Parker v. Simpson ( 1907 )

Erlanger, J.

On the 19th of "March, 1906, the Union Central Life Insurance Company of Cincinnati, Ohio, duly authorized to transact its business in this State, issued its policy of insurance to the defendant for and during his life, and thereby, upon his death, agreed to pay to his wife, if living, otherwise to the executors, administrators or assigns of the insured, the sum of $2,000. The policy recites among other things that, in consideration of the payment of $84.32 on its delivery, and of the payment of the premium annually thereafter of $60.64, beginning on the 30th day of March, 1908, at noon, in every year during the lifetime of the insured, or until nineteen such annual premiums shall have been paid, and of the payment when due of any and all notes given for premiums or parts of the same, it insures the life of the defendant. The policy was issued subject to a number of conditions, among others the two following:

“Application For Insurance.”

“ I. I agree that any policy which -may be issued under this application shall not be valid until the first premium is paid to the company, or its authorized agent, and the receipt therefor countersigned by the agent and delivered during my life.”.

“ Conditions.”

“ 1. Payment of Premium.— The failure to pay any of the first three years’ premiums, or any note, or interest upon the notes given to the company therefor, on or before the day upon which such premiums, notes or interest becomes due, shall avoid and nullify this policy without action on the part of the company or notice to the insured or beneficiary, and all payments made upon this policy shall be deemed earned as premiums during its currency. Any and all notes with their conditions which may be given for premiums or loans upon the securing of this policy are hereby made a part of this contract of insurance.”

Contemporaneously with the issuing and delivery of said policy, on March 19, 1906, there was paid on account of the eighty-four dollars and thirty-two cents, the first payment mentioned therein, the sum of twenty-three dollars and eighty-six cents in cash, and at the same time there was executed and delivered by the defendant to the company his promissory note, dated on that day, whereby he agreed to pay to it, on or before March 30, 1907, the sum of sixty dollars and forty-six cents without discount at the New York office of the company, “ being for premium on policy No. 317,798 in said company due March 30th, 1907.” The note contained this additional clause: “ Said policy, including all conditions therein for surrender, or continuance as a paid-up term policy, shall, without notice to any party, or parties interested therein, be null and void on the failure to pay this note at maturity, with interest at six per cent per annum.” When the payment, mentioned was made and the note delivered, plaintiff received his policy together with a receipt for the first premium of eighty-four dollars and thirty-two cents subject to the conditions mentioned in the note and receipt. Before the note became due, plaintiff, acting for the company, caused to he sent to the defendant a notice to the effect that the note for premium, due on March 30, 1907, would then mature, and that prompt payment thereof “ is of vital importance to your insurance.” On March 30, 1907, the defendant did not meet his note, hut, instead, wrote a letter to the plaintiff in which, among other things, he'said: “ I have paid for protection up until March 30th of this year, and iioav return by special messenger policy number 317798, with instructions to cancel the same on that date.” Plaintiff promptly, and on the same day, returned the policy, and requested payment of the note in full or in part as was suggested in a prior letter of the same date.

The defendant refused to retain the policy and again returned it to plaintiff. The defendant defaulted in meeting the note, and thereupon this action was brought to recover the amount due thereon. Many defenses are set up in the answer; for example, it is pleaded that plaintiff is not a bona fide holder for value; that the policy lapsed hv force of its oavu terms on March 30, 1907, and that defendant after that date Avas entitled to none of the benefits thereunder; that because the first premium was not paid the policy never became operative, and that there is a complete failure of consideration, and that plaintiff at no time during the year 1906 was authorized to act as agent, not having procured a license from the Superintendent of Insurance as required by the laws of this State. The defenses were held by the court "to he untenable and plaintiff recovered. Defendant appeals. From the foregoing facts it is clear that by the contract between the parties nothing was to be paid by way of premium until the 30th of March, 1908, except the balance due on the premium mentioned in the note. The delivery of the policy and receipt for the first year’s premium Avas not only a good and valid consideration for the note, but the defendant was absolutely protected under the terms of the policy; and, had he died during the life of the note, his beneficiary would have become entitled to the amount of the insurance. The contention of the defendant that, under the conditions of the policy above referred to and of the note, the policy lapsed upon the nonpayment of the premiums and voided itself by its own terms, begs the question. The argument must necessarily be predicated upon the theory that either party could declare the contract at an end because one of them reserved the right to do so under certain conditions. If this were true, few contracts containing conditions could be enforced. One of the maxims in the law is, that no one shall be permitted to take advantage of his own wrong. This is exactly what was sought to be done here. The defendant bréales his contract and then claims that, because the company could have terminated the policy, but did not elect to do so, he may refuse to pay the sum owing from him. All the conditions above recited, whether in the policy, the note or in the receipt, were for the benefit of the company; and, despite the rigor of the terms, the company had the right to continue the policy in force if it elected to "do so. In this case it made its election to continue it. And we can see no way by which the defendant can escape liability. The case may be illustrated by the following example: If A. covenants with B. to perform certain acts, and it is stipulated that for the breach of any of them, the contract shall fail, can it be said that A. may deliberately violate the terms of the compact, and thus escape the penalty of such breach? If the answer be in the affirmative, the law would resolve itself into a positive absurdity. The analogy between the case at bar and the illustration is readily apparent. Here the insurance company determined to keep the policy alive and waived its right to cancel it; and it does not lie in the mouth of the defendant to say: “You shall not or cannot do it because you have covenanted with me, if I do not pay my note my policy shall be void.”

The defendant further urges upon us, that the acceptance of the sum of twenty-three dollars and eighty-six cents in cash shows that the policy was “ term rated,” that is to say, that it was in force from March 16, 1906, when it was issued, until March 30, 1907;" /when the note became due. The plaintiff, called as a witness, testified that the twenty year term began to run from March 30,1907; and it is argued from that, that the cash payment was for protection up to that time. But nowhere is it shown why the premium from March 19, 1906, to March 30, 1907, a little over a year, was but twenty-three dollars and eighty-six cents, when the annual premium in the policy is fixed at sixty dollars and forty-six cents. It is denied by plaintiff that the policy was “term rated,” so that the difference in rate is wholly a matter of conjecture. It may be that a premium rate of eighty-four dollars and thirty-two cents was agreed upon for the first "two years as a consideration of the acceptance of the policy. The errors complained of by the exclusion of proof are not of sufficient moment to require us to reverse the judgment. The conversations sought to be elicited were wholly immaterial to the issue. Besides, parol evidence was not competent to vary the terms of the note.

The judgment must be affirmed, with costs.

Gildersleeve and Leventritt, JJ., concur in result.

Judgment affirmed, with costs.