Court Opinion

ID: 6689821
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:36:43.035799+00
Date Added: 2024-06-11T16:01:04.651298
License: Public Domain

'SMITH, P. J.
(dissenting)'. I cannot concur in the conclusion reached by my asociates and deem it my duty to state the grounds of my dissent.
The ¡binding receipt given the insured states that, if the application for insurance is approved 'by the company, “the said applicant will be insured from the date of such approval.” The application was approved at the home office on /September 19, 1914, and therefore liability .on the policy attached on that date, with one year’s premium paid in advance, by note. The policy was thereby put in force until September 19, 1915. At that date the right accrued to 30 days’ grace within which to pay succeeding premiums. McMaster v. N. Y. Life Ins. Co., 183 U. S. 25, 22 Sup. Ct. 10, 46 L. Ed. 64. But the due date of succeeding premiums remained unchanged and, by the terms of the policy, was fixed on September nth, each year in advance. The second year’s premium therefore became due on September 11, 1915, with the right already accrued at that date, to 30 days’ grace, which would extend the time for payment of the second premium from September 11, 1915, to October 11, 1915. The insured would not be in default for nonpayment of the second year’s premium until after that date. The default date therefore, for all years after the first, would be October nth in each year. The insurance company, however, 'by agreement, could extend the due date of the premiums, and upon such extension no default would occur until 30 days of grace had elapsed, after the date to which the payment was extended. No further attention need be paid to the matter of nonpayment of the first year’s premium. We come now to the second year’s premium. On 'September 11, 1915, the insured gave, and the company accepted, a note for the second year’s premium, which note became due on or before September 1, 1916, and contained an express agreement that the policy should remain in force until default was made in payment of the note, and that, upon such default, “all rights and benefits under said policy shall cease and determine without notice and said policy shall be ipso facto null and void.” Whether this express agreement nullified the provision in the policy for days of grace *533presents a difficult question. But on 'September i, 1916, a renewal note for this second premium was given by- the insured and accepted by the company, again’ extending the payment of the second premium for three months from September x, 1916. No default for nonpayment of the second year’s premium therefore could accrue until December 1, 1916. The insured died on October 20, 1916. But none of the transactions above stated affected or had any connection with the third year’s premium which, by the terms of the policy, was payable in advance on September 11, 1916.
There is no contention that this premium was ever paid or time of payment extended. If. the insured be given the benefit of the month’s grace for payment of this third premium, ■ default occurred on October ia, 1916. But it is urged that paid-up insurance may not be forfeited for nonpayment, in advance, of premium covering a future year, and that in this case the paid-up insurance extended to September 21st, the date of. the issuance of the policy. The date from which the life of applicant was insured-was fixed in express terms in the application signed by him, which is made a part of the policy itself. The original binding receipt and the application signed by the insured and approved by the company, both declare that “the said applicant will be insured from the date of such approval.”
It is undisputed that the application was approved on September 19, 1914.. This provision in the application fixes the date when the insurance took effect and is controlling. The policy was dated (September 21, 1914; but there is no provision in. the policy which fixes any date, other than September 19th, at which the insurance became effective. This provision in no manner controls the due date for payment of premiums. But if it be assumed that default in payment of the third year premium could not take effect within the period during which paid-up insurance was in force, it is clear that, allowing the 30 days’ grace default in payment of the third year’s premium, accrued on October 19, 1916, the day on which the paid insurance expired, and the policy by reason of nonpayment of the third year’s premium, lapsed and became void on that date.
Can a policy, in force by reason of an extension of the time *534of payment of a previous year’s premium,-foe-defaulted for nonpayment of a succeeding year’s premium -which falls due while the policy is still in force? As hereinafter indicated, we need not decide that question -in this case.
In McMaster v. N. Y. Life Ins. Co., 183 U. S. 25, 22 Sup. Ct. 10, 46 L. Ed. 64, relied upon 'by my Associates, the -first year’s premium had been paid in full, and the material question was whether such payment entitled the insured to the benefit of the 30 days’ grace, where the insured) -died; after a full year had expired, but within the grace period. The date at which the policy took effect was material in that case, in that it was decisive as to whether the insured died within the grace period. The insured requested in his application that the policy, when issued, should bg made to take effect at the date of the application, December 12th; but this request was ignored by the company, in that no date was fixed other than the date of the policy, at which it became effective. The court, under the ordinary rule, held that the policy became effective on the day it was -dated, which was December 18th, although not delivered until D-ecemiber' 26th. On. October 18th th-e insured- died. It was held that the grace period included the latter date, and that the policy was in force at the date of death. The court held that payment of the first year’s premium gave the insured protection for 13 months. There was no question as to a forfeiture for nonpayment of premium. That case is not authority for the proposition that an insurance policy becomes effective on the day on which it is dated.-or delivered, where the application, which is signed by the insured and expressly made a part of the contract, fixes a certain and different date at which the policy becomes effective, as in this -case. 'Certainly no reason exists, either in law or in public policy, which forbids the making of a contract which itself fixes the date at which it becomes effective, and it is the plain duty of courts to enforce contracts lawfully entered into by the parties thereto. In this case it was expressly agreed that the policy should 'become effective on September 19th, and therefore the payment of any year’s premium made the insurance effective for one year from that date, and the grace period extended the date of default one month more each year after the first. It follows in this-case that the period of effective *535insurance covered by the note given for the second year’s premium, allowing the grace period, expired on October 19, 1916, and the third year period of effective insurance ¡began on that date. The insured was therefore in default after October 19th, within the third year. It follows that if it be assumed that nonpayment of the third year’s premium, on September id or October n, 1916, would not work a forfeiture of the policy during the period of paid-up insurance, the fact remains that non-payment of the third year’s premium, later than October 19th, would work a forfeiture of the policy.
I concur fully in the view that the furnishing of a copy of the policy after such default and after the death of the insured was not a waiver of the default.
The judgment should be affirmed.