Case Name: Anna Ellsworth Poste, Appellant, v. American Union Life Insurance Company, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1898
Citations: 32 A.D. 189
Docket Number: 
Parties: Anna Ellsworth Poste, Appellant, v. American Union Life Insurance Company, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 32
Pages: 189–197

Head Matter:
Anna Ellsworth Poste, Appellant, v. American Union Life Insurance Company, Respondent.
Life insurance—condition in an application that the policy shall not go into effect until the first premium has been paid — the company’s report totfhe Insurance Department is not a waiver.
An insurance policy delivered to, and found among the papers of, a decedent, upon whose life it was issued under an application, stated by the policy to be a part of the contract, which application provided “ that any policy issued thereon shall not go into effect until the first premium has been actually paid during the lifetime and good health of the insured,” cannot.-be enforced where the premium has not in fact been paid, although the company had reported a few weeks before the death of the insured, and some'four months after the policy was issued, to the Insurance Department of the State, that the policy in question was a policy “at present in force.”
Putnam and Herrick, JJ., dissented.
Appeal by the plaintiff, Anna'Ellsworth Poste, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of St. Lawrence on the 6th day of November, 1897, upon the decision of the court, rendered after a trial before the court without a jury, dismissing the plaintiff’s complaint.
John O. Keeler, for the appellant.
George W. Miller, for the respondent.

Opinion:
Landon, J.:
The defendant, September 13, 1895, executed and delivered to William A. Poste a policy of insurance in the sum of $10,000, payable to the plaintiff, his wife, upon his death. Mr. Poste died January 21, 1896. Mr. Poste never paid anything upon the policy, and the single question- presented by this appeal, is whether the policy, which was found among Mr. Poste's papers after his death, ever became operative as a contract. The policy calls for a payment of a premium of $126.40 in advance, and a like payment semi-yearly thereafter. It was issued upon the application signed by Mr. Poste, which contained this provision: " That any policy issued thereon shall not go into effect until the first premium has been actually paid during the lifetime and good health of the insured." The policy states that the application is a part of the contract. It also states that " No person, except the President, First or Second Vice-President, Comptroller, or Secretary of the company, is authorized to make, alter or discharge contracts or waive forfeitures."
The complaint alleges that, at the time of the issuing and delivery of the policy, Mr. Poste was an attorney and counselor-at-law, and one of the attorneys in the employ of the defendant doing its legal business, and so continued until his death; that, it was agreed between him and the defendant that he need not pay the premium in advance, but that he might pay the same at some future time, and that meantime the policy should be in full force, and because of such agreement Mr. Poste deferred payment in advance and postponed payment and accepted the policy upon such agreement.
. The answer placed this special agreement in issue. The plaintiff failed to prove this special agreement. The plaintiff proved that the defendant in its report to the Insurance Department of the State, made January 3, 1896, reported respecting this policy, under the caption, " Description of all the policies and other life contingent obligations of the American Union Life-Insurance Company at present in force, with all the data necessary for a correct valuation of the same returned to the Insurance Department of the State of New York by the President and Actuary of the said Company. Number of Policy, '2192;' 'Date of Issue,' 'Ninth Month, 1895;' ' Age at Issue, 46 ; ' ' Form of Policy,' ' T.,' ' at ten years; ' ' Amount Insured,' ' $10,000.' " The evidence tended to show that the company reported such policies as were outstanding at the date of the report, subject to' correction by later reports, if they lapsed meantime.
•' The learned trial judge in his decision stated the grounds thereof to be, " That the complaint alleging- that the policy therein described was delivered upon a special agreement, and admitting that the premium was not paid; and the testimony' failing to warrant a finding that there was any special agreement, the plaintiff has failed to sustain, the allegations- of the complaint, and to prove a cause of action against the defendant." The propositions of fact thus stated by the trial judge are established. . The. report to the Insurance Department in connection with the delivery of the policy to Mr. Poste without prepayment might tend to support a finding that the prepayment of the premium was waived, if the admission by the pleadings of non-payment did not preclude both inference and finding, or if it could be waived otherwise than as specified in the policy itself, or if the effect of the delivery of the policy without prepayment were not declared as above by the application signed by Mr. Poste.
But the policy does not bind the insured to pay anything; his paymentis optional with him. If he pays the policy, hy its terms it binds the company ; if he does not pay, he does not run in debt to the company as in the case of afire policy delivered without prepayment ; he simply fails to bind the company or to give validity to the policy. (Roehner v. Knickerbocker Life Ins. Co., 63 N. Y. 160 ; Evans v. United States Life Ins. Co., 64 id. 304.) In a fire policy the term of the insurance is usually specified, like this, " from noon, May 1,1898, to noon, May 1, 1899," and thus the time covered is the same whether you buy your insurance for cash or upon,credit. But in this life policy the term of the insurance does not begin " until the first premium has been actually paid during the lifetime arid good health of the insured." Grant that you have-bought it on credit, what have you bought ? Simply the option to give the policy effect by payment according to its terms. Of course, there might be facts estopping the company from insisting upon the. condition of prepayment, but the allegations of the complaint tending in that direction were not proved; the report of the company to the department was unilateral; it reported a risk that might at any time be perfected by the policyholder, but never was perfected.
The policy, in the absence of acts accompanying its delivery in the nature of an estoppel, merges all previous oral stipulations and is the contract. (Insurance Company v. Mowry, 96 U. S. 544.)
We think the judgment must be affirmed, with costs.
All concurred, except Putnam and Herrick, JJ., dissenting.