New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1870-06-03
FRIDAY JUNE 1870
A CASE or LIFE INSURANCE.
Important DeclslOn By Judge Collens-
Seventh District Court.

Important Decision BY Judge Collens-
seventh District Court.
Mrs. Lydia Hardie VS.. St. Louis Mutual
Life Insurance Company. In this case
Judge Collens has delivered the following
opinion:
The defendants appointed J. G. Purvis
their agent in this city Ito solicit applica'
tions and collect premiums for insurance.
according to specified conditions and in
structions appended to the power of attor.
| nev they gave him.
The evidence demonstrates that on the
fourteenth of September. 1867, Mr.. J. W.
Hardie, then in good health, desiring to
have insurance on his life, made his appli-
cation, in due form, to Purvis, who agreed
to accept the risk from that date, and to
| give the applicant credit for the whole
amount of the premium. The insurance
was effected for the benefit of plaintiff, the
applicants wife. The application was for
| warded to the principal Office of the COM
pany. in st. Louis, was duly accepted, and
| policy was made out dated the fourteenth
of September.
This policy was forwarded to Purvis, to be
by him delivered to the applicant, but be.
fore it reached New Orleans Hardie fell sick,
and on the twenty y.seventh of September
died. About the first of October, as soon as
Purvis had received the policy, plaintiff
made legal tender of $50, amount of the
premium, and demanded fulfllment of the
contract. This was refused on the ground
that the premium had not been paid and the
assured had died before the delivery of the
policy. To support this refusal the defend
ants rely on the following article of the sin
structions" to the agent.
"When the application sent to the Office
is approved, policy will be Immediately
made out and sent to you by mail, of which,
when received, you will promptly notify the
applicant, etc., and if before the delivery of
the policy you have evidence of intervening
impaired health or bodily injury, you will
withhold it. No policy is in force until de.
livered and premium paid.'
Ali conditions in contracts must be inter
preted according to principles of equality
and justice, unless their terms absolutely
preclude such Interpretation. When of two
possible interpretations, one produces a
reasonable, and the other an absurd sense,
the latter should be rejected and the other
followed.
Certainly parties may stipulate suspen-
sive resolutory condition depending upon
the happening OF an event, and hence the
parties in this case might have stipulated
that the assurance and risk should
take effect and begin to run only
from the day and date of the de-
livery of the policy. In that case it would
be perfectly reasonable to s:ipulate that
should the applicant die after the date Of
the application and before delivery of the
policy, the contract should not take place.
In case Of such q stipulation, however, it
is clear that the date of the policy should
be indorsed or inserted to correspond with
the date OF delivery.
On the other hand condition to arrest
the taking effect OF the contract, and make
it null, should the applicant fall sick or die
before delivery Of the policy, is wholly in
consistent with the dating of the risk and
assurance from the day of the application.
If such an Interpretation were admitted,
then the Insurance company would in every
instance be receiving premiums for time
during which they would be incurring no
risk whatever. If this were admitted, in this
case for instance, the company would have
stipulated for premiums on risk to be-
gin on the fourteenth of September, when
IN fact, by their conditions they would be
October. The condition was that if Har-
Gle should die at any time after the four
teenth of September, the company would,
pay his wife 10000, yet by this inconsis-
tent Interpretation they would give it this
effect, viz: that if Hardie died after that
date, and before the first of October, the
contract would be NULL but if he continued
alive and in good health during that time,
he would have to pay the premium for that
ditionally. Such an Interpretation would
be Oue-sided, contradictory, unjust and alb
surd. It would be inconsistent with the
very nature of the contract of assurance,
which in its very essence, ls one OF wager
and risk, going On during the term for
which the premiom is stipulated to be paid.
According to the policy in this case, the
risk began on the fourteenth of September,
and the assured bound himself to pay his
yearly premium on or before that date in
every succeeding year.
Now, it is clear, that if the policy had
been delivered, and Hardie had died on the
twenty seventh of September, of the ensu-
ing year, without having paid the yearly
premium OF that year, the penalty of a re
duction OF the policy would have been
incurred; yet this would neither be true or
just, if the risk did not really begin to run
till the first of October, when the policy
would have been delivered. The death, on
twenty-seventh of September. 1868, would
have been within one year after the real
commencement of the risk, according to the
present theory of the company; yet it is
clear that in that event they could. in case
of neglect to make payment OF new INSTALL
ments within the year. written on the face
of the policy, have forfeited nine-tenths OF
it's amount.
l. therefore, conclude that the date on the
face Of the policy took effect for and against
both parties.
The company can not avail themselves of
the fact that the premium was not paid or
rendered before delivery of the policy, and
that, therefore. their agent had the right to
withhold it. They issued the policy to him
without exacting the fulflment of the clause
in their instructions to the effect that ''the
agent is expected to remit the premiums
promptly as received" nor do they appear
to have ever made inquiry as to whether
their agent had ever received the premium
or not. Issuing and sending the policy TO
him, dated fourteenth of September, was in
and giving the agent full authority to
carry out his agreement with Hardie.
Judgment for plaintiff.