Hipp v. Fidelity Mutual Life Insurance

Lumpkin, J. (After stating the foregoing facts.) This case presents the following controlling questions: (1) Did the policy of insurance take effect? (2) If so, did the failure to pay the first of the notes given in lieu of the cash premium required by the policy work a forfeiture? (3) Did the sickness of the insured at the time when the note fell due, and continuing until his death, excuse a failure to pay it and thus prevent a termination of the policy? (4) Did the fact that the note was not payable in bank but was sent for collection through bank, and that no notice was given to the insured personally, but the note was presented at the. address appended to his signature, when ■ he was sick in. another place, operate to excuse non-payment and prevent a forfeiture? (5) Did the voluntary effort of the brother of the insured, made at his own instance and not as agent for the insured, to find the note on the day when it was due, with the intention — 497 — of paying it for the benefit of his brother, excuse non-payment by the insured? (6) Did the other facts shown by the evidence have that effect (7) Did the rider attached to the policy as a part of the contract prevent forfeiture for non-payment of the note? (8) Did the making of a pencil memorandum of the number of the policy in the blank space left in the premium note for such number, after it was signed, render the note invalid, or inadmissible in evidence ? 1, 2. The policy provided on its face that the contract should not be operative or binding until the actual payment of the initial premium and delivery of the policy. The company might have stood on this provision. But if, instead of doing so, it delivered the policy, took notes for the initial premium, payable monthly for six months, and gave to the insured a receipt for the premium payable in advance, containing the clause “the above premium settled by note,” this was -a waiver of payment in cash and an acceptance of the notes in lieu of cash. Both the policy and the notes expressly' provided that if any note given for premium was not paid at maturity the policy should ipso facto be null and void and should so remain until reinstated or restored 'in the manner provided. While the taking of the notes in lieu of a prepayment in cash waived such prepayment or postponed the time of payment, it did so on the terms agreed upon. It did not operate both to waive the prepayment in cash and also to waive the express terms and conditions on which the postponement of payment was agreed upon. In such a case a failure to pay the notes at maturity would terminate the policy. Bank of Commerce v. New York Life Ins. Co., 125 Ga., 552. 3. It is contended that the sickness of the insured when the note fell due was an excuse for non-payment and prevented a forfeiture or termination of the policy. Where personal services are contracted for, sickness rendering their performance impossible may furnish an excuse for non-performance. Griggs v. Swift, 82 Ga. 392; Clark on Contracts (2d ed.), 476-7, §250. Our code declares that if performance is impossible and becomes so by act of God, such impossibility is itself a defense equivalent to performance (Civil Code, §3725). In the absence of statutory provision, the general rule is that where a person, creates a charge or — 498 — obligation upon himself by express contract, he will not be permitted to excuse himself therefrom by pleading an act of God rendering performance impracticable, if there is no provision in the contract for such a contingency. 1 Am. & Eng. Ency. Law, 588", and cases cited in note 2. “The sickness of the insured is no ground for avoiding the forfeiture of a life policy, or for granting relief in equity against such forfeiture.” 19 Id. 51; Klein v. Insurance Co., 104 U. S. 88; Thompson v. Insurance Co., Id. 252. The section of the Civil Code above referred to is a codification, not a legislative enactment, except as it .was made so by the adoption of the code. Whatever construction may be put upon it, the payment of a premium on a policy of insurance is not excused by reason of sickness; and under a clause providing that if a premium note is not paid at maturity the policy shall at once terminate, such a termination or forfeiture will not be prevented because the insured is sick and fails to pay his premium note when due. Sullivan v. Connecticut Indemnity Asso., 101 Ga. 809; National Life Asso. v. Brown, 103 Ga. 382; American Assurance Asso. v. Hardiman, 124 Ga. 379; Bank of Commerce New York Life Ins. Co., 125 Ga. 552, supra; Thompson v. Fidelity Mutual Life Ins. Co. (Tenn.), 92 S. W. 1098, 1112. The policy and the notes expressly provided that the former should terminate and become void upon non-payment at maturity of any of the latter. To hold that this should not be the case if the insured were sick when one of the notes fell due would have the effect to continue the contract of insurance by sickness, not by payment, in spite of the express contract of the parties. 4-7. It was urged that the note was not made payable at bank; that no notice of its being placed there or sent through bank for collection was given to the insured; and that there was no sufficient presentation to him. It is immaterial whether or not the insured was notified that the note would be placed in bank for collection, if in fact he had a sufficient opportunity to pay it accord' ing to its terms. It was on its face made payable in Macon, Georgia. It was presented for payment at the address appended by him to his signature. He was absent from the city and payment was not made. No previous arrangement had been made to have the note paid when presented at such address. No inquiry was made by the insured or any agent for him of the company or any — 499 — of its agents as to where the note was on that day or before. The truth is evident that the insured was sick and made no effort to find the note or to pay it. It is said that the note, not being payable at bank, should not be construed to be payable within banking hours only, and that the insured had the entire day within which to make payment. This may be true, but he made no effort to pay at any time during the day. He could not say that he was prevented from paying by the closing of the bank, since he made no effort to pay at all; and his administrator is in no better position than that in which he would have been had he lived. His brother testified that he (the brother) heard that the note was in bank and went there after banking hours, but found the bank closed; and also that he went to the office of the local agent of the company, but found it also closed. He was a mere volunteer, and not the agent or representative of the insured. His voluntary going to the bank and to the office of the local agent was not the act of the insured or of any agent for him. He did not in fact pay the note or make further effort or offer to. pay it, though apparently both the officers of the bank and the agent of the company were in Macon. He testified that his intention was to pay the note for his brother. But his mere intention as a volunteer, not carried into effect, or ■even ^reaching the point of a tender, did not suffice to keep the policy alive. He testified that he proposed to pay the local agent of the company two or three days later, after the note had been dishonored and returned to the company. On this subject the evidence was conflicting; but taking his version of it, his proposal did not reinstate the policy. The contract provided how that ■could be done, by application on the part of the insured, under ■certain conditions. The local agent also appears to have been without power either to reinstate the policy or waive the forfeiture. For similar reasons the sending by the insured to the agent of the railroad, under whom he was employed, of an order to pay the amount from his salary, and the inquiry by the agent at the bank as to where the note was, resulting in ascertaining that it had been unpaid when due and had been returned to the company (this occurring several days after the maturity of the note), neither waived the forfeiture nor reinstated the policy. More — 500 — over, the agent testified that he did not make any effort to pay, but merely inquired about the note; and that if it had been there, he intended to arrange for an advance of money to the insured oil account of his salary. 8-9. It was claimed that what was termed the “Ordinary life elective life rider” prevented a forfeiture of the policy. This “rider,” which was attached to the policy and made a part of it, provided, among other things, that upon acceptance by the company of due and satisfactory proof of the total and permanent blindness or' deafness of the insured, or that he had become totally and permanently incapacitated either by accident or bodily or mental disorder, in lieu of other benefits and advantages under the policy, he should be entitled to either one of two options. One was that from the date of such proof the premiums payable for the remaining years should cease, or b.e remitted during the continuance of the incapacity, and the insurance should be payable as an endowment at the age of eighty, or at death if before that age. The second option was to take a life annuity. In order for either one of these options to be exercised it was necessary that due and satisfactory proof should be made to the company. This was. not done; nor was there any exercise of the option. Nor do we think that the total and permanent incapacity referred to meant merely that if an insured person was taken sick and died, in a few weeks without recovering, the failure to pay premium notes falling due pending the sickness would be excused on that account. The expression that premiums payable “for the remaining years shall cease,” as well as fhe other provisions above referred'to, negative any such idea. 10. The notes were given in lieu of prepayment of the cash premium. There is no contention that they were not given for the premium on the policy sued on. The evidence on that subject is uncontradicted. If these notes were invalid for any reason, then the cash premium had not been prepaid as required by the policy. If the notes were invalid, there was no reason to claim that the insurance ever took effect. The whole case of the plaintiff rested on the fact that the first premium was either paid in cash or settled by giving these notes. The mere insertion of the .pencil memorandum of the number of the policy in the blank was. not such an alteration as to invalidate the notes or to cause their — 501 — rejection from evidence. There is no pretense that this was done with any fraudulent purpose, or that it really altered the effect of the notes, or that the contract could not be enforced as well without the insertion. .See Civil Code, §3702. 'The policy having terminated, the. direction of a verdict for the defendant was proper. Judgment affirmed. All the Justices concur.