The Home Life Ins. Co. v. Pierce

• Decision Date: 30 September 1874
• Citation: 75 Ill. 426,1874 WL 9267
• Parties: THE HOME LIFE INSURANCE COMPANYv.FIDELIA E. PIERCE.
• Court: Illinois Supreme Court

75 Ill. 426

1874 WL 9267 (Ill.)

THE HOME LIFE INSURANCE COMPANY

v.FIDELIA E. PIERCE.

Supreme Court of Illinois.

September Term, 1874.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Stephenson county; the Hon. WILLIAM BROWN, Judge, presiding.

Mr. SMITH D. ATKINS, and Mr. H. C. HYDE, for the appellant.

Mr. J. M. BAILEY, and Mr. J. I. NEFF, for the appellee.

Mr. JUSTICE CRAIG delivered the opinion of the Court:

This was an action of assumpsit, brought by appellee, Fidelia E. Pierce, in the Circuit Court of Stephenson county, against appellant, The Home Life Insurance Company, to recover upon a policy of insurance issued upon the life of Lorenzo D. Pierce, the husband of appellee.

A trial was had before a jury, resulting in a verdict and judgment against the company, for the amount of the policy.

The company has prosecuted this appeal, and insists, first, that the verdict is against the evidence; second, that the court admitted improper evidence; and third, that the court erred in modifying certain instructions of appellant, and in giving instructions for appellee.

The two main grounds of defense relied upon by appellant on the trial of the cause were, first, that the policy of insurance lapsed before the death of the insured, by reason of a failure to pay the annual premium, due August 31, 1867; second, that the policy was rendered void, prior to the death of the insured, for the reason that he was employed as a laborer on a steamboat running on the Mississippi river, without the consent of the company.

The policy was issued on the 31st of August, 1864, to appellee, by the terms of which, in consideration of an annual premium of $65.20, to be paid on or before the 31st of August of each year, the life of Lorenzo D. Pierce was insured to the amount of $2,000, for the term of life, with participation in profits.

The policy contained several conditions, among others, the following, the non-performance of which should render it void: In case the said Fidelia E. Pierce shall not pay, or cause to be paid, the premium, as aforesaid, on or before the day herein mentioned for the payment thereof, or any note, or notes, which may be given to, or received by said company in part payment of any premium, on the day, or days, when the same shall become due, except the note given for half the annual premium, and made payable twelve months after date, or shall not renew such last mentioned note when the same shall become payable, and pay the interest or discount thereon, etc.

The policy also contained a clause, as follows: That the dividend of profits (if any), which may become payable, by virtue of this policy, to the holder thereof, shall be applied towards the payment of the note taken for half premiums aforesaid, and if this policy shall cease, or become null or void, the said Fidelia E. Pierce, her heirs, etc., shall be liable to pay to said company the amount of all notes taken for premiums which shall remain unpaid, except the balance remaining unpaid on the note taken for half premiums, and made payable at twelve months from date, and that the said last mentioned note is to be canceled by the said company on the surrender and cancellation of said policy.

Under this plan of insurance, the policy-holder was entitled to share in the profits of the company; the annual premium was to be paid, one-half in money, and a note, with the interest paid in advance, given for the other half, due in one year, at the expiration of which, and when another annual premium became due, one-half was paid in cash, the other half added to the note previously given, the dividend the policy-holder entitled to, deducted, and a new note given for the balance.

This was the construction given to the contract by the company, as shown by the manner in which it transacted the business annually with appellee.

It also appears that the company had a peculiar form of note, which it prepared for the policy-holder to execute each year, at the home office in New York.

This new note, together with a statement of amount due, it was the custom of the company to forward to the policy-holder each year, before the annual premium became due.

At the expiration of the first year, and on the 31st of August, 1865, the deceased renewed his note for $65.20, which was the half premium for the two years, and paid in cash $36.87, being in full of the half premium of $32.60 then due, and interest on the $65.20, for which he had renewed his note.

On the 31st of August, 1866, when the time for renewal and payment of premium arrived, deceased did not at the time pay or renew. On the 24th of October, 1866, it appears deceased had lost the statement received from the company; he, however, sent to the agent at Milwaukee, $35. In reply, he received a letter, dated October 26, 1866, from the agent of the company, as follows:

“L. D. Pierce, Esq. Dear sir: We have a letter written at Rock Island, October 24, conveying $35 currency, to pay on policy 5940, and this is your number; therefore, we send your old note and Home receipt, with a twelve month renewal note, which please sign and return.

+---------------------------------------------+
                ¦The amount of cash due at this time is¦$37 30¦
                +--------------------------------------+------¦
                ¦Paid                                  ¦35 00 ¦
                +--------------------------------------+------¦
                ¦Yet due                               ¦$2 30 ¦
                +---------------------------------------------+
                

“Please send it with note.”

In 1867 no notice was sent to appellee, or the deceased, of the amount, cash or note, which the company required paid, in order to renew.

The deceased had been absent from his home in Rock Island for about two weeks, and returned on the 30th day of August, 1867, unwell, and died on the 10th day of September following.

The premium that was due at that time was not paid, neither was the note renewed.

It is urged that on account of the failure to pay the annual premium that became due on the 31st day of August, 1867, when the same was, by the terms of the policy, payable, the policy was forfeited.

Courts of justice do not regard forfeitures with favor, and they are never enforced, unless the evidence is clear that such was the intention of the parties. In May on Insurance, page 434, it is said: If the practice of the company and its course of dealings with the insured, and others known to the insured, have been such as to induce a belief that so much of the contract as provides for a forfeiture in a certain event, will not be insisted on, the company will not be allowed to set up such forfeiture as against one in whom their conduct has induced such belief.

In 1866 the annual premium was not paid until nearly two months after it became due, and yet the money, when sent, was accepted by the company without a single word of disapprobation.

The general agent, in his correspondence with the policy-holders, used paper upon which was printed his card, a prominent feature of which...