Appleton v. Phenix Mutual Life Insurance

The fact is established by the report of the referee, that prior to February 12, 1878, the plaintiff rightfully supposed and had reason to believe, from the defendants' course of dealing with her, that Moore had authority to receive premiums overdue, and that the defendants would receive the money so paid for such time as Moore should accept money paid on his request. The policy by its terms became void February 9, 1877, for non-payment of the note falling due on that date, unless the forfeiture was waived by the defendants. This condition was inserted for their benefit and could of course be waived by them at their pleasure; and the facts reported show that the defendants did not intend to insist upon the prepayment of the premiums as a condition precedent. Forfeitures are not favored in the law, for they are often the means of oppression and injustice. Insurance Co. v. Norton, 96 U. S 234,242. Courts are prompt to seize hold of any circumstances that indicate an election to waive a forfeiture, or an agreement to do so, on which the assured has relied and acted — Insurance Co. v. Eggleston, 96 U.S. 572,577; and a forfeiture will not be enforced except where the evidence is clear that such was the intention of the parties — Leslie v. Knickerbocker Life Ins. Co., 63 N.Y. 27, Helme v. Philadelphia Life Ins. Co., 61 Pa. St. 107, Buckbee v. U.S. Ins. Tr. Co., 18 Barb. 541, and May Ins., S. 361; and a waiver may be inferred from any circumstances which show that both parties understood the payment of a premium when due would not be required. Currier v. Insurance Co., 53 N.H. 538, 549-552; May Ins., s. 360; Heaton v. Manhattan Fire Ins. Co., 7 R.I. 502; Goit v. Nat. Prot. Ins. Co., 25 Barb. 189; Hodsdon v. Guardian Life Ins. Co., 97 Mass. 144.

The defendants' course of dealing having been such as to induce the belief in the plaintiff that they would not insist upon the stipulation in the policy for a forfeiture for non-payment of premiums when due, the ordinary principles of estoppel apply. The defendants are estopped to claim that the plaintiff's policy had lapsed prior to February 12, 1878. Meyer v. Knickerbocker Life Ins. Co 73 N.Y. 516; Horn v. Cole, 51 N.H. 287. Indeed the doctrine of waiver as asserted against insurance companies to avoid the strict enforcement of conditions contained in their policies, is only another name for the doctrine of estoppel. Insurance Co. v. Wolff95 U.S. 326, 333. It will be observed that when Moore called upon the plaintiff's agent, February 11, for the money then due, and informed him that if it was not paid at once "all would be lost" (meaning, as we understand, that the policy would become void), no claim was made that the policy had already lapsed. The claim was then made for the first time that further delay in the payment of the premiums due would work a forfeiture of the policy. After July 23, 1877, no request was made for the balance of the premium due August 9, 1876, nor for the premium due August 9, 1877, until February 11, 1878. When the plaintiff was informed on the latter date that immediate payment was necessary to prevent a forfeiture of the policy, it became her duty to act promptly. The whole amount of arrearages claimed was paid within the next two days, no credit being given for the sums of $25 and $15 paid in June and July, 1877. If the defendants intended to insist on the forfeiture of the policy, the rules of good faith and fair dealing required that the plaintiff's agent should have been so informed before he made the payment of $100; otherwise the defendants would be demanding and receiving money to which they had no claim, and for which the plaintiff would receive no benefit. Not till the payment of $100 had been made and the receipt therefor delivered, was her agent informed of the defendants' claim that the policy had already lapsed. The defendants' conduct having been such as to induce the plaintiff's action in reliance upon it, if the defendants could elect to treat the policy as lapsed without giving her a reasonable opportunity to pay the balance due, it would operate as a fraud upon her. The receipt of the sum of $100, February 12, without objection, to be credited to premiums past due, no purpose of claiming a forfeiture being made known, shows that the plaintiff had been induced to delay the prepayment of premiums by the defendants' course of dealing with her. It would be a fraud upon the plaintiff, after being put off her guard, not to be permitted a reasonable opportunity to pay the premiums overdue — Meyer v. Insurance Co., 73 N.Y. 516, 527; and there can be no claim that she did not act with reasonable promptness after the defendants' change of purpose was made known February 11.

When the defendants claimed, February 12, 1878, that the policy had already lapsed, and proposed that the plaintiff should pay up the premiums in arrears, and give them the option of reviving the policy or refunding the money if the result of a medical reexamination should not be found satisfactory, the plaintiff might have stood upon her legal rights, and insisted that the policy had not lapsed for the reason that prepayment of premiums had been waived. She however assented to the proposition, and thereby waived her right to insist that the defendants were estopped to claim that the policy had lapsed for non-payment of premiums in advance. Under this new contract Robert paid the balance of premiums in arrears February 13, and procured and furnished a medical reexamination of the plaintiff which the defendants pronounced unsatisfactory, and declined to revive the policy. The plaintiff then demanded the repayment of the money paid February 12 and 13, agreeably to the terms of the alternative agreement, and the defendants declined to refund the money. The defendants having refused to perform either alternative of the contract, the plaintiff became entitled to treat the contract as rescinded by the defendants and entitled to be reinstated in the position in which she stood when the contract of February 12 was entered into. The defendants cannot set up the contract which they have violated, as a waiver by the plaintiff of the estoppel against the defendants arising from their usage and course of dealing with her. Meyer v. Insurance Co., 73 N.Y. 516, 527. Nor can they set up the contract which they have violated as a means of destroying previous rights of the plaintiff given up and waived by the contract which the defendants have refused to perform. Danforth v. Dewey, 3 N.H. 79; Fuller v. Little,7 N.H. 535; Luey v. Bundy, 9 N.H. 298; Snow v. Prescott, 12 N.H. 535; Drew v. Claggett, 39 N.H. 431; Chamberlin v. Perkins, 55 N.H. 237, 241.

The plaintiff is not confined to her suit at law to recover back the money paid. That is not her only remedy. She may elect to become restored to the position occupied by her when called upon to pay the premiums in arrears, which was, that the defendants were estopped by their course of dealing with her and her agent to claim that the policy had become forfeited.

Decree for the plaintiff.

BINGHAM and ALLEN, JJ., did not sit: the others concurred.