The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1876-05-19


Life insurance companies. The policies
are all contracts on their face, forfeitable |
on Noncompliance with their terms and |
conditions, and equally binding on both |
parties. The company agrees to pay q |
certain sum on the happening OF given |
contingency, on condition that the assured
shall make certain payments, and do, or
omit to do, certain acts. The common
sense view of a policy would be that, how
ever harsh 1t might be to policy holder,
on the non-payment of premium, or a
failure to comply without other prescribed
conditions, the company should be released
from its part Of the contract but, as we
have said, the tendency of the courts has
been otherwise-probably for the reason
that corporations have no souls, and can
better afford to stand the loss than can
poor widows and children.
The first innovation made on the strict
letter Of the contract was the decision that,
Notwithstanding the terms of the policy, 1t
was not forfeited when the assured, being
insane, died by his own hand. This con-
clusion is doubtless sound law, and 10 based
on the argument that an insane person is
not responsible for bis acts and that in
taking his own life, he no more commits
suicide than he would commit murder by
taking the life of another. Within few
weeks the courts Of New York have car
ried the insanity matter a step further, by
deciding that although policy would be,
by its terms, torfeitablc on the non pay
ment of the annual premium, and in the
case of person of sound mind would be
actually forfeited by such non payment;
yet if the assured ia insane, has sufficient
means to pay the premium, and yet on &C.
count of insanity neglects to pay it and
dies before payment, the policy is binding
on the company and must be paid to the
| person for whose benefit it was issued.
But TO show the absurdify of the decision,
the court further holds that if tho assured
was not Of sufficient pecunary ability to
make the payment promptly, his insanity
| Llhi hNAhihtf put thS hOhSy 10 Ava
feited and non-c ollectible, even if he dies
the day after the premium became payable.
The supreme court OF Kentucky have gone
even step further, and decided that not
withdrawing company accepts part of its
premium in q note, accepting the note and
issuing the policy on the express condition
that the policy should lapse and be for.
feited by the non payment of the Interest
on the note in advance, yet the non pay.
ment of the interest would not work such
forfeiture, the policy still remaining il
its full amount less such unpaid interest.
The effect of these decisions has been t
make the courts Of other states pause ant
consider the way in which they were tend
ing. The United States circuit court TO
Tennessee, a few days ago, had befor,
them case where the interest on the pre-
MUM note was unpaid at the time of death
although past due only few days by tn
terms OF the policy, and Judge Emmon
promptly decided that it had lapsed. Ant
the supreme court of Missouri, in a Gimia
case, have taken the same ground, express
ing, as it seems to us, the common sens
view of the matter, by saying that If tn
assured desires TO take the chance of gail
by not making full payment at one tim
Z" he must at the same time incur the haz
.'ard of loss, and cannot complain If he b
7 held to the terms of the contract he ha
This may be harsh doctrine, but SO
seems harsh that one should pay premium
]. for fifteen years TO obtain an insuranc
: against fire, on his buildings, and becaus
: he suffers week to elapse without renew
ing, he, and not the company, suffers til
loss in case of fire. In such q case tn
lose is all to the individual, the gain all I
the insurance compsny-but no one eve
'. bad the hardihood to claim that the rul
, was harsh, or to appeal 10 the courts tn
- recover the amount of his lapsed policy
The harshness is more fancied than rea
and is more than counterbalanced by Ii
uncertainty thrown about life insuranc,
by the evident straining of the courts I
find loop hole by which they can allo
y the assured to escape from the Performance
of his part of the contract, and yet bold
q company to theirs. The law would
a plsIn enough, and there would be 4
n harshness in enforcing tie strict letter {
q the contract, if courts and jurors, in ever
o case, were governed by reason instead {
i by sympathy for one party and prelude
q against the other-for then policy holde
- would know what to do and what to e,
pect, and be disinclined to take uncertai
d risks looking to courts and jurors to hel
them out.