Ætna Life Insurance v. Sanford

Mb. Justice Dibell delivered the opinion of the court. The letter written by Frank Sanford to the company on February 5 th, was dated at Morris, Illinois, and on his father’s letter head. It informed the company his father was in Mexico and could not be reached and a repty returned in time to act by February 10th. It showed that the writer desired to be informed whether it was necessary the premium falling due February 10th should be paid on that date or if it could wait until Sanford returned and then be paid, and what the rules of the company on that subject were. It indicated that the writer desired and intended to do whatever was necessary, but wished to leave'till his father’s return whatever could be so left without infringing the company’s rules. It is not necessary to decide whether Mason & Son were bound to answer this letter. They did answer it, and they were bound to convey time information and not in any way to mislead Frank or to withhold some part of the necessary information. He had a right to rely upon their letter. In their reply Mason & Son enclosed a note for an extension of the premium for sixty days, and suggested that Frank sign it for his father, “ and in the meantime you can communicate with him and learn what his wishes are.” This letter was written February 8th, and liable to be received, as it was, on February 9 th. These agents did not tell Frank that unless the note was signed and returned to them, or the cash paid,'by the 10th, the policy would become forfeited. Frank’s letter to them showed them that he^was ignorant of the rules governing that subject, and applied to them for information. He would naturally understand they were making a full answer to his letter, or as full an answer as was necessary for his correct guidance. If they had said to him, the cash or this note duly signed must reach them February 10th or the policy would be forfeited, it is a fair inference he would have done what was necessary to keep the policy alive. They told him only to sign the note for his father, and then during the sixty days thus provided, communicate with his father and ascertain whether or not he wished to pay the premium and keep the policy alive. The letter told Frank his father would have sixty days in which to make that determination. Mason & Son dated the note February 10th. It can not be assumed they intended Frank should sign it before that date. He did sign it on that date, and caused it to be mailed in time to reach the agents during business hours of the next business day. The letter left it uncertain Avhether Mason & Son desired Frank to sign his father’s name to the note or his own. It Avas natural that he should doubt whether he had a right to sign his father’s name, and should Avish to consult his older brother on the subject before acting. While Mason & Son probably meant that he should send the note to them before communicating with his father, their letter did not say so, and Avas uncertain in that respect. Their letter clearly implied that the note Avas not to be paid if his father desired to let the insurance lapse, and left it uncertain whether he Avas expected to send in the note before his father had ratified his act in signing it. Mason testified he knew Sanford’s financial circumstances were good, and he no doubt felt entirely sure that when Sanford returned or was reached he Avould not allow a policy to lapse upon which he had paid premiums for twenty-three years, aggregating over $3,000. It is within the power of an insurance company to waive such a provision as that here relied upon, and this may be by its course of dealing with the insured. (Chicago Life Ins. Co. v. Warner, 80 Ill. 410.) In Metropolitan Accident Ass’n v. Windover, 137 Ill. 417, the court said: “ It can not be doubted that while, by the express terms of the defendant’s by-laws, the consequences of a failure to pay an assessment within thirty days after notice was a forfeiture of all claims the member might have against the defendant by reason of his certificate, the forfeiture thus provided for was one which the defendant was at liberty to Avaive, and that such forfeiture, after being once waived, Avas incapable of assertion by the defendant. A forfeiture of this character is a matter of strict legal right, and the defendant, in order to assert it, must abide inflexibly by the terms of its contract. (Johnson v. Southern Life Ins. Co., 79 Ky. 403.) It follows that conduct on the part of the association inconsistent Avith an intention to abide by the strict terms of the contract and insist upon a forfeiture, if not amounting toa waiver, is at least evidence of a waiATer.” We are of opinion that by what was said by Mason & Son in their letter of February 8th, and by their omission to state therein that forfeiture would follow a failure to pay or send the note by February 10th, they granted an extension of sixty days and waived their right to forfeit the policy. After a reasonable time in which to ascertain whether the letter meant he should sign his own name for his father or should sign his father’s name, he did both, and mailed the letter to the agents so that it should reach them during the next business day. We regard it as immaterial whether the note in fact reached the office of Mason & Son or miscarried in the mails. The agents did not intend the note should be enforcible if Sanford did not ratify it. The signing of Sanford’s name to the note without his authority ivas a mere matter of form. The substantial matter was that the time should be extended sixty days, so that Sanford might be notified and his wishes ascertained and carried out. The purpose obviously was that Sanford should be notified his name had been signed to a note for the premium without his authority, and that he could either ratify the act and pay the note within sixty days or could repudiate it and let the policy lapse and fake a paid-up policy for the surrender value if he preferred. Having granted an extension of sixty days the company could not, a month later, demand the execution of form 22, which required Sanford to admit thereby that the policy had already lapsed, and to certify that he was still in good health, as a condition to permitting the policy to remain in force during the sixty days. On March 10th Sanford remitted Mason a check for $130, thanking him for the extension of payment for sixty days, and saying he did not know the exact amount required and presumed there would be some interest to be added, and requesting if the remittance was not sufficient to inform him immediately and he would remit, and saying if it was too much they could credit the balance due on the policy or return the surplus to him, as they saw fit. This was a ratification of the note and of the extension and an election to treat that policy as still in force. In reply to this Mason & Son did not deny his statement that they had extended the policy for sixty days, but called upon him again for the execution of form 22, to which we are of opinion they were not entitled. They did not object to payment by check, nor did they present the check to the Chicago bank on which it was drawn for payment. They retained the check not only till Sanford’s death on March 18th, but for ten days thereafter, and finally returned it on March 28th, eighteen days after it was sent. We are of opinion Sanford had the right to pay the required amount at the time he sent the check, and, as the check was sufficient to cover the amount due, their retention of it beyond a reasonable time for its return or its presentation for payment precluded them from afterward asserting a forfeiture. By the check Sanford assigned $130 of his funds in said bank to the company to pay said premium and interest thereon, and"the company’s agents retained the benefit of that assignment for eighteen days. It is a fair inference they would have cashed the check if Sanford had recovered. The retention of the check is strong proof that they had not decided to enforce a forfeiture even for some days after Sanford’s death. If there was any inaccuracy in the court’s modification of the seventh instruction offered by defendant so as to state it was a sufficient delivery of the note if it was delivered by the maker to some person for transmission to the payee, we regard it as immaterial and harmless. The note having been signed as directed by defendant’s agents, and an attempt having been made to deliver it to them, the policy would not be avoided by failure to make a legal or sufficient delivery, in view of the fact that the agents did not instruct Frank to send the note to them, but left it an open question whether they did not intend he should retain it till his father ratified it. We find no reversible error in the rulings of the court. The proofs made a case for plaintiff. The judgment is therefore affirmed.