Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1876-05-05
LIFE INSURANCE.
An lmporsana autt Against the Sc,
Louis MntnaI Decidsd-Tne huecl
of Defnult In Payment OF
on fremfum Notes.

An lmporsana suit Against the sc.
Louis MntnaI Decidsd-Tne hueet
OfDefault in Payment OF
ON Premium Notes.
The Nashville American OF the 4th
contains the following interesting insur-
ance decision;
Judge Emmons delivered an impor-
tant decision yesterday in the United
States Circuit Court, in an insurance
case.
In April, 1865, the late Henry A.
Prayer insured his life ia the st. Louis
Mutual Life Insurance Company, for
$4,000, for the benefit Of his wife.
The policy contained a provision that
uon.payment Of premiums should cause
it TO lapse, except that, after three pre-
miums had been paid, future default
should not work a forfeiture, but should
commute the policy to the amount OF the
premiums paid, for which it should stand
good, provided the interest on the pre-
MUM notes outstanding was paid annu-
ally in advance.
After SIX payments the policy was
committed, for failure to pay further
premiums, to $2256, leaving outs' nding
a premium note for 1913 l9, upon which
the interest was paid TOR only n year,
several years after which the assured
| died; and this suit was brought by the
widow to recover the committed amount
of the policy, less the note and interest,
The point argued was, whether the
non-pAyment Of the interest on this note
had caused the policy to lapse. It was
ably aud earnestly insisted by Messrs,
Thomas NJ. Malone and NJ. M. Brien,
IT,, that this effect could not have been
produced; that cases 10 which such for
lectures had been allowed were cases al
law, while this was an equity casei that
the policy being a psid-up one, except
that a small amount Of interest had to
be paid annually (for the note, IT MOI
Cancelled by dividends, was to be finally
~deducted). the company could not bt
prejudiced by a failure to pay the inter
est; as the small amount must be r
garded as secured by the hyp%othecatloI
Of the policy; that the amount OF l
could be ascertained with mathematical
precision, and deduced from the amour
ultimately paid on the policy; that thu
case was one where equity would inter
vene 10 prevent a forfeiture, aud that Thu
payment of the interest was a condition
subsequent, non ful6lment of whicl
would not forfeit, etc. -.
The company was represented by MI
R. Mop. Smith.
Judge Emmons decided that the laps
of a life policy, for failure to compl,
with a condition Of its subsistence, couli
in no Just sense be termed a forfeiture
} that, in such cases, time was of the e'
sence Of the contract, and that 1t wa
, obvious that a general failure upon tn
part of the policy-holders similarly eli
cumstanced to pay interest upon thel
: notes could rot but disarrsnge tn
, scheme of the company, looked at as
, whole. BE, therefore, held that by tn
failure to pay the interest on the pr
MUM notes, as required, the policy
: question had lapsed.
: We learn that there are a large nun
I Der Of such policies Of this company j
suit in the Chaneery Court here, an
that the cases will ultimately be remove
: into the Federal Court. The foregoln
: decision will, therefore, be of intere
e the complainaRts in these cases.