Court Opinion

ID: 6676126
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:16:05.293145+00
Date Added: 2024-06-11T16:00:42.721143
License: Public Domain

The opinion of the court was delivered by
Mr. Justice McGowan.
This was an action by the plaintiffs against the defendants upon a premium note given in consideration of a policy of insurance. The company covenanted to insure certain property against “loss or damage by fire and lightning” for a period not exceeding five years in the sum of $4,000. At the time the policy was issued the defendants paid the sum of $30.00 in cash, arid gave a premium note for the sum of $120.00, the entire premium being $150.00. The contract of insurance was made on March 4, 1881, and on that day the cash payment was made and the premium note executed and delivered. In the note the defendants agreed to pay the amount in annual instalments of $30 each, on the 4th days of March, 1882, 1883, 1884, and 1885, to be paid in advance. It is provided in the note, that, in case of non-payment at maturity of any one of the instalments, the whole amount of the instalments remaining unpaid shall become immediately due and payable. But the action was not brought until after the expiration of the whole term of five years.
The following condition or stipulation was attached: “It is also covenanted and agreed, that if default is made in payment at maturity of any of the instalments of premium, to be paid as stipulated in premium note given herewith, the whole amount of all instalments unpaid shall become immediately due and payable, and the policy of insurance issued thereon shall cease to insure, and the said company shall not be liable for any loss or damage which may accrue to premises, issued thereunder during such default, nor until said policy shall be revived by the written consent of the superintendant of said company’s Southern department or by an officer of said company, on payment to him of all dues thereon.” It is further conditioned that “any suspension of liability under this policy, on account of such default, shall not have the effect of extending such liability beyond the period of its termination as originally expressed in writing herein [no such right therefore in this case] ; that no attempt by law or otherwise to collect any premium due upon any instalment note shall be deemed a waiver of any of the conditions of this policy, nor shall it be deemed in any manner to revive this policy. This *332company may at any time cancel this policy by returning the unexpired premium pro rata. The assured may at any time have the policy cancelled by paying the customary short rate for the expired time of the full term, (5 years)” &c.
The defendants refused to pay the first or any of the instal-ments of the premium note at maturity; and there was no proof before the court that the company ever made demand upon the defendants for payment of the said instalments or any one of them, and no evidence that notice was ever given by the company to the defendants through the mails or otherwise. There were no transactions between the plaintiff and defendants at any time between the date of the maturity of the first instalment of the note, and the date of the filing of the complaint in this action, July 24, 1885.
Upon the complaint and answer, and the facts as set forth, Judge Kershaw rendered a decree dismissing the complaint, upon the grounds therein stated, from which the plaintiffs appeal to this court upon the following grounds: I. For that his honor erred in holding that the instalment note therein was without consideration, null, and void; that the defendants should be allowed to avoid its payment, and that the policy for which the note was given was void; whereas, it is respectfully submitted, his honor should have held that there was a sufficient consideration and that said note was good and valid, due and payable, and that the policy was voidable and not void, and then only at the election of the insurance company. II. For that his honor erred in holding that said policy was void at the time of the suit brought herein especially, whereas it reads that it shall issue for five years from March 4, 1881, until March 4, 1886, the policy being the only evidence introduced upon that point by any one, and was taken by admission as what it purported to be on its face. III. That said decision was contrary to the law applicable therein, and that the decision, it is submitted, should have been in favor of the plaintiff.
This is certainly a very hard case. The insurance was avowedly for “five years.” The company carried the liability only one year, for which they received the cash, but as to the other four years, the company carried nothing, carried no liability *333whatever, for the reason that the instalments of the note were not paid at maturity, and yet now sues on those instalments, claiming that they are “good and valid, due and payable.” At first view it would seem that this was a contract of insurance from year to year upon “the instalment plan” to run for a period not exceeding five years, as in the case of The American Insurance Company v. Stoy, 41 Mich., 385, cited in the judgment of the court below. But it seems that this company (Continental Insurance) had what are called “long terms” and “short terms” ; that they charged a larger premium for one year (short) than for five years (long), and that this difference was twenty-five per cent.; so that the defendants, in this case, by taking a long insurance for five years, secured insurance for the year which they paid, at twenty-five per cent, less than they would have had to pay if they had taken the insurance for a single year, as was the practical result; and that this difference of $7.50, may be regarded as consideration for the note of $120.00.
It is true that one of the numerous stipulations and conditions attached, was that the assured might at any time have the policy cancelled; but, however, upon the express condition of “paying the customary short rates for the expired time of the whole term,” which was not done. The simple failure to pay the instalments as they fell due, without payment of the additional short rate premium for the time then expired, can hardly be regarded as “a cancellation” under the very particular terms of the agreement. This appears to have been the contract, and although, as it seems to us, it ivas one-sided, unequal, and unjust, yet if parties, who are of full age and of sound mind, without misrepresentation, imposition, or fraud, choose to make such a contract, we know of no principle or authority which would justify the court in denying the right to enforce it. The precise point has just been ruled by this court in another case of the same plaintiff, Continental Insurance Company v. Boykin (case next ante), to which reference is made, as conclusive of this case.
The judgment of this court is, that the judgment of the Circuit Court be reversed, and the case remanded to the Circuit for a new trial.