Court Opinion

ID: 7098854
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:13:45.527919+00
Date Added: 2024-06-11T16:13:20.582076
License: Public Domain

Beck, J.,
dissenting. — The policy in the case insured the property for five years, the term to end November 12, 1880. *411The premiums were payable annually, the first being paid when the policy was issued, and the others secured by a promissory note payable in installments of equal sums on the 12th day of November of each subsequent year. The whole of the condition of the policy touching the effect of non-payment of these installments is not set out in the opinion of the majority of the court. The part omitted follows what is quoted in that opinion. I here present it:
“ "When a promissory note is given by the assured for the cash premium it shall be considered a payment of such premium, provided such note is paid at or before maturity, but if such note, or any part thereof, .shall remain unpaid and past due more than thirty days at the time of any loss or damage, then this company shall not be liable to pay such loss or damages happening during such default, and no attempt to collect such note or any installment of premium upon the installment note aforesaid, whether by legal process or otherwise, shall be deemed a waiver of any of the conditions of this policy, or have the effect to renew the policy; but upon payment by the assured of the full amount of such note or installment, as the case may be, and all cost that may have accrued, then this policy shall be in force as to losses happening thereafter, unless inoperative or void from some other cause.”
The agent who, as plaintiff claims, extended the time of payment, was expressly empowered by the defendant to collect and remit the premium due upon notes of the kind given by plaintiff.
The case presents this state of facts: The policy was an existing contract at the time of the destruction of plaintiff’s property. Rut on account of the failure of plaintiff to pay an installment of the note which had fallen due, the contract could not be enforced against defendant if the breach of the condition were interposed as a defense. The contract had not ceased to exist; it was binding upon the parties, and defendant would become again liable thereon upon payment of *412tbe premiums. The casé does not, therefore, require us to determine whether the agent was authorized to enter into a contract of insurance. It is not claimed that his acts had that effect; nor, indeed, did the agent in the act of giving plaintiff time upon his note, make any contract for the company. The whole contract between the parties is embodied in the policy. But by extending the time of payment, the agent dispensed with the strict performance of the -contract of the plaintiff to pay the premium on the day stipulated. The opinion of the majority of the court, I understand, concedes that if the agent did extend the time of payment, and had authority to do so, his act would operate as a dispensation of the condition of the policy and operate as a waiver of the forfeiture resulting from the non-payment. The only question, then, to be determined involves the power of the agent to "make an arrangement with plaintiff that he should have further time for the payment of the installment then due or about to fall due.
The agent was authorized to oollect the premiums. It cannot be doubted that if the plaintiff had paid to the agent the premium after default, the policy would have again attached. The agent could have enforced the payment under the terms of the policy. Thus far he was clothed 'with authority, upon the exercise of which, at his discretion, depended the binding force of the policy.
■Iiis authority to collect the premium could be exercised in such a manner and at such times as the interest of the defendant determined by the agent required. Surely, the authority to collect the premium was not so limited that it could not have been exercised after default by plaintiff. It follows that the agent, before default, could arrange with the plaintiff to extend the time in the exercise of his authority to collect, or in other words, could extend the time for payment.
It is not necessary to hold that the agent had authority to enter into a contract for the extension of the- time upon the note. This would require authority to make a new contract under which the old contract would be modified. But the *413extension of indulgence to the plaintiff under an agreement that the insured shall not be prejudiced by delay is quite a different thing.
I will illustrate this point hy a supposed case. A. enters into a contract for the sale of lands to B., payment to be made upon a specified day, the time of payment being of the essence of the contract. The note given by B. to secure the purchase money is placed in the hands of C. for collection, who agrees with B. that indulgence shall be extended for a time agreed upon. In such a case the condition as to time is waived. The agent’s power to collect the money was exercised in granting indulgence. I know of no reason why the same doctrine should not apply to policies of insurance.' It is based upon the plainest reasons. Parties to a contract should not be enabled to lay ambuscades and pitfalls for one another; they should not, by professions of kindness and indulgence, induce the violation of 'the contract, and then take advantage of the default.
The agent of defendant in this case was authorized to collect the premium; there was no limitation upon this authority. He, therefore, could in the exercise of his authority, do all acts that could have been done by his principal in collecting the premium. He could grant indulgence and delay in the exercise of his authority.
As I have said, the agent made no new contract; his act in granting indulgence does not demand the exercise of authority to make a new contract.
My brothers in the foregoing opinion express the thought that the agent could not grant indulgence, unless he had the authority to enter into a contract of insurance. They think that the time for the payment of premiums can only be extended by insurance agents when they deliver the policy, or do some other act required in the execution of the contract. That agents possessing such authority,' and under such circumstances may waive conditions as to the time of payment, does not support the conclusion that indulgence, or, if you *414please, extension of time, may not be granted by an agent employed to collect premiums after the policy has attached. In my opinion the time at which an agent may perform acts under his authority, if not prescribed by the principal, rests in his discretion, to be exercised for the interest of the principal. The agent of defendant was authorized to collect the premium, he determined that he would not collect it, or demand its payment, until plaintiff received his pension, and so informed plaintiff, who, relying upon the arrangement, did not pay the premium before his house was burned. As the act of the agent in extending the time of payment -was done in the exercise of authority to collect the premium, the defendant is estopped to enforce the forfeiture for the non-payment of the instalment.
The conclusion I reach that the payment of the installment on the day it fell due was dispensed with, and the forfeiture waived by the act of the agent in extending the time of payment, is supported by the following authorities. Viele v. Germania Insurance Company, 26 Iowa, 9; Walsh v. The Ætna Life Insurance Company, 30 Id., 133; Young & Co. v. Hartford Fire Insurance Company, 45 Id., 377; Insurance Company v. Horton, 96 U. S., 234; Mississippi Valley Life Insurance Company v. Neyland, 9 Bush., 430; Sheldon v. Connecticut Mutual Life Insurance Company, 25 Conn., 207; Bouton v. American Mutual Life Insurance Company, 25 Conn., 542; Trustees of Baptist Church v. Brooklyn Insurance Company, 19 N. Y., 305; Bowman v. Agricultural Insurance Company, 59 N. Y., 521; Hallock v. Commercial Insurance Company, 2 Dutcher, 268.
In my opinion the judgment of the District Court ought to be affirmed.