Court Opinion

ID: 3582466
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:33:20.751704+00
Date Added: 2024-06-11T13:54:21.928387
License: Public Domain

My brethren are of the opinion that the judgment of the General Term in this case should be affirmed, except for the admission contained in the "tenth" item of the case. I am not able to find a reason in that source for a reversal. It is recited in the ninth item that it was admitted to have been the usage of the company to allow some extension or days of grace beyond the pay day, within which to pay the annual premium, and that the defendants were accustomed to receive it, and that the policies continued in full force and effect, and that such usage was known to Mr. Howell. The tenth item was as follows, viz.: "That it was understood and agreed by and between the defendants and the said George Howell, at the time the said insurance was effected and the policy issued, and also thereafter when the annual premium was paid, that if anything should happen to him to prevent his paying such premium on the day when the same became payable, the said policy should not thereby become null and void, but should continue in full force for a reasonable time thereafter, so that the said premium could be paid; that by the act of God he was prevented from paying the said premium on the 15th of July, 1862, and that the same was tendered and offered to the defendants within a reasonable time thereafter." It is said that this contains an absolute admission of an agreement that the policy should be and remain in force for a reasonable time after the pay day, whether the party insured continued to live or whether he in fact died before such reasonable time elapsed. The appellant's counsel considers these facts as presenting a fit case for the application of the doctrine of estoppel in pais.
The answer given by the respondent's counsel, that the original agreement was in writing, that the subsequent agreement *Page 287 
being by parol was void, is not satisfactory. It does not appear from the case that this agreement was by parol. And, again, a subsequent agreement may be by parol and the original agreement afford a sufficient consideration for the modification. (Trustees v. Brooklyn F.M. Co., 19 N.Y., 305; 25 Barb., 189.) We must, therefore, look into the agreement itself.
The complaint alleges that Howell did not intend to abandon the insurance, but expected to pay the premium on the 15th of July, 1862, and had made his preparations for that purpose, but was prevented by the sudden and severe illness, which caused his death. It also avers that the defendants were accustomed to receive the annual premiums on life policies after the time when the same became payable, and to treat the same as valid and effectual payments upon the policy; that this policy was made in reference to that usage, and that it was understood and agreed between defendants and Howell when the policy was issued, and subsequently, that if anything should happen to him to prevent his paying when the premium became due, the insurance should not become void, but should continue thereafter, a reasonable time, to allow him to make the payment of the premium. Some significance may possibly attach to the averment, that Howell himself was to make the payment after the lapse of the time referred to. The intention of the defendants under this usage and the effect of their agreement, as admitted, are identical. Indeed, the agreement was a practical application of the effect of the usage to the case in hand. This would present a case where a life insurance company was in the habit and practice of receiving small premiums for the issuing of large policies of insurance upon the lives of persons already dead. To bring it to the case of Mr. Howell, who, according to this construction, was only one of a numerous class, the case was this: This company agree with Mr. Howell that if he should die on the 15th of July of any year, after twelve o'clock at noon of that day, or within a few days thereafter, if any one on his behalf should then pay to the company the sum of $138 *Page 288 
they would at once issue or renew a policy upon his life for one year, for the sum of $5,000. They would, in short, agree positively to pay $5,000 for the consideration of $138. This is the inevitable result of the construction which I am considering. It is agreed that in default of payment at the day "the policy shall not become void, but shall continue in force for a reasonable time thereafter, so that the premium could be paid." "The policy shall continue in force." This, it is said, keeps it in existence as a valid insurance for several days after the death of Mr. Howell. "So that the premium can be paid." This, it is said, provides that when, after his death, the premium shall be so paid, the vitality of the policy continues, so as to compel the payment of the $5,000. It is as already stated, an agreement to insure the life of a man who is dead at the time of making the agreement. On the other hand, the language we are considering is capable of a construction sensible and reasonable. While a practice to insure the life of dead men would be absurd, a practice to extend the time of payment for a few days beyond law day and then to receive payment from those who continued alive and in good health would be sensible and profitable. This is the fair construction of the agreement with Mr. Howell. This insurance, when commenced, was upon the life of a man of the age of thirty-six years, at an annual premium of $138. He had paid for nine or ten years. If, by failure to pay at the day prescribed, his policy should be declared forfeited, and he should take out a new one, his premium would be much larger than was required by the original policy. He would be compelled to pay a premium of $200 or $250. To avoid this result, the company adopted the usage referred to, and made the agreement with Mr. Howell, alleged in the complaint and admitted in the tenth item. The expression, "so that the said premium could be paid," is in harmony with this construction. While it would be absurd and unreasonable to receive a premium of any amount less than the sum insured, for the life of one already dead, it would be right and just to overlook a few days' delay by not exacting *Page 289 
an advanced premium, but to continue in force the existing policy at the same annual premium.
Upon the construction contended for, the policy would be without consideration as to all beyond the amount of premium paid. A hands to B, or promises to him, $100; in consideration whereof B promises to pay A at once $1,000. What is the consideration for the $900? I can see none. If A owes B $1,000, and in consideration of $100 paid accepts that amount in full satisfaction of the debt, it is no satisfaction. He may immediately sue A for the balance. The principle of the case is the same.
For affirmance, HUNT and LEONARD, CC. For reversal, LOTT, Ch. C., and GRAY and EARL, CC.
Judgment reversed, and judgment ordered for the plaintiff upon the verdict with costs.