Page:North Dakota Reports (vol. 48).pdf/675

 was subject to such limitations as appear in the policy, that these in turn were capable of being extended by the action or nonaction of the company. The effect of this holding, in connection with the facts in the instant case, is that the note which the company mailed to its agent, Haigh, and which Haigh retained, must be regarded as remaining in its possession, and the failure to Haigh to notify Boerger must be treated as the failure of the company. We may readily assume that the company had the right to reject the application for reinstatement either on account of the nonpayment of the premium in the manner required or on account of a defective showing of insurability, but when it elected to reject the application on either or both of these grounds, it must be held to a knowledge of the transaction between its agents and the insured, and to have assumed the legal consequences of its failure to communicate its rejection to the applicant, provided it was under duty soto do. There is ample evidence in the record that Boerger was led to believe his note would be accepted for the premium, and that the application for reinstatement satisfied the requirements of the company. Certainly this evidence, in conjunction with the complete failure to return the note and to notify the insured that his application was rejected, would justly warrant the inference that the insured believed his reinstatement to have been completed, that he had become liable upon the note given for the premium, and that the company had, in fact, waived payment in cash. It is to be noted here that notwithstanding the return of the note to Haigh, the application, though defective, was retained by the company. Since we are of the opinion that the evidence warrants the inferences suggested as inferences of fact, it remains to determine whether or not these inferences may be effective in law as against the express provisions of the policy.

There is no rule of law or policy that prevents contracting parties from waiving provisions that are inserted for their benefit. As was said by the United States Supreme Court in a case involving policy stipulations similar to those in the instant case (Knickerbocker Insurance Co. v. Norton, 96 U. S. 234, L. ed. 6&9):

“But a party always has the option to waive a condition or stipulation made in his own favor. The company was not bound to insist upon a forfeiture, though incurred, but might waive it. It was not bound to act upon the declaration that its agents had no power to make agreements or waive forfeitures; but might, at any time, at its option, give them