Perry v. Bankers' Life Insurance

Rumsey, J.: The action was brought to recover on a policy of life insurance issued to the plaintiff’s husband in September, 1895, and payable at [569] his death to her. The insured died on the 27th of March, 1898. Thé necessary steps were taken to entitle the plaintiff to the payment of the policy, and the only defense is that it has been forfeited by non-payment of the premium said to be due oh the 21st day of March, 1898. The learned justice at the Trial Term held that the defendant was estopped by its manner of dealing from insisting that the payment was not made in time; and for that reason he ordered a judgment for the plaintiff for the amount of the policy. From that judgment the defendant appealed. The policy was made on the 21st day of June, 1895, upon an application which is found in the case and dated the twenty-fourth of April in the same year. It was stated in the application that the premiums were to be paid quarterly — twenty-three dollars and fifty cents. The policy purports to have been issued in consideration of the application, and of all statements made therein and to the medical examiner, and of the stipulations and agreements on the hack of the policy, all of which were made a part of the contract; and “ in. further consideration of the sum of twenty-three dollars and "fifty cents in full payment of the first premium on this policy from its date until the 21st day of September, 1895, and the further payment of all premiums coming due on this policy in accordance with its terms and the constitution and by-laws of the company.” The policy itself contains upon its'face nothing further with regard to the payment of the premiums. There is upon the back of the policy something over a page of print, which is headed, “ Stipulations and agreements.” All that is said with regard to the payment of premiums in these stipulations is that they “ may be paid annually, semi-annually or quarterly, in accordance with the rates in the following table, subject to reduction by dividends as aforesaid. Any unpaid semi-annual or quarterly installment of the current year’s premium, or any indebtedness to the company, will be deducted in the settlement of this policy; ” and the further provision that each premium is due and payable at the home office of the company, but for convenience it will be accepted by an authorized agent at some other place. There is nothing else, either in the policy or in • the stipulations and agreements, with regard to the payment of premiums. The by-laws contain a provision that premiums must be paid on the [570] day they become due by the terms of the policy, and ft failure to pay the same on that day will work a forfeiture of the policy and all benefits thereunder. But this provision is not made a part of the policy by its terms. It is alleged that a premium which was due on the 21-st of March, 1898, was not paid; and for that reason it is said that the policy had become forfeited. The rule is well settled that no strained or forced construction of a contract will be resorted to for the pur^ pose of establishing a forfeiture, but that to warrant a party in insisting that his adversary has forfeited any rights which he would be entitled to by a contract bétween them, he must put his finger upon the specific provision of the contract which requires the party against whom the forfeiture is alleged to do the thing the failure to do which is relied upon to work a forfeiture. The breach of the contract here upon which the defendant insists as constituting a forfeiture is a failure to pay the premium when it became due by the terms of the policy; and so it is essential to see when it did become due by those terms. It will be noticed that there is.no direct agreement on the part of the plaintiff, nor any requirement in the policy or in the stipulations and agreements which are made a part of it, or in the application, that the premiums shall be paid on any particular day. The amount of the premiums is fixed. It is to be twenty-three dollai-s and fifty cents, payable quarterly; and the first premium paid at the date of the policy is said to be a payment up to the 21st day of September, 1895, and it is said that the other premiums are to be paid quarterly. But it is nowhere said, either in the application or the policy or the stipulations and agreements, that they are to be paid on any particular day ; and from the provision in the stipulations and agreements, that any unpaid quarterly installment of the current year’s premium will be deducted in settlement of the policy, it is fairly to be inferred that there was in the minds of the parties, at 'the time the contract was made, an intention that the quarterly-premiums might not necessarily be paid at the end of the quarter ^— which in this case was the 21st of March, 1898. In order -to establish that the payment of tile premiums was to take place on the twenty-first of March the defendant resorts to an ' indorsement on the back of the policy, which is as follows: [571] .‘No. 1544. “ Bankers Life Insurance Company of the City of New York. “ Insurance on the Life of “ N. W. Perry. “ Amount $5,000. “ Premium $23.50. “ Payable on the 21st day of June, Sept., Dec., Mch. “Dated June 21, 1895.” This is the usual indorsement put upon every insurance policy by "the company before it is issued, and although it is on the back of this policy, it is no part of the stipulations and agreements — which alone are made a part of the policy and constitute the contract between the parties. Therefore, although this indorsement may be regarded perhaps as a suggestion of what.was intended by the defendant, it cannot, except by a very strained construction, be said to be any part of the policy so as to be binding upon the plaintiff, or to constitute any of its terms so that a violation of a suggestion contained in it shall be sufficient to forfeit the policy. But it is said that a construction has been put upon the policy by the act of the parties, as the result of which the premium became' payable on the 21st of March, 1898. It is undoubtedly true that a notice, was given to Perry from time to time that a particular premium coming due at a particular time had not been paid ; and it is qiiite probable that whenever he received that notice he complied with the demand of the defendant by giving it a certificate of health if he paid the premium after the twenty-first day of ihe month. But those .acts do not constitute any part of the terms of the policy for the purpose of authorizing a forfeiture. If when this notice had been served upon Perry he had said that the contract did not provide for the payment of a premium on the 21st day of September, 1895, but that he had a reasonable time to pay it, no one could have said that he had violated the terms of the policy; and the fact that he acceded to this demand does not change his rights to insist upon the precise terms of the policy when the defendant fries to forfeit the terms of the contract. The judgment must be affirmed, with costs. Van Brunt, P. J., O’Brien and Ingraham, JJ., concurred ; Patterson, J., dissented.