Michigan Mut. Life Ins. Co. v. Bowes

• Citation: 51 N.W. 962,42 Mich. 19
• Court: Michigan Supreme Court
• Decision Date: 28 October 1879
• Parties: MICHIGAN MUT, LIFE INS. CO. v. BOWES.

51 N.W. 962

42 Mich. 19

MICHIGAN MUT, LIFE INS. CO. v. BOWES.

Supreme Court of Michigan

October 28, 1879

Error to circuit court, Wayne county.

Assumpsit by Mary E. Bowes against the Michigan Mutual Life Insurance Company. Judgment for complainant. Defendant brings error. Affirmed.

Maybury & Conely, for appellant.

Wilkinson, Post & Wilkinson and C. A. Kent for appellee.

COOLEY J.

There are no disputed facts in this case. On the 15th day of November, 1873, the plaintiff in error issued to Mary E Bowes, the defendant in error, a policy of insurance by which the payment of $10,000 was assured to her on the death of her husband, William R. Bowes, in consideration of the payment of an annual premium of $434.80. Mr. Bowes himself effected the insurance, and, instead of paying the first premium in money, gave his note therefor. November 15, 1874 the second premium was paid, and the note which was given for the first was taken up. November 15, 1875, Mr. Bowes gave his note for the third premium, less $62, the amount of certain allowances made to him by the insurer. November 15, 1876, the amount of this note was added to the fourth premium, and two notes were given by Mr. Bowes therefor, one of $538.83, due in 7 months, with 10 per centum interest, and one of $222.39, due in 60 days. This last note when it fell due was renewed for 90 days, and was made to bear 10 per centum interest. Neither of these notes was ever paid. The premium which fell due on November 15, 1877, was not paid, nor was any note or other security given for it. Mr. Bowes died November 17, 1878. It was provided in the policy that, if the premiums should not be paid when due, the company should not be liable for the payment of the sum insured, or any part thereof, and the policy should cease and determine, excepting only that on the surrender of the policy duly receipted, within one year after an accrued premium was due, the insured being then alive, the company would issue a paid-up policy for the amount the surrender value would purchase as a single premium. Claiming that the notes were, in legal effect, payments of the premiums for which they had been given, Mrs. Bowes on November 8, 1878, tendered to the company a surrender of the policy, and demanded a paid-up policy for the surrender value, which the company refused to issue while the notes remained unpaid. The surrender value would at that time have purchased a paid-up policy for $1,210.85. For this sum Mrs. Bowes thereupon brought suit, and in the circuit court recovered judgment. There was no express agreement to receive the notes in payment of the premiums, and it is therefore insisted that, according to the well-settled rule in this state, they cannot amount to payment until actually paid. Gardner v. Gorham, 1 Doug. (Mich.) 507; Hotchin v. Secor, 8 Mich. 494. It appears, however, that renewal receipts were given when the notes were taken, so that by the express act of the company the policy was kept alive, and the company precluded from any right to insist upon a forfeiture up to ...