Mouton v. New York Insurance ( 1922 )

BX: VíUiLIMI A. BEED, JUDGE:

The plaintiff as Beneficiary under an insurance policy issued on the life of her deoeased husband, for' the sum of -$2,000, sues defendant for said amount. Erom an adverse judgment, plaintiff appeals.

There is no contention as to the material faots mainly disclosed by documentary evidence. Testimony'by de-' positions taken on behalf of the defendant, is found upon examination to be of little value save to establish the dates upon which certain premium payments were made by George Clinton Mbutoji, the insured.

The policy in question is an ordiAary life insurance and investment policy in effect as of January 15, 1906, upon which date the first annual premium of $106.82 was paid. The insured also made two other premium payments, of iike amounts, one on January 15, 1907, and another on January 15, 1908. On the due ’ date of the fourth annual premium, to wit: January 15, 1909, same was not paid. Under the terms of the policy it íb provided that one insured at age "62,years" (Houton's age) having paid premiums for three years, as did he, and having defaulted in payment of premium for the fourth.year, the insurance would be extended one year and four months from date of default.

These faots all having arisen in the 'instant aA case, it follows^an indisputable fact that the policy; under term insurance, was extended automatically to May 15) 1910. It also appears from the provisions of the policy that had the insured paid the fourth annual premium on January 15, 1909, and defaulted in payment on the fifth annual payment, to wit: January 16, .1910, that Vhe'policy would have been extended automatically as term Insurance, one year and eleven months from date of the default ón the fifth premium payment, or, in other words, that the policy would not have terminated except by ad interim death of the.insured,until Hovember 15, 1911.

There is no authentic proof in the record of the insured's death, but plaintiff, by supplemental petition, alleges the same to have occurred on October 24, 1911. It is oon-olusively proven that no other premium payments were ever made, save the three heretofore stated, and that the insured defaulted in his payments on the fourth, fifth and sixth annual premiums falling due respeotively on January 16, 1909, January 16, 1910, and January 16, 1911.

It is contended, however, and,the plaintiff so alleges, that the fourth premium payment was paid on its due date, to wit:- January 16, 1909, in cash, ¡$S6.82, and hy oertain note of the insured for $79.00. Upon this allegation - not home out hy the faots as we find them - it is argued that though no other premiums were subsequently paid, the automatic term insurance as stipulated in the policy extended the life of the policy to November 16, 1911 - a period bdyond the death of the insured.

The sole issue for determination is whether the transaction above referred to, 'and which occurred between the insured and the defendant, on January 16, 1909, in any manner effected the contract of insurance herein sued upon. Defendant admits that the policy was dated January 16, 1906 (not January 16, 1907, nor February 16, 1907, as alleged in plaintiff's petition and supplemental petition) but denies that premiums were paid for four years. It further alleges that three premiums were paid carrying the policy to January 15, 1909, the due date of the fourth premium payment, but denies that any part of the fourth premium was ever paid by cash or note, though in fact, it did, on January 16, .1909, reoeive from George Clinton Mouton, the insured, $26.82 in cash, under and in accordance 'with a certain written contraot or agreement known as a "blue note," reading as follows:

"Bol.No.2266228 Rayne.Ia., 1/16,1909.

ON OR BEFORE July 16, 1909, after- date, without grace, and without demand or notice, I promise to pay to the order of the NBW-YOBE LIFE INSURANCE COMPANY, SEVENTY-NINE Dollars at Tihitney-Central National Bank, New Orleans, Da., value received, with'interest at the rate of five per cent per annum. This note is aocepted by said Company at the request of the maker, together with $26.82 Dollars in cash, on the following express agreement:

That although no-part óf the premium due on the 15th day of Jan., 1909, under Polioy No. 2256913 issued by said Company on the life.of G.C. Mouton has been paid, the insurance thereunder shall be continued in force until midnight of the due date of said note; That if this note is paid on or before the date it becomes due, such payment, together with Said cash, -will then be accepted by-said Company as peyment of said premium, and all rights under said policy shall thereupon be the same as if said premium had been paid when due; That if this note is not paid on or before the day it becomes due.it shall thereupon automatically cease to be a claim against' the maker, and said Company shall retain said cash as part compensation for the rights and privileges hereby granted, and all rights under said policy shall be the same as if said cash had not been paid nor this agreement made; That said Company has duly given every notice required by its rules or by the laws of eny State in respect to said premium, and in further compensation for the rights and privileges hereby granted the maker hereof has agreed to waive, and does hereby waive every other notice in respect to said premium or this note, it being well understood by said maker that said Company would not have accepted this agreement if any notice of any kind vie re required as a condition to the full enforcement of all its terms.

Name.(Name) C, Clinton Mouton, Address.(Address) Rayne, la."

#79.00

The defendant cashier at New Orleans, la, upon receiving the above cash and not», gave the insured a written duplicate receipt therefor, reading as follows:

"NEW YORK HI'S INSURANCE COMPANY 3*6 and 348 Broadway, N.Y.

Received from G. CIINTOH MOUTON, #26.82, in cash and a note for #79.00 dated the 15th day of January, 1909, due on or before July 15th, 1909, after its date, with interest at the rate of five per cent per annum, without'grace, and without demand o'r notice, payable at Whitney-Central National Bank in the City of Hew Orleans,-la. in the State of louisiana.

Said note is received by the NEW YORK 1IE3 INSURANCE COMPANY at the request of the maker and is held by said Company together with said cash on the following express agreement, whióh forms a part of said note:

’That although no part of ’the premium due on the 15th day of ’January, 1909, under Policy No. ’2255923, issued by said Company ’on the life of G. Clinton Mouton ’has been paid, the insurance there’under .shall continue in force until ’midnight of the due date of said ’note; That if this note is paid ’on or before the date it béoomes due ’such payment, together with said cash, 'will then be accepted by said Company ’as payment of said premium, and all ’rights under said policy shall there’upon be the same as if said premium 'Rad Reen paid when due; That if 'this note is not paid on or Re-'fore the day it heoomes due, it 'shall thereupon automatically cease' 'to Re a claim against the maker, 'and said Company shall retain said 'cash as part compensation for the 'rights and privileges hereby granted, 'and all rights under said policy shall 'Re the same as if said cash had not 'Reen paid nor this agreement made; 'That said Company has duly given every 'notice required Ry its rules or Ry the 'lav/s of any State in respect to said 'premium, and in further compensation 'for the rights and privileges hereby 'granted the maker hereof has agreed 'to waive, and does hereby waive evérjr 'other notice in respect to said pre'mium or this note, it being well un'derstood Ry said maker that said Com'pany Would not have accepted this '.agreement if any notice of any kind 'were required as a condition to the 'full enforcement of all its terms.

H3W YORK LIES BTSURAKCE 00., '

By 3.0. Toombs, Cashier."

There being no dispute that the signature attached to the original note, as above described, is that of the insured, the admission or declaration therein made to the effect "that no part of the premium due on January 15, 1909 has Reen paid," is conclusive of this all important fact,', and in the absence of allegations ana proof of fraud or error, same cannot Re questioned by one claiming under the policy. It follows, therefore, that there could not have Reen any automatic term insurance extending the policy to Bovemb'er 15, 1911, or until death of the insured on October 15, 1911, unless - despite the declarations contained in the note - it can Re held that the payment of the cash and the giving -of the ' note was'a payment in full of the fourth premium due January 16,190,9.

Suoh construction would Re abhorrent to the law of the contract as stipulated in the' policy which specifically provides that the insurance will automatically continue "if there is no indebtedness to the Company." a fact definitely declared to the contrary in the note itself

The contention of plaintiff by 'Which recovery is sought, can only he predicated upon the theory of novation under Revised Civil Code, Art, 2185, whereby an existing obligation is substituted by a new one in its place, but this can occur only where the old debt is extinguished by the new, and the intention so to do clearly results from the terms of the agreement, fully discharging the original debt. Such intention cannot be presumed. Rev. P.C. Arts. 2187,2189,2190. As just observed, there was not only no express intention to novate the obligation due for the fourth premium of insurance, but special declarations in the "blue note" and the reoeipt therefor clearly pronounoe against such intention.

Counsel for plaintiff cites with confidence the decision of Lawrence v. Penn Mutual Life Insurance, 113 La. 87, as authority against an insurance company's accepting a note in payment of a first premium, and subsequently forfeiting the policy or treating it as null without notifying xhe insured that such has been done because of his failure to meet the note at maturity. She facts in the cited case are clearly not applicable to conditions which have arisen in the instant case, particularly for the reason that in the "blue note" signed by Mouton, it is provided in most positive and unambiguous language as follows:

"Shat said Company has duly given every notice required by its rules or by the laws of any State in respect to said premium, and in further compensation for the rights and privileges hereby granted, the maker hereof has agreed to waive, and does hereby waive every other notice in 'respect to said premium or this note, it being well understood by said maker that said Company would not have accepted this agreement if any notice of any kind were required as a condition to the full enforcement of all its terms."

In Lawrence v. Penn Mutual Life Insurance Co., it is plainly indicated what the ruling would have been had the facts there been similar to those now before us, for the Court said even in that ease, the following, viz:

"If the company takes it as its own and approves his act, it is to be viewed in the light of having possession of a note which it accepted in payment of premium due on the policy. Unless it be stipulated in the policy, or in some way in the contract of insurance, that forfeiture is to be immediate in event the note is not paid, no such result can follow its. non-payment. She power to forfeit or cancel must he 'nominated in the hond.' Here no such consequence was stipulated."

She judgment of the trial court dismissing plaintiff's petition is justified hy abundant authority found in the jurisprudence of the highest courts of other states, where similar notes under like conditions have been construed as in no manner qualifying the terms or conditions of the original contract of insurance stipulated in the policy. - White v. N.Y.Life Insurance Co., 200 Mass. 512; Holly v. Metropolitan Ins. Co. 105 N.Y. 437; Baker v. Union Insurance Co., 43 N.Y. 283; Bank of Commerce v. New York Insurance Co., 125 Ga. 522; Slocum v. New York Life Insurance Co., 228 U.S. 364.

It is therefore ordered, adjudged, and decreed, that the judgment herein appealed from be, and the same hereby is affirmed, at plaintiff's cost.

JUUGIIEKT ARPIPISU.

Becember 11th, ‘1922.