Court Opinion

ID: 5183000
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:44:36.753402+00
Date Added: 2024-06-11T08:26:38.527152
License: Public Domain

Barrett, J. (dissenting):
. The respondents’ claim is based upon a policy of insurance in their favor in the defendant company upon the life of James H. *537Platt. This policy was a substitute for a previous one held by the insured in the National Alliance, a company which consolidated with the Commercial Alliance. The policy in suit was issued July 1, 1890, and by its terms expired on the' first of the following month, but it was provided that “ the said company further agrees to renew and continue this insurance in full force during each period of two months thereafter, so long as there shall be paid to the said company, as hereinafter provided, on the first days of August, October, December, February, April and June, during each policy year of the continuance of this policy, the premium contained in the table on the margin of this policy.” Mr. Platt paid these bi-monthly premiums, and the company accepted them without dispute, until •February, 1894. On January 29, 1894, he mailed a check from Denver Mills, Col., to the company’s office in New York, for the February premium. The policy required that all payments should be made to the home office of the company, and, as the check did not arrive until February fifth, it elected to forfeit the policy, claiming the right to do so because the money was not paid on or before February first. The insured died in August of the same year, and the respondents presented a claim under the policy, which was rejected upon the ground stated. Whether that action was justified is the question for decision.
The policy, as we have seen, provides for payment of premiums “ on the first days ” of the months specified. There is, of course, no ambiguity here. But it is said that. other portions of the policy raise one. Two provisions are relied upon. Section 9 makes the table of premiums'part of the policy, and that table is headed, ■“ Table of Premiums for each $1,000 insured, payable during the months of June, August,” etc.—■“ as provided in this Policy.” The wording of this heading cannot conflict with the policy provision, since it distinctly7 refers to it and makes it controlling. A payment on the first of a month is a paynnent during the month, and the heading to the table might be correctly paraphrased so as to state that the premiums were payable during that portion, or on that day, of the month specified in the policy.
The other provision relied upon is section 5 of the application for the policy in the National Alliance. This policy did, in express *538terms, allow payment of premiums at any time during the months in question, and a provision to that effect' somewhat unnecessarily found its way into the application blank' along with the printed questions put to those seeking insurance. 'The policy in suit-stated that it was issued in consideration of the surrender of the former policy, and “ of the declarations contained - in the application for said policy, which declarations áre hereby made- part of this contract.” The meaning of this is entirely clear. The second policy, like the first, was made to depend upon the truthfulness of the information furnished by the insured. Without such a provision neither policy could safely have been issued. The word declarations has a perfectly proper and sufficient office to perform if taken to mean simply the applicant’s answers to questions. ■ That is the simple, and natural construction of it. There is scarcely more reason for making it include, this misplaced provision as to payment of premiums than the printed questions put to the applicant. A provision constituting one term of a policy cannot well be called a declaration. And the context makes it clear that it was not so used here. The company made its agreement with the deceased in consideration of, among other things, the answers contained in. the application for the old policy. A consideration implies something done or parted with by the insured. His answers, with the implied guaranty of their truthfulness, fall readily within the meaning of the term. But the provision as to payjment of premiums does not. If not a concession by the company, it is at least a perfectly neutral provision as to the subject-matter of the contract. Giving to this policy that fair and reasonable interpretation to which all contracts, including those of insurance, are entitled' (Foot v. Aetna Life Insurance Company, 61 N. Y. 575), it seems impossible to hold that the clear provision in the body of the policy requiring payment of premiums on the first of the month is qualified or rendered doubtful by other portions of the instrument.
But it is said that a course of dealing had arisen which justified the deceased in making payment after the first of February. The company did at the outset undoubtedly allow him to pay his premiums after the first of t-he months when they fell due. From the inception of the policy down to June, 1893, the premium notices sent him and the receipts given him stated that the company would *539accept payment at any time during the month. The notices and receipts subsequent to June, 1893, were altered so as to require payment on or before the day fixed in the policy. The first premium after this change fell due August 1, 1893, and though it was not paid until after the first, the company accepted and retained it. The premiums due, however, on October first and December first were paid before these dates. Then came the premium of February, 1894, for non-payment of which the policy was forfeited. On these facts the referee held that the company itself construed the policy to permit the payment of premiums at any time during the months . specified, and that it was not at liberty thereafter to change such construction.
In the view we have taken that the contract was not ambiguous as to the time for payment of premiums, much of thé argument for the respondents is beside the point, and many of the cases cited inapplicable. Where' a contract is ambiguous, a party may perhaps be irrevocably bound by his own interpretation of it. But where the instrument plainly accords him a right, his waiver of it in one instance does not preclude him from thereafter insisting upon it in another. (Wyckoff v. Taylor, 13 App. Div. 240, 244.) The result would be the' same whether or not the party was aware of the true condition of things. The waiver of a clear contract right, whether conscious or unconscious, may estop one as to the past, but cannot constitute a binding precedent for the future. The other party to the contract has given no consideration for the change, and may not insist upon the continuance of a mere favor. Of course a mutual mistake as to the terms of the agreement would be ground for its reformation, but the result outlined must follow so long as it remains in the form in which it was drawn. Hence it is immaterial whether the company believed that the policy gave the insured the right to make payments at any time during the month, though there is the strongest evidence that it did not so believe, but was consciously extending him a favor. In either event the company had a perfect right to insist that the premiums falling due after June, 1893, should be paid promptly, on the first of the month.
On the other hand, the assured was undoubtedly entitled to clear and unequivocal notice, calling distinctly to his attention the fact that for the future the company elected to stand upon its strict legal *540rights. Without such notice ft would be estopped from holding him to.the strict terms of the contract, while he still believed that the variation was in force. The notice given here was by no means so clear as it might have been. It consisted merely of an alteration in certain formal papers which the insured could, hardly be expected to read carefully from month to month. It might be our duty to Fold it insufficient as matter of law, if it did not, in fact, call the . attention of the deceased to the company’s change of plan. If, however, it did in fact call his attention to the change, then it answered its purpose, and he must suffer for his failure to comply. Whether this was the fact thus became a crucial question upon which the case turned. The receiver gave some quite cogent evidence to show that the insured did know of the change. This evidence consisted of the fact that the two premiums, prior to February, 1894, were paid before the .first of the months when they fell due, although from August, 1890, to. December, 1892, Mr. Platt had invariably paid after the first, and, so far as appears, did likewise during the remainder of the period before the company’s change of plan; that a similar change was made prior to February, 1894, in the case of another policy held by the insured, which resulted in a like change of conduct on his part in the payment of premiums; and that, when the company forfeited the policy, he did not claim to have been deceived, but, so far as appears, made no expostulation whatever. It is inconceivable that Mr. Platt should then have remained silent and apparently quiescent if he really believed that the company had refused his draft or check without justification. It is thus clear that this issue was seriously litigated, and error in the admission of testimony thereupon cannot well be •overlooked. There was in- this view of the case grave error in .admitting the testimony of the respondents’ witness JRoberts, the .agent of the deceased. He was allowed to state that he made out a check for the February, 1894, premium, expecting to send it to a local bank, but discovered that payment was required in New York. He. then testifies: “ Mr., Platt then said we will still have time to get it there, as we have thirty days’ grace' anyway, and neither of us noticed that the clause in the notice for payment of premium providing for thirty days’ grace had been omitted.” This was objected to as irrelevant, incompetent and immaterial. The objec*541tion was overruled, and an exception taken. We think this evidence was clearly hearsay and incompetent for any purpose whatever. For the insured to say that he still had the thirty days’ grace was tantamount to a declaration that he had no knowledge of the change made by the' company. He himself -might have been allowed to testify that he had not observed the change of phraseology in the company’s notices, since he would thus have been stating a material fact peculiarly within his own knowledge. But it was quite erroneous to permit a third party to testify that he made the statement. The insured, if alive and examined as a witness, might have been cross-examined upon the point of his declaration and made to explain how he reconciled his assertion with his other conduct. The receiver lost this right when another was allowed to state what the insured-said. The evidence was a mere declaration made by a principal to his agent, and no citation of authorities is needed to show that it was incompetent. The subsequent death of the insured in no way enlarged the respondents’ rights. This testimony was their chief, if not only, evidence upon the issue in question, and the error in its reception necessitates a reversal.
It should be added that the respondents were, of course, entitled to show still another waiver by the company of the provision as to-payment of premiums after the position which it took in June, 1893. But the evidence shows but one permitted deviation from the requirement made, followed by two compliances and then the forfeiture of the policy. This is quite insufficient to establish a course of dealing which would protect the respondents.
The order should be reversed and a rehearing of the claim ordered, costs to abide the event.
Order affirmed, with costs.