Stinchcombe v. New York Life Ins. Co.

• Decision Date: 03 April 1905
• Citation: 80 P. 213,46 Or. 316
• Parties: STINCHCOMBE v. NEW YORK LIFE INS. CO. [*]
• Court: Oregon Supreme Court

80 P. 213

46 Or. 316

STINCHCOMBE v. NEW YORK LIFE INS. CO. ^[*]

Supreme Court of Oregon

April 3, 1905

Appeal from Circuit Court, Multnomah County; John B. Cleland, Judge.

Action by Idonia Stinchcombe against the New York Life Insurance Company. From a judgment of dismissal, plaintiff appeals. Reversed.

George W. Stinchcombe made application, May 5, 1894, at Forest Grove, Or., to defendant for insurance on his life in the sum of $2,000, payable to his wife, the plaintiff, in case of his death during the continuance of the policy contemplated to be issued in pursuance thereof. Among other things, it was stipulated by the applicant that any policy that might be issued should not be in force until the actual payment to and acceptance of the premium by the company or its authorized agent during his (the applicant's) lifetime and good health, and that no suit should be brought against the company under "said contract" after the lapse of two years from the time the cause of action accrues. The defendant signed and issued its policy on July 10th following, which was transmitted to Stinchcombe, who accepted it and paid the premium of $70.40, being for two years, on the 24th of the same month. The defendant by its policy promises and agrees to pay $2,000 to Idonia Stinchcombe, wife of the insured, immediately upon receipt and approval of proofs of the death of the insured during the continuance in force of such policy. The policy further provides, and it is so conditioned, that it is made in consideration of the written application therefor, and of the agreements and warranties therein contained, which are made a part of the contract, and in further consideration of $70.40, to be paid in advance by the insured (being premium for two years' term insurance), and of the payment of $47.40 (being the life premium), on the 5th day of May every year thereafter during the continuance of the policy. The benefits and provisions placed on the next page of the policy were also made a part of the contract. Among such provisions are found these:

"All premiums are due and payable at the home office of the company unless otherwise agreed in writing. *** If any premium is not thus paid on or before the day when due then (except as hereinafter otherwise provided) this policy shall become void, and all payments previously made shall remain the property of the company.

"A grace of one month will be allowed in payment of premiums on this policy, subject to an interest charge of five per cent per annum for the number of days during which the premium remains due and unpaid.

"During said month of grace the unpaid premium, with interest as above, remains an indebtedness due the company, and in the event of death during the said month, this indebtedness will be deducted from the amount of the insurance.

"Within one year after the death of the insured the company must be furnished at its office, in the city of New York, with proofs of death which shall comprise satisfactory statements establishing the claim. Such statements must comply fully with the company's present forms. If it is found that the age of the insured was understated in the application, the amount of insurance payable shall be such proportion of the amount of the policy as the premium paid bears to the required premium at the true age."

The complaint contains two counts. The first, after setting out the issuance of the policy, its conditions, and the death of Stinchcombe on July 3, 1896, shows that the defendant, at the request of plaintiff, made March 22, 1900, sent her blank forms for proof of death, which were received on April 3d following; that on the 26th of the latter month she duly prepared said blanks by filing in the required data, and verified and forwarded the same to the company at New York City, and that the company received such proofs, and has since retained them in its possession, without making any objections thereto. The action was commenced July 6, 1900. The second cause is, in effect, the same as the first, except that it states matter intended to show a waiver on the part of the company of the condition contained on the next page of the policy, providing that proofs of death must be furnished the company at its office in New York City within one year after the death of the insured. A demurrer was interposed to both these causes of action, which was sustained as to the first and overruled as to the second, and, trial being then proceeded with before a jury, the defendant at the close of the plaintiff's evidence moved for a judgment of nonsuit against plaintiff, which being granted, the case was dismissed, and plaintiff appeals.

O.F Paxton, for appellant.

Geo. H Durham, for respondent.

WOLVERTON C.J. (after stating the facts).

The first question presented in the logical course of inquiry is whether the policy had lapsed prior to the decease of Stinchcombe, July 3, 1896. By its terms the life premium of $47.40 is made payable on the 5th day of May in every year "thereafter," the premium for two years in advance having been paid on July 24, 1894. Under a condition of the application, the policy was not to be in force until the actual payment to and acceptance of the premium by the company, and during the lifetime and good health of the applicant. There was no binding receipt issued by the company, or its agent, putting the insurance in force from the date of the application, to wit, May 5, 1894, subject to the condition of its acceptance by the company and the issuance of the policy, as is sometimes done. We have therefore only to look to the terms of the policy to ascertain when it became effective as an insurance upon the life of Stinchcombe, and to determine the conditions upon which it might be continued in force, as well as those the nonobservance of which would entail a forfeiture. There was a care, it will be seen, on the part of the company, that the policy should not be in force--that is that the company should not itself become liable--except on the concurrent existence of certain conditions, namely, the actual payment of the premium during the lifetime and good health of the applicant. He might have been living and in good health, but without the actual payment of the premium no liability would have been incurred on its part, and that because, as the condition reads, the policy "shall not be in force." Now, if it was intended that the policy should become effective as against the company only when these conditions were fulfilled on the part of the applicant what is there in the contractual relations to put it in force or to cause it to become operative as against the applicant in the meantime? There are no other stipulations indicating an intendment of that nature, and, as we have seen, there is no binding receipt putting it into effect at once, either conditionally or otherwise. The policy was issued on July 10 1894, and, if left to the provisions on the face of it alone, would ordinarily have been effective from that date; but the application is made a part of it, and so are the conditions and provisions on the next page following the signatures of the officers of the company, and all must be construed together to get at the true intendment of the parties as they are, and constitute in reality but one contract. If, therefore, the policy was not to be in force to bind the company until the concurrence of the conditions designated, it is a most reasonable and fair deduction that it was also not intended that it should become effective as it concerned the assured at a date prior to their fulfillment. The defendant either insured Stinchcombe from the 5th day of May, or it did not insure him until the 24th day of July, when the policy was delivered and the premium paid and accepted by it. It is certain that it did not make itself liable until the latter date, and are we to suppose that, without engagement to that purpose, the company intended to collect the premium and the insured to pay for insurance he did not have? Rather would the deduction be to the contrary. And such is our interpretation of the contract, that it did not become effective and binding as an insurance upon the life of Stinchcombe until such latter date, either to fix the liability of the company or to require the insured to pay for insurance in the meanwhile. Now, the $70.40 paid for two years' insurance. It is so expressly stated in the policy as follows: "Being the premium for two years' term insurance." This insurance began with the date of July 24, 1894, by the delivery of the policy and the payment and acceptance of the premium, and Stinchcombe's life became insured, not alone for the term of two years, but for the entire term fixed by the policy according to its provisions, but subject to forfeiture for the...