People v. Commercial Alliance Life Insurance

Patterson, J.:

The only question arising in this case relates to the contention of the receiver, that the policy on which the claim presented, by these claimants was based, was not upon an outstanding and valid risk at the time of the death of James H. Platt, the assured. Mr. Platt died August 13, 1894; the policy was issued in June, 1890; premiums were payable bi-monthly, and it is an undisputed fact in the casé that all premiums were paid up to and including that for the month of December, 1893. On the 29th of January, 1.894, Mr.Platt sent by mail to the insurance company in ■ the city of New York his check for the premium payable in February of that year, which check was not received until the 5th of February, 1894, and oil the seventeenth of that month the company returned the' check to Mr. Platt with a notification that the remittance was too late and that the premium was due on the first of February. Although not in terms a declaration that the company elected to forfeit the policy, its act in returning the premium was tantamount to such a notification". The insurance " effected by this policy was yearly insurance, although the premium was pay ably bi-monthly'; it is so referred to in the policy, the reference to the premiums being made in connection with the statement that they are to be 'paid during each policy year of the "continuance of the policy, and there is also a provision that if the contract be terminated by death, the amount of -unpaid premiums that might otherwise have fallen due during the - policy year will be deducted from the sum insured. The referee' found that the contract made by the policy was in full force at the time of Mr. Platt’s death, and allowed the claim at the face-value of .the policy minus the premiums for the current policy year of 1894.

The conclusion reached by. the referee was right. The policy was an outstanding one and in full force in February, 1894, at the time it was repudiated by the company upon the pretext that the February premium was not paid in time. By the terms of the policy it is provided as follows: “ The said company further agrees to renew and continue this insurance in full force during each period of two months thereafter so long as there shall be paid to the said company, as hereinafter provided, on the first days of August, October, December, February, April and June, during each policy year of the continuance of this policy, the premium contained in the table on the margin of this policy.” There was also contained in the policy this specific statement: “ Premiums will be payable during the months of February, April, June, August, October arid December.” There was a further provision that in case any furiher payment or premium required or agreed to be made at any time on account of the policy should not be paid when due, thereupon the contract should become and remain null and void and of no effect. In the table of premiums is. contained a statement of what premiums are payable during the specific months , for each $1,000 insured. It thus appears from the policy that in one of its provisions payment is required to be made on the first day of certain specified months, and in other provisions of the same policy that the premiums may be paid during those months. The construction of the policy in view of these apparently inconsistent provisions was given by the company itself in all of its dealings with Platt, the assured, prior to June, 1893. When the first premium fell due after the policy was issued, a notice was given by the company to the assured stating that the premium for August, 1890, would be due on the first of August, and unless it were paid before the 1st of September, 1890, the policy would be void and the payments under it forfeited. A similar notice 'according one month’s grace for each successive bi-monthly premium down to and including June, 1893, was given, and pursuant to those notices the assured made his payments on the policy sometime within a period of thirty days after the first day of the month upon which such pre-. miums were payable. Receipts for premiums were als'o given prior to August, 1893, upon the back of which was a written notification that the premium must be paid on or before the day it becomes due, “ or within the thirty days’ grace allowed.” Subsequent to June, 1893, the words quoted as to grace were omitted from the indorsement of the receipts, but the receipts were in every other respect identical in shape and color of paper and general characteristics. In July, 1893, a notice was sent by the company to Platt, the assured, requiring payment for the August premium on the fifst day of that month. No reference whatever was made to its payment during the month or to an allowance of thirty days’ grace. Similar notices were sent after that month up to February, 1894. The October premium, 1893, was paid on the 28th of September, 1893; the premium for December, 1893, was paid on the 15th of November, 1893, and, as stated, the premium for February, 1894, was attempted to be paid by a check mailed on the 29th of January, 1894. . •

It is apparent from the foregoing statement'of facts that in all of its dealings with Platt, the assured, prior to September, 1893, the insurance company placed its own construction upon the requirements of the policy respecting the payment of premiums, not only by its course of business in accepting premiums during the month,, upon the first day of which they were technically due and payable, but by its express notices to the assured informed him that he had thirty days after the first day of the month in which to pay each, of the premiums nécessary to keep the policy alive. To this so-called grace the assured was entitled by the terms of his policy under the construction given to it by the company itself. That such construction, given by the company to this contract, will be that adopted by the court, has been held. (Dodge v. Zimmer, 110 N. Y. 48; Dutcher v. Brooklyn Life Ins. Co., 3 Dill. 97; Reynolds v. Commerce Fire Ins. Co., 47 N. Y. 597; McMullen v. Hopper, 15 App. Div. 369.)

The terms of the contract cannot be changed by the simple act of the company itself. It had no right to do so in the manner in which it sought to accomplish that end. The omission of the thirty days’ margin of time, from the printed indorsement on the receipts and from the notices,, cannot operate to make a new contract with the assured, nor can it be claimed that he acquiesced in a change of the contract simply because he paid some of the later premiums before the first day of the month on which they became due. That was a right he had under the original policy, and the mere fact that he availed himself of it in later instances is 'not to be construed as an assent on his part to a modification of the contract..

The order overruling the exceptions and confirming the referee’s report must be affirmed, with costs.

Van Brunt, P. J., Rttmsey and Williams,. JJ., concurred; Barrett, J., dissented.