Case ID: ohio-st_46/html/0418-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Scheifers et al. v. Insurance Company.
    
      ■Life insurance — Lapse of -premiums — •Massachusetts’ Statute — “Net single-premium of temporary insurance.”
    
    Where in a suit upon a policy of life, insurance the plaintiff relies upon the provisions of a statute of the state of the company that .issued it, to avoid the effect of a forfeiture for non-payment of premiums, the facts bringing the case within such provision must be averred.
    (Decided May 14, 1889.)
    Error to the Superior Court of Cincinnati.
    The suit below was upon a policy of life insurance ; and the errors assigned arise upon the sustaining of a demurrer to the amended petition of the plaintiffs. The pleading as amended reads as follows:
    
      “ And now come the said plaintiffs, and by leave of the court first had and obtained, file this their amended petition; and for a cause of action against the said defendant, say : That the plaintiff, Elizabeth M. Scheifers, is the widow, and the other above named plaintiffs are the children and heirs at law, of Rudolph F. Scheifers, deceased, and Elizabeth M. Scheifers; that said plaintiffs, Rudolph F. Scheifers and Clara Scheifers, are minors, aged respectively fourteen and seven years, and bring this action by their next friend, said William R. Scheifers.
    “ That the defendant, the said Massachusetts Mutual Life Insurance Company of Springfield, Massachusetts, is a duly incorporated life insurance company, under and by the laws of the State of Massachusetts, and is located in said state, at Springfield, Massachusetts.
    
      “ That on the second day of September, 1863, at the city of Cincinnati, in this the State of Ohio, then and there, by and through its agent, located at said Cincinnati, receiving the premium from the insured, and delivering to him the policy hereinafter mentioned, in consideration of the payment of forty dollars and sixty-seven cents, annually, during the life .of the said Rudolph F. Scheifers, deceased, the said defendant, then and there, did duly execute its policy of insurance in writing to said Rudolph F. Scheifers, since deceased, on his life, in the sum of two thousand dollars, said sum so insured being expressed in said policy for the express benefit of the said Elizabeth M. Scheifers, wife of the said insured, and their children, who are these plaintiffs, a copy of which policy is annexed to and filed with the petition herein; that at the time of effecting said insurance, and at no time thereafter, had the said insured any notice or knowledge (and he was a resident of the State of Ohio) of the statute of the State of Massachusetts hereinafter mentioned; nor had any of the plaintiffs such knowledge, but were wholly ignorant of the same, until the time and in the manner hereinafter stated, while they aver that the defendant, before, at the time of, and ever since making said contract of insurance, had full knowledge of said statute, and of all its terms and provisions, and had then obtained the privilege to do business in this state as a foreign life insurance company; that the premiums under said policy were duly paid to the defendant by said insured for the period of thirteen years to September 2, 1876; that on said last named day there was an additional premium due, which additional premium was unpaid by said said assured, and no premium was thereafter paid by him, or any one for him, before his decease, which occurred on July 13,1881, but all the other terms and conditions of said policy were duly kept and performed by said assured until his death, as aforesaid.
    
      “ That the defendant, knowing, as aforesaid, said statute, and said insured being wholly ignorant of the same, incorporated the following terms and provisions in said policy, to which the said assured, in ignorance of such statute, assented, to-wit:
    
      “ Massachusetts Mutual Ufe Insurance Company, Springfield, Mass., Incorporated by the Legislature of Massachusetts, 1851.”
    
      “ This policy witnesseth, that the Massachusetts Mutual Life Insurance Company, in consideration of the premium of forty dollars and sixty cents, to them paid as per margin by Rudolph F. Scheifers, of Cincinnati, in the county of Hamilton, and in the State of Ohio, being the assured in this policy, and a like sum to be paid to them by the said assured, on or before the second day of September in every year during the continuance of this policy, do insure the life of Rudolph F. Scheifers in the amount of two thousand dollars, for the term of the continuance of life, from the date hereof at noon. And the said company do hereby promise and agree to and with the said assured, his executors, administrators, or assigns, well and truly to pay the said sum insured to the said assured, his •executors, administrators, or assigns, ninety days after due notice and proof of the death of the said Rudolph F. Scheifers during the continuance and before the termination of this policy, the balance of the year’s premium, if any, being first deducted therefrom; said sum insured being for the express benefit of Elizabeth M. Scheifers, wife of the said assured, and their ■children.
    “ Provided always, and it is hereby declared to be the true intent and meaning of this policy, and the same is accepted by the assured, upon these express conditions:
    “4. * * * And in case the premiums shall not be paid to said company on or before the time herein mentioned for the payment of the same, then, and in every such case, the said company shall not be liable for the payment of the supi insured or any part thereof,'and this policy shall cease and determine.”
    And said policy contained the further condition, in relation to any creditor notes given by the assured to said defendant for any premium, etc., that1* on non-payment of any premium, or such note or security, or any part thereof, when due, this policy shall be forfeited to said company, and become void.”
    “ 6. In case of this policy becoming null and void, the holder of the same will not be entitled to a return of any part of the premium paid thereon.”
    That the plaintiffs claim the defendant thereby represented to said assured that it had the corporate power and authority to make the contract of insurance aforesaid, which the assured understood and believed.
    That these plaintiffs being wholly ignorant of the statute of Massachusetts hereinafter mentioned, and never having been residents of the State of Massachusetts, but of the .State of Ohio, believed from the said statements made by said defendant in said policy, that it had, with all the premiums paid upon the same, become void and forfeited to the defendant on and from the said seeond day of September, 1876; that none of them were administrator or executor of said assured, or had the custody of said policy and papers relating to said insurance, until long after the expiration of ninety days from the death of said assured; that had they known of said above mentioned statute of Massachusetts, they would, within ninety days after the decease of said assured, have given the defendant notice of the claim, and submitted to it proof of the death of said assured, in all respects as required by said statute; that as soon as they learned of the existence of said statute they notified the defendant of the death of said Rudolph F. Scheifers, and requested the defendant to furnish them with the necessary forms or papers, that they might make proof of loss of said death, and demand of payment, within ninety days after such said discovery of said statute of Massachusetts (which proof in due form they were ready and willing to make, and furnish said defendant, and offered so to do), but the defendant refused to furnish them with such forms and papers, as it was bound to do, or make payment for said loss, but denied its liability to the plaintiffs upon said policy for any sum whatever ; that said statute of Massachusetts is in the words and figures following, to-wit:
    
      £ Chapter 186.
    
      ‘An Act to Regulate the Forfeiture of Policies of Life Insurance, Approved April 10, 1861.
    £Be it enacted, etc., as follows :
    ‘ Section 1. No policy of insurance on life, hereafter issued by any company chartered by the authority of this Commonwealth, shall be forfeited or become void by the non-payment of premium thereon, any further than regards the right of the party insured therein to have it continued in force beyond a certain period, to be determined as follows, to-wit:
    
      ‘ The net value of the policy, when the premium becomes due and is not paid, shall be ascertained, according to the “combined experience,” or “actuaries” rate of mortality, with interest at four per centum per annum. After deducting from such net value any indebtedness to the company, or notes held by the company against the insured — which notes, if given for premium, shall then be cancelled — four-fifths of what remains shall be considered as a net single premium of temporary insurance, and the term for which it will insure shall be determined according to the age of the party at the time of the lapse of the premium, and the assumptions of mortality and interest aforesaid/
    
      ‘ Section 2. If the death of the party occur within the term of temporary insurance covered by the value of the policy, as determined in the previous section, and if no condition of the insurance other than the non-payment of the premium shall have been violated by the insured, the company shall be bound to pay the amount of the policy the same as if there had been no lapse or premium, anything in the policy to the contrary notwithstanding: Provided however, that notice of the claim and proof of death shall be submitted to the company within ninety days after the decease; and provided, also, that the company shall have the right to deduct from the amount insured ip. the policy the amount of six per cent, per annum of the premiums that have been forborne at the time of death/
    “ And that said defendant never at any time insisted upon, or made any claim under, said first section of said statute, or notified the said assured thereof in any way, and of which he was wholly ignorant, as were these plaintiffs, none of whom were ever so notified by the defendant.
    “Wherefore the plaintiffs ask judgment against the defendant for the sum of two thousand dollars, wdth interest'from July 13th, 1881.”
    Judgment having been rendered in favor of the defendant on the demurrer at special term, was afterwards affirmed on error in general term; and this proceeding is prosecuted to reverse the judgments of both terms.
    
      Alfred Yaple and A. S. Langley, for plaintiffs in error.
    
      Thompson, King, Richards & Thompson, for defendant in error.
   By the Court.

The effect of the Massachusetts statute was to save the policy from a forfeiture by a lapse of the premiums from September 2,1876, to the death of the life insured, provided the death occurred “within the term of temporary insurance covered by the value of the policy” as provided in the first section. The provision is as follows :

“The net value of the policy, when the premium becomes due and is not paid, shall be ascertained, according to the 'combined experience/ or 'actuaries’ rate of mortality, with interest at four per centum per annum. After deducting from such net value any indebtedness to the company, or notes held by the company against the insured — which notes, if given for premium, shall then be cancelled — four-fifths of Avhat remains shall be considered as a net single premium of temporary insurance, and the term for which it will insure shall be determined according to the age of the party at the time of the lapse of the premium, and the assumptions of mortality and interest aforesaid.”

The petition does not show that the death of the party occurred within the term of temporary insurance to which he w'ould have been entitled under the provisions of this statute at the time the lapse in the payment of the premiums occurred. No data are given from which the “net single premium of temporary insurance ” to which he would have been entitled, can be ascertained. The age of the party at the lapse of the premiums is not given, nor is it shown whether he was indebted to the company in any way, nor, is given the “'combined experience” or actuaries” rate of mortality applicable to the case. Hence the petition failed to state a cause of action.

Judgment affirmed.