Young v. Mutual Life Ins.

SAWYER, Circuit Judge (after stating the facts). It is not denied that there was, in fact, a contract made. The receipt and memorandum given to the applicant, dated June 5, purports upon its face to insure him from its date, provided, only, that the application should be accepted by the defendant. It was accepted, and a policy in due form fully executed and sent to the San Francisco office to be delivered. These acts, it is conceded, constitute a contract. [858] But it is insisted that, although the memorandum of agreement of June 5 does not specify all the terms of the contract, it is implied that the policy shall be upon the usual terms embraced in the company’s policies; that the acceptance was upon the terms of the policy, as it was actually prepared and executed, and that, under these terms, the policy became forfeited for nonpayment of premiums, as required by one of its express conditions. The defendant claims that the note given for the first quarter’s premium, not having been paid when due, a forfeiture resulted. If not, then, that a forfeiture accrued upon the non-payment of the second quarter’s premium, which fell due on July 5, if the date of the policy, or on September 5, if the date of the receipt and memorandum of June 5 is to control. The plaintiff insists that it is incompetent to show a non-payment of the note against the acknowledgment of the receipt of the money in the memorandum of June 5, and also in the policy, for the purpose of defeating the contract; that the note was accepted as payment, and the defendant is estop-ped from denying it for such a purpose. It was so expressly held in Insurance Co. v. Fennell, 49 Ill. 180. This, I suppose, is on the principle recognized by the authorities, that such acknowledgments are often to be regarded as presenting a double aspect—-firstly, as a simple- receipt for money; secondly, as constituting a part of a contract. In the first aspect, and for collateral purposes, such as the recovery of the money, the acknowledgments may be contradicted. In the second, and for the purpose of defeating the operation of the contract, they cannot be contradicted. These distinctions are discussed in Peck v. Vandenberg, 30 Cal. 23, and cases there cited; Ashley v. Vischer, 24 Cal. 322; Gott v. Insurance Co., 25 Barb. 192. But I shall not rest my decision on that ground. The plaintiff further insists that, if there was a forfeiture it was waived by defendant. It is elementary law that forfeitures are not favored, and that provisions for forfeiture must be strictly construed. The authorities, also, hold that these principles are applicable to forfeitures in insurance poli-ches; that the provisions for forfeiture are inserted for the benefit of the companies, and may be waived by them; and that courts will find a waiver upon slight evidence. See, among many cases, Ripley v. Aetna Ins. Co., 29 Barb. 557; Id., 80 N. Y. 136; Goit v. National Protection Ins. Co., 25 Barb. 189; Baker v. Union Life Ins. Co., 6 Rob. (N. Y.) 394; Boehen v. Williamsburgh City Ins. Co., 35 N. Y. 131; Bouton v. American Mut. Life Ins. Co., 25 Conn. 542; Pino v. Merchants’ Mut. Ins. Co., 19 La. Ann. 214; Insurance Co. v. Webster, 6 Wall. [73 U. S.] 129. Apply these principles to the facts of tills case. The policy bears date April 5, and the receipts prepared by the company correspond with this date. The company, therefore, regarded the second quarter’s premium as due July 6, and acted upon that idea, although the application was made, and the first memorandum, receipt and contract given on June 5. The promissory note given for the first quarter’s .premium being payable without grace, fell due August 4. It will be seen that the condition of the policy imposing a forfeiture required payment to-be made “at the office of the company, in. the city of New Xork, or to agents,” when they produce receipts signed by the president or secretary, “unless otherwise expressly agreed in writing.” There is no evidence-in this case of its having been otherwise agreed in writing. It does not appear that the policy was received at the San Francisco office before the second of August At or about the sixth of July the policy must have been in defendant’s office in New Xork, which would give twenty-seven days to August 2 to make the passage to San Francisco. 'The defendant knew, at the time of dispatching the policy, that the second installment of premium had not been paid at the-office in New Xork. It also knew that it could not be paid to its agents here, in accordance with the terms of the contract, so-as to be obligatory upon defendant, for the reason that the only receipt duly signed, as-specified in the policy, authorizing the payment to its agents, was attached to. the policy, and would not reach San Francisco till the month of August, a month after it was-due. The defendant did not expect payment at its office in New Xork City, or it would not have sent its receipt to its agent to enable him to receive payment. The defendant, then, by its officers in New Xork,. transmitted the policy and receipts with knowledge that payments had not, and would not, be made at the office in New York, and that it could not be made elsewhere in the mode required by the terms of the contract for a month after due. Xet the policy was sent with an intent that it should be delivered, and payment received by its agent in San Francisco, although it knew that there must necessarily be a forfeiture upon the strict letter of the contract. Also, after the receipt of the policy at San Francisco, on the second of August, nearly a month after the second installment fell due, according to the terms of the policy, the defendant’s agent, necessarily knowing that payment had not been made, stamped and countersigned the receipt, ready for delivery upon payment, thereby treating the agreement as still in force. Again, on the eighth of August, four days after the note given for the first quarter’s premium fell due. and after default in payment, and necessarily with knowledge of non-payment of both the note and second installment, the agents of the defendant addressed to Young the note set out in the findings of facts. [The above judgment was reversed by the supreme court. 23 Wall. (90 U. S.) 85.] This act, after the forfeiture, if any there was, had attached, recognizes the agreement as being still in force. The letter does not even demand payment, or refer to the fact of non-payment, or fix any time when the insured should call for the policy, or make payment. It simply notifies him that his policy has arrived, and asks whether it should be sent to him at Vallejo, or whether he would call and get it, when in the city, implying that it would be at his option to have it sent to him at once, or wait his convenience till he should come to the city, and be able to call for it. The defendant manifested no haste or anxiety upon the subject, for the policy was on hand from the second to the eighth of August at least, before the notice to Young was even written, and it does not appear when it was sent. It does not appear that this or any other notice reached him. No other act of the company is shown inconsistent with this action, or tending in the slightest degree to show an intention to insist upon a forfeiture till after the death of Young, when the policy was canceled October 31, payment of the loss having before been refused. It could hardly have been expected that Young would call to make the second payment until notified whether the risk had been accepted, especially as there was ample time between June 5, when the application was made, and the fifth of September, the time when the next payment would have fallen due, had the date of the policy agreed with the date of the application, and the preliminary memorandum of agreement given to him by defendant’s agent in San Francisco. It was, doubtless, supposed that notice of acceptance or rejection would be given before the note for the first quarter’s premium would fall due. But however this may be, the several acts of the defendant, and all its acts, and the acts of its officers in relation to the matter shown to the court, which were performed subsequent to the accruing of the forfeiture, if any accrued, treat the agreement for insurance as still in force. They affirmatively indicate an intention not to insist upon a forfeiture, and had the accident and death not occurred, there can be no doubt, from the facts shown, that even as late as the death of Young, the premium would have been received and the policy delivered. In the case cited by counsel of Ohipman against the same defendant, tried in this court a year ago. there was no act of any kind shown on the .part of the company indicating an intention to waive the forfeiture, or in any way recognizing a subsisting contract. Whereas, in this case, all the acts of the • company, after the forfeiture accrued and prior to Young’s death, shown to the court, recognize the contract as still subsisting, and manifest an intention not to claim a forfeiture. I think, upon the facts, the court must find a waiver of any forfeitures which had ae-crued, and that under the circumstances, after the death of the assured, it was too late, for the first time, to insist upon the forfeiture.- Let the plaintiff have judgment for the amount of the policy, less one year’s premiums, and interest from the time payment should have been made.