
    Imperial Life Insurance Co. v. Glass.
    
      Action on Life Insurance Policy.
    
    1. Condition in life insurance policy; release of insurer by insured's failure to pay premium — A policy of life insurance contained the condition that “if anote, taken for the. premium or renewal premium, or any part thereof, on this policy, shall not be fully paid when due, the premium shall then be considered as fully earned, and the policy shall no longer be in force or binding upon the company.” The insured gave his note for the premium, which he failed to pay when it became', due, and died after the maturity of the note, never having paid it or any part of it. field, that the company was not liable on the policy.
    2. Same; what provisions in policy are not inconsistent. — A provision in alife insurance policy authorizing the deduction,from the amount payable in the event of the death of the insured, of any balance of the premium for the year remaining unpaid, or any indebtedness on the policy, is not inconsistent with a provision that the policy shall no longer be in force or binding upon the company if a note taken for a premium, or any part thereof, is not fully paid when due.
    Appeal from tbe Circuit Court of Barbour.
    Tried before the Sou. J. M. CaRMiohael.
    The defendant filed several pleas, among them special pleas setting up the conditions in the policy sued on which are stated in the opinion, and also the giving of the premium note by John D. Glass, and the non-payment thereof, as also stated in the opinion. The plaintiff demurred to said special pleas, upon the ground, among others, “that such stipulation for the consideration of said note, and for the forfeiture of the policy, is unconscionable] and a mere subterfuge, or excuse for the, defendant’s demanding or claiming the whole amount of said note, without the corresponding duty or liability on tbe part of tbe defendant to furnish insurance upon the life of said John D. Glass, for the entire insured period.” The court sustained the demurrers to said special pleas. The defendant excepted to the rulings of the court in excluding evidence offered by tbe defendant, as stated in tbe opinion. There was judgment in favor of tbe plaintiff. The defendant appeals, and now assigns as error said rulings of the court on the pleadings and in sustaining plaintiff’s objections to evidence offered by tbe defendant.
    
      G. L. ComKR, for appellant.
    H. I). Clayton, and A. H. Muiibill, contra.
    
   WALKER, J.

This is a suit upon a policy of insurance, dated February 15th, 1890, upon the life of John I). Glass. By the terms of the policy the insurance was to begin at twelve o’clock noon on the first day of March, 1890, and expire at twelve o’clock noon on the first day of March, 1891. Provision was made for renewals of the insurance by the payment annually thereafter of premiums, the amounts of which were fixed by a table which was made a part of the policy. The evidence tended to show that said John D. Glass died about the 27th day of September, 1890. There was no acknowledgment in the policy of the receipt by the insurance company of the amount of the first premium. The court sustained objections by the plaintiff to proof offered by the defendant to show that said Glass never paid any money or anything else on the policy, but gave his note for the amount of the premium, fifty-seven dollars, payable to the defendant or bearer on March 1st, 1890, and that said Glass never paid or offered to pay said note when it fell due, or at any other time ; but refused, on demand, to pay the same or any part thereof.

The policy contained the following provision: “This policy is issued, and accepted by the insured and assured, upon the express conditions and agreements contained in said application, as well as those printed on the back hereof, which are hereby made a part of this contract, as fully as if they were embodied herein.” One of the conditions printed on the back of the policy was as follows : “4. If a note, taken for the premium or renewal premium, or any part thereof, on this policy, shall not be fully paid when due, the premium shall then lie considered as fully earned, and the policy shall no longer be in force or binding upon the company, but it may be revived according to the condition and agreement No. 3, as to reinstatement.” There was no evidence of any reinstatement of the policy.

We know of no principle of law or rule of public policy affecting the validity of a provision in a policy of insurance that it shall not be binding on the insurer until the premium is paid, if it is payable it cash, or that the policy shall cease to be binding on the insurer when a note given for a premium, or any part of it, is not paid at maturity. No duty is imposed upon insurers to extend the benefits of insurance unless the consideration therefor is paid as stipulated for in tbe contract of insurance. An insurance business can not be successfully carried on unless tbe continuance of tbe risks assumed by tbe insurer is made dependent upon tbe prompt payment of tbe premiums, wbicli go to make up tbe fund from which losses are to be paid and profits earned. Tbe time fixed for tbe payment of the premium is material— is of, tbe essence of tbe contract; and non-payment at tbe appointed time involves tbe release of tbe insurer from bis obligation under tbe policy, if such are tbe terms of tbe contract, and tbe condition to this effect is not waived. — Mobile Life Ins. Co. v. Pruett, 74 Ala. 487; Brooklyn Life Ins. Co. v. Bledsoe 52 Ala. 551; New York Life Ins. Co. v. Statham, 93 U. S. 24; Williams v. Albany City Ins. Co., 19 Mich. 451; Wall v. Howe, Ins. Co., 36 N. Y. 157; Pitt v. Berkshire Life Ins. Co., 100 Mass. 500; 11 Am. & Eng. Encyc. of Law, 304, 306.

Tbe provision in tbe policy sued on authorizing tbe deduction, from tbe amount payable in tbe event of the death of tbe insured, of any balance of tbe premium for tbe year remaining unpaid, or any indebtedness on tbe policy, is not inconsistent with tbe provision that tbe policy should no longer be in force or binding upon tbe company, if a note taken for a premium or any part thereof should not be fully paid when due. Tbe provision for such deductions would be applicable in tbe event of tbe death of tbe insured before the maturity of a note given for a premium, or in tbe case of a waiver by tbe insurer of tbe payment of tbe whole or a part of a premium at tbe time it was due. Nor is it necessary to tbe validity of tbe provision for tbe discharge of tbe insurer from tbe obligation of tbe policy by a failure to pay in full any premium note at its maturity, that effect should also be given to tbe further provision that, upon such non-payment, tbe premium should be considered as fully earned. Tbe former provision is a valid one, whether tbe latter is legally enforceable or not in such circumstance as are presented in this case, where tbe premium note in question became due on tbe day of tbe commencement of tbe risk under tbe policy. Whether tbe amount of tbe premium can be recovered when tbe non-payment of a note therefor terminated tbe obligation of tbe insurer before tbe risk under tbe policy bad been in force a single day is a question not presented by tbe pleadings in this case. We are satisfied, that, in tbe absence of a waiver of tbe condition in tbe policy on this subject, upon tbe non-payment at its maturity of tbe note given for tbe premium, the policy ceased to be in force and binding upon tbe company, whether its right to the premium was then perfected or not.

The rulings of the Circuit Court, both upon the pleadings and the evidence, are in conflict with the conclusion we have announced.

Beversed and remanded.  