New England Mut. Life Ins. Co. of Boston v. Clinchfield Coal Corp.

ROSE, Circuit Judge

(concurring in the result). I am at one with Judge WADDILL as to the judgment we should enter in this *51case, but I am not sure that I agree with all the reasons he assigns for tho conclusion to which he comes. Under the circumstances, it seems expedient to state briefly my own views.

The insurance company, as against the insured and the original beneficiary, is clearly entitled to show that the premium was not paid. "Whatever difference of opinion there may be on that question among the state courts, the law for us is settled by Iowa Insurance Co. v. Lewis, 187 U. S. 335, 23 S. Ct. 126, 47 L. Ed. 204. I am not persuaded that the West Virginia statute has anything to do with this controversy. It or something substantially identical with it has been in force in a number of states for many years, and our attention has not been called to any ease in which it has been held to preclude the insurance company giving credit, in whole or in part, for any of the premiums, initial or otherwise, and subsequently forfeiting tho policy for their nonpayment. The primary purpose of the enactment was to prevent rebating of premiums and discrimination among policy holders. It has expressly been held to be inapplicable where notes with forfeiture provisions have been taken for premiums subsequent to the first. Fidelity Mutual Insurance Co. v. Price, 117 Ky. 25, 77 S. W. 384; French v. Columbia Life & Trust Co., 80 Or. 412, 156 P. 1042, Ann. Cas. 1918D, 484; Keller v. North American Insurance Co., 301 Ill. 198, 133 N. E. 726. It therefore follows the judgment below is not open to the attack made upon it by the cross-writ of eiTor.

A policy of insurance is not a negotiable instrument, and ordinarily the insurance company may, as against the beneficiary or assignee of a policy, avail itself of any equities it has against the insured. The company is not bound to give notice to a beneficiary or assignee when a premium or note for a premium falls due or of the consequences of nonpayment thereof, unless some statute so provides.

None of these principles of law, well settled as they seem to mo to be, control the disposition of tho writ of error itself. The insurance company did in writing recite that it had received its first premium in full. As the agreed statement of facts shows, the assignee, in reliance upon this statement, accepted the assignment of the policy. If it had known or had any reason to suspect that any part of the premium was unpaid, it might have done one of two things. It could have refused the assignment altogether, or it might have itself paid tho • premium note when it fell due. It did neither, because the insurance company bad said the premium was paid, and there was nothing anywhere in the policy to suggest that this statement was not absolutely true.

The special circumstances of this ease somewhat resemble those of Lee Blakemore, Inc., v. Lewelling (C. C. A.) 281 F. 952, and, as in that case, I think the insurance company is liable to the assignee.

Judge WOODS, who sat in the ease, and concurred that the judgment below should be affirmed, died before he had a chance to consider what is above said by either of liis colleagues.