Case Name: McMASTER v. NEW YORK LIFE INS. CO.
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1899-12-11
Citations: 99 F. 856
Docket Number: No. 1,202
Parties: McMASTER v. NEW YORK LIFE INS. CO.
Judges: Before CALDWELL, SAYBOBY, and THAYEB, 'Circuit Judges.
Reporter: Federal Reporter
Volume: 99
Pages: 856–888

Head Matter:
McMASTER v. NEW YORK LIFE INS. CO.
(Circuit Court of Appeals, Eighth Circuit.
December 11, 1899.)
No. 1,202.
1. Insurance — Contract—Parol Evidence to Yary Terms of Policy.
Parol statements made by an agent prior to, or contemporaneous with, the delivery of a life insurance policy to the insured, as to the contents or legal effect of such policy, cannot control plain provisions of the written contract in the absence of fraud or artifice, and where the insured had full opportunity to read the policy.
2. Same — False Representations — Estoppel.
Nor does such statement by the agent in itself constitute fraud or artifice which will relieve the insured from the duty of reading the policy, or create an estoppel against the company which will prevent it from enforcing the written contract in accordance with its terms, in the absence of an actual fraudulent intent.
3. Same — Contract.
Where an agent takes an application for life insurance, which he forwards to the company for acceptance or rejection, under an agreement with the applicant, which is also stated in the application, that, if accepted, the contract shall take effect from the delivery of the policy and payment of the premium, no contract of insurance is made until the policy is delivered and the premium paid; and the contract then made, and by which the company is bound, is that embodied in the policy delivered and accepted.
4 Same.
An Interlineation in the application of a request that the policy, If issued, be dated as of the date of the application, made by the agent without the knowledge of the applicant, is immaterial, and cannot affect the rights of the parties under a policy subsequently issued, as the applicant is free to refuse to accept the policy tendered, if the date is not satisfactory to him, and after its acceptance he is bound by its terms.
& Same — Construction of Policy.
A provision in a life insurance policy, or in the application, which forms a part of the contract, that premiums shall bs paid annually, is not inconsistent with a further provision of the policy fixing the time for the payment of the second annual premium on a date which is 6 days less than a year from the date of the policy, and 14 days less than a year from the date when it was delivered and took effect, and making the policy forfeitable on default of payment on the date so named; nor do such provisions render the contract ambiguous, so as to authorize a court, by construction, to extend the life of the policy, on account of the first annual premium paid, beyond the date fixed therein for the maturity of the second premium,.
O. Appeal — Review-Case Tried to tiie Court.
When a case is tried in a circuit court without a jury, only the rulings of the court in the progress of the trial, and the sufficiency of the facts found to support the judgment, can be reviewed on a writ of error. The technical sufficiency of a pleading which substantially avers’ the facts constituting the cause of action cannot be considered by the appellate court where it was not challenged in the trial court.
7. Same — Findings by Trial Court — Verity.
When a jury is waived, and a case is tried by the court, in pursuance of section 649, Rev. St. U. S., and the court makes a special finding of the facts, the facts so found must be accepted by the appellate court as absolute verity. Per Caldwell, Circuit Judge, dissenting.
8. Insurance — Agents—Statements—Agreements—Effect.
Under the Iowa statute one who is authorized to solicit insurance, take applications, receive premiums, and deliver policies in that state for an insurance company is the agent of the company, “anything in the application to the contrary notwithstanding”; and his statements and agreements in the course of his business in soliciting policies, taking applications, delivering the policies, and receiving the premiums are, in law, the statements and agreements of the company itself. Society v. Clements, ti Sup. Ct. 822, 140 TJ. S. 226, 35 B. Ed. 407; Indemnity Co. v. Berry, 1 O. C. A. 561, 50 Fed. 511; Cook v. Association, 35 N. W. 500, 74 Iowa, 746; Insurance Co. v. Chamberlain, 10 Sup. Ct. 87, 132 ü. S. 304, 33 B. Ed. 3-11; Insurance Co. v. Iiussell, 23 C. C. A. 43, 77 Fed. 94. Per Caldwell, Circuit Judge, dissenting.
9. Same — Policy—Interpolated Clause — Knowledge of Assured — Estoppel — Presumption—Construction.
An agent of the company in Iowa agreed with the insured, when the application for insurance was signed, “that the first year’s premium was to be paid by the assured upon the delivery to him of the policies, and that the contract of insurance was not to lake effect until the policies were delivered,” and one of the conditions of the application, which was made a part of the policy, was “that any policy which may* be issued under this application shall not be in force until the actual payment to and acceptance of the premium by said company”; and the agent of the company, when he tendered the policies to the assured, was asked by him if the policies were as represented, and if they insured him for the period agreed upon, namely, 13 months from that date, and the agent replied that they did so insure him, whereupon the assured .paid the premiums, and received and put away the policies, without reading them. Without the knowledge or consent of the assured, the company had interpolated into the policies a clause by which the term of insurance, instead of dating from the payment of the premiums and the delivery "of the policies as agreed upon, and as provided in the, application and as represented by the agent when be delivered them, was made to begin 14 days before that date, thus shortening the term of insurance by that number of days. Upon these facts, held: (1) That the assured was not “conclusively presumed” to have consented to the interpolated clause in the policies by merely receiving and putting them away without reading them; (2) that the assured was not estopped to show these facts, and that he never knew or assented to the interpolated clause shortening the term of insurance from that agreed upon and called for by the stipulations and conditions of his application; (3) that when the policies were delivered the assured had a right to presume that the terra of insurance conformed to the agreement made with the agent and the stipulations and conditions of his application, and to rest confidently in that belief; (4) that the company will not be heard to say that the assured was guilty of culpable negligence in placing reliance on its agent’s assurance that the policies conformed to their agreement and the stipulations of the application; (5) that upon the facts found the company is estopped to set up the interpolated clause as a defense to this action; (0) that the clause secretly interpolated into the policies contradicts and is inconsistent with the express stipulations of the application, which is made a part of the policy, and that under the settled canon for the construction of policies of insurance, which declares that, when they contain contradictory, conflicting, -or inconsistent provisions, effect must be given to the provisio'ns most favorable to the insured, the interpolated clause in the policies must be disregarded, and the policies construed according to the stipulations aud conditions of the insured's application, which was made part of the policy. Per Caldwell, Circuit Judge, dissenting.
10. Trial — Failure to Find Facts — Effect.
When the court makes a special finding of facts, the failure to find any fact, or the insufficient finding of any fact, essential to support the judgment, is fatal to it. Per Caldwell, Circuit Judge, dissenting.
11. Same — Statements in Findings of Fact — Conclusion of Law.
A statement in a special finding of fact of the legal effect of a document or paper which is neither in the record, nor made part of the findings, nor its contents anywhere disclosed, Is not a finding of fact, hut a mere conclusion of law upon the legal effect of an undisclosed document, and of no effect. Ter Caldwell, Circuit Judge, dissenting.
12. Insurance — Forfeiture — Statutory Notice — Findings—Insufficiency.
Under the New York statute (Laws 1892, c. 090, art. 2, § 92), the forfeiture of a policy of life insurance does not. depend upon the nonpayment of premiums according to the terms of the policy, but upon their nonpayment after the notice prescribed by the statute has been given. The requirements of this statute must be read into, and are part of, the policies in suit. One requirement of the statute is that notice of the time when the premium on a policy will he due shall be sent to the assured “at least 15 and not more than 45 days prior to the day when the same is payable”; and the giving of this notice is a condition precedent to the right of the company to declare a forfeiture of the policy for the nonpayment of the premium. The burden of proof to show this notice was given rests upon the insurance company. The insurance company alleged in its answer that It did give the required notice to the insured “at least 15 and not more than 45 days” before the premiums were due, as required by the statute of New York. This allegation of the answer was denied. The only finding of the court on this issue was “that not later than November 17, 1894, notice was sent to Frank E. Mcilaster of the coming due of the premiums on the policies issued to him by. the defendant company, in accordance with the requirements of the statutes of the state of New York.” Held-. (1) That this finding did not show a compliance with the statute, and that the finding “that not later than November 17, 1894, notice was sent” did not show tíiat the notice was sent “at least 15 and not more than 45 days” prior to the day the premiums were payable, as required by the statute, and hence that no forfeiture of the policies could be declared; (2) that the finding that the contents* of the notice sent were “in accordance with the requirements of the statute of the state of New York” was a mere legal conclusion, and not a finding of fact, and that the finding should have set out the notice, so that the appellate court could judge of its sufficiency. Per Caldwell, Circuit Judge, dissenting.
In Error to the Circuit Court of the United States for the Northern District of Iowa.
This was an action brought by the plaintiff in error, Fred. A. McMaster, administrator of the estate of Frank E. McMaster, deceased, against the defendant in error, the New York Life Insurance Company, upon five policies of insurance, of i?J,000 each, upon the life of Frank E. McMaster. The defense was that the insurance had ceased before he died, on January 18, 1895, because he had failed to pay the annual premiums due on December 12, 1894. The policies were dated on December 18, 1893, and contained these provisions: "This contract is made in consideration of the written application for this policy, and of the agreements, statements, and warranties thereof, which are hereby made a part of this contract, and in further consideration of the sum of twenty-one dollars and--cents, to be paid in advance, and of the payment of a like sum oil the twelfth day of December in every year thereafter during the continuance of this policy. * * * If any premium is not thus paid on or before the day when due, then (except as hereinafter otherwise provided) this policy shall become void, and all payments previously made shall remain the property of the company. After this policy shall have been in force three months, a grace of one month will be allowed in payment, of subsequent premiums, subject to an interest charge of 5 per cent, per annum for the number of days during which the premium remains due and unpaid.” The applications for these policies were in writing, and wore dated on December 12, 1893, and contained this agreement: "I do hereby agree as follows: * * * (2) 'That inasmuch as only the officers at the homo office of said company, in tiro city of New York, have authority to determine whether oy not a policy shall issue on any application, and as they act on the written statements and representations referred to, no statements, representations, promises, or information made or given by or to the person soliciting or taking tills application for a policy, or by or to any other person, shall be binding on said company, or in any manner affect its rights, unless such statements, representations, promises, or information be reduced to writing, and presented to the officers of said company, at the homo office, in this application.” After the applicant had signed the applications, the agent who solicited them wrote into each of Ihem, without the knowledge of the applicant, “Idease date the policy same as application;” and copies of the applications, containing this interlineation, were attached to the policies which were delivered to the insured on December 20, 1893, when he paid his first annual premiums. Ho died on January 18, 1835, and the only question in the ease was whether or not the second annual premiums, which he never paid, became due before December 18, 1891.
The court below tried the case without a jury, made special findings of the facts, and dismissed the action. 90 Fed. 40. The findings of facts, so far as they are material to the question at issue, were as follows: “(8) That in December, 1893, F. W. Smith, an agent for the New York Life Insurance Company. residing at Sioux City, Iowa, solicited Frank E. McMaster to insure. Ms life in that company, and, as an inducement to taking the insurance, pressed upon McMaster the provision adopted by the company, and set forth in the circulars issued by the company, and printed on the back of tlu> policies issued by the company, under the heading, ‘Benefits and Provisions Referred to in This Policy,’ in the following words: ‘After this policy shall have been in force three months, a grace of one month will be allowed in payment of subsequent premiums, subject, to an interest charge of five per cent, per annum for the number of days during which the premium remains due and unpaid. During said month of grace the unpaid premium, with interest as above, remains an indebtedness due the company, and in the event of death during the said month this indebtedness will be deducted from the amount of the insurance.’ (4) Relying on the benefits of this provision, and in the belief that if he accepted a policy of insurance upon his life from the New York Life Insurance Company, paying the premiums thereon annually, the company could not assert the-right, of forfeiture until thirteen months had elapsed since the last payment of the annual premium, the said Frank E. McMaster signed an application for insurance in said company, dated December 12, 1893, of the form which is made part of the policies sued on, and attached to the petition; the same being made part of this finding of facts. (5) In the application, when signed by Frank E. McMaster, it was .provided that the amount of insurance applied for was the sum of $5,000, to be evidenced by five policies, for $1,000 each, on the ordinary life table; the premium to be payable annually. (6) There now appears on the face of the application, interlined in ink, the words, ‘Please date policy same as application.’ These words were not in the application when it was signed by McMaster, but after the signing thereof they were written into the application by F. W. Smith, the agent of the New York Life Insurance Company, without the knowledge or assent of Frank B. McMaster, and were so written in by the agent in order to secure to the agent a bonus which the company allowed to agents for business secured during the month of December, 1893; and it does not appear that Frank E. McMaster ever knew that these words had been written into the application, and it affirmatively appears that he had no knowledge thereof when the application was forwarded to the home office of the company, and was acted on by the company. (7) By the express understanding had between F. W. Smith, the agent of the New York Life Insurance Company, and Frank E. McMaster, when the application for insurance was signed it was agreed that the first year’s premium was to be paid by McMaster upon the delivery to him of the policies, and that the contract of insurance was not to take effect until the policies were delivered. (8) The defendant company, at its home ofbce in New York City, upon receipt of the application, determined to grant the insurance applied for, and issued five policies, each for the sum of $1,000, dated December 18, 1893, and reciting on the face thereof that the annual premium on each policy was $21, and forwarded the same to its agent, F. W. Smith, at Sioux City, Iowa, for delivery to Frank E. McMaster. These five policies are in the form of the one attached to the petition in this case, which is hereby made part of this finding of fact, and each policy contains the recital: ‘This contract is made in consideration of the written application for this policy, and of the agreements, statements, and warranties thereof, which are hereby made a part of this contract, and in further consideration of the sum of twenty-one dollars and-cents, to be paid in advance, and of the payment of a like sum on the twelfth day of December in every year thereafter during the continuance of this policy.’ (9) The five policies, inclosed in envelopes, on or about December 26, 1893, were taken by F. W. Smith, the agent of the defendant company, to the office of Frank E. McMaster,' who asked the agent if the policies were as represented, and if they would insure him for the period of 13 months, to which the agent replied that they did so insure him; and thereupon McMaster paid the agent the full first annual premium, or the sum of $21, on each policy, and, without reading the policies, he received them and placed them away. The agent did not in any way attempt to prevent McMaster from reading the policies, and he had the full opportunity for reading them, but in fact did not read them, and accepted them on the statement of the agent of the company, as hereinabove set forth. (10) That not later than November 17, 1894, notice was sent to Frank E. McMaster of the coming due of the premiums on the policies issued to him by the defendant company, in accordance with the requirements of the statutes of the state of New York. (11) The renewal receipts for the second annual premium on -the five policies held by Frank B. McMaster in the defendant company were sent for collection to Mary A. Ball, at Sioux City, Iowa, who on the 11th or 12th day of December, 1894, called on said McMaster for payment of the premiums in question. At that time McMaster declined making payment thereon; saying that he had seen other policies which promised better results, and that he did not think he would renew the insurance in the defendant company. Miss Ball told him the New York contracts had some nice provisions, like thirty days of grace and loans, and, in reply to an inquiry from McMaster, stated that his policies entitled him to the month’s grace in the payment of the premiums, and that, as she understood it, the grace on the second premium wouli expire January 11th; and McMaster said, if he concluded to keep any of the insurance, he would call and pay for it before the grace expired. (12) That in November or December, 1894, Frank E. McMaster was examined for the purpose of obtaining life Insurance by the agents of the Union Central Insurance Company; it being understood between the parties that the policies were not to issue until in January, 1895, and it being the purpose of McMaster to take one or two thousand dollars insurance in th’e Union Central Company at the expiration of his insurance in the defendant company, but also to continue part of the policies in the defendant company. (13) That on or about January 15, 1895, the agent of the Union Central Company, meeting McMaster on the street in Sioux City, told him the policies issued by the Union Central Company had been received, and in reply McMaster said: ‘All right. Just hold them. There is no hurry about them.’ And in the same conversation he slated that he had other insurance, referring to the policies in the defendant company. (14) That the action of Frank E. McMaster shows, and the court so finds the fact to he, that the said McMaster believed that the policies issued to him by the defendant company would continue in force for the period of thirteen months from the date of the policies, and his action with respect to the policies in the defendant company and the proposed insurance in the Union Central Company was based upon and governed by this belief on his part.” The only error assigned is that upon these facts the judgment should have .been for the plaintiff.
Henry J. Taylor and F. E. Grill, for plaintiff in error.
W. E. Odell, for defendant in error.
Before CALDWELL, SAYBOBY, and THAYEB, 'Circuit Judges.

Opinion:
SAYBQBY, Circuit Judge,
after stating the case as above, delivered the opinion of the court.
This is another attempt to cause prior and contemporaneous parol statements of the terms and legal effect of written agreements to prevail over the plain stipulations of the writings themselves. The argument of the counsel for the plaintiff in error, when reduced to its last analysis, is that because in the parol negotiations which preceded the delivery of the policies in suit the agent of the insurance company informed the deceased that his policies would insure his life for 13 months without the payment of the second annual premiums, and because when he delivered the policies to him he told him that they did so insure him, therefore this preliminary information and this contemporaneous statement must supersede the written contracts, which expressly provide that the policies shall cease to be binding if the second premiums are not paid by January 12, 1895, 12 months and 17 days after the policies were delivered. This proposition, as it affects the policies in this case, was considered, and our decision concerning it was rendered, in a suit in equity to reform these policies, which is reported under the title Insurance Co. v. McMaster, 57 U. S. App. 638, 30 C. C. A. 532, 87 Fed. 63; and the circuit court of appeals for the Sixth circuit has since rendered a like decision, upon a similar state of facts, in McConnell v. Society, 34 C. C. A. 663, 92 Fed. 769. The views expressed in our opinion in the former suit undoubtedly met the approval of the supreme court, for it denied an application to issue a writ of certiorari to review our decision. 171 U. S. 687, 18 Sup. Ct. 944. Our conclusion in the suit in equity was that upon the facts there presented the plaintiff could not recover upon these policies, either at law or in equity. The facts which the court below has found in this case do not vary from those presented in the former suit so materially as to warrant a different conclusion here. The only notable difference is that it appears in this case, as it did not in that, that, at the time the policies were delivered, the insured "asked the agent if the policies were as represented, and if they would insure him for the period of thirteen months, to which the agent replied that they did so insure him, and thereupon McMaster paid the agent the full first annual premium or the sum of twenty-one dollars on each policy, and, without reading the policies, he received them and placed theni away. The agent did not in any way attempt to prevent McMaster from reading the policies, and he had the full opportunity for reading them, but in fact did not read them, and accepted them on the statement of the agent of the company as hereinabove set forth," — and that he believed that the policies would continue in force until 13 months from their date, which was December 18, 1893, although they plainly stated that the second annual premiums would be due on December 12, 1894; that there was only one month's grace thereafter; that the policies would cease to insure his life if those premiums were not paid within that time; and although on December 11 or December 12, 1894, the collector of the company called on the deceased for these premiums, he declined to pay them, and said he did not think he would renew the insurance; and she told him that he was entitled to one month's grace, and that, as she understood it, the grace on the second premiums would expire on January 11, 1895. It will be borne in mind that the policies provided that the annual premiums should be paid on December 12th; that they gave one month's grace; that they were dated on December 18, 1893; that they were delivered and the first premiums were paid on December 26, 1893; and that the insured died on January 18, 1895, — six days after the policies had expired according to their terms. It is also worthy of note that the statement made at the time the policies were delivered was not a representation of any words or terms which the contracts contained, but a mere statement of the legal effect of the policies.
The only question which this new fact that this statement was made when the policies were delivered presents is whether oral statements made by one of the parties to a written contract to the other at the time of its delivery, respecting its terms and their legal effect, or the written terms themselves, constitute the agreement, and that question has been repeatedly answered by the supreme court and by this court. In Thompson v. Insurance Co., 104 U. S. 252, 259, 26 L. Ed. 765, the policy provided that it should be void on the nonpayment of the note taken for the- premium; and the supreme court held that a plea that a parol agreement was made, at the time of the giving and accepting of the policy, that the policy should not become void for the nonpayment of the note, but should only be voidable at the election of the company, was bad. Mr. Justice Bradley said:
"An insurance company may waive a forfeiture, or may agree not to enforce a forfeiture; but a parol agreement, made at tbe time of issuing a policy, contradicting the terms of the policy itself, like any other parol agreement incon sistent with a written instrument made contemporary therewith, is void, and cannot be set up to contradict the writing."
In Insurance Co. v. Henderson, 32 U. S. App. 536, 536, 543, 16 C. C. A. 3n0, 393, 895, 69 Fed. 762, 766, 768, the agent of the company told the insured when he delivered the policy that, "if any one killed him while he was going to and from the city, the policy would cover him," but the policy expressly excepted "intentional injuries inflicted by the insured or any other person." The insured was shot from ambush, and this court held, in a suit in equity to reform the policy, that the bill must be dismissed, and declared the law to be that:
"Where the class of risks intended to be insured against is clearly described in the policy, and the assured has a full and fair opportunity to read the instrument, the company will not be bound by representations made by its agent, in good faith, that the policy covers risks that are not in fact within its provisions."
In Green v. Railway Co., 35 C. C. A. 68, 92 Fed. 873, 877, the plaintiff had signed a final receipt and release of all his claims under a certain contract, before that contract was completed, in reliance upon the statement of the engineer of the railroad company, which was made at the time he signed the release, that it covered nothing but the work already completed. When, however, he sued the company for damages for its refusal to permit him to complete his contract, this court held that the oral statement was incompetent evidence, and that: the final release had discharged the corporation from all liability. We adhere to the conclusion which we reached upon this question after' a review of these and many other authorities in the suit in equity. Insurance Co. v. McHaster, 87 Fed. 63, 69-72, 30 C. C. A. 532, 57 U. S. App. 688. We there said:
"Tins proposition is founded in reason, and sustained by the authorities, and it should be deemed to be the settled law of the land: No representation, promise, or agreement made, or opinion expressed, in the previous parol negotiations, as to the terms or legal effect of the resulting written agreement, can be permitted to prevail, either at law or in equity, over the plain provisions ami just interpretation of the contract, in the absence of some artifice or fraud which concealed its terms, and prevented the complainant from reading it. Laclede Fire-Brick Mfg. Co. v. Hartford Steam-Boiler Inspection & Ins. Co., 19 U. S. App. 510, 513, 520, 9 C. C. A. I, 3, 8, 60 Fed. 351, 353, 858; Insurance Co. v. Henderson, 32 U. S. App. 536, 540, 543, 547, 16 C. C. A. 390. 391, 393, 395. and 69 Fed. 762, 764, 766; Thompson v. Insurance Co., 101 U. S. 252, 259. 26 L. Ed. 765; Insurance Co. v. Mowry, 96 U. S. 544, 547, 24 L. Ed. 674; Assurance Co. v. Norwood, 57 Kan. 610, 611, 613, 17 Pac. 529-532; Association v. Kryder, 5 Ind. App. 180, 435 31 N. E. 851; Union Nat. Bank v. German Ins. Co., 18 C. C. A. 203, 71 Fed. 473; Casualty Co. v. Teter, 336 Ind. 672, 673, 676, 679, 36 N. E. 288; Burt v. Bowles, 69 Ind. 1; Clodfelter v. Hulett, 72 Ind. 137; Hudson Canal Co. v. Pennsylvania Coal Co, 8 Wall. 276, 290, 19 L. Ed. 349; Insurance Co. v. Lyman, 15 Wall. 661, 21 L. Ed. 246; Pearson v. Carson, 69 Mo. 550; Insurance Co. v. Neiberger, 71 Mo. 167; Lewis v. Insurance Co, 39 Conn. 100."
For is it any excuse for a party who has an opportunity to read or to know the contents of his agreement, or any ground for an abrogation or modification of it, that he relied upon the statement or interpretation of it given by the other parly to the contract, and failed to read it. The very purpose of a written agreement is to supersede testimony of its terms, and to shut out the uncertainties that arise from the failing memories and changing interests of living witnesses. Under the law the writing is the highest evidence of the subject, the extent, and the manner of the contracting. If written agreements may be swept away and disregarded at will by the parties to them, upon simple proof that they did not read them, and that the other parties to them told them when they were made that they contained terms different, or had legal effects variant from their actual terms and effects, then the functions of written contracts are gone, and the salutary rule that they must prevail over prior and contemporaneous verbal negotiations, arrangements, and representations as to their contents and effects is subverted. The argument that a false statement of the contents or effect of a contract to one who has possession of it, and is about to accept or make it, constitutes a fraud which will avoid the written agreement, and estop the party who makes the statement from denying its truth, is conclusively answered by the unanimous opinion of the supreme court in Insurance Co. v. Mowry, 96 U. S. 544, 547, 24 L. Ed. 674. That court said:
"Tbe doctrine of estoppel is applied with respect to representations of a party, to prevent their operating as a fraud upon one who has been led to rely upon them. They would have that effect if a party who, by his statements as to matters of fact, or as to his intended abandonment of existing rights, had designedly induced another to change his conduct or alter his condition in reliance upon them, could be permitted to deny the truth of his statements, or enforce his rights against his declared intention of abandonment. But the doctrine has no place for application when the statement relates to rights depending upon contracts yet to be made, to which the person complaining is to be a party. He has it in his power in such cases to guard in advance against any consequences of a subsequent change of intention or conduct by the person with whom he is dealing. For compliance with arrangements respecting future transactions, parties must provide by stipulations in their agreements when reduced to writing. The doctrine, carried to the extent for which the assured contends in this case, would subvert the salutary rule that the written contract must prevail over previous verbal agreements, and open the door to all the evils which that rule was intended to prevent. White v. Ashton, 51 N. Y. 280; Bigelow. Estop. 437-441; White v. Walker, 31 Ill. 422; Faxton v. Faxon, 28 Mich. 159."
The statement of the terms or effect of a written agreement which one has in hjs hands and is about to make, and which he may read at his will, is not calculated to deceive, and is not an artifice or a fraud that will excuse his ignorance of its contents, because he has the patent means to verify the averment at his command. It is the written contract itself, and not any one's statement of its contents or of its effect, which binds the parties, and the law charges every party to an agreement with knowledge of this fact. In view of it, it is the duty of every man to see to it that every writing he signs or receives fairly and fully expresses his contract. He owes this duty to the other party to the contract, who generally acts, and often changes his position, in reliance upon it; and he owes it to the public, which, as a matter of policy, treats the writing as proof of the terms of the agreement. If he fails to discharge this duty,— if he fails to read his contract, — his ignorance of its contents is the result of his own negligence; and, in the absence of fraud or mutual mistake, he is thereby estopped from showing that its terms are other than those expressed by the writing. Railway Co. v. Belliwith, 55 U. S. App. 113, 119, 28 C. C. A. 358, 361, 83 Fed. 437, 440; Green v. Railway Co., 35 C. C. A. 68, 92 Fed. 873, 876. Insurance policies do not constitute exceptions to this rule. Insurance Co. v. Henderson, 32 U. S. App. 536, 540, 16 C. C. A. 390, 393, 395, 69 Fed. 762, 766, 768; Morrison v. Insurance Co., 69 Tex. 353, 359, 6 S. W., 605; Quinlan v. Insurance Co., 133 N. Y. 356, 365, 31 N. E. 31; Wilcox v. Insurance Co., 85 Wis. 193, 55 N. W. 188; Fuller v. Insurance Co., 36 Wis. 599, 604; Herbst v. Lowe, 65 Wis. 316, 26 N. W. 751; Hankins v. Insurance Co., 70 Wis. 1, 2, 35 N. W. 34; Herndon v. Triple Alliance, 45 Mo. App. 426, 432; Palmer v. Insurance Co., 31 Mo. App. 467, 472; Insurance Co. v. Yates, 28 Grat. 585, 593; Ryan v. Insurance Co., 41 Conn. 168, 172; Barrett v. Insurance Co., 7 Cush. 175, 181; Holmes v. Insurance Co., 10 Metc. (Mass.) 211, 216; Insurance Co. v. Swank, 12 Ins. Law J. 625, 627; Insurance Co. v. Hodgkins, 66 Me. 109, 112; Insurance Co. v. Neiberger, 74 Mo. 167, 173; Beach, Ins. (1895) § 414, and cases cited. The statement of the legal effect of the policies ihade by the agent of the insurance company when they were delivered does not abrogate or modify the terms or the meaning of the contracts. Nor can his prior statement to the same effect, made 14 days before, when the applications were signed, or his interlineation in the applications of the request to date the policies the same as the applications, after McMaster had signed them, and without his knowledge, have any greater effect. The reasons for this decision are stated in our opinion in the equity suit. The findings in the case at bar make still clearer the conclusion at which we arrived in that case, that prior to the delivery and acceptance of the policies there was no contract, and no intention to contract, to insure McMaster otherwise than by policies made and delivered upon the simultaneous payment of the premiums; for one of the findings of the court below is that when the application was made "it was agreed that the first year's premium was to be paid by McMaster upon the delivery to him of the policies, and that the contract of insurance was not to take effect until the policies were delivered." An ingenious argument for the modification of the policies has been constructed by counsel for the plaintiff in error on the assumption that when the applications were made there was an agreement to insure on the part of the company, and a contract to pay the first premiums on the part of the insured. The assumption is unsupported by the facts of the case. The only finding upon the subject is that which we have quoted. But this finding must be read in connection with the application, which was made a part of the findings, and in the light of the custom of life insurance companies to make no contracts to insure except by means of written policies, and upon the actual payment of premiums. The application contains this provision: "I do hereby agree as follows: (2) That inasmuch as only the officers at the home office of said company, in the city of New York, have authority to determine whether or not a policy shall issue on any application, and as they act on the written statements and representations referred to," etc,., — from which it clearly appears that the delivery of the policies and the payment of the premiums were conditioned — First, upon the acceptance of the applications by the officers of the company at the home office, and the issue of the policies; and, second, upon the acceptance of those policies by the applicant when they were written. Moreover, there is no finding that the insurance company ever agreed to issue any policies or to insure the life of McMaster in any way when the applications were signed, or at any time before the policies were delivered. There was therefore no consideration for any agreement by McMaster to pay the premiums, and no binding contract on his part to do so, or on the part of the company to issue any policies or to insure his life until the policies were actually delivered and the first premiums were paid. Prior to that time the company was free to reject the applications, the insured was free to reject the policies, and the whole subject and the entire extent of the agreement found by the court is limited to the time when the premiums should be paid, and when the insurance should take effect, if the'company should subsequently conclude to accept the applications and to issue the policies, and if McMaster should decide to accept them when written. This agreement is in accord with the customary course of the conduct of life insurance. The almost universal custom of that business is for the companies to make no, contract and to incur no liability to insure the life of any man until a premium has been paid and a policy has been delivered. Society v. McElroy, 49 U. S. App. 548, 561, 28 C. C. A. 865, 372, 83 Fed. 631, 638; Kendall's Adm'r v. Insurance Co., 10 U. S. App. 256, 263, 2 C. C. A. 459, 461, 51 Fed. 689, 691; Heiman v. Insurance Co., 17 Minn. 153, 157 (Gil. 127); Markey v. Insurance Co., 103 Mass. 78; Hoyt v. Insurance Co., 98 Mass. 539, 543; Markey v. Insurance Co., 118 Mass. 178, 194; 1 May, Ins. (3d Ed.) § 56.
There was therefore no contract of insurance until the policies were delivered to and accepted by McMaster. The applications were nothing but a proposition to take insurance. They were not contracts, but mere requests for, or a proposition to take, policies. The company was not bound to grant these requests or to accept the proposition. It had the right to reject them in toto, or to reject some parts of them and to make a counter proposition. It took the latter course. It rejected some parts of the applicant's proposition, and made a counter proposition. It proposed, by the five policies it sent to the deceased, to insure him on the terms written therein. But these policies were nothing but a proposition to insure, up to the time when McMaster accepted them and paid the first annual premiums. The proposition which these policies contained was clearly expressed, and its meaning was plain. The law, as we have .seen, charged McMaster with knowledge of their terms, and> when he accepted them, estopped him from disputing these terms on the ground that he had not read them, because the policies were placed in his hands, and his failure to read them was his own negligence. On December 26, 1893, he accepted the policies and paid the first annual premiums. Then, for the first time, contracts to insure his life were made, and they were that the company would insure it as long as he paid his annual premiums within one month of December 12th in each year. This brief review of the course and effect of the negotiations which preceded the acceptance of the policies shows how baseless is the claim that the statement of the agent when the policies were made, and his interlineation of the request to date the policies the same as the application, can either contradict or modify the written agreements. It is true that there is a rule of law that a company may be estopped from defeating a policy, when its agent has written into the application of the insured, without his knowledge, a false statement of a material fact which conditions the insurance. Laclede Fire-Brick Mfg. Co. v. Hartford Steam-Boiler Inspection & Ins. Co., 19 U. S. App. 510, 521, 9 C. C. A. 1, 8, 60 Fed. 351, 358, 359; Insurance Co. v. Robison, 19 U. S. App. 266, 7 C. C. A. 444, 58 Fed. 723, 22 L. R. A. 325; Insurance Co. v. Russell, 40 U. S. App. 530, 553, 23 C. C. A. 43, 54, 77 Fed. 94, 106; Insurance Co. v. Wilkinson, 13 Wall. 222, 225, 20 L. Ed. 617; Insurance Co. v. Mahone, 21 Wall. 152, 22 L. Ed. 593; Insurance Co. v. Snowden, 12 U. S. App. 704, 7 C. C. A. 264, 58 Fed. 342; Kausal v. Association, 31 Minn. 17, 21, 16 N. W. 430; Deitz v. Insurance Co., 31 W. Va. 851, 8 S. E. 616. But this rule has no application to the interlineation made by the agent in this case, because the request he wrote into the application misstated no fact which conditioned the insurance, but related solely to one of the terms of the contract, which was still the subject of negotiation, and concerning which each party had every opportunity after the interlineation was made to protect himself when the policies were presented for acceptance. The interlined request was immaterial, because it was not complied with by the company, and the policies do not rest upon it, because it did not relate to a fact which conditioned the insurance, but to a term of the policies which then was, and continued to be, the subject of negotiations, and because the company had the right, regardless of the request, to date the policies, which it tendered in its counter proposition, when, and to write them on such terms as, it saw fit, and the deceased had an equal right to reject them when they were offered to him. The statement of the agent to McMaster when the applications were signed that the policies would insure him for 13 months for only one premium, his interlineation of the request in the applications, and all the acts and negotiations before the policies were accepted, were alike immaterial, because they were merged in the written policies. The amount of the insurance, the amount of the premiums, the times when they should be paid, the time the insurance should continue, were all expressed there for the very purpose of avoiding any question respecting them, and the previous negotiations were incompetent to contradict or modify the terms of the policies. "The writing must, on familiar principles, be held to embody the entire contract obligations of the parties, and all negotiations and colloquiei of the parties preceding the execution of the writing were immaterial." Hotel Co. v. Wharton, 49 U. S. App. 108, 112, 24 C. C. A. 441, 443, 79 Fed. 43, 45; Insurance Co. v. Lyman, 15 Wall. 664, 669, 21 L. Ed. 246; Insurance Co. v. Mowry, 96 U. S. 544, 547, 24 L. Ed. 674; Insurance Co. v. McMaster, 30 C. C. A. 532, 539, 540, 87 Fed. 63, 69, 71, and cases there cited.
It is earnestly contended, however, that, if the previous parol negotiations and the representation of the legal effect of the policies do not modify them, still they are ambiguous, and the familiar rules of construction, that contracts of doubtful meaning should be construed more strongly against their framers, and that the interpretation given them by the parties should prevail, are invoked to extend the life of these policies beyond the limit fixed by their terms. Rules of construction are valuable aids in the interpretation of ambiguous expressions, inconsistent provisions, and terms of doubtful meaning, in agreements; but they serve only to befog and mislead the judgment, to defeat the intentions of the parties, to destroy the contracts they actually make, and to make those for them to which they never consented, when they are applied to agreements whose terms are plain and whose meaning is clear. They aid in the interpretation of ambiguous contracts, but they must not be permitted to abrogate or modify those that are clear and certain. When the language of an agreement is plain, it must be held to mean what it expresses, and no room is left for construction. Green v. Railway Co., 35 C. C. A. 68, 92 Fed. 873, 880; Knox Co. v. Morton, 32 U. S. App. 513, 516, 15 C. C. A. 671, 673, 68 Fed. 787, 789; U. S. v. Fisher, 2 Cranch, 358, 399, 2 L. Ed. 304; Railway Co. v. Phelps, 137 U. S. 528, 536, 11 Sup. Ct. 168, 34 L. Ed. 767; Bedsworth v. Bowman, 104 Mo. 44, 49, 15 S. W. 990; Warren v. Paving Co., 115 Mo. 572, 576, 22 S. W. 490; Davenport v. City of Hannibal, 120 Mo. 150, 25 S. W. 364. Before we resort to hules of construction, let us see if there is any real ambiguity in the expressions, or doubt of the meaning, of these policies. It is said that the applications are parts of the contracts; that they declare that the premiums are payable annually; that the first premiums were not paid, and the policies did not take effect, until December 26, 1893; that consequently the second annual premiums would not be due under the applications until December 26, 1894; and that this conclusion is inconsistent with the provision of the policies that the second premiums should become due on December 12th in each year. The argument seems to us more specious than sound. The applications did not become parts of the contracts until the contracts were made. They were not made until December 26, 1893, when McMaster accepted the policies and paid his first premiums. It is a custom so universal, that it is within the knowledge of all men who have the slightest acquaintance with the business of life insurance, to date the policies and to fix the day of the payment of the annual premiums earlier in the month than the day of the month upon which the policies happen to be accepted and the first premiums happen to be paid, because the policies are issued and dated at the home office of the company, and some days usually intervene between that time and the date of their delivery to, and acceptance by, the insured. There was therefore nothing unusual or extraordinary in the fact that the annual due date of the premiums was somewhat earlier in the month of December than the day in that month in which the policies were delivered to McMaster. Nor was the difference between policies, the due date of whose annual premiums was on December 12th, and policies the due date of whose premiums was on December 26th, very striking or important when the contracts were made, and when both parties expected the premiums to be paid" according to their terms. The policies offered an extension of time of payment for 1 month in consideration of interest at the rate of 5 per cent, per annum, and that interest on the premiums on these policies for the 18 days between December 12th and December 26th amounts to only 26 cents in each year. Thus, it will be seen that the difference between the due date of the premiums and the date of the delivery of the policies was not extraordinary, and the difference between an annual due date of December 12th and one of December 26th was not crucial when the contracts were made, although now, through the failure of the insured to comply with the terms of his contracts, it has become grave. Turn now to the contracts. They consist of the applications and the policies, and these must be read together. The applications provide that the premiums shall be paid annually, or once in each year; but they do not provide on what day in each year they shall be paid, and they are dated on December 12, 1893. The policies are dated on December 18, 1893, and they read that they are made in consideration of the applications, "and in further consideration of the sum of twenty-one dollars, to be paid in advance, and of the payment of a like sum on the twelfth day of December in each year thereafter during the continuance of this policy," and that if the premiums are not paid within one month after December. 12th in any year, the insurance shall cease. The words which we have quoted, which fix the dates when the premiums fall due, are not tucked away on the backs of the policies, but are written in plain terms upon their faces where a cursory reading would be certain to disclose them. The word "annually," which the applications contain, signifies once in a year, but it does not signify at what time in the year, and it is by ño means inconsistent with a stipulation in the same instrument which fixes that time. Leases, promissory notes, mortgages, and many other contracts of like character, provide^for the payment of interest and installments of various kinds annually, and also name the day in the years in which they shall be paid. One could not successfully maintain that these stipulations, or the mere fact that the first installments were not paid until some days after they were due by the terms of the agreements, could create any inconsistency or ambiguity in the terms, or any doubt of the meaning, of such agreements. The policies and applications, when read together, are of the same character. They provide simply that the premiums shall be paid annually on the 12th day of December in each year, and that, if they are not so paid within one month after they are due, the insurance shall cease. To our minds, these provisions present no inconsistency, no ambiguity, no doubt of their meaning, and no basis for the application of rules of construction. The terms of the policies are clear, and their meaning is certain.
Another position of counsel for the plaintiff in error is that this judgment should be reversed because the service of the notice of the amount of the second annual premiums, of the date when they fell due, and of the effect of a failure to pay them, was not well pleaded, under the law of the state of New York upon this subject, which was made a part of the policies. But the question is not here for our consideration. The service of the notice was clearly averred, whether with such accuracy and particularity that the plea would have been impervious to a demurrer it is not necessary to inquire, because this pleading was not challenged below, and the court heard the evidence upon this subject without objection, and found that the notice was sent "in accordance with the requirements of the statutes of the state of New York." When a case is tried by a federal court without a jury, and the resulting judgment is brought by a writ of error to an appellate court for review, it is only "the rulings of the court in the progress of the trial of the case," and the sufficiency of the facts found to support the judgment, that can be reviewed. Bev. St. § 700. In such a case this is a court for the correction of the errors of the court below only. As the question of the sufficiency of this pleading was never brought to the attention of, or ruled upon by, the trial court, it certainly committed no error regarding it, and there is nothing in this point for us to review or correct. Trust Co. v. Wood, 19 U. S. App. 566, 571, 8 C. C. A. 658, 660, 60 Fed. 346, 348; Bowden v. Burnham, 19 U. S. App. 448, 8 C. C. A. 248, 59 Fed. 752; Norris v. Jackson, 9 Wall. 125, 127, 19 L. Ed. 608; Insurance Co. v. Folsom, 18 Wall. 237, 249, 21 L. Ed. 827; Cooper v. Omohundro, 19 Wall. 65, 69, 22 L. Ed. 47; Martinton v. Fairbanks, 112 U. S. 670, 5 Sup. Ct. 321, 28 L. Ed. 862; Lehnen v. Dickson, 148 U. S. 71, 13 Sup. Ct. 481, 37 L. Ed. 373. The judgment below is affirmed.