Case Name: CHARLOTTE HAYNER, Plaintiff and Respondent, v. THE AMERICAN POPULAR LIFE INSURANCE COMPANY, Defendants and Appellants
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1873-02-01
Citations: 3 Jones & S. 266
Docket Number: 
Parties: CHARLOTTE HAYNER, Plaintiff and Respondent, v. THE AMERICAN POPULAR LIFE INSURANCE COMPANY, Defendants and Appellants.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 35
Pages: 266–282

Head Matter:
CHARLOTTE HAYNER, Plaintiff and Respondent, v. THE AMERICAN POPULAR LIFE INSURANCE COMPANY, Defendants and Appellants.
A policy-holder in a life insurance company, from whom quarterly premiums were due on the 39th day of July, 1870, applied to the company for an extension of the payment of the premiums, alleging her inability to pay them, and her wish that the policy should not lapse and become void by reason of non-payment. The policy-holder was then informed verbally, and in writing, by the president of said company, that the policy was good, and would remain in foree, by virtue■ of what had already been paid, until November 39, 1870.
This statement or stipulation that the policy would '■'■remain in foree’1'' not only continued the legal existence of the policy, but also all its stipulations and obligations, and operated as a waiver of any forfeiture of the same for the non-payment of the premiums due until November 39,1870.
The construction of the language of the president (as claimed by the company), to the effect that the company stipulated that the policy remained in force, “merely as a policy,” and that its statement did not operate as a waiver of the forfeiture, cannot be sustained.
The president of an insurance company is presumedly the agent of the company for the transaction of its general business, and by his acts can bind the company to any agreements made by him within the scope of his general authority; and if his acts, statements, and agreements with a policy-holder operated as a waiver of any of the conditions in the policy, it was a waiver by the company.
It is peculiarly within the province of courts of equity to relieve parties against forfeitures. But the cases are such, that by the cure or removal of the alleged forfeiture a present cause of action will arise to the party relieved, or some beneficial estate be at once enjoyed ; and it would be somewhat anomalous to ask a court to remove, or relieve a party from, a forfeiture, without such party has a present right of action or a present benefit that can be enjoyed thereby.
In this case the position of the parties before the court are as follows :
1. The company declares its policy to have lapsed and become void by the reason of the policy-holder’s default, yet it has not instituted any legal proceedings to foreclose the rights of the holder under the policy, and to have the same adjudged to home lapsed and become void. The company has determined the question and declared that determination, as it claims the right to do under the policy; and thereupon it refuses to have any further dealings with the policy-holder.
3. The latter brings an action at once to dispute this position of the company, and seeks in a court of equity to have the policy adjudged and decreed to be in life and full force ; and all this before any right of action or claim against the company has accrued under the policy, by reason of the death of the person whose life is insured thereby.
Held, that the action cannot be maintained.
The policy-holder has no present right of action under the policy, and cannot enforce any of its stipulations or covenants, and no liability of the defendants has as yet arisen upon it. The court will not now intervene, and declare this to be a subsisting policy, in full force and effect, and compel the company to accept the premiums and acknowledge its validity ; in other words, to adjudge and decree that the policy is not forfeited. There is no existing principle of law nor equity upon which such an action can be sustained.
Before Monell, Sedgwick, and Van Vorst, JJ.
Decided February 1, 1873.
Appeal from a judgment.
In January, 1869, the defendants issued to the plaintiff their policy of insurance upon the life of her husband, which required the premium to be paid, in quarterly payments, on or before the 27th days of January, April, July, and October, in each year, and provided that, in case of default, the policy should thereupon cease. The following covenant also appears in the policy :—
“And the said company does further agree, that after payment of any of the premiums above mentioned, the said company will give to the assured an equitable paid-up policy for an amount equal to its true value as shall be estimated at that time by the actuary of the company, upon the delivery to it of this policy properly receipted and cancelled ; provided the last payment of premiums due shall not have remained unpaid for more than thirty days.”
The defendants, claiming that default had been made, declared the policy annulled, and refused to admit or allow its validity.
The plaintiff, alleging performance on her part of all the conditions, and especially the payment or timely tender of all premiums due, demanded in her complaint “that the said policy may, by the judgment and decree of this court, be declared and adjudged to be in life and of full force'in all its provisions, on the payment to said defendants of all the back unpaid premiums due, and to grow due and payable up to the time of such decree, with the interest thereon, including said premiums covered by said note with theinterest thereon, or that the defendants be compelled to issue to the plaintiff an equitable paid-up policy for an amount equal to the true value of the policy herein, set forth, as shown by the amount in premiums actually paid thereon at the time of issuing such paid-up policy, according to the true intent and meaning of said policy herein set forth, upon delivering up said original policy to be can-celled.”
The action was tried by the late Justice Spehcbr, without a jury, who found as facts : that in July, 1870, the defendants agreed that the policy should be in force until November 29, 1870, and, through their president, gave to the plaintiff the following note or memorandum:
“ Hew Yobk, July 29,1870.
“Mbs. Charlotte Hayher.
“Madam:—According to Mr. Reid, our assistant “actuary, your policy (No. 2,723) will remain in force “by virtue of what has already been paid, until Nov. “29, 1870.
“Respectfully,
“T. S. Lambert, President.”
That on the 29th of November, 1870, the plaintiff desired the defendant to take the promissory note of another person, which the defendant consented to do ; and to apply the same in payment of the premium due, if on investigation the note proved to be good; and thereupon they took the note, agreeing to report the next day, and also agreeing that until then the policy should remain in force, and should not lapse nor become void by reason of the delay. On the next day the defendants declined to take the note, and thereupon claimed that the policy had lapsed and become void, by reason of the non-payment of the premium. Thereupon, on the same day, the plaintiff tendered to the defendants the full amount of the premium due, which was refused.
Prom those facts the justice found as conclusions of law, that the policy continued and was in force until the 30th of November, 1870, and had not lapsed or become void prior to that time by reason of any omission to pay premiums theretofore due, and that the tender on that day of all premiums due was sufficient to prevent the lapsing of the policy. He thereupon decided “That the plaintiff is therefore entitled to the judgment and decree of this court. That said policy is and shall be in life and in full force and effect, and binding in all its terms and conditions upon the defendant, in the same manner as if the plaintiff had paid to defendant each quarterly premium, and by its terms she was bound to pay at the time the said policy specified the same should be paid, and that defendant shall specially perform and fulfil each and every of the terms and conditions of said policy on defendants’ part to be performed and fulfilled, provided that said plaintiff shall within forty days from the entry of said decree pay to the defendants all the quarterly premiums owing and past due at the time of the entry of said judgment and decree from the plaintiff to the defendant, together with interest upon each of said quarterly premiums from the time the same became and was due and payable by the terms of said policy, to the time of the payment of the same as herein provided, and shall thereafter perform and fulfil on her part each and every of the terms and conditions of said policy on plaintiff’s part to be fulfilled and performed ; or if plaintiff shall so elect, the judgment or decree of this court, instead of providing for the payment of said premiums and interest, shall be adjudged and decreed that the plaintiff may within ten days after the entry of the judgment deliver the said policy to defendant, receipted and cancelled; and the defendant shall thereupon make, execute and deliver to plaintiff an equitable full paid-up policy, for an amount equal to its true value, for the premiums paid on the same to and including the last premiums paid on the 27th day of January, 1870 ; such amount and value to be estimated and ascertained by the actuary of the defendant in accordance with the agreement of the defendant, in the policy, providing for such ascertainment and estimate.”
The defendants excepted to the conclusions of law, and appealed from the judgment entered upon the decision.
Mr. George Bliss, Jr., for appellants, argued:
1. Assuming the facts to be as found by the court below, and that there had been at the time of the commencement of this action no legal forfeiture of the policy, but that it was then in full force, and was binding on the defendants, we submit that this action cannot be maintained. The complaint asks the court to declare, and the judgment rendered does declare, that if the plaintiff shall, from the time of the rendering of the judgment, perform the conditions of the policy, the defendants will be liable to the plaintiff to pay her some money, at some future time, when that person whose life is insured shall die.
It is an attempt to make the court declare in advance what will be the liability of the defendants upon the happening of the event on which—and on the happening of which alone—the policy was by its terms to be available to her.
2. So far as relates to the first branch of the relief asked—viz.: that the policy be adjudged to be in full force on payment of the premiums then due or thereafter to accrue—the theory upon which the action is based is wholly unknown to English law. It is an attempt to bring into a court of chancery a question which properly belongs to a court of common law, and to procure an adjudication now upon questions which have not yet- arisen and may never arise. Such an action cannot be assigned to any recognized head of equity juris prudence, and no similar case can be found in which an action of this nature has been sustained (Brooks v. Lord Kensington, 2 Kay & John, 755; Grove v. Bostard, 2 Phillips Ch. R. 619; Jenner v. Jenner, 1 Law Rep. Eq. Cas. 361; Baylies v. Payson, 5 Allen (Mass.) 488).
3. The action could only be assigned to one of the three following heads. 1. Specific Performance. 2. Bills quia timet. 3. Bills of Peace. And it does not fall within the principles applicable to any one of these.
4. The courts of this State have refused to maintain such actions. As in Scott v. Onderdonk, 14 N. Y. 9, a case of alleged illegal assessment upon real estate.
5. This court has expressly applied the principles discussed in the last cited case to actions upon life insurance policies (O’Reily v. Mutual Life Ins. Co., 2 Abb., N. S. 167; Cohen v. Same, not reported, decided at General Term, June, 1868).
6. It is therefore clear that so far as relates to the prayer of the complaint, that the policy should be regarded as in full force on payment of the premiums due and to grow due, the action cannot be maintained either upon principle or authority.
7. Except for the alternative prayer of the complaint, the objection heretofore urged could have probably been raised by demurrer, but the complaint also prays that “the defendants be compelled to issue to the plaintiff an equitable paid-up policy for an amount equal to the true value of the policy.’ ’ This is in pursuance of a clause in the policy which provides that, after the payment of any premiums due, “the said company will give to the assured an equitable paid-up policy for an amount equal to its true value, as shall be estimated by the actuary of the company, upon the delivery to it of this policy properly receipted and cancelled’ ’ '
Upon the trial no proof whatever was given of any offer, prior to the commencement of this action, to deliver up the policy properly receipted or cancelled, or of any demand, of a paid-up policy. ' Until this was done the defendants were not in default, and no right of action existed against them.
The policy is for the benefit, not only of the plaintiff, but in case of her death before her husband, for the benefit of her children. She could not therefore surrender it and take out a-paid-up policy in such a way .as to bind them. And there is no evidence that she or they ever offered to surrender it or to cancel it (Chapin v. Fellows, 36 Conn. 132; Eadie v. Slimmon, 26 N. Y. 9; Swan v. Swan, 11 Allen, 224; Burroughs v. State Mut. Life Ass. Co., 97 Mass. 359; Ruppert v. Union Mut. Life Ins. Co., 7 Robertson, 155; Knickerbocker Life Ins. Co. v. Wertz, 99 Mass. 157; Conn. Mut. Life Ins. Co. v. Burroughs, 34 Conn. 305).
Mr. L. R. Marsh, for respondent, held:
I. The action was well brought, and the plaintiff is entitled to the relief granted in the findings, and the proof sustains the material allegations contained in the ■complaint, and justifies the findings of the judge who tried the cause.
1. The policy was not legally lapsed, the forfeiture being waived ; the plaintiff therefore had the right to ■•ask the decree of the court declaring its validity, and that it continue in force.
2. It cannot be contended that the plaintiff is bound, after the defendant insists that the policy has lapsed or is void, to continue to tender the premiums to the company from time to time until the death of her husband (which may be ten years hence), before she can sustain .an action to test the fact whether the policy be legally lapsed or still in force.
3. Such a rule would put it in the power of the company to set their policy-holders at defiance at any time by claiming policies as lapsed - or void, and thus save the company from all liability until the death of the assured.
4. The courts have and will entertain actions for specific performance of insurance policies (Whitaker v. Farmers’ Ins. Co., 29 Barb. 312). (a). A parol agreement to renew a policy of insurance made by an authorized agent of the company, may be enforced by an action for specific performance (Post v. Aetna Ins. Co., 43 Barb. 351.) (b). When the agent of an insurance company makes mistakes in issuing a policy, the insured can insist upon a performance of the contract in accordance with the terms agreed on (Bunten v. Oriental Ins. Co., 8 Bosw. 448; S. C., 2 Keyes, 667).
5. The rights and equities of the plaintiff under this policy cannot be held in suspense during the life of her husband. She has the right to claim a specific performance of its terms or damages for the non-performance (Post v. AEtna Ins. Co., 43 Barb. 352). (a). When the action is for the specific performance equity considers the agreement as made, which the party was in equity bound to make, and decree the payment of the money which would have been payable under the consummated agreement (43 Barb. 352). (b). The policy was of much greater value, because obtained at a lower rate of premium than one that could be obtained on the life of the assured at the present time. (c). And. a life policy which the company repudiates for any reason (unless equity affords an immediate remedy), is of no appreciable value for any purpose whatever. It is only valuable when recognized by the company as of binding force.
6. It is the policy of the law that all conflicting claims should be adjudicated as soon as practicable after such conflict occurs. Thus equitable actions for the construction of wills—for the removal of a cloud upon title—bills of quia timet, to settle and establish a party’s title to an estate securely against conflicting claims—is of long ac knowledged equity jurisdiction (2 Story’ s Equity, §§ 825, 826; 2 Burrell's L. Dicty. 370; 46 Barb. 121).
7. If the policy had not legally lapsed or was in force at the time the tender was made Tby the plaintiff, she was entitled to the full paid-up policy prayed for. This right was wholly ignored Tby defendant in claiming the policy had lapsed and was no longer in force.
The defendants having ignored the validity of the assurance on the life of plaintiff’s husband, and having thrown obstacles in the way of plaintiff’s performance, the plaintiff is entitled in this action to recover back the amount paid to the company in premiums, with interest, or at least to the actual damage sustained (O’Reilly v. The Mutual Life Ins. Co., 2 Abb. N. S., 171; Post v. AEtna Ins. Co., 43 Barb. 352).

Opinion:
By the Court.—Monell, J.
The decision in this case, if it can be sustained upon other grounds, is supported, I think upon sufficient evidence, that the policy had not, at the time the tender was made on the 30th of November, 1870, either lapsed or become void, by reason of the non-payment of any of the premiums previously, or on that day due. The only doubt suggested, was as to the sufficiency of the proof of the president's authority to bind his company. The construction of the language of that official's note, that the policy would "remain in force," namely (in effect), that it should remain in force as a policy merely, without operating as a waiver of the forfeiture, cannot be sustained. Under a general agreement continuing the legal existence of the policy, all its obligations and stipulations continue also ; and anything which had theretofore, or which might thereafter happen, that could be construed into a waiver of previous forfeitures, would likewise continue to be available.
The various extensions of the time, for the payment of the premiums, were made by the president of the de fendant' s company. As such 'president he was presumedly the agent of the company for the transaction of its general business, and by his acts could bind them to any agreements made by him within the scope of his general authority. And if his acts and agreements operated as a waiver of any of the conditions in the policy, it was a waiver by the company.
But it was strenuously urged on behalf of the defendants, that assuming the facts to be as found by the court, and that there was no legal forfeiture, and that the policy was in full force and binding upon the defendants, still this action cannot be sustained.
The defendants have incurred no liability under the policy. The life insured is yet in existence; and the plaintiff has no cause of action to enforce the performance of any part of the contract.
But she demands that the court shall now declare the policy to be in force, and that she shall now be restored to all her rights under it.
This prayer for relief is in effect a demand to be relieved from a forfeiture which the defendants allege to have occurred, and which they claim annuls the policy.
The plaintiff could doubtless continue to tender payments of the premiums from time to time, as they shall become due, and upon the death of the life insured, in an action upon the policy to recover the amount insured, insist that the policy was then in force ; and upon that issue could show the facts which are now claimed to be a waiver of the forfeiture.
But it is said in reply to this, is she bound to do all that, and wait the uncertain and probably distant event of her husband's death, before she can ascertain her legal rights under the policy ? Or may she not, in advance of that event, ask to be shown and have her status under the contract declared %
It is peculiarly within the province of courts of equity to relieve against forfeitures. But the usual cases are such, that upon curing or removing the forfeitures, a present cause of action will arise, or some beneficial estate be at once enjoyed. And it is somewhat anomalous to ask such courts to remove a forfeiture' without such a present right of action.
The relief sought in this case is not such as can be claimed to fall within the principles of bills of equity quia timet, yet it is said that the principles which govern such bills are analogous. Mr. Justice Story says of them (2 Story Ay., § 826), "they are in the nature of writs of prevention to accomplish the ends of precautionary justice. They are ordinarily applied to prevent wrongs or anticipated mischiefs, and not merely to redress them when done. The party seeks a court of equity because he fears some future probable injury to his rights or interests ; and not because any injury has already occurred, which requires any compensation or other relief."
The position which the defendants have taken in respect to the policy in this case does not, it seems to me, bring it within any of the principles governing such bills. They (the defendants) declare the policy to have lapsed and become void by reason of the plaintiff's default. They have not, it is true, instituted any legal proceeding with a view of having the policy declared and adjudged to be void, and thus foreclosing all rights of the plaintiff under it. But determining that question for themselves, as they claim the right to do, they construe the default as a forfeiture, and insist that there has been no waiver.
There is no doubt of the plaintiff's right at some time, and in some way, to dispute this position of the defendants ; and it is conceded that it may be done whenever a right of action arises upon the policy. Then, and then only, as the defendants. claim, can the plaintiff assert that there has been no lapsing or forfeiture, and that the policy is in force. But it is contended that although that remedy is conceded, it does not necessarily deprive the party of all other remedies, if any other exist. Nor that it is always necessary to wait until some legal liability arises, for if there is some anterior duty which ought to be performed, which will aid in establishing the legal liability, equity ought and will require the performance of such duty. And we are referred to the case of Taylor v. Mut. Ins. Co., 9 How. 390, which was an action to compel an insurance company to issue a policy. There the court say (p. 405), "that the party had a right to resort to a court of equity to compel the delivering of the policy either before or after the happening of a loss."
But that was a bill to enforce the specific performance of a contract to insure, and was filed after a loss had happened, and the prayer was to compel the delivery of a policy, pursuant to the agreement, and also for payment of the loss. Justice Nelson, in answer to the objection that there was an adequate remedy at law, observed that before the loss occurred, the appropriate, if not the only remedy was in a court of equity, to enforce a specific performance, and compel the company to issue the policy, and that such remedy was as appropriate after, as before the loss ; to facilitate the proceedings at law. The jurisdiction in that case was sustained because it was a bill for the specific performance of a contract after a loss had occurred, and for no other reason ; and it does not, therefore, furnish us with any aid in this case. This is not an action of that nature, although possibly, in one aspect, the alleged agreement that the policy should be continued in force until the 29th of November, and the further agreement, that until the next day, it should not lapse or become void by reason of the delay and postponement of payment of premiums, might be regarded in the nature of a new contract.
But I do not think it can so be regarded. The effect, and the only effect, that can be claimed for such agree ments is, that they operated merely as a waiver of any supposed forfeiture of the policy, and therefore revived and validated that which was lost; and such effect could he given to the agreements at the proper time, without the aid of a court of equity to enforce them specifically as supposed new contracts.
But apart from the supposed analogies, which it is claimed are furnished in the principles which govern hills in equity, quia timet, or for the specific performance of contracts, it was further claimed that there are others which can he successfully invoked in support of this action. They are such as relate to reformation of contracts, removing clouds from titles, to relieve against void contracts, and the like. But those cases are sustained on the ground that there is no adequate remedy .at law at any time, or as in the case of a cloud on title, that the oppressive nature of litigation at law, required to protect the enjoyment of it, affords a proper ground-for equitable jurisdiction.
It is true that that is equity which is founded in natural justice, in honesty and right, and which properly arises ex aequo et bono, and that in the administration of it, it is contradistinguished from a strict adherence to the mere letter of the law. Its rules are more flexible, and better suited to the different postures of cases ; and its decrees may be adjusted, so as to meet most, if not all, exigencies ; and may vary, qualify, restrain, and model, the remedy, so as to suit it to adverse claims, controlling equities, and the real and substantial rights of all the parties {Story, B. § 28).
But the application of those fundamental rules and principles must be to cases where the law has not determined, and is not capable of determining, the matter with all its circumstances; or where, as is commonly said, "the law furnishes no adequate remedy. ¡Nor is it required that the legal right of the party should presently -exist. If it can arrive at a future time, and the legal remedy can then be adequate for the enforcement of the right, and the protection of the party, a court of equity cannot intervene.
It is only where the danger is imminent of the loss of a remedy at law, that the aid of equity can be invoked to save the remedy; and, as far as my examinations have gone, such aid can be used to enforce a present, and never a future liability.
The difficulty with the plaintiff's case is, that she has no present cause of action upon the policy. She cannot now enforce any of its stipulations or covenants; and no liability of the defendants has, as yet, arisen upon it..
But she seeks to have the policy declared to be a subsisting policy, and to compel the defendants to accept the premiums and acknowledge its validity; in other-words to have it now declared that the policy is not forfeited.
I have endeavored to find some principle upon which this action can be sustained, and I have been unable to> find any, either in law or equity; and the reason is; obvious ; no such principle exists. Indeed, the action, is in hostility to those principles of justice which are-designed for the protection of legal rights, and if sustained, would be subversive rather than promotive of such rights.
The forfeiture claimed by the defendants to have an- , nulled the policy, can only be made effective in answer to a demand upon it for the amount insured. Such a, demand would of necessity be a legal cause of action to-which the defendants would be permitted to show that the instrument upon which it was founded had no validity, and would be entitled to have that issue tried by a. jury.
By endeavoring to secure the aid of equity in advance-of any legal liability, the question of forfeiture, which is strictly a legal defence, is disposed of without the intervention of a jury, which, under the guarantees of the. constitution, cannot be done. The defendants have the undoubted right to insist upon a trial by a jury of all questions involving their liability under the policy, and that is a right which a court of equity is powerless-to deprive them of. It is a right which strikes at the very foundation of the present case, and, if there were no other reasons, would be sufficient to defeat it.
We are not without adjudications on this subject. Two cases have arisen in this court (O'Reily v. Mutual Life Ins. Co., 2 Abb. N. S. 169, and Cohen v. Same, not reported), which were to restore policies of life insurance, forfeited for non-payment of premium. The policy-holders resided in the State of Alabama, during the war of the Rebellion, and failed to make payment of premiums. Furnishing as an excuse for not paying, the suspension of all communication by reason of the war, they demanded the relief. But ' the court at Special Term, the late Chief Justice Robertson presiding, held that the action in equity could not be maintained. He says (p. 170), 1 ' The court cannot make a declaration or proclamation of its opinion to the world now, to be of any avail to the plaintiffs' representations in recovering the amount insured hereafter; no transfer, or vesting, or divesting of rights would ensue for such a declaration, and nothing could now be decreed to be done as a consequence of such a declaration." In the case of Cohen, the same learned justice, alluding to the O'Reily case, says: "The relief sought is the same, and the same-reasons prevail against any committal by the court to an opinion before any cause of action could have arisen on the policy."
In the judgment and the mode of reaching it in this action, manifest injustice has been done the defendants; for, although they had an opportunity to meet the plaintiff's case and to insist upon the forfeiture, they could not do so in the tribunal which the law allows them to select. Nor can we discover any hardship towards the plaintiff in requiring her to wait until a cause of action arises on the policy. She cannot recover anything at present, and the period is indefinite when she may have a right of action.
But she can perpetuate the testimony she now has to establish a waiver of the forfeiture, and in that way make it available whenever her cause of action arises. She need not, I think, repeat her offer to pay the premium at each stated quarter. One unqualified refusal by the defendants to refuse on the ground of the policy's having been forfeited, would satisfy the condition to pay, and would effectually estop the defendants from claiming a forfeiture, by reason of the omission to pay or tender such quarterly premiums.
The judgment is erroneous and should be set aside, and judgment absolute ordered for the defendants, with costs.
Note.—Since the decision in this case, a re-argument was ordered and heard by the General Term, and the court reached á different conclusion: affirming the judgment of the Special Term, with modifications.
The case and opinion of the court on the re-argument will be reported in volume 36 of these reports. Befobtebs.