Lenz v. German Fire Ins.

Mr. Justice Wright delivered the opinion op the Court. Action in assumpsit by appellant against appellee, on an insurance policy. Trial by jury, and after the close of plaintiff’s evidence, on motion of appellee, the court instructed the jury to find the issues in its favor, and judgment accordingly, from which the appellant prosecutes this appeal, assigning such action of the court for error. That part of the policy upon which the questions for decision arise, is as follows: “Ho. 12. This policy shall not be binding upon this company until the premium is actually paid, and unless such payment is made before the fire occurs. When a promissory note is given by the assured for the premium it shall be considered a payment, provided such note is paid at or before maturity; but it is expressly understood and agreed by and between the parties that, should any loss or damage occur to the property hereby insured, and the note given for the premium, or any part thereof, remain past due and unpaid, in whole or in part, at the time of such loss or damage, then this policy shall be void while such note and premium remain unpaid. The collection of said note by said company, by law or otherwise, it is expressly agreed, shall not make said company liable for any loss or damage caused to the property insured while said note is past due and unpaid, but shall only have the effect when fully paid or collected to revive said policy from the date of said payment or collection, and continue the same to the end of the term for which it was originally made, and no longer, and said premium shall be considered as fully earned, the same as though said policy had been in force all the time.” The premium note in controversy is as follows : “ $20. On the first day of August, 1894, for value received, I promise to pay to the German Insurance Company, or their order, at their office, in Freeport, Illinois, the sum of twenty dollars, in payment of premium on policy Ho. 1,265,872 of said company * * * from date until paid. If this note is not paid at maturity said policy shall then cease and determine, and become null and void, and so remain until this note shall be fully paid and received and accepted by said company, as provided in said policy. In case of loss under said policy, this note shall immediately become due and payable, and shall be deducted from the amount of said loss. It is understood and agreed that this note is not negotiable. Dated at Yarna this 11th day of June, 1894. Feed. A. Lenz.” The property covered by the policy was destroyed by fire October 11, 1894, and at that time the premium note above quoted was unpaid. On October 15, 1894, appellee wrote to appellant demanding payment of the note, offering to reinstate the policy on payment of one-half the note and interest, $10.35, and to extend time for payment of the balance to February 1, 1895, and if such payment was not made within fifteen days, the note would be sent to an attorney for collection. . Tender was made October 31, 1894, of the amount due upon the note, and it is argued, from the facts, the policy was in force at the time of the loss, and that appellee is liable thereon. Under the terms of the note and policy, the latter was suspended during the period of non-payment of the premium note, after its maturity, August 4,1894, and would be revived only upon payment, and then only from the time of such payment. By the terms of the contract there could be no forfeiture for non-payment of the premium note, for the insured, at all times, had the right to pay, and it was the duty of the insurer to receive payment, thereby reviving the policy. According to the terms of the contract, the policy was suspended at the time the loss occurred, in consequence of which appellee was relieved of liability. That which counsel insist was a forfeiture, was not, but only a suspension of the policy during the period of the nonpayment of - the note after it was due, and which was effected by operation of the contract made by appellant himself. If the facts relied upon had the effect of reviving the policy, it would take effect only after the loss, and would therefore be unavailing to appellant. The policy and premium note here presented are, in all essential particulars, like those involved in the case of Carlock v. Phœnix Insurance Co., 138 Ill. 210, in which the court said : “ The case is quite different- from, one in which, by the terms of the contract, the failure to pay the premium works a forfeiture of the policy. In that case, since there can be ho liability to pay premium where there is no liability upon the policy, the acceptance of premium is an implied admission of liability upon the policy; and it would be a fraud upon the insured to accept from him payment of premium and at the same time repudiate liability upon the policy. Lycoming Ins. Co. v. Barringer, 73 Ill. 230, and cases cited. But here the failure to pay the note at maturity is not an absolute forfeiture of the rights of the insured under the policy, but a suspension simply of those rights until full payment of the note, by which act they would be revived in all their original force. The receipt of partial payment of the note waived nothing,' for the insured had the right to make payments from time to time, and thus revive the liability of insurer upon the policy, and what he had a right to pay, it was the duty of the insurer to receive. That he did complete the payment of the note before the loss was in nowise induced by the insurer’s act of receiving partial payments. Curtin v. Phenix Ins. Co., 78 Cal. 619.” The judgment of the Circuit Court will be affirmed.