Hewitt v. American Union Life Insurance , 70 N.Y.S. 1012 ( 1901 )

Chester, J.

' The trial of this action was begun before Mr. Justice Chase and a jury. At the close, of the evidence he took the -case from the jury and reserved decision. Before deciding the case he was assigned to the Appellate Division. Because -of that fact the parties have stipulated that the case shall be determined by me.

The action is one upon an insurance policy issued December 30, 1898, by the defendant upon the life of the plaintiff’s husband, Dr. Clifford Hewitt, for her benefit. It was applied for through Levi Hoag, general agent or manager for the State of New York of a special department of the defendant, known as the " total abstinence department.”

The application, which was made a part of the contract, contained a provision “ that any policy issued hereon shall not go into eeffect until the first premium has been actually paid during the lifetime and good health of the insured.” Some time before the application was made the insured, who was a physician, had been appointed medical examiner for his locality for the defendant. The policy was sent by Hoag to Dr. Hewitt by mail soon after it was,issued. ■ Under the terms of the policy the premium was payable in semi-annual installments of twenty-three dollars and twenty-nine cents. The agent’s commission was sixty-five per cent, of the premium for the first year. ' Dr. Hewitt died on the 18th day of February, 1899, without having paid the first premium. After his death and before commencing the action the amount of this premium was tendered to the defendant’s agent and he refused to receive it. The plaintiff alleges in her complaint that the policy was delivered to her husband upon the understanding and agreement between him and Hoag, the agent, that the latter should advance the first' premium, and that Dr. Hewitt was to reimburse him or the defendant from the fees that he should receive as medical examiner for the company; in other words, that he was in that way to be given a credit for his first premium, and Hoag has testified in substance that it was on that understanding that the doctor gave him the application and on which the policy was delivered to him.

In its report to -the Insurance Department, as required by law, the^defendant, under date of January 4, 1899, included this policy as one in force on the 31st day of December, 1898.

The defendant cites Poste v. Am. Un. Life Ins. Co., 32 App. Div. 189; affd., 165 N. Y. 631, in support of its defense. That was a case against the same defendant upon a policy in terms substantially like the one here, and the judgment was for the defendant. There, as here, the insured died before the payment of his premium. It was alleged there that the insured'was an attorney and counsellor-at-law, and as such was employed by the defendant in doing its legal business and so continued until his death; that it was agreed between him and the defendant that he need not pay the premium in advance but might pay the same at some future time; that meantime the policy should be in full force and that he accepted the policy upon such agreement and for that reason he deferred payment in advance. The answer denied this. On the trial the plaintiff failed to prove such agreement, and it was held by the Appellate Division, in affirming the judgment dismissing the complaint, that because of the nonpayment of the first premium in accordance with the terms of the policy it could not be enforced. But, after coming to that conclusion, the court said: “Of course, there might be facts estopping the company from insisting upon the condition of prepayment, but the allegations of the complaint tending in that- direction were not proved.” Here, as has been above indicated, facts were alleged in the complaint, and proof was given in support of such allegations, which justifies the conclusion that the company is estopped from insisting upon the condition of prepayment; or rather, that such condition, under the circumstances presented here, has been waived. The agent had the power, by his acts, to effectuate a waiver of the condition, notwithstanding the provision in the policy that “No person had the power to give credits, except the president, vice-president, comptroller or secretary of the company, and they only in writing.” The act of the agent in making the agreement which he did with the insured, and under which the policy was delivered to him, was effective, in my opinion, under the authorities, to give him credit for this premium and to constitute a waiver of the provision for its advance payment. Skinner v. Norman, 165 N. Y. 565-569; Van Schoick v. Niagara Fire Ins. Co., 68 id. 434, 439; Stewart v. Union Mut. Life. Ins. Co., 155 id. 257; Hancock Life Ins. Co. v. Schlink, 175 Ill. 284; 1 May Ins. (3d ed.), § 135, note 2; 16 Am. & Eng. Ency. of Law (2d ed.), 942.

I think the plaintiff is entitled to judgment for the amount of the policy, less the amount of the first premium, with interest from the date of the’ receipt by defendant of proofs of death, besides costs.

Judgment for plaintiff, with costs.