Mutual Life Insurance Company of New York v. Tine Cohen

• Decision Date: 03 December 1900
• Docket Number: No. 157,157
• Parties: MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Petitioner , v. TINE COHEN
• Court: U.S. Supreme Court

179 U.S. 262

21 S.Ct. 106

45 L.Ed. 181

MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Petitioner,

v TINE COHEN.

No. 157.

Argued March 14, 15, 1900.

Decided December 3, 1900.

[ Messrs. Julien T. Davies, John B. Allen, Edward Lyman Short, Frederic D. McKenney, and Robert C. Strudwick for petitioner.

Messrs. S. Warburton and Harold Preston for respondent.

Statement by Mr. Justice Brewer:

On June 10, 1885, the petitioner delivered to Alexander Cohen, in the state of Montana, a life insurance policy for $3,000, conditioned upon the annual payment of a premium of $89.61. Upon it the insured paid premiums up to and including June 10, 1892. No subsequent premiums were paid. On September 21, 1897, he died. His wife, Tine Cohen, was the beneficiary named in the policy.

The application commenced in these words: 'Application for insurance in the Mutual Life Insurance Company of New York, 140 to 146 Broadway, corner of Liberty street, New York city, subject to the charter of such company and the laws of said state.' It further contained this provision: 'That if the insurance applied for be granted by the company, the policy, if accepted, will be accepted subject to all the conditions and stipulations contained in the policy. Among those conditions and stipulations was this: 'Notice that each and every such payment is due at the date named in the policy is given and accepted by the delivery and acceptance of this policy, and any further notice, required by any statute, is thereby expressly waived.'

On November 9, 1898, this action was commenced in the circuit court of the United States for the district of Washington.

The single defense was the nonpayment of premiums after June 11, 1892. There was no suggestion of rescission, abandonment, knowledge by the beneficiary of the nonpayment of the premium, or any refusal or failure on her part in respect to the policy. A demurrer to the answer was sustained, judgment rendered for the amount of the policy, less the unpaid premiums, which judgment was affirmed by the United States circuit court of appeals for the nonth circuit (38 C. C. A. 696, 97 Fed. Rep. 985), and thereupon the case was brought here on certiorari.

Mr. Justice Brewer delivered the opinion of the court:

Mutual L. Ins. Co. v. Phinney, 178 U. S. 327, 44 L. ed. 1088, 20 Sup. Ct. Rep. 906, was an action against the same insurance company, in the same district, on a policy like the one in controversy here, save that in that the insured was himself the beneficiary. It resulted in a judgment in the circuit court against the company. Thereupon the company sought to transfer it by writ of error to the court of appeals of that circuit, but that court dismissed the writ of error. Thereafter, on April 19, 1897, a certiorari was issued by this court. 166 U. S. 721, 17 Sup. Ct. Rep. 1004. On examination we held that the court of appeals erred in dismissing the writ of error, that it had jurisdiction, and that it ought to have reversed the judgment of the circuit court. The decision was based on the ground of error in the ruling of the circuit court in respect to rescission and abandonment. In the opinion we referred to the fact that there was a primary question of the applicability of a statute of the state of New York, but deemed it unnecessary to decide it. That decision was followed by the cases of the same company against Sears (178 U. S. 345, 44 L. ed. 1096, 20 Sup. Ct. Rep. 1032) against Hill (178 U. S. 347, 44 L. ed. 1097, 20 Sup. Ct. Rep. 1032) against Allen (178 U. S. 351, 44 L. ed. 1098, 20 Sup. Ct. Rep. 1032),—all of which cases were disposed of in like manner.

The primary question noticed, but not decided, in those cases is distinctly and solely presented in this.

The insurance policy contained a stipulation that it should not be binding until the first premium had been paid and the policy delivered. The premium was paid and the policy delivered in the state of Montana. Under those circumstances, under the general rule, the contract was a Montana contract, and governed by the laws of that state. Equitable Life Assur. Soc. v. Clements, 40 U. S. 226, 232, sub nom. Equitable Life Assur. Soc. v. Pettus, 35 L. ed. 497, 500, 11 Sup. Ct. Rep. 822. In that state, there being no statutory provisions to the contrary, the failure to pay the annual premium worked, in accord with the terms of the policy, a forfeiture of all claims against the company.

New York, on the other hand, the state by which the insurance company was chartered and in which it had its principal office, by § 1 of chapter 321 of 1877 had enacted—— 'Sec. 1. No life insurance company doing business in the state of New York shall have power to declare forfeited or lapsed any policy hereafter issued or renewed by reason of nonpayment of any annual premium or interest, or any portion thereof, except as hereinafter provided.'

The provision rererred to, and which is stated at length in the succeeding part of the section, is one for notice of a special kind and to be given in a particular way. The section is quoted in full in 178 U. S. 330, 44 L. ed. 1089, 20 Sup. Ct. Rep. 906.

This notice was not given. Hence, if the law of New York controls, the policy was still in force and the plaintiff was entitled to recover.

The question therefore is whether the law of New York controls.

The presumption is in favor of the law of the place of contract. He who asserts the contrary has the burden of proof. The New York statute does not purport to change any insurance company charter. On the contrary, its obvious purpose is only to reach business transacted within the state. Proceeding on the accepted principle that a state may determine the conditions, the meaning, and limitations of contracts executed within its borders, the language of the statute reaches contracts made within the state. Undoubtedly a foreign insurance company making a contract within the state of New York would find that contract burdened by its provisions, and equally clear is it that such company making a contract in another state would be free from its limitations. There is no indication of an intent on the part of the legislature of New York to affect, even if it were possible, the general powers of a foreign company coming within the state and transacting business. But on the fact of the statute there is no express demarcation between foreign and local companies. There is no attempt to say that a foreign company doing business within the state shall, as to such business, be subject to the prescribed limitations, and that a home company doing business within the state and elsewhere shall as to all its business be so limited. If we cannot from the language impute to the legislature an intent to regulate the business of a foreign company outside of the state, how can we find in such language an intent to prescribe limitations upon the contracts of a home company outside the state? In the absence of an expressed intent it ought not to be presumed that New York intended by this legislation to affect the right of other states to control insurance contracts made within their limits. Can it be that the state of New York, aware of the fact that other states and other countries might by their legislation properly prescribe terms and conditions of insurance contracts, meant by this legislation to restrict its local companies from going into those states and countries and transacting business in compliance with their statutes if in any respect they were found to conflict with the regulations prescribed for business transacted at home?

Again, it is worthy of notice that the state of New York has changed its legislation repeatedly in the last quarter of a century in respect to this very matter of notice. See Laws 1876, chap. 341, § 1; the statute now under consideration, Laws 1877; Laws 1892, chap. 690, § 92; Laws 1897, chap. 218, § 92. The varying provisions of these statutes, directed in terms, not to local companies, but to companies doing business in the state of New York, strengthen the conclusion that the state was not thus changing the several charters of its companies, but prescribing only that which in its judgment from time to time was the proper rule for business transacted within the state.

Again, the terms of the act itself tend in the same direction. It provides for a...