Court Opinion

ID: 6272549
Source: CourtListenerOpinion
Date Created: 2022-02-18 15:49:57.305069+00
Date Added: 2024-06-11T08:59:57.303617
License: Public Domain

Opinion by
Rige, P. J.,
The insured having paid more than three annual premiums, three courses were open to him when the premium of July 15, 1895, was about to become due. First, he might surrender his policy and obtain a paid-up policy for the amount stipulated in table “A.” Second, he might default in the payment, in which case the contract of insurance would become a paid-up term policy. Third, he might pay the premium or with the consent of the company extend the time for its payment. He chose the latter *274course, and the company assented to it by accepting his note. He thus avoided the consequence of a default, namely, the conversion of the policy into a paid-up term policy which would expire in a little over two years. If as against him it did not become a paid-up term policy neither did it as against the company. The granting of this extension, as the learned judge of the court below correctly held, was a sufficient consideration in iaw for his stipulation that if the note given for the premium was not paid at maturity the policy “ including all conditions therein for surrender or continuance as a paid-up term policy ” should be null and void. This stipulation seems to be in entire harmony with the terms and conditions of the policy itself. The argument that the note was given for a loan to which the insured was entitled under the terms of the policy, that the proceeds of this loan were applicable to the payment of the premium, and, therefore, that there was no consideration for the waivers contained in the note is ingenious but it cannot be sustained upon the present state of the record. The affidavit of defense distinctly avers that it was given for the premium, and for present purposes we must accept this statement for verity. Nor was it necessary for the company on nonpayment of the note to formally cancel the policy or declare it forfeited and give immediate notice to the insured; for it was expressly provided therein as well as in the note that it should become null and void “without notice to any party or parties interested therein.” Moreover the insured was notified within four months, and so far as now appears he did nothing. It is argued by the defendant’s counsel that in the absence of evidence of some act from which a waiver could be inferred, a forfeiture took place at once. This position is well sustained by the authorities cited by them and we find nothing actually decided upon a similar state of facts in the cases cited by the plaintiff’s counsel which conflicts with this conclusion. The case of Mutual Life Ins. Co. v. French, 30 Ohio, 240, is easily distinguishable, for, as was pointed out in Thompson v. Ins. Co., 104 U. S. 252, as well as in the case itself, the policy there under consideration contained no provision for forfeiture in case of the nonpayment of a note given for the premium. Courts do not favor forfeitures, but they cannot avoid enforcing them when the party by whose default they are incurred cannot show some *275good and stable ground in the conduct of the other party on which to base a reasonable excuse for the default: Thompson v. Ins. Co., supra; Holly v. Metropolitan Life Ins. Co., 105 N. Y. 437. No such conduct has been alleged thus far in this case. We conclude, therefore, that the motion for judgment for want of a sufficient affidavit of defense was correctly refused.
Appeal dismissed at the costs of the appellant, but without prejudice, etc.