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Stewart v. Home Life Ins. Co.

Supreme Court of New York, Appellate Division

November 3, 1911


APPEAL by the defendant, the Home Life Insurance Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 21st day of November, 1910, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk's office on the 23d day of November, 1910, denying the defendant's motion for a new trial made upon the minutes.


Bernard Hershkopf [Howard Van Sinderen with him on the brief], for the appellant.

Frank E. Carstarphen [Joseph A. Burdeau with him on the brief], for the respondent.

Page 710


The plaintiff has recovered on a policy of insurance issued by the defendant on the life of her husband, in which she was designated as the beneficiary. The policy was issued on the 27th day of February, 1906, at which time a premium of twenty-seven dollars and ninety cents was paid as a term rate premium covering the period until the twenty-seventh day of August thereafter, from which time it was provided that an annual premium of one hundred and twenty-nine dollars and twenty-five cents should be payable annually in advance. Six days before the time at which the first annual premium became due, at the request of the insured and plaintiff, an agreement in writing was made between the insured and the plaintiff and the company to the effect that the premium should be payable in equal semi-annual installments of sixty-seven dollars and twenty cents each on the twenty-seventh day of August and February, instead of annually, and that the conditions of the policy with respect to payment or non-payment of premium should apply to such installment payments, but that otherwise they should remain in force.

The first semi-annual payment was timely made. A premium notice was duly mailed to the insured on the 17th day of January, 1907, with respect to the semi-annual premium falling due on the twenty-seventh day of February thereafter. This premium, however, was not paid. The policy contained the usual provision for one month's grace in the payment of premiums, as follows:

'GRACE IN PAYMENT OF PREMIUMS. In the payment of the second and subsequent premiums, a grace of one month will be allowed provided interest be paid at the rate of five per cent per annum for the number of days payment is deferred, during which time this policy shall remain in force.' On the last day of grace, namely, on the 27th day of March, 1907, at the request of the insured in writing, the company accepted thirteen dollars and forty-four cents, being one-fifth of the semi-annual premium due, and fifty-nine cents interest from the due date a month before, and extended his time for the payment of the balance for one month. On the day of the expiration of this extension, the insured applied to the company in writing to

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accept thirteen dollars and forty-four cents, another one-fifth payment, and grant an extension on the balance until the twenty-seventh day of May thereafter. The company accepted the payment and granted the extension. In the meantime, and before the expiration of this extension, the insured was twice notified of the balance unpaid and when it would be due, but he failed to pay the same, and did not ask for or obtain any further extension of time within which to pay it. The company thereupon elected to treat the policy as lapsed and forfeited, and two days later, and on the 29th day of May, 1907, wrote the insured expressing regret that he had allowed the policy to lapse without remitting the balance, and expressing the hope that he might desire to have the policy reinstated, and manifesting willingness to assist in so doing should he desire it. On the thirty-first day of the same month the superintendent of the renewal department of the company wrote the insured again calling attention to the fact that he had terminated his contract, and manifesting willingness to continue the policy provided he furnished satisfactory evidence of insurability and continued to pay the premiums as required, and requesting that he communicate with the writer of the letter on the subject. It appears that thereafter an appointment was made between the insured and the medical examiner of the company for his physical examination, with a view to reinstatement, but that the insured failed to keep the appointment, and that terminated the negotiations. The insured died on the 8th day of June, 1907.

The complaint contains two counts, one of which is based on the theory that the defendant prematurely declared the policy forfeited, which dispensed with a formal tender of the balance of the premium and with formal proofs of death, and the other on the theory that the company, by accepting the installment payments, impliedly agreed to give the insured temporary insurance for a period extending beyond the time of his death.

The only limitation the law imposes on the right of the company to declare a policy of insurance forfeited for the non-payment of premiums is that such forfeiture shall not be declared 'within one year after the default in payment of any

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premium, instalment or interest,' unless a written or printed notice shall have been mailed to the insured 'at least fifteen and not more than forty-five days prior to the day when the same is payable,' stating the amount due, and the place where and the person to whom the same is payable, and that unless such payment shall be made by or before the day it falls due the policy shall become forfeited, and it is also provided that no such policy shall be declared forfeited 'until the expiration of thirty days after the mailing of such notice.' (Ins. Law [Gen. Laws, chap. 38; Laws of 1892, chap. 690], ยง 92, as amd. by Laws of 1906, chap. 326.) The policy contained the following provision: 'If any premium be not paid when due or within the month of grace, or, if any cash loan or interest thereon be not paid when due, this policy shall be void and all premiums forfeited to the company except as herein provided.' Were it not for the extensions of the time of payment for part of the semi-annual premium in question, it is manifest that the rights of the insured, and of the plaintiff, under the policy would have been forfeited for the non-payment thereof. We fail to see how the extensions, which were given upon condition that the balance should be paid within the period of the extension, relieve the insured or the plaintiff from the forfeiture. The forfeiture had taken place. The effect of the extensions was to make a new agreement between ...

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