Dillard v. Manhattan Life Insurance

McCay, Judge. We recognize fully the general doctrine contended for by the plaintiff in error. It would have been illegal for Mrs. Dillard to pay the premium to the company during the war, contrary to Act of Congress. And were this a case of a forfeiture for the failure, we should hold that the forfeiture was prevented by the illegality of the performance of the condition. But is this such a case ? The company contracts to pay so much at the death of the insured, if the annual premiums are paid as stipulated. It is clear from the policy and from the known practice of all companies, that the insured has a right at any time to refuse to pay and give up his policy. The contract, upon its face, requires to be renewed from year to year by the payment of the premium. Indeed, a contract of life insurance is, at best, nothing but an undertaking that the company will take the annual premiums paid, invest them safely, and pay to the insured the product, after deducting the expenses of the business. Indeed, if every person insured lived to an average age, this ■would be exactly the contract. But as any individual may .die at any time, the company agrees to pay him what his (premiums would amownt to, making up its losses on him by [123] the payments of those who live beyond the average age. The regular annual payment of the premium agreed upon is thus a condition precedent of the contract, and not a condition subquent. And it is just here that the authorities relied upon fail to apply. If a condition subsequent become illegal, there is no forfeiture; for the estate having once vested, it shall not be divested because the party fails to do an illegal or impossible act: Code, section 2680. But it is different with a condition precedent. If that be illegal the right never vests. It is not a question of forfeiture, but a failure to do the thing necessary to acquire the right: Brown’s Legal Maxims, page 176. And this, as it seems to me, is a distinction based upon principles of justice and sound sense. If I promise a man to sell him my house, pi’ovided he appear, on a particular day with the money, and he fails for whatever reason other than my fault, he has no right in the house. But if I sell him the house, and it is agreed that he shall forfeit it if he fail to pay me for it in full by a particular day, then the cause of his failure may, both in equity and sound sense, become very material. "We are very clear that, as the case is made by the record, the judgment is right. Judgment affirmed.