Miles v. Connecticut Mut Life Ins Co

• Citation: 13 S.Ct. 275,147 U.S. 177,37 L.Ed. 128
• Decision Date: 09 January 1893
• Docket Number: No. 92,92
• Parties: MILES v. CONNECTICUT MUT. LIFE INS. CO
• Court: U.S. Supreme Court

147 U.S. 177

13 S.Ct. 275

37 L.Ed. 128

MILES

v CONNECTICUT MUT. LIFE INS. CO.

No. 92.

January 9, 1893.

R. P. White, for plaintiff in error.

Hunn Hanson, for defendant in error.

Mr. Justice BLATCHFORD delivered the opinion of the court.

This is an action at law, brought by Sarah G. Miles against the Connecticut Mutual Life Insurance Company, in the court of common pleas No. 3 for the county of Philadelphia, state of Pennsylvania, and removed by the defendant, a Connecticut corporation, into the circuit court of the United States for the eastern district of Pennsylvania.

The suit was brought to recover $5,000, with interest, on a policy of insurance issued by the defendant on June 20, 1877. The policy set forth that, in consideration of the representations and declarations made to the corporation in the application for the insurance, and the annual premium of $140.20, to be paid to it on or before June 20th in every year, it insured the life of John S. Miles (the insured) for the term of his natural life, in the sum of $5,000, for the sole use and benefit of Sarah G. Miles, (the assured,) the wife of the insured. It was provided in the policy that, if any premium thereon, subsequent to the first, was not paid when due, 'then this policy shall cease and determine.'

All of the premiums paid on the policy were paid by John S. Miles with his own money. The policy was made at his instance. It remained continuously in his possession, and during the entire time it was in force his wife had nothing to do with it.

The sixth condition in the policy, being one of the express conditions and agreements upon which it was issued and accepted, was as follows: '(6) That if, after the payment of two or more annual premiums upon this policy, the same shall cease and determine by default in the payment of any subsequent premium when due, then this company will grant a paid-up policy, payable as above, for such amount as the them present value of this policy will purchase, as a single premium: provided, that this policy shall be transmitted to and received by this company, and application made for such paid-up policy, during the lifetime of the said insured, and within one year after default in the payment of premium hereon shall first be made.'

In June, 1886, John S. Miles called at the office of the company in Philadelphia, where all the preceding premiums had been paid, and said that he was unable to pay the premium then coming due, and on that account desired to give up the policy for $5,000, and take a paid-up policy under the sixth condition above set forth. He was told by the company the disadvantages of doing so, and was advised by it that a plan more beneficial would be to have so much of the $5,000 released as would enable him, with the sum allowed by the company for such release, to pay what would be due as a premium on the remaining sum under the policy. The clerk of the company calculated the amount, and, finding that if $700 were released, an allowance would be made by the company of $82.39, which was very nearly what would then be due as premium on the $4,300 remaining, Mr. Miles decided to adopt that course. He procured from the company the requisite papers for the signature of his wife, and afterwards delivered such papers to the company, with her name, purporting to be signed to a receipt, dated June 20, 1886, for $82.39, 'as a full consideration and satisfaction for all claims and demands' on account of $700 of the amount of the $5,000 policy, 'released, quitclaimed, surrendered, and discharged to said company;' the $82.39 'having been applied as follows: In part payment of 1886 premium on the remaining $4,300 of said policy.' Thereupon Mr. Miles received from the company its policy for $4,300 upon his life for his wife's benefit. That policy was executed and dated June 28, 1886, and stipulated for an annual premium of $120.57. It bore the same number as the $5,000 policy.

In June, 1887, Mr. Miles again visited the office of the company at Philadelphia, and said that he could not pay the premium on the $4,300 policy, and insisted upon taking out a paid-up policy, though again advised by the defendant against doing so. He was given the requisite receipt to procure the signature of his wife to it, and returned it to the company with what purported to be her signature. This receipt was dated June 20, 1887, and set forth that she had received from the company $583.24 'as a full consideration and satisfaction for all claims and demands' on account of policy No. 145,756, 'released, quitclaimed, surrendered, and discharged to said company, said amount having been applied as follows: In payment of a premium on a participating paid-up policy' for $1,195. Mr. Miles received from the company, on July 9, 1887, a policy of that date for $1,195, on his life, payable to his wife.

Mrs. Miles testified that her name on both receipts had been written by her husband, without her assent; but it also appeared that her name to the application for the $5,000 policy was written by him, and that in his dealings with two other insurance companies he had signed her name.

Mr. Miles died in February, 1888, of pulmonary consumption, and his wife testified that a year before his death he was in very poor health. He was able, however, to attend to his business affairs within three months of his death, and there was no evidence that in June, 1886, he was otherwise than in good health.

In the affidavit of defense put in by the defendant in the state court there were set forth the issuing of the policy for $4,300 and of the policy for $1,195, the discharge of the company from all liability on the policies for $5,000 and $4,300, and the fact that no premium had been paid on the $5,000 policy after June 28, 1886. The defendant pleaded non assumpsit.

The case was tried before Judge Butler and a jury, in April, 1889. At the trial, the plaintiff asked the court to charge the jury: '(1) That, if the company united with the agent, and accepted the surrender of the policy in suit from him when he had no authority to make such surrender, and did this without notice to or knowledge of the plaintiff, they cannot complain of the nonpayment of premium after such surrender and acceptance.' To that point the court answered: 'The futile attempt to surrender the policy (and the transaction referred to was nothing more in legal contemplation) had no effect whatever on the rights or obligations of either party. The defendants were not required to notify the plaintiff of the transaction, but they were fully justified in believing, by the conduct and representations of her agent and husband in presenting the paper, which purported to be signed by her, that she knew of and authorized the transaction. There is nothing in what is stated in the point sufficient to excuse her failure to pay the premium when it became due.'

The plaintiff also asked the court to charge the jury: '(2) If the surrender was made without authority, it was a wrongful act on the part of both the company and the agent, and the nonpayment of the premium is not a bar to the recovery.' The court disaffirmed that point.

The plaintiff also asked the court to charge the jury: '(3) The jury are the sole judges of the credibility of the statement of the witnesses as to what took place at the time of the surrender.' To that point the court answered: 'It is true, as a general proposition, that the jury are the judges of the credibility of the witnesses, but the jury are not at liberty to disbelieve the witnesses without finding something in their conduct or statements, or in other evidence in the cause, tending to discredit them, and such finding, under the circumstances, would be unjustifiable. Furthermore, if these witnesses were disbelieved and disregarded, the result would not be varied. No conclusion that would justify the nonpayment of the premiums would be permissible under the evidence, even in the absence of their testimony.'

The plaintiff also asked the court to charge the jury: '(4) If the company accepted the surrender without taking due steps to ascertain whether Mrs. Miles had authorized it, this was such negligence as amounts to evidence of collusion.' The court disaffirmed that point.

The court, in respect to the defense that the $5,000 policy was annulled by surrender, charged the jury that that defense was not sustained; that the policy was not annulled; and that the transaction between the plaintiff's husband, who was her agent, and the defendant, respecting it, was not authorized by the plaintiff, and therefore had no effect on her rights or obligations under the contract.

As to the defense that the premiums due on the $5,000 policy were not paid, the court charged the jury that that defense was sustained, and was fatal to the plaintiff's claim; and the court further charged the jury as follows: 'The premiums, the payment of which was necessary to keep the policy alive, were not paid, and nothing has been shown, in the judgment of the court, which excuses or tends to excuse the failure to pay them. Whether the failure resulted from the agent's inability to pay or his unwillingness to pay is unimportant. He did not pay, and the principal must bear the consequences of his failure. It was her duty to have the payments made, and, failing in this, she cannot recover.' The court also charged the jury as follows: 'As I have already charged you, gentlemen, there is nothing here to justify a failure to pay the premiums, and, in consequence of that failure, the plaintiff cannot recover, and your verdict must be for the defendant.'

The plaintiff excepted to the direction to find a verdict for the defendant; to the refusal of the court to affirm the plaintiff's points 1, 2, 3, and 4; to the answer to each of those points and to the instruction of the court that, as the evidence showed that the premiums were not paid, and nothing had been shown to excuse such nonpayment, the...