Phenix Insurance Company of Brooklyn, New York v. Rollins

• Decision Date: 16 April 1895
• Docket Number: 5964
• Citation: 63 N.W. 46,44 Neb. 745
• Parties: PHENIX INSURANCE COMPANY OF BROOKLYN, NEW YORK, v. JOHN A. ROLLINS
• Court: Nebraska Supreme Court

63 N.W. 46

44 Neb. 745

PHENIX INSURANCE COMPANY OF BROOKLYN, NEW YORK, v. JOHN A. ROLLINS

No. 5964

Supreme Court of Nebraska

April 16, 1895

ERROR from the district court of Lancaster county. Tried below before TUTTLE, J.

REVERSED AND REMANDED.

A. G Greenlee, for plaintiff in error:

The provision for suspending the policy in case of default in payment of the premium note is not unreasonable. (Phenix Ins. Co. v. Bachelder, 32 Neb. 490; St. Paul Fire & Marine Ins. Co. v. Coleman, 43 N.W. [Dak.], 693; Williams v. Albany City Ins. Co., 19 Mich. 465.)

The judgment of the court below is in violation of the principle that parties have the right to make their own contract, and that where one party does all he agreed to do, and gives all that he agreed to give, he has a right to enforce the contract against the other party. (Fleetwood v. Dorsey Machine Co., 95 Ind. 491; St. Paul Fire & Marine Ins. Co. v. Coleman, 43 N.W. [Dak.], 693; Williams v. Albany City Ins. Co., 19 Mich. 451; Minnesota Farmers Mutual Fire Ins. Association v. Oleson, 44 N.W. [Minn.] 672.)

The plaintiff is entitled to recover the full amount of the note. (American Ins. Co. v. Klink, 65 Mo. 78; Phoenix Ins. Co., v. Lansing, 15 Neb. 494; American Ins. Co v. Henley, 60 Ind. 515; Shimp v. Cedar Rapids Ins. Co., 16 N. E. Rep., [Ill.], 229; Robinson v. German Ins Co., 11 S.W. [Ark.], 686; Williams v. Albany City Ins. Co., 19 Mich. 451; Blackerby v. Continental Ins. Co., 15 Ins. L. J. [Ky.], 756.)

Davis & Hibner, contra:

The insurance company can only recover the amount of premium actually earned. (Yost v. American Ins. Co., 39 Mich. 531; Mathews v. American Ins. Co., 40 Ohio St. 135; American Ins. Co. v. Stoy, 41 Mich. 385.)

OPINION

The facts are stated in the opinion.

NORVAL, C. J.

This suit is on a promissory note for the sum of $ 40, bearing date July 10, 1887, due in one year, made by the defendant in payment of the premium upon a policy of fire insurance issued to him by the plaintiff. Upon the trial the court rendered judgment against the defendant for the sum of $ 19.28. To review this judgment is the object of this proceeding. The only contention here is that the verdict is contrary to the law and the evidence. The cause was tried and decided in the court below upon the following stipulation of facts:

"It is admitted that the defendant executed the note hereto attached, and that the consideration for said note was the execution and delivery to the defendant by plaintiff of a policy of insurance, a copy of which is hereto attached, and marked 'Exhibit B;' that the defendant duly received said policy, and has at all times since said day retained possession of the same; never offered to surrender it to the plaintiff, or to any one for it, nor has it ever been demanded from the defendant by the plaintiff; that the defendant, at the time of the execution and delivery of the said note and the receipt of the said policy, was fully advised as to the provisions and conditions of the said papers.

"It is further stipulated that the usual, customary, and reasonable price of the insurance mentioned in the policy, if taken for one year only, would be $ 13.33, but that in the consideration of the defendant taking the policy for five years the plaintiff agreed to insure said defendant for five years for the amount of three years' premium if taken for a single year.

"It is further stipulated that the plaintiff duly issued the said policy and delivered the same to the defendant; has never canceled the same, but at all times since the said note became due has endeavored to collect the same, and that if the defendant has not had insurance for the full term of five years, as stated in said policy, it is wholly due to the fact of the failure of the defendant to pay the said note, taken in connection with the conditions in said note and policy."

The note, which is the foundation of the suit, contained this clause: "If this note is not paid at maturity, said policy shall then cease and determine, and be null and void and so remain until the same shall be fully paid and received by said company."

The following condition appears upon the face of the policy of insurance: "In case the assured fails to pay the premium note or order at the time specified, then this policy shall cease to be in force, and remain null and void during the time said note or order, or any part thereof, remains unpaid after its maturity; and no legal action on the part of this company to enforce payment shall be considered as reviving the policy; the payment of the premium in full, however, revives the policy and makes it good for the balance of its term."

If we correctly understand the argument of counsel for defendant it amounts to this: That by virtue of the foregoing provision contained in the policy and the stipulation in the note, the insurance terminated upon default being made in the payment of the premium note, and the insurance having ceased in favor of the plaintiff at the maturity of the note, the premium likewise ceased to accrue against the defendant. This is, doubtless, the view adopted by the trial court. If this is the proper construction to be placed upon the clauses quoted above, when read in the light of the facts in the case, the decision is right, otherwise the judgment must be reversed. By the terms of the contract the policy was voidable upon the defendant making default, but voidable merely at the option of the company. The condition declared the insurance suspended during default of payment of the premium note. The provision was inserted in the policy for the sole benefit of the insurer and not the insured, and is valid and binding. This stipulation could be waived by the company. This was decided in Phenix Ins. Co. v. Bachelder, 32 Neb. 490, 49 N.W. 217, and the same doctrine is held by other courts. (Zinck v. Phoenix Ins. Co., 60 Iowa 266, 14 N.W. 792; Mehurin v. Stone, 37 Ohio St. 49; Palmer v. Sawyer, 114 Mass. 1.) It appears that this defendant has retained the policy and never offered to surrender it, and that plaintiff has at all times since the maturity of the note endeavored to enforce the collection of the note, and brought this action for that purpose. As to what acts have been construed as a waiver of conditions in a policy similar to the one in this case, see Johnson v. Southern Mutual Life Ins. Co., 79 Ky. 403; East Texas Fire Ins. Co. v. Perkey, 24 S.W. 1080; Brady v. Prudential Ins. Co., 29 N.Y.S. 44; Western Horse & Cattle Ins. Co. v. Scheidle, 18 Neb. 495, 25 N.W. 620; Nebraska & Iowa Ins. Co. v. Christiensen, 29 Neb. 572, 45 N.W. 924; Phenix Ins. Co. v. Dungan, 37 Neb. 468, 55 N.W. 1069. In the last case the stipulations in the premium note and policy were the same as in the case before us. After the maturity of the note a payment was made thereon and the note was left with an agent...