Lovick v. Providence Life Ass'n

Merrimon, C. J. after stating the case: When on the trial the plaintiff closed his introduction of evidence, the defendant demurred ore tenus thereto, and insisted that accepting and treating it as a true embodiment of the material facts of the case, the plaintiff could not recover, because he failed to pay a premium as required by the terms of the policy of insurance in question, and by such failure this policy became absolutely forfeited and inoperative; and likewise all premiums and assessments paid by the plaintiff on account of the policy were forfeited to the defendant, and the latter was not bound to reinstate the plaintiff, .or the policy, or continue it in force for any purpose. In ofir judgment this contention is-not well founded. The Court below decided that the policy was forfeited by the failure of the plaintiff to pay the premium, therein required to be paid, at the time it came due. No question in that respect arises here, as the plaintiff failed to prosecute his appeal taken. Then, was the plaintiff entitled under the contract of insurance to be reinstated as a policyholder and have his policy continued in force upon the payment of the premium due and unpaid? We concur with *97 the Court in holding that he was. The contract of insurance was not wholly embraced by the policy. The latter expressly declares and provides that: “'The contract between the parties hereto is completely set forth in this policy, the application therefor, and the by-laws of the association, taken together.” So that the by-laws of the defendant, in so far as they are pertinent, constitute part of the contractas much as if the same were set forth in the policy as part of it. The by-laws (Art. 11, § 2) provides that “others shall be declared forfeited in like manner as those who fail to pay annual dues, with opportunity for reinstatement on similar conditions.” This provision is not very clear in its terms. • It seems to be awkwardly and not of itself fully expressed. But taking it in connection with the immediately preceding clause, the policy and other provisions in respect to forfeitures provided, it must mean that in case of forfeiture of the policy the insured shall have “ opportunity.” to be reinstated as one of the insured and a member of the company, and have his policy continued in force upon the payment of all premiums, assessments and any other dues unpaid. We cannot see any other intelligible meaning that may be attributed to it. The defendant’s officers seem to give it this interpretation, except that they insist that it has the right to determine when the insured may have the benefit of “ reinstatement,” and when he shall not. “Reinstatement” does not imply reinsurance, the granting or making of a new policy, a new contract, of insurance; it fairly implies placing the insured, in respect and relation to the company, the policy, the whole contract of insurance, in the same condition that he occupied and sustained towards them next before the forfeiture was incurred. The provision is not that the insured may reinsure — he might do this without such provision. The purpose was to give him a valuable benefit, the benefit of such reinstatement, and secure it to him by and as part of the contract of *98 insurance. The purpose was to save him from loss as to premiums and assessments paid, and from any disadvantages he might be at in seeking reinsurance or other insurance in some other company. Otherwise, why so provide for such reinstatement? What advantage could arise from it? And why put such a provision in the contract, if the defendant might, at its will and pleasure, refuse to allow such reinstatement ? This provision is a Substantial, a valuable part of the contract, that the insured has the right to avail himself of, and the defendant has no right to deprive him of it, any more than to deprive him of the insurance if no forfeiture had been incurred. The terms and conditions of such reinstatement are not expressly specified, but the reasonable and just implication is, in the absence of expressed stipulations, that the insured shall be entitled to have the benefit of it upon the payment of all premiums, assessments and other dues and costs made or tendered within a reasonable time next after the forfeiture. He must, however, be diligent, active and vigilant under the circumstances in availing himself of it. Otherwise, he will be deemed to have been negligent and to have abandoned his right. Such provision does not imply that he may delay and insist upon such right at his convenience, will and pleasure. It was insisted on the argument for the defendant, that the person whose life was insured by the policy was at the time of the forfeiture not within, but above, the insurable age, and therefore the plaintiff was not entitled to have such reinstatement. This contention grows out of the misapprehension of the nature and purpose of such reinstatement. As we have already said, it does not imply reinsurance or new insurance; it implies a revival and continuance of the contract of insurance forfeited, just as if there had been no such forfeiture. This is the very purpose contemplated and intended by the contract; otherwise it means, and is worth *99 nothing practically. It is said in argument, why would the defendant make such contract, and what is the contract as to the forfeitures worth to it? The answer is obvious: it encourages persons to take insurance in the defendant company, while it loses nothing, and only continues to insure the life it contracted and intended to insure. The forfeiture is important as a spur to the insured to, be vigilant and prompt; and valuable to the company when the insured cannot or will not avail himself of the advantage of such reinstatement. The plaintiff applied promptly for reinstatement, and the defendant wrongfully refused to reinstate him, and is chargeable with a breach of its contract with him. By such breach he is endamaged, at least, to the extent of the premiums and assessments he paid the defendant, and which it seeks to deprive him of by putting an end to the contract. It cannot complain at the measure of damage allowed, and the plaintiff does not. Braswell v. Insurance Co., 75 N. C., 8; McCall v. Insurance Co.., 27 Am. Rep., 558. Affirmed.