Case ID: ohio-st_24/html/0067-01.html
Source: Caselaw Access Project
Author: {"author": "White, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Union Mutual Life Insurance Company v. Sarah A. McMillen.
    I., A life policy issued by a foreign company, is not rendered void by the neglect of the company to comply with the provisions of the act of April 16, 1867, providing for the incorporation and regulation of insurance companies; nor will such neglect, in an action brought against the company on the policy, excuse the policy-holder from paying premiums according to the terms of the policy.
    •2. Where a life policy is made and accepted, upon the expressed condition that if the annual premium is not fully paid within the time specified, the policy “ shall be null and void, and wholly forfeited,” the failure to pay the premium avoids the policy.
    3. Where the policy also provides that no agent of the company, except the president and secretary, can waive such forfeiture, authority conferred upon an agent before the premiums became due to collect them, does not impliedly invest him with authority to waive the forfeiture.
    4. Notwithstanding the limitation upon the power of agents, declared in the policy in respect to waiving the forfeiture, the company is competent to invest such authority in any of its agents. The authority may be express, or it may be implied from circumstances, but the burden of showing it in either case, is on the party claiming the benefit of its exercise.
    
      5. An agent, having no authority to waive the forfeiture, acting in the-interest of the assured, received the unpaid part of a premium on a forfeited policy, after the life insured had ended, for which he gave a receipt antedated, and forwarded the money to the company, concealing the facts as to such payment: Held, that the receiving of the-money by the company, in ignorance of such facts, was no ratification of the act of the agent in receiving the money.
    6. The fact that the company, on tendering back the money so received,. omitted to return certain notes given in part payment of premiums,, but which the forfeiture of the policy rendered uncollectible, will not affect the rights of the parties in a suit on the policy; nor is the fact, that the notes are payable to order material, where they show on their face the consideration for which they were given.
    Error to the Court of Common Pleas of Logan county.. Reserved in the District Court.
    The action below was on a policy of insurance, issued by the plaintiff in error, in the name of Daniel K. McMillen,. the husband of the defendant in error, and insuring his-life for her sole and separate use. The annual premium was $83.32, which was to be paid on or before the 1st day of December in every year, during the continuance of the-policy. The policy bears date February 2, 1868, but in the-body it purports to operate from the 1st of December,, 1867.
    The policy provide's, that “the first payment of the before-mentioned annual premiums, having first been received by the company or their accredited agent, during the lifetime and good health of the said insured as is hereinafter provided, and not otherwise, and in consideration of such payment having been so received, and of the provisions herein for future payments of premiums, the said-company do hereby insure the life of Daniel 3L McMillen aforesaid, in the amount of one thousand dollars, from the 1st day of December, 1867, at noon, until the said'insured shall arrive at the full age of sixty-five years,” etc.
    It also contains the following provisions :
    “ Provided especially, and this policy is made, and it ia accepted by tbe assured and tbe said Daniel X. McMillen, upon the express condition' that if the amount of any annual premium herein provided for is not fully paid'/ with the interest due thereon, on the day and in the manner so provided for, then this policy shall be null and void, and wholly forfeited, and also that no agent of this company^ except the president or secretary, can waive such forfeiture, or alter this or any other condition expressed in this policy. . . . And it is also a condition of this ■policy, accepted by the assured therein, that in case it 'becomes null and void, for any of the above causes, or by -forfeiture, or otherwise, all payments of premiums made thereon, and all dividend credits accruing therefrom and remaining unpaid, and all apportionments of profits thereto, -shall also be null and void, and shall not constitue any claim against the company to any party. . . . Said -company shall have a right to set off any demand they shall have against said assured, her assigns or representatives, .arising incidentally to, or in connection with, this insur.anee, against any claim for which this company shall be ■liable thereon.”
    It was likewise provided that the contract should not he binding until the advance premium was paid.
    In the margin of the policy is the following :
    
      “Special Agreement. — It is expressly understood and ■agreed, and this policy is accepted by the assured upon the ■condition, that if, at any time, any note, cheek, or draft *(other than the usual premium note for one-half of the .annual premium) shall be given in payment, or part pay-•ment, of any premium then due, orto become due, for or •on account of this policy, and such note, check, or draft .shall not be paid according to the provisions thereof, then this policy shall become immediately void, and the company be thereby released from all obligations under it, and .after three annual premiums, herein provided for, have been fully paid, the company will at any time pay the holder of this policy its fair value, in cash, upon its surrender while: in force, or in lieu of such cash value/ a paid-up policy for an equitable amount will be granted.” .
    Poliowing the signatures of the officers of the company is the following provision:
    “ The annual premium required to keep this policy in-force must be paid on or before the day it falls due, or the insurance under it ceasés, and the policy is void. The-company are under no obligation to renew or revive' it. Should they upon any occasion do so, by the acceptance of' the renewal premium, each such acceptance must be considered an independent act of grace or courtesy, in nowise-creating any obligation or precedent for waiving any forfeiture or any condition of the policy in regard to future-non-payments of premium. Premiums are payable at the* company’s office in Boston, Mass., and no agent or other person whatever is authorized to collect payment elsewhere of any annual premium to continue this policy in force,, except with a special certificate of such authority signed by the secretary of the company, stating the specific payment for which it is issued, and attached to which must be-the receipt to be given for that payment, and such special certificate is the only evidence of the policy-holder of the authority of any person to receive the renewal premium.”
    Under the rules of the company the assured was allowed to pay the annual premium as follows : One-half in a premium note due at five years, one-half of the remainder in-cash, and the other half in a note due at six months, the-notes bearing interest.
    .At the trial, three notes were produced by the defendant, which were given in evidence by the plaintiff. Two-of these were premium notes, and were alike, except as to date. One was dated 'December 1, 1867, and the other December 1, 1868. The following is a copy of the last-named :
    
      
      
    
    “ Bellefontaine, 1st December, 1868. $16. Eiye years after date I promise to pay the Union Mutual Life Insurance Company, or order, sixteen dollars, with interest, annually, at six per cent., for value received, And it is an express condition of the acceptance of this note by the said company, in part payment of the annual premium for policy No. -23,789, which condition is fully agreed to by the promisor herein, that such acceptance shall in nowise affect the condition in said policy, respecting the forfeiture thereof, in case of the non-payment of any other portion of said annual premium ; and that if the interest on this note is not paid annually, or the note itself at maturity, then all the benefits which full payment in cash of said annual premium would have secured, shall become immediately void and forfeit to said company. D. 3L McMillen.”
    The third was payable in six months, and was called a cash note. Of this, the following is a copy:
    
      
    
    “ Union Mutual Life Insurance Company, Directors’ Office, 80 Washington street. $8. Bellefontaine, 1 December, 1868. Eor value received, I promise to pay to the Union Mutual Life Insurance Company, or order, eight dollars, in six months, without grace (waiving notice), with interest; being in part payment of the annual premium on policy No. 23,789, issued by said company, and all benefits which full payment in cash of said annual premium would have secured, shall become immediately void and forfeit to said company, if this note is not paid at maturity. Payable at Bellefontaine, Ohio. D. K. McMillen.”
    E. Durkee was the agent of the company at Bellefon•taine during the transactions in question. It does not appear at what time the policy was delivered by the agent, nor at what time he received the first premium. It does appear from his testimony that the first premium was reported to the company as settled in his report made the 15th of December, 1868-, and that the first premium note and the remainder of the first premium in cash were' then transmitted to the company, the receipt of which was duly acknowledged. No reference was made in this report to the premium, which became due December 1, 1868.
    Durkee was a witness for the plaintiff. It also appears from his testimony that, on the 1st of December, 1868, when the premium for the second year became payable, he was absent. On the 11th of the same montbq a few days after the agent’s return, MeMillen came to him and executed the premium note for $16, and the cash note for $8, dating both as of the 1st of December, but no. money was paid. MeMillen requested the agent, when he was about to remit to the company, to call on him at the post-office and get the money, which the agent promised to do. When the agent was about to make his next remittance, he called on MeMillen aud said to him he would like to have the cash part of his renewal for 1869 — $8.32. Mc-Millen remarked that he was busy making up the mails, and had not then time to stop, and asked the agent if he would not be remitting again in a few days. The agent answered that he would be, and said that when he next remitted he would let MeMillen know. This was the last conversation between them. The agent states that when he made his next remittance he never thought of MeMillen.
    MeMillen died on the 2d day of March, 1869. On the morning of that day, and while MeMillen was in a dying condition, the policy in question became the subject of conversation between Durkee, the agent, and some others who were friends of MeMillen. Durkee informed them of the facts in l’egard to the last premium. On one of them expressing regret that the money had not been paid, Durkee stated that he did not think it would make any difference whether the money was paid at that time or not; that he considered it his fault, and not McMillen’s. One of them remarked, that if he had the money, he would pay the amount of the unpaid premium, and expressed a desire to borrow the money for the purpose. Durkee handed him ;$10, and gave him directions to deposit it in bank to Dorkee’s credit. The $10 was on the same day so deposited, but before the deposit was made, McMillen died.
    On the same day, Lyman Dow paid Durkee $10, for which he took a receipt, antedated to February. 2d. A copy of the receipt is as follows: “Received of L. Dow} for D. K. McMillen, to' be credited on life insurance policy, this 2d day of February, 1869. E. Durkee.”
    On March 4th, Durkee reported the policy to the company as renewed December 11, 1868, and inclosed the two renewal notes before referred to, and $9.32, the cash part of the premium. The report of this .renewal was made by adding it to his previous monthly report of February, which had been returned to him by the company for certain corrections. At the same time, he advised the company of McMillen’s death, and in explanation of the omission to include the renewal of this policy in his former reports he said:
    “ On the 11th of December he came to my house and executed the notes I here inclose, and it was my fault their not being put in a former report, he saying to me, “ When you want the cash, call at the post-office,” he being chief clerk there. My report, 15th December, 1868, should have included his account, but as I went to the bank for the draft I called, but did not find him, and did not send the renewal.”
    In the letter of the president of the company, acknowledging the receipt of the letter of Durkee of March 4th, with the inelosures, he states that it appears from the report that the renewal premium on this policy, which was d.ue December 1st, was not paid until December 11th. He further states that Durkee was not authorized to receive it then; and that the policy was not in force March 2d, when McMillen is reported to have died.
    A correspondence followed between the president of the company and Durkee, on the subject of this policy, which it is not deemed necessary here to notice,
    On the 25th of May, 1869, the superintendent of agencies of the company went to Bellefontaine to investigate the facts in regard to the payment of the premiums on the policy. On ascertaining them to be as before stated, he tendered back the money paid on the last premium; 'but the tender was refused. The two notes taken by Durkee on December 11, 1868, and foi-warded to the company March 4, 1869, were not tendered back.
    On these facts, the court (trial by jury having been waived) found for the plaintiff. A motion for a new trial was made by the defendant, on the ground that the finding was against the evidence and against the law.
    This motion was overruled, and judgment rendered for the plaintiff.
    The case was taken on error to the District Court, where it was reserved for decision by this court.
    
      West, Walker § Kennedy, for plaintiffs in error:
    1. A contract made in violation of a statute, the statute being one having a penalty attached, will not be enforced.
    2. An insurance policy is a mutual contract, and is subject to the same rules of law as other contracts. Elizabeth Gelleman v. Knickerbocker Life Ins. Co., Superior Court of Maryland.
    3. The terms and conditions contained in the policy are the terms of the contract, and can not be varied or altered, except by the mutual agreement of the insured and the company itself, through its president and secretary and managing officers. Bunyon’s Life Insurance, 56, 57; Robert v. New England Life Ins. Co., 2 Disney, 106; S. C., 1 Disney, 355; Simpson v. Accidental Life Ins. Co., 2 Com. B. (N. S.) 257.
    4. The special agents of the company have no authority to change or alter its terms or conditions, without the express previous consent of its managing officers; and any attempt to do so without that cousent is void, and can not revive lapsed policies, and can not involve the company in any fresh liabilities — his acts are only binding on company to extent of his authority. Bhnyon’s Life Insurance, 116, secs. 10, 11; Bouton v. American Mutual Life Ins. Co., 25 Conn. 522; Lodges v. Guardian Life Ins. Co., 2 Lansing, 480; Catoir v. Home Life Trust Co., 4 Vroom, 487.
    5. The president, secretary, and managing officers of an insurance company are its general agents, and have power, with consent of the insured, to change and alter the terms-of policy and times of payment. Bunyon’s Life Insurance, 14, sec. 6; Ib. 116, sec. 9.
    6. The terms of the policy must be strictly complied with, and must govern, for the law will be strictly construed. Bunyon, 56, sec. 7.
    7. The premium must be paid, and paid promptly; and must be paid on or before the day it actually falls due — and the'poliey becomes void and lapsed by reason of non-payment. Bunyon’s Life Insurance, 56, sec. 7; 8 H. L. Cas. 748, H. of L’s. 1860; Robert v. New England Mutual Life Ins. Co., Disney, 355; S. C., 2 Disney, 106; Simpson v. Accidental Death Ins. Co., 2 Com. B. (N. S.) 257; Bissel v. American Tontine Ins. Co., Com. Pleas Lucas, 1871, 2 Bigelow, 150.
    8. The policy of McMillen, if in force at all, was only in force from December 1, 1867, to December 1, 1868, and expired, by reason of non-payment, December 1, 1868.
    9. The policy was not renewed, and could not be renewed by Durkee, the special agent; and if the company had attempted, in good faith, to renew the policy, it would still have been void, because McMillen was dead, and there-was no future contingency that could happen, and no life to insure. Jones, Assignee of Franklin, v. Keene, 2 Moody & R. 348, Exch. N. P. 1841; Lefavour v. Insurance Co., 1 Phil. 558; Pritchard v. Mer. and Tra. Mut. L. Ins. Co., 3 Com. B. (N. S.) 622, C. P. 1858.
    10. If paid by error or mistake, or received by agent without authority, or policy becomes void, they are only entitled to recover back the premium paid. Bunyon’s Life Ins. 73; Jones, Assignee of Franklin, v. Keene, 2 Moody & R. 348, Exch. N. P. 1841
    
      
      Wm. Lawrence and J. 11. Lawrence, for defendant in •error:
    I. The policy was not forfeited prior to December, 1868.
    The policy acknowledges the payment of the $9.32, the first annual premium, at its delivery, and is conclusive to give the policy effect. Baker v. Union Life Ins. Co., 6 Abb. Pr. N. S. 144; Provident Life Ins. Co. v. Fennell, 49 Ill. 180; 1 Bigelow Life Ins. 99; 2 Bigelow, 128; 43 N. Y. 283; Madison Ins. Co. v Fellowes, 1 Disney, 217; Pickard v. Sears, 6 Adol. & El. 469; Freemau v. Cooke, 2 Exch. 654; N. Y. Central Ins. Co. v. National Protection Ins. Co., 20 Barb. 475; 1 Campb. 532; 3 Taunt. 493; 1 Sandf. S. C. 58; 1 Phil. on Ins., secs. 514, 515; 2 Ib. 1849, 1993, 2116.
    This applies equally to the “ cash note ” as to the cash part of premiums. Baker v. Union Life Ins. Co., 6 Abb. Pr. (N. S.) 144; 1 Bigelow Life Ins. 595; Froehlick v. Atlas Life Ins. Co., 47 Mo. 406; 2 Bigelow, 82.
    The note for eight dollars, due June 1,1868, was paid; the company received the money without objection, and it must be presumed to have been paid at maturity. Hodsdon v. Guardian Life Ins. Co., 97 Mass. 144; 1 Bigelow Life Ins. 218; Gray v. Gardner, 17 Mass. 188; Kingsley v. New England Ins. Co., 8 Cush. 393; Daniels v. Hudson River Ins. Co., 12 Cush. 426; Onell v. Hampden Ins. Co., 13 Gray, 431; Baker v. Union Mutual Life Ins. Co., 43 N. T. 283; 2 Bigelow Life Ins. 127.
    The company ratified the policy by receiving in December, 1868, the first cash and cash from first “ cash note ” without objection. Bouton v. American Mutual Life Ins. Co., 25 Conn. 542; 1 Bigelow Life Ins. 56; Wing v. Harvey, 24 Eng. Law & Eq. 140; Bucklee v. United States Ann. Ins. & Trust Co., 18 Barb. 541; Sheldon v. Conn. Mutual Life Ins. Co., 25 Conn. 207; Angell on Ins., sec. 213 and note; Id. 343; 6 Abb. Pr. (N. S.) 144; 1 Bigelow Life Ins. 27, 50, 218, 406, 595; Hodsdon v. Guardian Life Ins. Co., 97 Mass. 144; 12 East, 183; Acey v. Fernie, 7 Mees. & Wels. 150; Mutual Life Ins. Co. v. Ruse, 8 Georgia, 534; Sanderson v. New 
      
      England Life Ins. Co., 1 Disney (Ohio), 365; Froehlick v. Atlas Life Ins. Co., 47 Mo. 406; 2 Bigelow, 82.
    II. The policy was not forfeited on or after December 1, 1868, for McMillen was excused from paying at the time fixed because of the absence of the agent entitled and authorized to receive it. It was impossible for McMillen to pay during the agent’s absence; he was not bound to do a. vain or impossible thing. Williams v. Bank U. S., 2 Pet. 96; Van Buren v. Briggs, 11 How. 461; Bross v. Wiley, 6 Wis. 485.
    The absence of the agent was the act of the company. It was a waiver of payment at the appointed time. Miller v. Brooklyn Life Ins. Co., 2 Bigelow, 35, 757.
    A local agent could waive a condition contained in the-policy of insurance. Mississippi Valley Life Ins. Co. v. Negland, 1 Am. Law Record, 759; 1 Bigelow Life Ins. 27-40.
    The insurance company waived any forfeiture by receiving the “ cash ” and “ cash note ” and “ premium note ” from their local agent. Bunyon Life Ins. 166; Bouton v. American Mutual Life Ins. Co., 25 Conn. 542; 1 Bigelow Life Ins. 51.
    If the company did not know the facts, there was a conclusive waiver by operation of law by receiving and retaining the money “ without inquiry.” Hodsdon v. Guardian Life Ins. Co., 97 Mass. 144; 1 Bigelow Life Ins. 218; Froehlick v. Atlas Life Ins. Co., 47 Mo. 406; 2 Bigelow, 82. If the company was deceived, it was by their own agent. They can not complain, to the prejudice of the defendant,, of any real or fancied fraud of their own agent. Miller v. Mutual Benefit Life Ins. Co., 2 Bigelow, 698; Rowley v. Empire Ins. Co., 36 N. Y. 550.
    There may be a ratification of a lapsed policy by receiving payment after the death of the assured; the ratification relates back. Clark v. Van Reinsdyk, 9 Cranch, 153; Conn v. Penn, Pet. C. C. 496; Loraine v. Cartwright, 3 W. C. C. 156; Bird v. Brown, 14 Jar. 134, Exch.; Lefavour v. Ins. Co., 2 Bigelow, 158.
    
      ITT. McMillen was excused from making any payment under the.policy because the company failed to comply with, the act of April 16, 1867, “for the incorporation and regulation of life insurance companies.” 64 Ohio L. 196.
    The insurance company, having failed to comply with the law, can not exact payment of premiums as a condition precedent to a right of action by the assured.
    
      E. J. Howenstine, also for defendant in error.
    
      West, Walker $■ Kennedy, for plaintiffs in error, in reply, insisted that the record shows that the cash note of $8, due June 1, 1868, was not paid until long afterward, viz., on the 11th day of December, 1868, at the same time the $9.32 cash part of said premium was paid, and that when the year 1867 was mentioned in Durkee’s testimony, Durkee himself corrected it by saying 1868; that the policy was not issued, nor this assurance effected, until February 20, 1868, when the policy was dated back to December 1,1867.
    In answer to the proposition that the company received the money without objection, the testimony shows that this payment was fully and explicitly denied, and the pretended renewal repudiated.
    If, as stated in defendants’ brief, “ the acknowledgment in the policy of payment is conclusive to give the policy force,” be a fact, it could only give it foi’ce for the time for which the acknowledged payment is made.
    The company was not bound to have an agent of any kind at Bellefontaine.
    The claim of defendants in error, that “ there can be no forfeitures,” is so preposterous and so destructive to the whole theory of insurance, that it would completely deprive, not only the insured, but insurer, of every means of protection .and safety.
   White, J.

It is admitted by the pleadings that the plaintiff’ in error is a foreign corporation, and that, at the time of the issuing of the policy, and until after the matters in controversy arose, it had failed to comply with the requirements of the act of April 16,1867, “ for the incorporation and regulation of life insurance companies.” S. & S. 218.

By this statute it is declared, among other things, not to be lawful for any agent to act for such corporation, in taking risks, collecting premiums, or in any manner transacting the business of life insurance in this state, except upon compliance with the provisions of the act.

The party violating the act is declared to be subject to a penalty of five hundred dollars for each violation, which is to be sued for and recovered in the name of the state. •

The company claims that its failure to comply with the statute renders the policy void, while it is insisted, on the part of the assured, that the effect of the statute is not to invalidate the policy, but to render a compliance with its terms, by the payment of premiums, unnecessary to the maintenance of her action.

Neither of these positions can be supported. The prohibition in the statute is against persons acting for companies that have not complied with the prescribed conditions. Such persons alone are made subject to the penalty.

Whether the statute was meant to invalidate policies issued by companies in contravention of its provisions, is to he determined from a consideration of the statute as a whole.

The object of the act is not to make the business of life insurance unlawful. The statute is designed for the protection of policy-holders and others dealing with insurance companies. To this end, it is made unlawful for persons to act on behalf of such companies until the provisions of the statute have been complied with. But we do not think it was intended to devolve on persons dealing with the companies the duty and risk of ascertaining whether they had complied with the statute. On the contrary, it seems to have been the intention of the legislature to rely on the penalties imposed as sufficient to insure such compliance.

In regard to the claim that, notwithstanding, the company is bound by the policy, yet the other party is excused from performing its condition, it is only necessary to say that if the policy operates at all, it must operate according to its terms. The plaintiff’s action is founded on the policy, and was brought to enforce it against the company. The' liability of the company, under the agreement, can not be-separated from the conditions on which it was made; and in undertaking to enforce it, the plaintiff is bound to show that these conditions have been performed.

As the statute does not render the policy void, the main questions arising in the case are :

1. Was the policy, at the time of the death of McMillen,. a valid and subsisting obligation against the company ?

2. If it was not, did the company by its subsequent conduct ratify the previously unauthorized acts of the agent in receiving payment of the premium which became due on the 1st of December, 1868 ?

In considering the first question it is to be observed that, the body of the policy contains a provision which declares that the policy is made and accepted upon the express condition that if the amount of any annual premium is not fully paid, on the day provided for, then the policy shall become null aud void, and wholly forfeited; and also that no-agent of the company, except the president or secretary, can waive such forfeiture, or alter that or any other condition, of the policy.

The parties were at liberty to contract in their own terms; and where no rule of law or of public policy is contravened, the terms thus employed must furnish the standard for determining their rights under the contract.

By the terms of this policy, full payment of the annual premium on the day provided for, was necessary to its renewal or continuance. As a consequence of the failure to make such payment, it is expressly declared that the policy shall become “ null and void, and wholly forfeited.” Hence,, if there was no authorized extension of the time of payxnent, the policy had ceased to be operative long before the termination of the life insured.

This brings us to the question as to whether Durkee, the agent, had authority from the company to extend the time for paying the premium, or to bind the company by receiving it after default. -v

It is declared in the policy that no agent of the company, except the president or secretary, can exercise such authority. Nevertheless, it was competent for the company to invest Durkee, or any other of its subordinate agents, with like authority, if it saw fit to do so.

But the authority must exist before effect can be given to-the act of the agent vai’ying an express condition of the-policy, after it has once taken effect.

The authority may be express, or it may be implied from the previous dealing between the company and its agent, or from other -circumstances. But in whatever form its existence is asserted, the burden of proving it is on the party claiming the benefit of its exercise.

The evidence as to the mode of doing business between the company and the agent, is limited to what appears in the statement. Nor is there any evidence shoeing the-system or method adopted by the company for conducting-its business from which the authority claimed for the agent can be inferred. And after careful consideration of all the evidence in the case, we are unable to discover any sufficient ground to warrant the conclusion that the agent was authorized to extend the time of payment, or to bind theeompany by waiving the default.

We have no hesitation in saying that there is sufficient in the case to show that it was the duty of the company to-afford the policy-holder the opportunity of paying the premium at Bellefontaine, where the agency was established and the policy taken. And although the agent was absent at the time the premium became due, it does not appear-that IMcMillen was ready or desirous to pay it during his-absence. On the contrary, on the agent’s return, which oc~ curred within a few days, McMillen had the opportunity to make the payment. He gave his notes for part of the premium, but neglected then to pay the part that was due in money, as he also did on one or more subsequent occasions when called on for it. The consequence was that the policy, at the time of his death, did not subsist as a valid obligation of the company.

Nor do we think the company, under the circumstances, can be held to have ratified the act of the agent in receiving payment after the policy had lapsed, and the life insured had ended.

Ratification by the company implies a knowledge on its part of the facts, or a case in which it was its duty to know them.

Durkee was evidently acting in the interest of , the plaintiff in concealing the facts from the company. This is apparent from the circumstances connected with the receiving ■of the money, from the antedating of the receipt, and from his report to the company. There was no change of circumstances between the time the money was received, and the time it was tendered back, that can affect the rights of the parties.

We think there is nothing, therefore, to estop the company from showing the facts, and it is apparent that as soon -as the truth became known the company tendered back the money.

Neither do we think the retaining of the notes by the •company to the time of trial, can be held to give effect to the policy. The notes and the policy are to be taken together as parts of the same transaction. The policy is expressly referred to in the notes. In the premium notes, it is stipulated that their acceptance is in no way to affect the condition of the policy respecting the forfeiture thereof.

The other note is stated to be given in part payment of the annual premium on the policy ; while the policy itself provides that it is to become void, if the annual premium is not fully paid at the specified time. On the forfeiture of the policy the consideration of the notes failed, and they ceased to be collectible. The failure of the company to tender them back was, therefore, a matter of no materiality to the rights of the parties.

There are cases, no doubt, in which equity would relieve against the forfeiture of a policy, or the company would be estopped from insisting upon it. But the evidence does not bring this ease within either class. And while it is true that in life policies, punctuality in the payment of the premiums is of the substance of the contract, yet it is also true that it is a contract eminently requiring good faith both on the part •of the company and of the policy-holder.

The motion for a new trial ought to have been granted. 'The j udgment will therefore, be reversed, and the cause remanded for a new trial.

Day, C. J., McIlvaine, Welch, and Stone JJ., concurred.