Smith v. New England Mut Life Ins Co.

• Decision Date: 18 October 1894
• Docket Number: 26.
• Citation: 63 F. 769
• Parties: SMITH v. NEW ENGLAND MUT. LIFE INS. CO.
• Court: U.S. Court of Appeals — Third Circuit

63 F. 769

SMITH v. NEW ENGLAND MUT. LIFE INS. CO.

No. 26.

United States Court of Appeals, Third Circuit.

October 18, 1894

This action was brought by Aline M. Smith against the New England Mutual Life Insurance Company on a policy of insurance for $10,000 issued on the life of Zant McD. Smith. Another action was brought at the same time on another policy, like, in all respects, to the one in this action, and the two cases were tried together. The policies contained the following conditions:

'General agents appointed directly by the company are along authorized to receive premiums at the day when payable, and not afterwards, but cannot give credit, or make, alter, or discharge contracts, or waive forfeiture; and no alteration or waiver of the conditions of this policy shall be valid unless made in writing at the office in Boston, and signed by the president or secretary. ' 'All premiums due on this policy shall be paid in advance, but any annual premium may, at the election of the assured, be paid in cash either in one sum, or in semiannual or quarterly installments, to be secured by the notes of the assured; it being understood that the company assumes no risk for the period covered by such deferred payments, but only for that portion of the year for which the premium shall have been actually paid in cash, in advance, and that in case of loss all such deferred payments are to be deducted from the amount payable.'

The premiums due May 24, 1891, were not paid until August 5th of the same year, or 73 days after they were due, and the three installment premium notes were not paid for 50 days, 120 days, and 30 days, respectively, after they were due. When the premiums fell due May 24, 1892, the assured delivered to the local agent at Pittsburgh premium vouchers for $46.90 on each policy, and premium notes for three quarterly installments, and an ordinary promissory note, payable in 30 days to the order of defendant, for $86.61, with interest for the balance of the first quarterly installments on both policies. This note and the regular premium notes were never paid. The assured died November 22, 1893, and, the company having refused to pay the amount of the policies, two suits were brought, and by agreement of counsel were tried together, and a verdict rendered in each case, under instructions of the court, for the amount of paid-up insurance due on the policies, under the Massachusetts statute, as lapsed policies. A writ of error was taken by plaintiff in only one case, counsel having agreed that the decision in this case should be treated as applicable to the other.

W. K. Jennings, for plaintiff in error.

Shiras & Dickey, for defendant in error.

Before ACHESON, Circuit Judge, and BUTLER and WALES, District Judges.

BUTLER District Judge.

The suit is on a policy of insurance for $10,000, issued on the life of Zant McD. Smith, dated May 24, 1890, which recites as a condition, the payment of a premium by the assured of $352, at its date, and the payment of like premiums on or before the 24th of May in every year thereafter until 34 such premiums have been paid, or during the term of Mr. Smith's life if he shall die within 34 years of its date. The defendant is a corporation of the state of Massachusetts, and the policy recited that it is issued 'subject to the provisions of the insurance act' of that state; the 76th section of which was indorsed and provides that 'no policy of life insurance thereafter issued by any domestic corporation shall become forfeited or void for nonpayment of premiums after two full annual premiums have been made, but in case of default of payment thereafter then without any further stipulation or act, such policy shall be binding on the company for the amount of paid-up insurance,' to be computed and valued according to a prescribed rule. Mr. Smith paid two full annual premiums. Whether he paid or tendered another, which fell due May 24, 1892, or was excused from doing so, is the question raised. The company, treating him as in default for failure to pay, refused payment subsequently, because, as it asserted, the policy had lapsed.

Under direction of the court, a verdict was rendered for the plaintiff in the amount of paid-up insurance under the statute, only. The plaintiff appealed and assigned the following errors:

'First: The court erred in refusing to affirm the plaintiff's first point, which was as follows:

'If the jury believe from the evidence that Z. McD. Smith, the insured, on the 24th day of May, 1892, signed and delivered to the defendant company a dividend receipt or voucher for $46.90 in each policy, authorizing the company to apply the same on the premiums then due; that he gave his three premium notes upon the forms provided by the company, payable in three, six and nine months, in accordance with the company's custom, and also gave an ordinary promissory note for $82.61, payable in thirty days, being for the balance of the cash payment of premium in each

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