Rosenplanter v. Provident Sav. Life Assur. Soc. of New York

• Decision Date: 03 October 1899
• Docket Number: 695.
• Parties: ROSENPLANTER v. PROVIDENT SAV. LIFE ASSUR. SOC. OF NEW YORK.
• Court: U.S. Court of Appeals — Sixth Circuit

96 F. 721

ROSENPLANTER v. PROVIDENT SAV. LIFE ASSUR. SOC. OF NEW YORK.

No. 695.

United States Court of Appeals, Sixth Circuit.

October 3, 1899

W. D Wilkerson, for plaintiff in error.

Frank P. Posten, for defendant in error.

Before LURTON, Circuit Judge, and CLARK and THOMPSON, District Judges.

LURTON Circuit Judge, after making the foregoing statement of facts .

The declaration shows that the contract of insurance upon which the suit was brought was made April 1, 1889. In consideration of the premium paid and stipulated to be paid, the insurance society agreed to pay the plaintiff, Mary A. Rosenplanter the wife of the insured, Carlos G. Rosenplanter, the sum of $10,000 within 90 days after acceptance of satisfactory proof of the death of said Carlos G. Rosenplanter, 'provided such death shall occur before 12 o'clock on the 1st day of April, 1890. ' The said contract further obligated the society 'to renew and extend said insurance upon like conditions during each succeeding year of the life of the insured from the date thereof upon the payment of the annual renewal premiums for the actual age attained by said insured, in accordance with the schedule printed on the next page of said policy, for each one thousand dollars insured, except as reduced by the application of the surplus and guaranty fund, such payments to be made in semi-annual equivalents, payable on 1st days of October and April, respectively, in each succeeding year. ' But it was further provided in said policy that, if 'the mortality in this society shall continue as favorable in the future as it has been in the past in the largest and best companies, this insurance will be extended and renewed, during the whole expectation or probable lifetime of the within-named insured, at the rate of premium charged for the first year only of this policy. ' It was also a term of the policy that failure to pay when due any semiannual equivalent 'will terminate the policy,' and that, 'subject to the stipulations regarding payment of premiums,' the policy should, if the death occurred two or more years after its date, 'be incontestable, except for fraud in obtaining this policy. ' The form of the policy is not at all like that construed in Insurance Co. v. Statham, 93 U.S. 24, where it was said: 'These policies did assume the life of the party named in a specific amount for the term of his natural life. ' The policy here involved is an agreement for a policy of insurance from year to year, and the payment of an annual premium only paid for an insurance for a single year. The extension of the policy for a succeeding year depended upon compliance with the terms and conditions in respect of a further premium payment to be made by the insured. 'It was,' to quote the language of the court of appeals of New York in McDougall v. Society, 135 N.Y. 551-553, 32 N.E. 251, where a policy in essentials much the same was involved, 'a contract for an insurance for the term of one year only, providing, however, by its terms, for its renewal for successive years upon compliance by the assured with the conditions named. ' Nevertheless, the terms upon which it might be renewed by the payment for succeeding years of the same rate of insurance charged for the first year only, notwithstanding the higher rate chargeable for the greater age of the insured, and the growing interest of the assured in the surplus premiums paid by him which go to form a reserve or accumulated fund operating to reduce subsequent premiums, gave to the insured an interest in the contract beyond the mere insurance for the term of a current year. We shall therefore assume that this contract was within the meaning and protection of chapter 321 of the New York Laws of 1877. McDougall v. Society, 64 Hun, 515, 19 N.Y.Supp. 481. That statute was in force when this policy issued. Among other things, it provided that:

'No life insurance company doing business in this state shall have power to declare forfeited or lapsed any policy hereafter issued or renewed by reason of non-payment of any annual premium or interest, or any portion thereof, except as hereinafter provided. Whenever any premium or interest due upon any such policy shall remain unpaid when due, a written or printed notice stating the amount of such premium or interest due on said policy, the place where said premium or interest should be paid, and the person to whom the same is payable, shall be duly addressed and mailed to the person whose life is assured.' Omitting the description of the part of the notice for the payment of an unpaid premium, and declaring a forfeiture if the notice is not complied with, the final proviso reads:

'Provided, however, that a notice stating when the premium will fall due, and that if not paid the policy and all payments thereon will become forfeited and void, served in the manner hereinbefore provided, at least thirty and not more than sixty days prior to the day when the premium is payable, shall have the same effect as the service of the notice hereinbefore provided for.'

The contract in question is a New York contract, and specifically provides that 'at all times and places' it 'shall be construed to be a contract made in the city of New York.'

The declaration avers that the insured paid the semiannual premium for April 1, 1889, and the semiannual premium due October 1, 1889, and the semiannual premium due April 1, 1890, and the semiannual premium due October 1, 1890, and the semiannual premium due April 1, 1891; but that he did not pay the semiannual premium due October 1, 1891, or the semiannual premium due April 1, 1892, or the semiannual premium due April 1, 1893, or the semiannual premium due October 1, 1893, or the semiannual premium due April 1, 1894; and that the insured died September 5, 1894, leaving six semiannual premiums due and unpaid. The averment of the declaration is that, notwithstanding the nonpayment of said last six semiannual premiums, the policy was in force at the death of the insured, by force of the said New York statute of 1877. The further averment is that the said insurance society 'did mail the notice required by the said statute on the 1st day of September, 1891, to the insured, ' of the semiannual premium due and payable October 1, 1891, but that said notice was mailed only 29 days prior to October 1, 1891, and not at least 30 days prior to the maturity of a premium, as required by the said statute, and that no other notice in respect to that premium, nor any of those which subsequently accrued, was ever given or mailed. In consequence of this noncompliance with the said statute, it is contended that the said policy was in full force and effect at the date of the death of the insured.

The learned judge who presided in the circuit court yielded to the authority of the case of Hicks v. Insurance Co., 9 C.C.A. 215, 60 F. 690, and reported as Rae's Ex'rs v. Insurance Co., 20 U.S.App. 410,decided by the United States circuit court of appeals for the Second circuit, and held that the day upon which this notice was mailed should be excluded in the computation of time, and hence that it had not been mailed 30 days prior to the day when the premium due October 1, 1891, fell due, and that the society was in no better position than it would be if no notice had been mailed. The opinion of the Second circuit court of appeals is based upon the decisions of the courts of New York, and involved the construction of the same New York statute here under consideration. Accepting this opinion as an authoritative interpretation of the law of New York, we concur in holding that the notice given was not the notice required by that law, and was ineffectual to terminate the contract, under the provisions in respect to the forfeiture or lapsing of New York contracts of insurance made subject to the provisions of the act of 1877. The notice required by the act of 1877 might be either a notice of the time when a premium would fall due or of a default in the payment of a premium. If given before default, the requirement is that the notice shall be mailed 'at least thirty and not more than sixty days prior to the day when the premium is payable. ' If given after a default has been made, the requirement is equally specific that it shall be a notice that a premium is due and unpaid, and that if not paid within thirty days 'after the mailing' of such notice the 'policy and all payments thereon will become forfeited and void. ' The same section also provides that, 'in case the payment demanded by such notice shall be made within the thirty days limited therefor, the same shall be taken to be in full compliance with the requirements of the policy in respect to the payment of said premium or interest, anything to the contrary notwithstanding; but no such policy shall in any case be forfeited or declared forfeited or lapsed until the expiration of thirty days after the mailing of such notice.'

The notice given before the premium fell due was insufficient and no notice whatever was given after the nonpayment of that premium. The effect of the prohibition against declaring a forfeiture of the interest of the assured under the contract was to keep the policy alive as a valid subsisting insurance, notwithstanding the stipulations of the parties to the contrary. The duration of the policy, so long as it was dominated by the statute, was not dependent upon the payment of premiums on the day named therein, but upon payment within 30 days after the statutory notice should be given. The only way in which the policy could be terminated under the statute was by the failure of the insured to pay his premium upon notice 'mailed' 30 days before the premium was due, or by a notice of default and demand for payment within 30 days...