22 A.D. 552

Henry Lamb, as Administrator, etc., of Mary Lamb, Deceased, Appellant, v. The Prudential Insurance Company of America, Respondent.

Xife insurance policy when a forfeiture is not waived by an acceptance of premiums— acts of waiver which present a question for the jury.

A default in the payment of a premium of insurance, due upon a policy providing that if the weekly premiums were not paid the policy should be void and the premiums already paid be forfeited to the company, and that its agents were “not authorized to make, or alter, or discharge contracts, or waive forfeitures or receive premiums on policies in arrears,” is not waived by the payment at the office of the company of part of the premium in arrear before and the rest after the death of the insured, and the acceptance of a receipt to the effect that “if the company accept the revival application the amount paid will be credited in the premium receipt book belonging with the policy, other-1 wise the money will be returned,” and that “under no circumstances will the •company be liable under said policy in case of death until the policy has been revived on the books of the company and the money credited in the premium receipt book belonging to said policy.”

Acts of payment on condition that a policy be continued in force, and of acceptance of the money by an agent of the company and evidence as to the agent’s knowledge of the facts, which the court considered required that the case be submitted to the jury.

Appeal by the plaintiff, Henry Lamb, as administrator, etc., of Mary Lamb, deceased, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the cleric of the bounty of Kings on the 16th day of February, 1897, upon the dismissal of the complaint directed by the court after a trial at the Kings County Trial Term, and also from an order entered in said •clerk’s office on the 25th day of February, 1897, denying the plaintiff’s motion for a new trial made upon the minutes.

O. B. Gould, for the appellant.

Thomas F. Maguer, for the respondent.

Bradley, J.:

The action was brought to recover the amount of the insurance upon the life of the plaintiff’s intestate by the policy of the defendant of date August 24, 1891. She was the wife of the plaintiff and died June 18, 1895. The defense is that, by reason of default in *553payment of the premium, the policy had become inoperative at the time of her decease. The policy in question was one of eight policies issued by the defendant upon the lives of the plaintiff, his wife and their minor children. The aggregate amount of the premiums, payable weekly upon them, was fifty-five cents. These were paid up to April 15, 1895. The policy in question provided that “if for any reason the premium ” should not be collected by the agent when due it would be the duty of the insured, before the premium should be in arrears four weeks, to bring or send it to the home office or to the company’s agent, and in the event of the failure to perform this duty the company might “ cancel this policy without notice to any person or persons interested therein.” All the policies were presumably the same in every respect. It does not appear that any action was taken by the defendant to cancel any of the policies prior to the 17th day of June, 1895, when the plaintiff called at the office of the defendant, and ascertained that the amount of premiums then unpaid upon the eight, policies was four dollars and ninety-five cents. He then paid four dollars and forty cents and stated that he would pay the other fifty-five cents on the call of the agent at his house the next Monday. The agent did not call and the plaintiff paid that residue on July eleventh. If there had been nothing to qualify the effect of those payments, the acceptance of them would have operated as a waiver of the default. But at the time each of those payments was made, the agent of the defendant gave the plaintiff a receipt to the effect that “ if the company accept the revival application the amount paid will be credited in the premium receipt book belonging with the policy, otherwise the money will be returned,” and that upon no circumstances will the company be liable under said policy in case of death until the policy has been revived on the books of the company and the money credited in the premium receipt book belonging to said policy.”

It does not appear that the plaintiff was advised by the policy, or otherwise than by the receipt, that anything to be done by the insured or by him was requisite to the revival of the policy. He knew that the insured was nine weeks in arrears in payment of the premium when he paid the four dollars and forty cents. And by reference to the policy he could have seen the provision to the *554effect that it would be void if the weekly premium was not paid according to its terms, with the consequence that the premiums which had been paid would be forfeited to the company, and that its agents were not authorized to make, alter or discharge contracts or waive forfeitures or receive premiums on policies in arrears beyond the time allowed by the regulations of the company, which in no case shall exceed four weeks.”

The situation was such,- when the plaintiff made the payments in June and July, 1895, as to enable the defendant to qualify the receipt of the money by the conditions expressed in the receipts, one of which conditions was the acceptance by the company of the revival application. The import of this was that some application for the purpose was to be made by or in behalf of the insured. This was not done in behalf of the plaintiff’s intestate. And it may be that if the defendant’s officer or agent, at the time the payment was made, had known her physical condition, he would have declined to receive so much of the amount as covered the weekty premium of ten cents, amounting to ninety cents in arrears on the policy issued to her. She was at that time very ill, not expected by the plaintiff to survive her then existing illness, and she died the next day. Of this condition of the insured the defendant’s agent was not advised. And when the proofs of death were soon after furnished to the company it declined to pay. Up to that time no fair and reasonable interpretation of what had occurred can permit the conclusion of waiver of the default in payment of the premium on the policy taken by the intestate, or estop the defendant from asserting forfeiture. While an insurance company will not be allowed any benefit from the doubtful construction of the terms of its policy, nor will any prejudice to the insured or those who represent him be permitted therefrom, the provisions of a policy of insurance, like those of other contracts, are to be observed, and the legal rights of the parties governed by them. It is essential to the waiver of a forfeiture of a policy that there be a recognition of its validity with knowledge of such forfeiture. (Weed v. L. & L. Fire Ins. Co., 116 N. Y. 106.) And then it can be done only by an agent who is not denied by the policy power to do it. (Marvin v. Universal Life Ins. Co., 85 N. Y. 278.)

A further question arises upon occurrences subsequent to the *555death of the intestate. On August 24, 1895, Robert Hoifman, one of the defendant’s agents, wrote and sent a letter from the office of the company to Mr. Lamb, asking to be advised if he wished to keep up his policy or wished to be crossed off the books of the company. Thereupon he placed four dollars and sixty cents in the hands of his attorney, who, in his behalf, inclosed that amount by his bank check, payable to the order of the defendant, in a letter of August twenty-sixth addressed to Robert Hoffman, stating that Mr. Lamb desired to keep up his policies, and to that end the amount due to that date was inclosed, and then added that the-payment of the four dollars and sixty cents was made and the check to be used upon the condition that “ all the above-mentioned policies were in force and paid up to June IT, and that all, except the last, are in force and paid to date.” The number of policies therein referred to was eight, designated by numbers, the last of which was-intended as that issued to the plaintiff’s intestate, and the others-were intended to designate the other seven issued to Mr. Lamb and the other members of his family. In this letter reference was made to the fact that the premiums were paid by Lamb up to April fifteenth, and that “ afterwards he paid $4.95, which was all the premiums on the above-mentioned policies due to and including June ITth last.” This inclosed check was received by the superintendent of the company, indorsed by him for credit to the company by the bank on which it was drawn. It may be assumed that it was so-credited. So far as appears, there had been no actual cancellation of the policy in question by the conqDany. The money paid in June and July on account of the premiums in arrears upon that policy was retained, and, at the time this check inclosed in the letter was sent and received, the company had been advised of the death of the intestate by the proofs to 'that effect, furnished to it in June before. Under such circumstances, the fact of her death did not deny to the defendant .the power to waive the prior default during her life. (Shay v. National Benefit Society, 54 Hun, 109; Magner v. Mutual Life Association, 17 App. Div. 13.) Whether this was the consequence of the receipt and retention of the amount so-remitted is a question not entirely clear and not free from doubt upon the evidence. The superintendent testified that the letter inclosing the check was not given by Hoffman to him when the* *556check was received; that his first recollection of seeing the letter was within ten days of the trial; that he does not remember when he received the letter; that he found it in looking over the old papers of Hoffman in the office, and that he, “ the agent, tendered the check at the office to apply towards the revival of the Lamb policy for which we gave a revival receipt, the policy having lapsed.” On his cross-examination the superintendent testified that the check “ was applied upon the Lamb family insurance, upon all the policies that were to be revived, not knowing of the death of any of them; I had not heard of the death.” Hoffman was not a witness on the trial. The relation of the superintendent to the defendant was such us to present the question of his credibility for consideration. (Dean v. Van JVosi/rand, 23 Wkly. Dig. 97.) Whether he was then advised •of all the facts essential to the treatment of the acceptance of the •check and placing the amount of it to the credit of the company as a recognition of the existing validity of the policy in question and a waiver of the default in payment of the premium was, in view of all the circumstances, a question of fact for the jury, and should have been submitted to them.

We have not failed to observe that six renewal applications were subscribed by Mr. Lamb for himself and five of his children, of date July 19, 1895. The cireumstauces under and the understanding with which that was done are the subject of conflict in the evidence of the defendant’s agent and Lamb, the latter denying that he was advised of or understood the purposes of the papers, or that anything was then said about the application of the money which had before been paid to the company on account of the arrears on the policies. This matter is also the subject for the consideration of the jury, as bearing upon the question of fact before mentioned.

These views lead to the conclusion that the judgment and order should be reversed and a new trial granted, costs to abide the event.

All concurred.

Judgment and order reversed and new trial granted, costs to abide the event.

Lamb v. Prudential Insurance
22 A.D. 552

Case Details

Name
Lamb v. Prudential Insurance
Decision Date
Jan 1, 1970
Citations

22 A.D. 552

Jurisdiction
New York

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