Case ID: ohio-st_39/html/0240-01.html
Source: Caselaw Access Project
Author: {"author": "O.Kuy, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Insurance Co. v. Tullidge.
    1. Where an insurance company refuses to receive from the assured a premium on a life policy, on the ground that the policy has lapsed by reason of the non-payment of such premium on the day stipulated for its payment, and the assured claims that the company has -waived the right to assert such forfeiture, equity has jurisdiction to determine, on the petition of the assured, the rights of the parties under such policy, and, if the policy is found to be in force, to compel the company to receive the premiums thereon, and issue renewal receipts.
    2. Although a life policy and the renewal receipts may contain a stipulation or notice that agents of the company shall not have authority to waive forfeitures where premiums have not been paid on or before the ¡ day designated for their payment, yet the course of business between the agent, the assured, and the company, in giving effect to payments made when overdue, may be such that the company will be precluded from objecting to a payment tendered when overdue, where no notice had been given the assured that in the future such overdue payments would not be received.
    Motion for leave to file a petition in error to reverse the judgment of the District Court of Hamilton county.
    
      ■ The National Life Insurance Company of the .United States, on March 19,1869, issued at Cincinnati, Ohio, to Alfred Tullidge and others a policy for $10,000 on the life of Frank E. Tullidge, in consideration of premiums of $41.90, payable on the 19th of March, June, September and December, each year, at the branch office in Philadelphia, or to their duly authorized agents when they produce receipts signed by the president or secretary. It was provided in the policy “ that the premiums shall be paid in cash on or before the days upon which they become due,” and that “ agents of the company are not authorized to make, alter, or discharge contracts or waive forfeitures.” It was further provided as follows : “ And the said company further agrees, that after due payment of premiums for three full years, they will, if requested, on the surrender of this policy duly receipted, issue another policy, payable as herein provided, on which no further premiums shall be required, on the life of the person whose life is hereby in sured, for an amount equal to to total amount of premiums paid on this policy.”
    All the premiums which accrued from the issuing of the policy down to and including September 19, 1880, were paid by the insured to the agent of the company, in Cincinnati, on receipts produced by him, signed by the president or secretary; and in no instance was it required that premiums should be paid at Philadelphia. The payments in 1877,1878, 1879, and 1880, were made on production by such agent of receipts sent from the office of the company at Chicago ; and the agent, on receiving the money from the insured, was required by the terms of such receipts to countersign the same. They contained the following clause : “ It is understood and agreed that if the premium is paid when overdue, such payment shall not restore or keep in force the policy, unless, at the time of such payment, the assured is alive and in good health.” And in the receipt given September 19, 1880, this further clause is added to those words: “ And a good risk, the same as when the application was made for, and when the same policy was issued.”
    During the four years mentioned (1877-1880), the premiums were not, as a general rule, paid until after the day upon which they became due, and in 187-9 and 1880 they were not paid in any instance until after the day on which they became payable. On December 31, 1880, he tendered the premium which had become due December 19, 1880, but the company refused to receive the money, on the ground that the poliey had beeome forfeited by such non-payment on December 19th. The company, however,.proposed to issue a policy under the clause above quoted, which proposition Tullidge declined. No notice had been given in any way to the insured or the assured that the premiums becoming due after September 19,1880, would not be received after the day on whibh they were payable ; and on December 31, 1880, Tullidge was, in all respects, as good a risk as when the original application for insurance was made. No part of the premiums received by the company were returned to the party paying the same.
    The company refusing to receive such premium, or to continue the policy in force, the beneficiaries, on March 3, 1881, brought suit in the court of common pleas of Hamilton county to compel it to do so. The cause was heard in that court on issue joined, and the relief asked by the beneficiaries was granted. 6 Oin. L. Bulletin, 341; opinion per Avery, J. The judgment was affirmed in the district court, and the company now moves for leave to file in this court a petition in error, to reverse the judgments of both courts.
    
      C. B. Robertson, in support of the motion :
    The policy was forfeited for non-payment of premium on December 19,1880; there was no waiver ; and a court of equity had no jurisdiction to relieve from such forfeiture. Insurance Co. v. Wolff, 95 U. S. 326 ; McKenzie v. Steele, 18 Ohio St. 38; Insurance Co. McMillen, 24 Ohio St. 82; Merserau v. Ins. Co., 66 N. Y. 278; Catoir v. Ins. Co., 33 N. J. L. 487; Bouton v. Ins. Co., 25 Conn. 542; Klein v. Ins. Co., Thompson v. Ins. Co., 104 U. S. 88, 252 ; Smith v. Ins. Co., 3 Hill, N. Y. 508; Barnley v. Proprietors, 2 L. R. H. L. 43 ; Howard v. Carpenter, 2 Md. 259; Howell v. Ins. Co., 1 Bigelow, 578.
    
      Sayler c& Sayler, contra:
    The forfeiture was waived, and a court of equity has jurisdiction. Cohen v. Ins. Co., 50 N. Y. 610; Bliss on Ins. (2 ed.), § 413; Mansbach v. Ins. Co., 17 Hun, 340; Ins. Co. v. Pottker, 4 Am. L. Rec. 111; s. c., 33 Ohio St. 459; Day v. Ins. Co., 45 Conn. 489 ; Neville v. Ins. Co., 17 Ohio, 218; s. c., 19 Ohio, 457; Carpenter v. Ins. Co., 4 Sand. Ch. 408; Taylor v. Ins. Co., 9 How. U. S. 390; Ins. Co. v. Norton, 96 U. S. 242; Rudwig v. Ins. Co. (Ky.), 11 Ins. L. Jour. 603 ; Ins. Co. v. McMillan, 24 Ohio St. 82; Ins. Co. v. Pierce, 75 Ill. 426; The State v. Graham, 25 La. 443; Helme v. Ins. Co., 61 Pa. St. 110 Ins. Co. v. Eggleston, 96 U. S. 577; Hanley v. Ins. Co., 96 Mo. 380; Meyer v. Ins. Co., 51 How. Pr. 263; McCraw v. Ins. Co., 78 N. C. 149; Buckbee v. U. S. M. A. & T. Co., 18 Barb. 544; Ruse v. Ins. Co., 26 Barb. 560; Garber v. Ins. Co., 5 Bigelow, 221; Bodine v. Ins. Co., 51 N. Y. 117; Thompson v. Ins. Co., 52 Mo. 469; Hanley v. Ins. Co., 4 Mo. App. 252; Ins. Co. v. Hinerly, 75 Ind. 1; Mayer v. Ins. Co., 38 Iowa, 304; Murphy v. Ins. Co., 59 Tenn. 450; Ins. Co. v. Huth, 49 Ala. 529; Ins. Co. v. Ins. Co., 10 Ins. L. Jour. 257; Miller v. Ins. Co., 12 Wall. 285; Ins. Co. v. Booker, 9 Heis. 606; Wing v. Harvey, 2 Big. 365; Sheldon v. Ins. Co., 25 Conn. 207; Rockwell v. Ins. Co., 20 Wis. 335; Smith v. Ins. Co., 2 Mo. App. 339; Ins. Co. v. Doster, 106 U. S. 30; Hodson v. Ins. Co., 97 Mass. 144; Dilleber v. Ins. Co., 7 Daly, 542; s. c., 76 N. Y. 567; Ins. Co. v. Ins. Co., 86 Pa. St. 236, s.c., 11 Ins. L. Jour. 540; Ins. Co. v. Tesler, 62 Ga. 247; Goodwin v. Ins. Co., 73 N. Y. 491.
   O.Kuy, J.

Where an insurance company has refused to receive from the assured the amount of a premium on a life policy, basing such refusal on the ground that the policy had lapsed by non-payment of such premium at the time stipulated for its payment, the assured, if the refusal is wrongful, has an election of remedies. He may tender the premiums as they become due till the policy is payable, and then recover the amount of the policy in an action thereon. He may, in an action for the rescission of the contract, recover back the premiums paid, with interest. Or he may maintain an action to obtain a judgment that the policy shall be continued in force. Union Gen. L. Ins. Co. v. Pottker, 4 Am. L. Rec. 111; s. c., 33 Ohio St. 459 ; Meyer v. Knickerbocker L. Ins. Co., 73 N. Y. 516 ; Day v. Conn. Gen. L. Ins. Co., 45 Conn. 480; May on Ins. § 356 et seq_. The latter course was adopted here, " and the propriety of pursuing it, where it is desired that the policy shall be continued in force, is obvious. The witnesses to prove there had been no forfeiture may die before the insured, and the insured himself may be an important witness on the question of forfeiture; and besides, insurance in another company may be desired, in case it is determined that the. policy is not in force.

Finding that equity has jurisdiction, the question is whether a case for relief is presented. The defendant is a foreign corporation, and the insured a resident of this state, and the premiums were all paid at Cincinnati, to an agent of the company residing there. This agent was required to and did countersign the receipts which had been furnished by the company, on payment of the premiums to him. Conditions uopn those receipts show that, notwithstanding the language of the policy, payment after the days on which premiums fell due, was contemplated, for they provide that such premiums shall not be received after the days named for their payment, unless the insured is in good health, and as good a risk as when the policy was issued. Premiums had been repeatedly, and without objection, received by such agent after the days specified for their payment, and no one of the last eight premiums had been paid until it was overdue — in some instances,' a week or more. This was done in the exercise of the power to receive premiums after the specified days, where the risk had not been increased by any change in the health or condition of the insured; and it is clear that there had been no such change in the insured’s health or condition-on December, 31, 1880, when the premium, falling due December 19, 1880, was tendered. No notice had been given to the insured or assured of any purpose on the part of the company to change the practice which had prevailed between the parties as to the times of paying premiums on this policy ; no part of the sums which had been received on overdue premiums was ever returned ; and it is clear that there was no intention on the part of the insured or the assured to abandon the insurance or evade the payment of any premium. In our opinion, it would be unwarranted, and indeed plainly unjust, looking to the character of the agency, the course of business as to this policy,' and other matters mentioned in the statement of the case, to permit the company to assert such forfeiture. We think the court of common pleas did not err in granting the relief which was asked for by the beneficiaries, and the district court properly affirmed the judgment; and in so holding we are fully supported by Union Central L. Ins. Co. v. Pottker, supra; Phoenix Ins. Co. v. Doster, 106 U. S. 30; Germania Life Ins. Co. v. Rudwig (Ky. Ct. of Appeals, 1882), 11 Ins. L. Jour. 603 ; May on Ins. § 361.

Motion overruled.