Mutual Life Ins. v. Hill

MORROW, Circuit Judge, after stating the facts as above, delivered the opinion of the court. The assignments of error relate to the refusal of the court to give certain instructions requested by the plaintiff in error, to the giving of other instructions by the court, and to the refusal of the court to grant a motion by the plaintiff in error for a judgment in its favor notwithstanding the verdict. Upon the former hearing it was held by this court that the policy of insurance in controversy was a New York contract, according to its terms, and that the Laws of New York of 1877 (chapter 321, § 1), providing that no insurance company shall declare a policy forfeited for nonpayment of premiums without having first given the assured 30 days’ notice that the premiums were due, and that the policy would be forfeited if they were not paid, were mandatory; also that under such a policy the rights of the beneficiaries could not be affected by an attempted waiver of the statute by the assured, or by other than their own act and agreement. The judgment of this court was reversed upon the ground that the answer of the defendant (plaintiff in error) alleged that the insured and the company had agreed to abandon and terminate, the contract of insurance, and that the beneficiaries (plaintiffs below) “had failed, neglected, and refused to pay the second premium,” thus refusing to continue the policy. This allegation of the answer, it was said, “disclosed a distinct agreement on the part of the insured and the company to waive and abandon the policy, and all rights and obligations on the part of the parties thereto.” Insurance Co. v. Hill, 178 U. S. 347, 350, 20 Sup. Ct. 914, 44 L. Ed. 1097. The case was sent back to the circuit court for trial on this question alone; the supreme court saying in its opinion that [711] it was an interesting question how far the action of the insured could affect or bind the beneficiaries in a life insurance policy, but that, under the allegations of the answer above stated, it was unnecessary to examine that question. The plaintiffs (defendants in error), by their replication, denied these allegations of the answer, and the case was brought to trial on the issues thus made. Upon the second trial it appeared by the testimony of each of the defendants in error, including the guardian, that not one of them had knowledge of the nonpayment of the premium, and that they had never refused to pay the same. The jury found a verdict for the plaintiffs (defendants in error), upon which judgment was entered. This question of fact relating to the alleged abandonment of the contract on the part of the beneficiaries was thus disposed of in their favor. The decision of this court upon all other points, not having been criticised or reversed by the supreme court, is now the law of the case for this court. Kankakee Coal Co. v. Crane Bros. Mfg. Co., 38 Ill. App. 555; Matthews v. Bank, 40 C. C. A. 444, 100 Fed. 397; Railway Co. v. Wilder, 41 C. C. A. 305, 101 Fed. 198. It is contended, however, that with respect to the opinion of this court that the contract of insurance must be considered as having been made in the state of New York, and subject to the laws of that state, this court has, in effect, been reversed by the supreme court of the United States in the case of Insurance Co. v. Cohen, 179 U. S. 262, 21 Sup. Ct. 106, 45 L. Ed. 181. Let us see if that is so. The contract in the present case was made up of the application on the part of the insured, and the policy issued by the company pursuant to the application, and the obligations of the respective parties are defined therein. The application contains the following clause: “It is agreed that * * * the contract of insurance, when made, shall be held and construed at all times and places to have been made in the city of New York.” In the policy issued in compliance with this application appears the following statement: “In consideration of the application for this policy, which is hereby made a part of this contract, the Mutual Life Insurance Company of New York promises to pay at its home office, in the city of New York, unto Ellen Kellogg Hill,” etc. The contract was thus, by the express agreement of the parties, made subject to the laws of New York, and governable by them. In the Cohen Case the supreme court gave particular attention to the question of what law should control a contract of insurance made by the insurance company in New York with an individual in the state of Washington. The application in that case contained a stipulation that it (the application) was made subject to the charter of the company and the laws of the state of New York. It was held that, while such a stipulation in the application is not tantamount to a stipulation that the policy issued thereon shall also in like manner be controlled, a provision that the contract issued upon such application should, when made, be in all respects controlled by the laws of New York, incorporates those laws into the terms of the contract, and the contract is then controlled by such laws. Reference was made [712] to the case of Baxter v. Insurance Co., 119 N. Y. 450, 23 N. E. 1048, 7 L. R. A. 293, as an example, where a stipulation appeared in the application for the policy that it was “a contract made and to be executed in the state of New York, and construed only according to the laws of that state.” The case was distinguished from the Cohen Case because of the fact that the application in the Cohen Case recited merely that the application was “subject to the charter of the company and the laws of the state of New York.” This application was held to be but a preliminary instrument, containing such a stipulation in order to prevent a local suit as to the effect of statements or representations or any other matter in the application from overriding the provisions of the charter and the laws of the state. No reference to the contract, when completed, was made in the application, and it was held that under those conditions the laws of .New York did not apply to the question of forfeiture. In the present case, however, the stipulation in the application is identical in substance with that appearing in the Baxter Case, 119 N. Y. 450, 23 N. E. 1048, 7 L. R. A. 293, containing the agreement that the contract, when made, should be held and construed at all times and places to have been made in the city of New York. The policy issued was pursuant to that application, and the agreements contained in the application became a part of the completed contract. The decision of the supreme court in the Cohen Case is not, therefore, a reversal of the decision of this court in the present case, but, on the contrary, it is clearly to be construed as in accord with our decision; and, so construed, we must hold that the contract in the present case is controlled by the laws of the state of New York. By those laws, no forfeiture could occur until the statutory notice had been given to the insured. This notice was not given either to the insured or to th'e beneficiaries. Hence the policy was still in .force at the time of the death of the insured, and the beneficiaries entitled to recover thereon. Attention has been called to the decision of this court in the case of Insurance Co. v. Hathway, 45 C. C. A. 655, 106 Fed. 815. It is only necessary to say that in that case the facts presented were identical with those in the Cohen Case, the application containing the same stipulation. The case was therefore governed by the decision of the supreme court in the Cohen Case, and is clearly distinguished from the one now under consideration. Here the completed contract was made subject to the laws of New York. There the application merely was subject to the charter of the company and the laws of New York. The action of the court below appears to have been in accord with the law herein stated, and the judgment is therefore affirmed.