Tennant v. Travellers' Ins. Co.

• Decision Date: 18 April 1887
• Citation: 31 F. 322
• Court: U.S. District Court — Northern District of California
• Parties: TENNANT, Adm'r, etc., v. TRAVELLERS' INS. CO.

31 F. 322

TENNANT, Adm'r, etc., v. TRAVELLERS' INS. CO.

United States Circuit Court, N.D. California.

April 18, 1887

Ross J.

This action is brought by the administrator of the estate of William Tennant, deceased, to recover the amount of a policy of insurance issued by the Travelers' Insurance Company of Hartford, Connecticut, to the said William Tennant, on the twentieth day of June, 1881.

For the defendant it is contended that the policy, as originally issued, was void by reason of certain alleged false statements contained in the application upon which it was based. I do not think the evidence shows that there was any misrepresentation of fact in the application, and the finding will therefore be against the defendant on that issue. But the defendant resists the action on two other grounds, -- one being that, conceding the validity of the policy as originally issued, it was not in force at the time of the death of Tennant; and the other that his death was not caused by external, violent, and accidental means, within the intent and meaning of the policy.

According to its terms the policy expired at noon of the twentieth of June, 1882. But it was continued in force from year to year until noon of the twentieth of June, 1885, by the issuance to the insured of renewal receipts expressly continuing it subject to the provisions and conditions therein contained. The evidence shows that it was the custom of the company to send such renewal receipts, signed by the secretary, from the home office, in blank, and they were intrusted to the commissioned agents of the company, with authority to countersign and deliver the same from time to time, as occasion required, for the purpose of continuing in force expiring policies. The evidence further shows that notwithstanding a clause of the policy to the effect that the actual payment of the premium before the happening of any accident is a condition precedent to its binding force, and that no waiver shall be claimed by reason of any act or acts of any agent unless such act or waiver be specially authorized in writing over the signature of the president or secretary of the company, the custom of the agents of the defendant las to give credit on the premiums, and such custom was acted on by the patrons of the company generally, and by the deceased in the present case, and was approved and ratified by the company by receiving and retaining, with full knowledge of the facts, the premiums paid pursuant to such credit. There is no difficulty, therefore, in holding that the policy in suit was continued in force until noon of June 20, 1885, by virtue of the delivery to the insured of the renewal receipts, and the subsequent receipt and retention by defendant of the premiums due thereon.

'The law of agency is the same,' said Mr. Justice FIELD in delivering the opinion of the court in Insurance Co. v Wolff, 95 U.S. 330, 'whether it be applied to the act of an agent undertaking to continue a policy of insurance, or to any other act for which his principal is sought to be held responsible. The principle that no one shall be permitted to deny that he intended the natural consequences of his acts, when he has induced others to act upon them, is as applicable to insurance companies as it is to individuals. * * * The principle is one of sound morals as well as of sound law, and its enforcement tends to uphold good faith and fair dealing. If, therefore, the conduct of the company in its dealings with the assured in this case, and with others similarly situated, has been such as to induce a belief that so much of the contract as provided for a forfeiture if the premium be not paid on the day it is due, would not be enforced if payment were made within a reasonable period afterwards, the company ought not,...