir.
Q. Why didn't you present your policy within six months?
A. The reason why I didn't present it was because I kept thinking all the time I would raise the money and pay it and keep the policy alive; that was the reason. When I found I couldn't do it I wrote to the company.
Q. And the reason you didn't present and surrender the policy within the time provided by the policy was in the hopes that you could raise the money?
A. Yes, sir.
And on cross-examination he testified:
Q. When did you first read the policy?
A. When I wrote the company and got their reply that my policies were lapsed and no good, I then put it in the hands of my attorney. As near as I can remember, I believe it was in August, 1888.
Q. After you had written to the company?
A. Yes.
Q. And the first that you knew of the six months clause was when you read the policy, which reading was brought about through the receipt of this letter that you have spoken of as having received from the company?
A. Yes, sir.
Q. Did you ever offer to surrender the policy to them?
A. I don't know that I made a formal offer to surrender it. I...
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McLaughlin v. Equitable Life Assur Soc. of the U.S.
... ... R. Scott, Judge.Action by Elma R. McLaughlin against the Equitable Life Assurance Society of the United States for specific performance of a contract to issue to plaintiff a certain policy of insurance. From a decree for defendant, ... ...