Universal Life Insurance v. Whitehead

Campbell, J., delivered the opinion of the court. The assured had an option to pay the stipulated premiums and thereby continue the policy in force, or to make default in payment and abandon the policy, or to obtain a paid-up term-policy as provided for ; but in order to entitle himself to a paid-up term-policy he was required, within sixty days after default in payment of the premium, to deliver the original policy, duly receipted, to the company. This was a condition precedent, upon • the performance of which a right was to accrue to the assured to have a new policy on his life for a' prescribed time. ' The fact that the company was enjoined from the performance of corporate acts except as stated in the order for in [232] junction, and was thus temporarily disabled to issue a paid-up term-policy to the assured if he had within sixty days after Ms default in payment delivered his policy, duly receipted, to the company, did not change the terms on which alone he was entitled to a paid-up term-policy. The right to such a policy •did not depend on any act or omission of the company, but on '.something to be done by the assured. It was at his option ■to secure a right by certain acts ; and although the company may not have responded to his demand, his right would have :been made clear by the concurrence of those acts by which it \was to arise. Although the company was enjoined from issuing a paid-up term-policy, the assured was not hindered from doing what would have entitled him to such policy, and which could have been enforced if he had entitled himself to it. The doctrine that the obligation to perform some act in ■Order to entitle a party to recover against the other party to a •contract is excused by the fact that such other party is disabled ¡to do what he has undertaken to do, is not applicable here. The question presented by this easels, whether the tempo-n-ary-and transient interference by injunction with the regular ■exercise of its corporate powers by the insurance company en-titled the assured to demand a new policy upon conditions •different from'those stipulated in the policy. 'The assured was required to do something which he alone •coiild do, without which he-had no right. The obligation of the company was to spring from the doing of the thing stipulated to be done by the assured. The temporary incapacity of the company to issue a paid-up term-policy, if it had been called for, did not entitle the assured to pretermit what he was required to do to create a liability against the company, .■and subsequently to call for a recognition of the right he had lost by his own delay. He should have performed the condi:-tions imposed on him, and his right would have been clear. 1Had he sent the policy, duly receipted, to the company within ■.sixty dáys after the default in payment of the premium, it [233] cannot be affirmed that a paid-up term-policy would not have been issued. The injunction might have been so modified as to allow the company to issue such policy. It is so manifestly proper that it should have been that it may be assumed that it would have been, and that the assured would have received the paid-up term-policy to which he would have been entitled if within sixty days after default in payment he had delivered the policy, duly receipted, to the company. If not, his right and the liability of the company would still have been clear. The restraint of the company proved to be temporary. The assured had no right to assume that it would be perpetual. The hinderance to the performance of corporate acts by the company was not its own act or by its procurement. It had not disabled itself from issuing a paid-up term-policy. It had not sought the injunction, although it had so acted as to subject itself to it. This case is obviously distinguishable from In re Albert Life Assurance Company, L. R. 9 Eq. 703, relied on by the counsel for the appellee. In that case the assured had. to perform a condition, the performance of which entitled him to certain benefits, and before the day arrived on which he was to perform the condition, “ the company rendered it absolutely impossible, by their own act, for him to perform that condition.” Because, by its own act, the company had determined the contract, for all practical purposes, it was held that non-payment of the premium due after that act did not affect the claim of the policy-holder. In the case at bar the contract was determined by the policy-holder, — by his failure to pay the premium, and by his failure to do what was necessary to entitle him to a paid-up term-policy, — and the company was not absolutely incapacitated to comply with what would have been its obligation if the assured had done what w¡?s necessary on his part. He was at least bound to signify his election to take a paid-up term-policy, and could not refuse to pay the premium because of the embarrassment of the company, fail to signify his option to have a paid-up term-policy, and long [234] afterwards obtain ' what be thought it not worth his while to claim in accordance with the terms of the policy. Affirmative action on his part within the prescribed time was essential to counteract the effect of his default in ‘payment of the premium, and evince his purpose not to abandon the policy. It is evident, that the policy was abandoned by the assured, and that the claim for a paid-up term-policy is an afterthought. ‘ It is not maintainable. Decree overruling demurrer reversed, and demurrer sustained and bill dismissed.