Case Name: POSTE v. AMERICAN UNION LIFE INS. CO.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1898-07-06
Citations: 52 N.Y.S. 910
Docket Number: 
Parties: POSTE v. AMERICAN UNION LIFE INS. CO.
Judges: 
Reporter: West's New York Supplement
Volume: 52
Pages: 910–916

Head Matter:
POSTE v. AMERICAN UNION LIFE INS. CO.
(Supreme Court, Appellate Division, Third Department.
July 6, 1898.)
1. Life Insurance—Policies—Time of Taking Effect—Waiver.
An application, made a part of the contract, provided that any policy-issued thereon should not go into effect until the first premium had been, actually paid during the lifetime of insured, and that only certain named-officers could alter the contract. The policy was delivered to insured,, an attorney of the insurance company, some four months before his death, but no premiums were paid. The complaint on the policy alleged a special, agreement waiving payment of the premium, which was only proven by showing that the company in its report to the insurance department, shortly before the death of insured, reported the policy under the head of policies. at present in force. The company showed, however, that they reported such policies as were outstanding at the date of the report, subject to correction by later reports if they lapsed in the meantime. Held, that no cause of action existed in favor of the beneficiary.
3. Same.
A policy, in the absence of facts accompanying its delivery in the nature of an estoppel, merges all previous oral stipulations, and is the contract.
Herrick and Putnam, JJ., dissenting.
Appeal from special term, St. Lawrence county.
Action by Anna E. Poste against the American Union Life Insurance Company to recover on a policy. From a judgment dismissing the complaint on the merits, plaintiff appeals.
Affirmed.
Argued before PARKER, P. J., and LAND ON, HERRICK, PUTNAM, and MERWIN, JJ.
John C. Keeler, for appellant.
George W. Miller, for 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 semiyearly 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 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 actuary of said company": "Number of policy, 2,192. Date of issue, ninth month, 1895. Age at issue, 46. Form of policy,. T., 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 nonpayment did not preclude both inference and finding, or if it could be waived otherwise than as specified in the policy itself, nr 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 payment is optional with him. If he pays the policy, by 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 a fire policy delivered without prepayment; he simply fails to bind the company, or to give validity to the policy. Roehner v. Insurance Co., 63 N. Y. 160; Evans v. Insurance Co., 64 N. Y. 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 and 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 policy holder, 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 Co. v. Mowry, 96 U. S. 544.
We think the judgment must be affirmed, with costs. All concur, except PUTNAM and HERRICK, JJ., dissenting.