Schumacher v. North American Life Insurance

WHTTING, P. J. Defendant corporation insured the life of plaintiff’s husband, plaintiff being named as the beneficiary. Within a year the insured died1. This action was brought .to recover upon the policy. From a judgment in plaintiff’s favor and from an order denying a new trial this appeal was taken. [1, 2] Appellant questions the correctness of the decision of this court in Noble v. Kansas City Life Insurance Co., 33 S. D. 458, 146 N. W. 606. We held1 in that case that the execution and delivery of a policy, worded similarly to the one now before us, was an “acknowledgment” of payment of premium under section 1849, C. C. But appellant contends that, even if the above be conceded, yet said section 1849, C. C., does not provide that such an “acknowledgment” is conclusive evidence of payment except for the pur-pose and to the end of forbidding- it to deny that the policy went into effect. Appellant contends that, under the [181] contract 'between it and) the insured, such contract, though it cam« into full force and effect upon its delivery, yet became forfeited, through the failure of the insured to pay a certain note when due; and that to prove such forfeiture, but not to prove that the policy never became binding, it had the right to introduce proof that the first annual premium was paid partly by a note given by the insured', that said note contained a provision that, upon- default in payment thereof, the policy should be void, that such note became due prior to the death of the insured, and that immediately upon nonpayment of such note the insurer notified the insured that such policy 'had become forfeited. The trial court excluded such proof. This ruling was strictly in accord with the decision of the Noble 'Case. The policy now before us was entered into after such decision and the construction that had been placed upon said section 1849, C. (C., in that 'decision had become a part of the law of this state. Douglas v. Price County, 101 U. S. 677, 25 L. Ed. 968. We said: “To hold in this case that ‘the secondary condition (provision for forfeiture in case of failure to pay when due the note received for first premium) thereupon came into operation’ would (plainly violate * * * .that section (section. 1849) of the -Civil Code.” [2] Moreover, the policy now before us differs from that in the Noble Case in that, in the Noble 'Case, the policy itself provided that the failure to pay any premium note before its maturity would work a forfeiture of such policy; while in the policy now ¡before US' we find no words that in any mariner would give notice that premium notes had been or could be given; neither, is there any provision, as in the 'Noble policy, that a nonpayment of a premium note would work a forfeiture. The policy before us specifically provides that it and the application therefor, a copy of which application is attached to and made a part thereof, contain the entire contract between the parties. Appellant contends that regardless of this provision in the policy the note signed by the insured became a part of the contract and the provisions thereof became binding. Without expressing any view as to whether, as between appellant and the insured, provisions in a note not referred to in the policy could override such a clause in the policy, certainly they could not, as against a third party named as the beneficiary in such policy. .By the issuance of this policy respon [182] dent acquired certain vested rights, and such rights could' not 'be destroyed by any provision in another paper of whose existence the policy itself .not only gave no notice 'but actually negatived. [3] But thjere is another reason why appellant could not prevail. Its answer sets forth a copy of the note. This note must be construed1 as a whole, and when so construed it is perfectly clear that, the parties intended at best no more than that the policy should he voidable in case of nonpayment of the note. This is apparent from the fact that such note contained provisions fixing the rate of interest which it should hear after maturity, together with other provisions that clearly contemplated1 that such note might have a legal existence after its» maturity! It must be borne in mind that there was no provision merely suspending the policy after maturity and until payment of tire note. This note clearly contemplated1 that, so long as the note remained a valid obligation against the insured, the policy remained ‘in full force. The answer of appellant, even as amended upon the trial, fairly sets forth facts showing that appellant treated t!he note as in existence and demanded payment thereof after its maturity. It could not make an effective declaration of forfeiture and! at the same time keep the note. May on Insurance (4th Ed.). § 344. [4] The policy provides that ,in case of liability thereunder, there should he deducted from the face of such policy any sums that might then he owing appellant front the insured. Appellant now complains because it was not permitted1 to offer the note in evidence and prove its nonpayment, and thus reduce the amount of its liability. It is sufficient answer to this to note that no offset or counterclaim was pleaded; neither was there any offer of this evidence for that purpose. The judgment and order appealed! from are affirmed1.