Poste v. American Union Life Insurance

Putnam, J. (dissenting):

The defendant, on or about the 13th day of September, 1895, executed and delivered to William A. Poste, deceased, a policy for the sum of $10,000 upon his life, payable to the plaintiff, his wife.

It is conceded that the premium was never paid. The application for insurance, which forms a part of the policy, contains the usual condition, viz.: “ That any policy issued thereon shall not go into effect until the first premium has been actually paid, during the lifetime and good health of the insured.” The policy .also provided: “No agent, nor any other person except the President, First or Second Vice-Presidents, Comptroller or Secretary of the Company, in writing, has power to alter or change in any .way the terms of the policy contract or waive forfeitures.” The insured died on the 21st day of January, 1896, the policy remaining in his possession and being found in his safe after his death.

The complaint contains an allegation averring an agreement between the deceased and the defendant, by which the latter was to give the former credit for the premium of $126.40, which, by the terms of the policy, was payable in advance. Under such an allegation the plaintiff, to recover in the action, was compelled to establish on the trial a waiver by the defendant of the prepayment of the premium. There is no substantial conflict in the testimony, and the question is presented whether the trial judge was right in his conclusion .that the policy in question never took effect in consequence of the failure of Mr. Poste to pay the premium.

. Notwithstanding the clause above quoted in the application, which must be deemed to have the same force as if inserted ill the policy, the defendant could waive prepayment of the premium. In Van Schoick v. Niagara Fire Ins. Co. (68 N. Y. 434, 439), Folger, J., remarks : “ It has been,,held over and over that the customary clause in a policy that it will, not be binding upon the insurer until the premium is paid in fact, may be waived by parol, or by act, and the policy may be delivered and becomé a binding contract upon the insurer without payment in hand of the premium. (Trustees, etc., v. Br. Ins. Co., 19 N. Y. 305; Sheldon v. Atlantic F. Ins. Co., 26 id. 460; Wood v. Po. Ins. Co., 32 id. 619 ; Boehen v. Wms. B. City Ins. Co., 35 id. 131; Bodine v. Ins. Co., 51 id. 117.) ”

Did the defendant in this case give credit to the insured for the premium ? No agent or officer of the company was sworn as to the actual transaction. We have simply the .fact that the policy was delivered to Mr. Paste and remained in his possession until the time of his death, and also that. the. defendant, about four months after the date of the policy, reported it to the Insurance Department as an outstanding obligation of the company.

In Bowman v. Agricultural Ins. Co. (59 N. Y. 521, 526), Judge Folger says: “ Undoubtedly, also, the defendant could waive its right to immediate payment, and give the plaintiff credit. A delivery of the policy without exacting payment is, for the time, a waiver of the right to have immediate payment. Nor does the fact that the policy contains a condition, which.expresses just what the law, without any condition, declares, make the delivery any less a waiver of the right to instant payment, and less a giving of credit. For the defendant may waive all conditions which it proposes in its own favor, as well as those which the law provides for it.”

In the opinion in Wood v. Poughkeepsie Mutual Ins. Co. (32 N. Y. 619, 620) it is said : “If he had waived the condition óf prepayment the insurers would have been bound by his act, though it was in violation of their private instructions. The law would have implied such waiver if the policy had been delivered by the agent, without requiring payment of the premium, and had been accepted by the plaintiff as a complete and executed contract.”

In Bodine v. Exchange Fire Ins. Co. (51 N. Y. 117, 122) it was held that a waiver of prepayment of the premium may be shown by direct proof, or be inferred by circumstances.

The authorities cited relate to a waiver by fire insurance companies, but there is no reason why the same doctrine should not apply to a life insurance company. (See Wyman v. Phoenix Mut. Life Ins. Co., 119 N. Y. 274; Merserau v. Phoenix Mut. Life Ins. Co., 66 id. 274; Marvin v. Universal Life Ins. Co., 85 id. 278.)

In the two cases last cited the, waiver of the payment of the premium claimed by the respective plaintiffs was held not established, solely on the ground of a want of power of the agents who assumed to act for the companies. In this case no such question arises. It is conceded in the answer that the policy was executed hy the defendant, and it is not denied that it was delivered to Mr. Poste, the answer merely denying that it was delivered “for value received.” And a delivery to the deceased was established by the evidence on the trial. Hence, if the proof was sufficient to show a waiver of prepayment of the premium, under the pleadings and evidence on the trial, it was a waiver by the defendant itself.

It is true that in most of the authorities above referred to there was proof given, aside from the delivery of the policy, indicating an intent of the insurers to give a credit to the insured for the-premium. But in the ease of Boehen v. Williamsburg City Ins. Co. (35 N. Y. 131), approved in Bodine v. Exchange Fire Ins. Co. (51 id. 122), and in Van Schoick v. Niagara Fire Ins. Co. (68 id. 439), it appeared that a certificate of renewal was delivered to the plaintiffs agent. Nothing was said as to giving credit, nor did it appear that the company had been in the habit of giving the plaintiff credit for premiums. It was held that the delivery of a policy without requiring paymént “ raises a presumption that a short credit is intended.”

I think the delivery to Mr. Poste on the 13th of September, 1895,, and its retention in his possession until his death four months afterward, was sufficient evidence of a waiver by the defendant of the prepayment of the premium, there being no testimony offered or. given by the defendant, or explanation made, to rebut the presumption arising from such delivery. As held in the authorities above cited, “ a delivery of the policy without exacting payment is for the time a waiver of a right to have immediate payment;” or .at least evidence of such a waiver. It was within the power of the company to have produced, on the trial, the agent or officer who delivered the policy to the deceased, and to have shown the circumstances surrounding the transaction, and .that the delivery was not an unconditional one; to have offered some evidence to rebut the presumption arising from such delivery. Failing to do so, the doctrine stated in Boehen v. Williamsburg City Ins. Co. (supra) should apply.

If, however, it was incumbent on the plaintiff,, in order to sustain her contention that prepayment of the premium by Mr. Poste was waived by the defendant,, to show other facts besides the mere delivery of the policy to him, she did produce convincing evidence' in that regard. It was shown that the defendant,, in its report to the Insurance Department of the State on January 3, 1896, three months and a half after the delivery of the policy, and but eighteen days before the death of the assured, under the caption, “ Description of all the policies and other life contingent obligations of the American Union Life Insurance Company at present in force, with all the data necessary' for a correct valuation of the same, returned to the Insurance Department of the State of New York by the President and Actuary of the said Company,” reported the policy issued to Mr. Poste as follows: “ Number of Policy, ‘ 2192; ’ ‘Date of Issue,’ ‘Ninth Month, 1895;’ ‘ Age at Issue, 46;’ ‘Form of Policy,’ ‘ T.,’ ‘ at ten years; ’ ‘ Amount Insured,’ ‘ $10,000.’ ” And the affidavit annexed to said report was as follows:

“STATE OF NEW YORK, ( , SS.:

■ County of New York,

“ E. S. Savage, Vice-President, and B. F. Reimund, Actuary, of the American Union Life Insurance Company, of New York, being severally duly sworn, severally depose and say, and each for himself says, that the foregoing register or registers contain a full and correct list of all the oiotstandi/ng policies of the said company in force on the 31st dap of December, last, with all the data necessary to make a; net seriatim valuation of the same, and that the policies which heme ceased to be in force prior to said date are correctly marlced off and canceled according to their best information, knowledge and belief.

“EDWARD S. SAVAGE.

“B. F. REIMUND.

“ Sworn and subscribed before me, this 3d day of January, A. D. 1896.

“ Edward Haight, Notary Public, Kings Oounty.

“ Certificate filed in New York City.”

This report was an official act of the company its'elf, sworn to by its officers, and affords satisfactory evidence that the policy issued to Mr. Poste was then in force, and, as it is conceded that the premium had not been paid, that prepayment of the premium had been waived by the defendant. If the position taken by the defendant on the trial, and in this court on the appeal, is correct, the policy in question was not in force on the 3d day of January, 1896; had never been in force; had never had an inception or delivery, and the report as to said policy, as well as the affidavit appended to said report, was in fact false.

It is difficult to conceive of a more conclusive admission of the truth of the plaintiff’s contention than this official and verified report. The attempted exjilanation by the company — that it was in the habit of reporting to the Insurance Department among its policies in force those which had never had any legal inception .or delivery — is not satisfactory to me.

The deceased was. one of a firm of attorneys who were doing business for the defendant at the time the policy was issued, and it may be presumed that it was the intent of the parties that the claim of the company for the premium, on the policy in question should be paid by services thereafter rendered by Mr. Poste for it.'

It appearing on the trial that the policy was delivered to Mr. Poste and retained by him until his death, and that three and one-half months thereafter the company, in its sworn statement to the Insurance Department, reported this policy as outstanding and in force, in the absence of any conflicting evidence, I think it satisfactorily appeared that the defendant had voluntarily given credit for the premium to the insured, and hence that the plaintiff was entitled to recover. _

From the evidence in the case it cannot be doubted that the deceased accepted the policy. He took it into his possession and placed it among his private papers in his safe, and at the time of his death it had been in his possession four months. His possession and retention of the policy for so long a period was sufficient to show his intent to accept a delivery thereof. The report of the defendant also shows such acceptance, and hence the deceased became liable to the company for the amount of premium reserved in said policy. (Sheldon v. The Atlantic F. & M. Ins. Co., 26 N. Y. 460, 465.) Such authorities as Roehner v. Knickerbocker Life Ins. Co. (63 N. Y. 160), and Evans v. United States L. Ins. Co. (64 id. 304) are not applicable to cases where it appears that a credit was given for a premium. Those authorities relate to the nonpayment of an annual premium after a delivery of a policy of life insurance, where there was no evidence to show a valid agreement to postpone the time of the payment of the premium. In such a case the liability 'of the insurance company ceases on the.breach of the condition of the policy by the-insured, and the latter does not become liable to pay the annual premium to the corporation.

Although in this case the defendant waived prepayment of the premium by the delivery of the policy without exacting payment, it 'could at any time after the delivery of the policy have enforced such payment by making a proper demand therefor of Mr. Poste, and in case of his neglect or refusal to comply with such demand, the company, under the provisions of section 92, chapter 690, Laws of 1892, could have canceled the policy by serving the notice required by the provisions of the section referred to.

My conclusion is that the judgment should be reversed and a new trial granted, costs to abide the event.

Herrick, J., concurred.

Judgment affirmed, with costs.