Chase v. Phœnix Mutual Life Insurance

Barrows, J. The defendants “in consideration of ...» and $223.50, .... and of the annual payment of a like amount on or before the fifth day of December in every year during the continuance of this policy, or until five full annual payments [90] have been made,” issued December 5, 1867, a document which they labeled in capital letters, “A Non-forfeiting Life Policy,” of insurance for $2,000 on the life of one G. M. Chase, in favor of this plaintiff, the daughter of the person insured. Five annual payments were to entitle her to a paid-up policy for $2000. Three such payments were made, but none after December, 1869. G. M. Chase died in 1873, and the required proofs of death were offered, but the company declined to receive them, claiming that all rights under the policy had been forfeited. The language of the policy is: “This policy isissued and accepted by the assured upon the following express conditions and agreements : ” [The conditions set forth under the first head relate to the acts and doings of the person whose life was insured, and to the cause of death; and it is not claimed that any of them were broken.] “ Secondly. If the said premiums shall not be paid at the office of the company, in the city of Hartford, Conn., or to an agent of the company on his producing a receipt signed by the president or secretary, on or before the date above mentioned, then, in every such case, the said company shall not be liable for the payment of the whole sum assured, but only for a part thereof, proportionate with the annual payments made as above specified, and this policy shall cease and determine.” “ Thirdly. In every case where this policy shall cease and determine, or become or be null and void, for any cause other than nonpayment of premiums, then all payments thereon shall be forfeited to this company.” Elsewhere, not among “the conditions and agreements,” upon which “the policy is issued and accepted,” we find the following : “It being understood and agreed that if after the receipt by the company of not less than two or more annual premiums, this policy should cease in consequence of the non-payment of premiums; then upon a surrender of the same, provided such surrender is made to the company within twelve months from the time of such ceasing, a new policy will be issued for the value acquired under the old one subject to any notes that may have been received on account of premiums ; that is to say, if payments for two years have been made, it will issue a policy for two-fifths of the sum originally [91] insured; if for three years, for three-fifths, and in the same proportion for any number of payments, without subjecting the assured to any subsequent charge except the interest annually in advance, on all premium notes unpaid on the policy.” The question is whether this last recited understanding and agreement is so connected with the conditions and agreements upon which the policy is issued and accepted as to work a forfeiture of all rights under this “non-forfeiting policy” when the insured neglected to surrender the policy and apply for a reduced paid-up policy within twelve months after the failure to pay the fourth annual premium. Stipulations for a forfeiture in a policy thus labeled should be strictly construed. We do not think the second express conditions should be so construed as to make the right of the insured to recover such part of the sum as is “proportionate witli the annual payments” which have been made, dependent upon the surrender of the policy within twelve months after the first failure to meet an annual payment and upon the reception of a new policy. If such had been the design of the provisions respecting the issue of new policies, it would have been easy to say so. But there is no such stipulation. The terms upon which the company will issue paid-up policies, (which the insured would doubtless find more convenient and available to be used, as they often are, as security for a loan) are stated by themselves. There is no necessary connection between them and the second express condition* nor anything to indicate that the limited liability recognized in. that condition is to be ignored, unless the insured surrenders the old and takes out a new policy. The meaning and effect of that condition seems to be that a failure to pay one of the annual premiums on or before the day specified will put an end to the contract for the whole sum, at the option of the insurers; and thereaftenvards they will be liable only for such proportion thereof as the payments previously made bear to the whole amount of the premiums stipulated for.- It may serve to enable the company, when there is a failure of prompt payment, to rid themselves of a bad risk for anything in excess of that which has not been already secured by the payments previously received; but not to convert [92] a non-forfeiting policy into a forfeitable one, nor to relieve the-company from the limited liability which they expressly admit in it. The third condition implies that there is to be no forfeiture, by mere non-payment of premiums, of payments already made; and this is in keeping with the express stipulation which we think is decisive of the rights of these parties, that upon such a failure of payments as occurred here “the said company shall not be liable for the payment of the whole sum assured, but only for a part thereof, proportionate with the annual payments made as above specified.”' Bliss on Life Insurance, § 219. The cancellation of the policy upon the books of the company was done without the knowledge or consent of Mary L. Chase, or anyone authorized to act for her, and is of no avail. In the face of such a policy as this, nothing in the application, looking to an avoidance of the policy and a forfeiture of payments for failure to make them promptly and completely, can be received to work such a forfeiture. It is one of the cases where the instrument itself “is conclusive as to the rights and liabilities of the parties, and its provisions are not subject to be controlled or superseded by preliminary negotiations and communications.” 1 Phillips on Ins., § 120. Graves v. Boston Insurance Co., 2 Cranch, 439. Nor if the subsequent conferences between G. M. Chase and the agent of the company, were admissible in evidence, do we perceive anything in them that could affect the rights of this plaintiff already acquired, upon the view which we take of the construction of the policy. The plaintiff is entitled to judgment for $1200, less the amount of the notes given on account of premiums, and interest on the same reckoned annually in advance. Upon the balance thus found the plaintiff can recover in addition interest from the date of the writ only, for lack of evidence as to the time when the proofs of death were submitted to the company. Judgment for plaintiff accordingly. Appleton, C. J., Dickerson, Danforth, Virgin, and Libbey, JJ., concurred.