Banholzer v. New York Life Insurance

Mr. Justice McKenna, after stating the case, delivered the opinion of the court. The case is here on a single question. The counsel for plaintiff in error says: “ "While originally other questions were raised by the plaintiff they were determined adversely to her and her case made to stand or fall solely upon the interpretation of the New York statute, and the question now before this court is, did the court below in the case at bar give to the statute such full faith and credit as is secured to it by the Constitution of the United States.” That question, therefore, is made the ground of our jurisdiction. The defendant in error challenges its sufficiency, and *406 moves to dismiss because the Supreme Court of Minnesota did not deny the validity of the New York statute, but only construed it, and, even granting' the construction was erroneous, faith and credit' were not denied to the statute. Glenn v. Garth, 147 U. S. 360, and Lloyd v. Matthews, 155 U. S. 222, are cited. Those cases sustain the distinction which defendant in error makes, and the deduction from it;- and our inquiry will therefore be: Did the Supreme Court of the State of Minnesota deny the validity of the New York statute or only consider its operation and effect ? The claim of the defendant in error is that each of the notes was an “ instalment or portion of the premium,” and that, therefore, the Supreme Court of Minnesota, in holding that the notice prescribed by section 92 was not necessary to be given prior to the maturity of the notes, denied full faith and credit to the statute. We dispute the conclusion without passing on the premises. The ruling was a construction of the statute, not a denial of its validity, and that the court meant no more, and meant.to follow, not oppose, the decisions of the State, is evident from its opinions. The first opinion was put on the authority of Conway v. Insurance Co., 140 N. Y. 79, on the assumption that its facts were not different from those of the case at bar. In the second opinion the construction of the New York statute was considered as res integra, and it was held that “the notice required by it was not applicable to the notes given by Banholzef for part of the September premium.” In the first opinion, the contention that the “premium notice ” required .by the statute applied to the note, wrhich fell due March 16, 1897, and that the policy could not be forfeited without such notice, the learned justice who spoke for the court said: “ Even if the question was res noval, I am clearly of the opinion that, upon the facts, this statutory provision has no application to this note. But as my brethren do not agree with me in this, it would be useless for. me to enter into any discussion of the reasons for my opinion. The parties mutually agreed *407 that this should be deemed a New York contract and construed according to the laws of that State. The decisions of the highest court of that State as to the construction of such a contract and of the statutes of New York must, therefore, be accepted as conclusive upon the parties. In Conway v. Insurance Co., 140 N. Y. 79, upon a state of facts and under a statute which, in our opinion, are in no way distinguishable from those involved in the present case, the Court of Appeals held that the notice required by statute did not apply to the notes; that the company having served that notice before the premium became due, no further notice was required. Counsel for the plaintiff do not claim that the facts of the two cases are in any respect distinguishable, but they seek to draw a distinction between the language of the statute considered in the Conway case and the statute applicable to the present case. The statute under consideration in the former was Laws of N. Y., 1876, ch. 341, as amended by Laws, 1877, ch. 321; the statute applicable to the present case is Laws of N. Y., 1892, ch. 690, sec. 92. This last act appears to be a compilation and revision of all the insurance laws of the State, and section 92 but an embodiment (with certain amendments) of the provisions of the act of 1876 as amended in 1877. We have compared the language of the two acts, and are unable to discover any difference between them that at all affects the question now under consideration. “ Even if ‘ the one month’s grace ’ allowed by the policy for the payment of the premium was applicable to the notes, (which I do not think is,) that fact would not aid the plaintiff, for the insured did not offer to pay the last note until thirty-three days after it matured.” In the second opinion the court said that it had overlooked that counsel had claimed the case to be distinguishable on the facts from the Conway case; but on reexamining the Conway case it further said that the question of notice might have been disposed of on the ground of want of power of the agent of the insurance company to accept a note— “ But we are now equally well satisfied that in what the court said on the subject of notice in the last part of the opinion it intended to and did decide the question upon the assumption *408 that the company was bound by the agent’s acceptance of a time note for the premium. This is made quite clear to our minds from an examination of the record and briefs in the case, copies of which have been furnished us by counsel for the defendant. " While this shows the views of the Court of Appeals upon the construction of the statute, the doubt in our minds is whether, under the circumstances, it is a decision of the question which is binding on us. See Carroll v. Carroll, 16 How. 275-286 and 287. “We shall not decide that question, as we are satisfied that if the construction of the New York statute is to be considered as res integra the notice required by it was not applicable to the notes given by Banholzer for part of the September premium. The statute was no doubt enacted for the benefit of the insured, recognizing the fact that they were very often people who were neither experts nor systematic in business matters, and therefore liable to overlook or forget the due days of their premiums according to the terms of their policies, issued perhaps years before, laid away and seldom examined or referred to. And while courts are usually liberal in protecting the assured against forfeitures, this is always done in the interest of justice, and is no reason why any strained or forced construction should be placed upon this statute which would be unreasonable or operate oppressively upon the insurers or which was not within the legislative intent.” The plaintiff in error, however, assails the conclusions of the court. It asserts the court erred in its construction of the Conway case, and erred in its'independent construction of the New York statute. . Granting, arguendo, the correctness of both assertions, the validity of the statute was not denied. Its validity and authority were declared and its meaning was first sought in a decision of the New York courts, and then confirmed by an independent case and construction. We think, therefore, that the cases of Glenn v. Garth and Lloyd v. Matthews, supra, apply, and on their authority the action should be Dismissed for want of jurisdiction.