Insurance Company v. Eggleston

ERROR to the District Court of the United States for the Northern District of Mississippi.

This was an action in the District Court of the United States for the Northern District of Mississippi, having the same powers as a Circuit Court, on a policy of life insurance, issued by the plaintiff in error, the defendant below, a New York corporation doing business in the city of New York, on the 11th of November, 1868, for the sum of $5,000, on the life of Edward C. Eggleston, a resident of the State of Mississippi, for the benefit of his children, Louisa and Thomas, and in consideration of an annual premium of $306, payable after the first premium semi-annually, one-half on the 11th of November, and one-half on the 11th of May, in each year. The policy contained the usual condition that if the premiums were not paid on or before the respective days named, together with any interest that might be due thereon, the company should not be liable. The following clause was added: 'All receipts for premiums are to be signed by the president or actuary. Agents for the company are not authorized to make, alter, or discharge contracts, or waive forfeitures.' Eggleston died on the 5th of January, 1872.

The defence set up on the trial was that the policy was forfeited by the failure of the assured to pay the last instalment of premium, which fell due on the 11th of November, 1871. The cause was tried by a jury, who found for the plaintiffs; and the only question raised by the bill of exceptions and brought here for review, is, whether the judge properly left to the jury the question of fact which was made by the plaintiffs below in answer to the alleged forfeiture. The case presented on the trial, as shown by the bill of exceptions, is as follows:--

The plaintiffs proved that the policy of insurance mentioned in the declaration was delivered, and the first premium received thereon, by one Stephens, a local agent of the defendant, in Columbus, Miss., and that said Eggleston, upon whose life said policy was issued, then and up to his death resided in the immediate vicinity; that soon after the issue of said policy the agency of said Stephens was revoked, and no other agent appointed at that place; that said Eggleston was notified by defendant to pay the next premium falling due to Johnston & Co., its agent at Savannah, Ga., and that he was also notified to pay the subsequent premiums to B. G. Humphreys & Co., the defendant's agents at Vicksburg, Miss., except the one falling due Nov. 11, 1871, all the other premiums falling due before the death of said Eggleston having been paid. It was also testified by the sons of said Eggleston, and by Goodwin, the cashier of the bank through which the other payments had been made, that if any notice was given by the defendant to said Eggleston, to whom and where the said premium due the eleventh day of November, 1871, should be made, that they did not know it; and that said Goodwin had the money to pay the said premium, which would have been paid had the notice been given; and after said premium became due and payable, said Goodwin, for said Eggleston, telegraphed to Johnston & Co., at Savannah, Ga., inquiring to whom payment should be made; who replied, to telegraph to B. G. Humphreys & Co., at Vicksburg; that B. G. Humphreys & Co. Replied, to make payment to Baskerville & Yates, sub-agents at Macon, Miss., who held the payment receipt. On Dec. 30, 1871, a friend of said Eggleston tendered payment of the premium to Baskerville & Yates, which was refused unless a certificate of health was furnished; said Eggleston was when sick, and died on the 5th of January, 1872. One Williams, a clerk of Baskerville & Yates in their insurance business, and a witness for the defendant, testified that on the 1st of November, 1871, he mailed a notice, post-paid, to said Eggleston, addressed to him at Columbus, Miss., to make payment to Baskerville & Yates, agents at Macon, Miss., and that they held the proper premium receipt. Macon, Miss., it was found, is thirty miles from Columbus by railroad.

Upon this evidence the judge charged the jury as follows. 'The non-payment of the premium is admitted; and, if nothing more appears from the evidence, the plaintiffs will not be entitled to recover. To avoid the defence, it is insisted by the plaintiffs that the non-payment was caused by the defendants not having given to the said Eggleston notice of the place where payment was required, and, therefore, the fault of the company, and not that of Eggleston or the plaintiffs. The onus of proving the cause for non-payment is on the plaintiffs. [If you shall believe from the evidence that the payments of the premiums had, before that time, been made to such agents as the company had designated from time to time, and of which and to where said Eggleston was given notice by the defendant, and that no such notice was given to said Eggleston before the time the non-paid premium fell due, and that as soon as he did thereafter receive such notice he did tender to the designated agent the premium due, and that such failure to pay was caused by the want of such notice, then the policy was not forfeited, and the plaintiffs will be entitled to recover the amount of the policy, with six per cent interest, from sixty days after the company was notified of the death of Eggleston, less the amount of any unpaid premiums, with like interest, up to the death of said Eggleston.] If you shall believe from the evidence that the notices before given were by letter through the mail, and that the agent of the company authorized to receive payments of the premium mailed to said Eggleston, at his post-office, such notice within such time as, by due course of mail, he would have received it, and within a reasonable time for Eggleston to make payment, then Eggleston will be held to have received such notice, and the plaintiffs will not be entitled to recover. The onus or burden of proof of such notice having been given is on the defendant.' The defendant excepted to so much of said charge as is included in brackets.

''Mr. Matt. H. Carpenter'' for the plaintiff in error.

The plaintiff in error was under no obligation to keep a local agent in the vicinity of the residence of the assured, and give him notice thereof. The premiums on his policy were payable at the domicile of the company. Insurance Company v. Davis, 95 U.S. 425.

If the defendants in error sought to excuse the payment when due, on the ground that it was the custom or usage of the company to notify the holders of policies where and to whom to pay, they should have proved on the trial that such was known to be the general usage and custom of the company, or a particular usage of universal notoriety at the place where the insurance was effected. Adams v. Otterback, 15 How. 539.

The case does not show that the assured intended to pay the premium falling due Nov. 11, 1871, or that he made any effort, prior to its maturity, to ascertain to what agent he should make payment. On the contrary, the presumption is, that, after his death became imminent, his friends took the matter in hand, and attempted to revive the policy for the benefit of his children. The agent was, therefore, independently of the express words of the policy, justified, both in law and in fair dealing, in refusing to waive the forfeiture.

The fact that the agents of the company had notified the assured to whom to make payment of particular premiums which became due prior to Nov. 11, 1871, was not such an act on the part of the company as acmounted to a permission to him not to make payment until notified.

The agent could not waive payment until notice was given by him to whom and where to pay it. On the contrary, the policy expressly prohibited him from so doing.

This provision cannot be set aside upon any act of the agent and the assured. It is as much a part of the contract as any other. Chase v. Hamilton Insurance Co., 20 N. Y. 52; Buffum v. Fayette Mutual Insurance Co., 3 Allen (Mass.), 360; New York Life Insurance Co. v. Statham et al., 93 U.S. 31.

Mr. Philip Phillips, contra.

There was no error in the charge of the court below. The obligation to give the assured notice where and when to pay premiums, can arise from the actions of the company, as well as from express words.

The principle that no one shall be permitted to deny that he intended the natural consequences of his acts, when he has induced others to rely on them, is as applicable to an insurance company as to an individual.

The doctrine of waiver, as asserted against such a company, to prevent the strict enforcement of conditions contained in its policy, is only another form for the doctrine of estoppel. Insurance Company v. Wolff, 95 U.S. 326.

That the assured acted in good faith, and was ready and anxious to continue the policy, is abundantly established by the evidence. He had the strongest inducement to do this, from the precarious condition of his health. His anxiety is shown by his prompt and repeated efforts to ascertain the agent to whom the payment was to be made.

The policy does not stipulate where the premiums were to be paid. The law of Mississippi, made for the convenience and security of its citizens, requires insurance companies to have agents in the State, and defines their duties and responsibilities. Rev. Code, 1857, p. 303, sects. 57-59.

MR. JUSTICE BRADLEY, after stating the case, delivered the opinion of the court.