Case ID: ohio-st_40/html/0270-01.html
Source: Caselaw Access Project
Author: {"author": "Gbang-er., O. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Insurance Company v. Robinson.
    A policy insuring tlie life of R. required him to p&y an annual premium of $47.85 by giving his note for $19.14 and $28.71 in cash on or before the seventh day of March in each and every year during the continuance of the policy; the first payment was to be made March 7,1871. The policy contained the following stipulations: “3. That * * * ' if the said assured shall not pay the * * * interest annually in advance on any outstanding premium notes which may be given for any portion thereof, * * * then, and in every such case, this policy shall cease and determine, and said company shall not be liable for the payment of the sum insured or any part thereof; * * * ” and also, “ 4. That if, after the receipt by this company of two or more annual premiums upon this policy, default shall be made in the payment of any subsequent premium when due, then, notwithstanding such default, this company will convert this policy into a “ paid up ” policy for as many twentieth parts of the sum originally insured as there shall have been complete annual premiums paid, when such default shall be made; * * * ” and also, *‘5. That, in every case where this policy shall cease, or be or become null] and void, all payments thereon, and all dividend credits accruing therefrom, shall be forfeited to said company. * * * ”
    On March 7, 1875, one year’s interest upon four of said premium notes was due, but no part of it was paid or tendered. Shortly after this default, R. applied for a “paid up” policy.
    
      Held: Under stipulations third and fifth the policy became null and void, on March 7, 1875, “all payments thereon” and “all credits accruing therefrom,” were forfeited to the company. Stipulation fourth did not apply to a default in payment of interest.
    Error to the District Court of Cuyahoga County.
    By a policy dated March 7, 1871, the company insured the life of Robinson. He was required to pay annually on March 7, during the continuance of the policy a premium of $47.85. Of this he could pay $28.71 in cash, and give his note for $19.14. The policy contained, besides other provisions not material in this case, the following stipulations :
    “Provided, always, and.it is hereby declared to be the true intent and meaning of this policy, and the same is granted by the company and accepted by the assured, upon the following express conditions and agreements: * * *
    “ Third. That this policy shall not take effect, nor become binding on the company, until the advance premium hereon shall have been actually paid during the lifetime of the insured; and no premium on this policy shall be considered as paid, unless a receipt shall be given therefor, signed by the president or secretary of the company; and that, if the said assured shall not pay the said annual premiums on or before noon of the several days hereinbefore mentioned for the payment of the same, and the interest annually in advance on any outstanding premium notes which may be given for any portion thereof, or shall not pajq at maturity, any notes or obligations given for the cash portion of any premium or part thereof, — then, and in every such case, this policy shall cease and determine, and said company shall not be liable for the payment of the sum insured or any part thereof, except as hereinafter provided.
    “ Fourth. That if, after the receipt by this company of two or more annual premiums upon this policy, default shall be made in the payment of any subsequent premium when due, then, notwithstanding such default, this company will convert this policy into a “paid up policy” for as many twentieth parts of the sum originally insured as there shall have been complete annual premiums paid, when such default shall be made; provided, that this policy shall be transmitted to and received by this company, and application made for such conversion, within one year after such default.
    “ Fifth. That, in every case where this policy shall cease, ór be or become null and void, all payments thereon, and all dividends, credits accruing therefrom, shall be forfeited to said company; except that, if the said insured shall die by his own hand during the .continuance of this policy, all premiums that shall have been received by said company hereon shall be returned to the said assured; and that, if assigned, the original instrument, or an attested copy thereof shall be sent to said company for record and acknowledgment.”
    Prior to.March 7,1875, he had, in the manner so authorized, paid four annual premiarías. On that day the company held four of his notes on which interest for one year then fell due. He failed to pay this interest, and paid none of the annual premium that also became due on that day.
    Afterwards he applied for a “ paid up ” policy under the fourth condition. The company refused to grant his application, and he sued to recover the.value of such a policy! In the common pleas the verdict and judgment were for the defendant. The district court reversed the common pleas, and the company asks a reversal of this last judgment.
    
      Sayler Sayler, for plaintiff in error,
    on the question of forfeiture, cited, Insurance Go. v. Bonner, 36 Ohio St., 51; 104 U. S„ 258; 82 N. Y., 172; 67 Me., 440; 3 Cent. Law Jour., 354, and cases there cited; 6 Ins. Law Jour., 426; 44 Vt., 481; 56 Miss., 512; 30 Ohio St., 240 ; 4 Daly, 512; 1 Disney, 355; 43 N. Y., 284; 100 Mass., 500; 52 Md., 28; 2 Tenn., ch. 742; Bliss on Ins., § 188.
    
      Foran Daivley, for the defendant in error,
    cited, 63 Howard (N. Y.), Pr., 443; 42 Mich., 10; 73 N. Y., 516; 82 Id., 548; 75 111., 426; 14 Bush, 51; 42 Mich., 19.
   Gbang-er., O. J.

If the courts should treat the conditions in the policy as mere modes of securing payment, and apply to them the rules governing the condition in a mortgage, they would deny effect to the plain intent of the parties to the contract, and impair the value of policies generally. To enable the company to promptly make payment in case of death, the insured, while living, must promptly make full payment of all dues under his contract with the company.

The “third” condition before us is plain. It clearly states that, upon a failure to pay the interest in advance, the policy should be void. The “ fifth ” adds that, in such case, “ all payments thereon and all dividends, credits accruing therefrom, shall be forfeited to the company.”

But the insured claims that the “ fourth ” condition modifies the “third.” This fourth condition makes no reference to interest, either expressly or by reasonable implication. Having failed to pay the interest due on /owrnotes he in effect was in default for a part of each of four annual premiums, besides the one that became due on March 7, 1875. This interest formed no part of the annual premium due on that day. Its punctual payment was necessary to complete the payment of tbe premiums due in the four preceding years. The fourth condition granted to an insured, who was guilty of but one default as to one annual premium, the right to receive a paid up policy, provided he made demand before a second default.

We are unwilling to so construe a stipulation, worded so plainly and with such evident care, as to make of no moment a default which the third condition declared of enough importance to destro3r the life of the p.olic3r. Therefore we are constrained to reverse the judgment of the district court and affirm that of the common pleas.

Judgment accordingly.