
    New York Life Insurance Co. v. Smith.
    
      Action 'upon Life Insurance Policy.
    
    1. Life insurance; when policy not rendered void by failure to pay note for premiums. — A insurance policy, after setting out the provisions as to the manner of making the payment of premium, further stipulates that “If any premium is not thus paid on or before the day when due then (except as hereinafter otherwise provided), this policy shall become void.” It was further provided in said policy as follows: “After this policy shall have been in force three full years, in case of non-payment of any premium subsequently due, and upon the payment within thirty days thereafter of any indebtedness to the company on account of this policy, and provided the policy has not been terminated by death within the month of grace allowed in the payment of premium (1) the insurance will be extended for the face amount as provided in the table below,” etc. Field: That the note given by the policy holder and accepted by the company in payment of the premium is not “an indebtedness to the company on account of ” said policy, as provided in said last stipulation, and if said note is given after the policy has been in force three years, and there is a failure on the part of the assured to pay the premium accruing after the giving of said note, the assured would nevertheless be entitled to extended insurance as provided by said table, and if he died during the time included in the extended insurance, the beneficiary named in the policy could recover thereon.
    Appeal from the Circuit Court of Geneva.
    Tried before tlie Hon. John P. Hubbard.
    This was a suit brought by the appellee, Mrs. Florence G. Smith, against the Netv York Life Insurance Company, to recover $2,200 upon a life insurance policy issued by the defendant to Malcolm C. Smith, who was the husband of the plaintiff, and who had died. The cause was tried upou issue joined upon the plea of the general issue. The defense interposed and the facts of the case are sufficiently stated in the opinion.
    Upon the introduction of all the evidence, the court at the request of the plaintiff gave to the jury the'general affirmative charge in her behalf. To the giving of this charge the defendant duly excepted, and also excepted to the court’s refusal to give the general affirmative charge requested by it.
    There were verdict and judgment for the plaintiff. The defendant appeals, and assigns as error the giving of the general affirmative charge requested by the plaintiff, and the refusal to give the general affirmative charge request-e<l by the defendant, and the rendition of judgment in favor of the plaintiff.
    Burn (3-raves, for appellant. —
    By operation of that general forfeiture clause, upon the non-payment of the premium due July 21, 1898, within the time allowed, this policy became lapsed and forfeited, and the payments previously made thereon remained the property of the company. — Insurance Vo. o. Burner, 62 Ohio St. 385; Union Ventral L. Ins. Vo. v. Wilkes, 92 Texas.
    Mulkey & Carmichael, contra.
    
   SUABLE, J.

On the 21st day of July, 1894, defendant issued a policy of insurance whereby the payment of two thousand dollars was assured to the plaintiff on the death oflier husband, Malcolm C. Smith, upon consideration of seventy dollars paid in advance and seventy dollars to be paid on the 21st day of July qach year thereafter until twenty years’ full premiums were paid. In one of the provisions of the policy a manner of making such payments was prescribed and it was stated that “If any premium is not thus paid on or before the day when due then (except as hereinafter otherwise provided), this policy shall become void, and all payments previously made shall remain the property of the company.” Another provision was as follows: “After this policy shall have been in force three, full years, in case of non-payment of any premium subsequently due, and upon the payment within thirty days thereafter of any indebtedness to the company on account of this policy, and provided the policy has not been terminated by death within the month of grace allowed in the payment of premiums (1) the insurance will be extended for the face amount as provided in the table below; or (2) on demand made within six months after such non-payment of premium due, with surrender of this policy paid-up insurance will be issued for the reduced amount provided in said table; or (3) the policy will be reinstated within the said six months, upon payment of the overdue premium with interest at the rate of five per cent, per annum, if the insured is shoivn bv evidence satisfactorily to the company to be in good health.” Next following is what purports to be a “Table of Guarantees, if payment of premiums is discontinued, provided there is no indebtedness against the policy (pursuant to the insurance law, Chapter 890, laws of 1892, of the statute of New York.)” This table contains a statement based on the payment of premiums to given dates, first, of the time to which the insurance of two thousand dollars (without participation in profits) would be extended, and second, of the amount of paid up insurance into which the policy might be converted. Besides the requirement for paying premiums when due, there is in the' instrument a provision for loans to be made by the company on the security of the policy and one for allowing one month as grace in the payment of premiums on consideration that during such month the uiqpaid premium should bear interest and remain an indebtedness to the company subject to deduction from the insurance in cáse of death.

The first three premiums due respectively in 1894, 1895, and 1898, were duly paid, and on July 21st, 1897, plaintiff and her husband and another gave their note, which, as the bill of exceptions states, “defendant accepted in payment” of the fourth premium then due, and defendant gaye its receipt as for such payment. That note was in its body as follows: “$70.00. July 21st, 1897. Twelve months after date T promise to pay to the order of the New York Life Insurance Company, at the office of said company in the city of New York, the sum of seventy dollars, with interest, for value received, being for premium on the policy numbered as below, upon the life of 51. C. Smith. It is understood and agreed, that if this obligation should not be paid before the said policy becomes a claim, the amount thereof shall be deducted from the policy, or if said policy shall be surrendered to the company and a paid up policy issued in lieu thereof, said paid up policy shall be subject to this or any other similar note or notes then outstanding, with interest thereon payable annually in advance.” On the note was written the number of the policy and the words, “Tnter-est paid in advance $3.50.” No other payment was ever made on this note, nor was the premium due July 21st, 1898, or any subsequent premium ever paid. After six months from the last mentioned date, defendant declared the policy forfeited and thereof gave to Malcolm C. Smith a written notice dated February 9th, 1899, as follows : “Dear Sir: Be policy No. 625193. The above policy has been cancelled on our books, non-payment of premiums due July 21, 1898. According to the terms of the policy, if it had been surrendered to the company within six months from the foegoing date, paid up insurance for a reduced amount would have been issued. As you have not complied with this condition, the policy by its terms has become void and of-no effect. It seems to us that you cannot be aware that through your failure so to comply, all your privileges under the policy have terminated: Influenced however by a desire to extend every possible privilege to those who have been members of this company, we are led to place at vour disposal for the period of thirty days from this date, the option of either of the following propositions: 1. The company will consider the reinstatement of the policy at the original premium -rate, upon presentation of evidence of sound health satisfactory to the company, and payment of over due premiums with interest; or, 2, upon return of the policy and renewal receipts together with a written request signed by the beneficiary, the policy will be endorsed for nonparticipating paid-up insurance of $160.00, the company cancelling the outstanding notes and interest. If you wish to avail yourself of one of these offers which have been made voluntarily, it will be necessary to notify the company in writing, stating which option is desired and comply with the condition indicated above within thirty days from the date of this letter, otherwise, at the end of that time the option will terminate without further notice.”

No application was made for a paid up policy. Malcolm C. Smith died on the 29th day of August, 1900, and due notice and proof of death was furnished defendant. The death was within the period limited by the provision for extending the insurance at the full amount of the policy in case of forfeiture after tliree years, and. judgment was obtained under that provision.

Defendant’s contention here is, that all right to such extension of insurance was destroyed by the failure to pay the note referred to within thirty days after default in the payment of the premium due July 21st, 1898. The facts being undisputed, the case calls for a construction of the contract in respect, merely, of whether the preservation of the right to the extension claimed, was made dependent upon payment of the note. In the application for insurance there is expressed an agreement that the contract should be “construed according to the laws of’the State of New York,” but the construction must be without reference to those statutes, since judicial knowledge does not extend to them and none of same has been introduced in evidencie We pass without deciding the question whether the provision for paying within thirty days “indebtedness to the company on account of this policy” or “against the policy” should be regarded as embodying a material stipulation, and proceed to consider whether the indebtedness evidenced by the note was within that class. The express provisions for the accrual of indebtedness, all of which are above referred to, do not include notes'taken in payment of premiums nor does the original contract in any part provide that such notes might or would be accepted or used instead of money payments, or that if taken they would be held or used in opposition to or for the defeat of the insurance in any event.

The terms “indebtedness on account of this policy,” and “indebtedness against the'policy,” are used in the contract as expressing the same'thing, and if one of them bears an import less favorable to the defendant than the oilier, that import, must be adopted as the true one. This for the reason that, presumably, the instrument was prepared and its expressions guarded by defendant with a view to availing itself of any construction that would militate unduly against its interest. — Peidmont & Co. v. Young, 58 Ala. 476; Georgia Ins. Co. v. Allen, 119 Ala. 436.

This note was lield against tlie plaintiff, but ivas it against tlie policy within tlie meaning of tlie contract? By it the policy had been freed from the premium charge of 1897 and from liability to forfeiture on account of that premium, and it contains no agreement for forfeiture of any right to insurance in case of its non-payment. The stipulations inserted therein for deducting its amount from the policy if the latter becomes a claim, was merely to provide a way for ultimate collection out of the proceeds of the policy and could not operate except in recog-, nition of the. policy- as a claim, nor could tlie provision therein made for subjecting such unpaid policy as might he issued, to the note, have had any operation as against die original policy. The above copied notice of defendant to Mr. Rmith indicates that payment of the note was not by defendant considered necessary to the preservation of the secondary right which accrued upon the forfeiture of the original form of insurance, for the provision as to paying indebtedness in thirty clays from forfeiture applied alike to each of those rights and in the notice defendant admitted that according to the terms of the policy a paid up policy would have issued had the first been surrendered within six months from July 21 s' 1888, and in that communication no reference Avas made to non-payment of' the note. The terms used in the contract to designate the kind of indebtedness intended to be provided for by the clause in question are ambiguous, and, therefore, the position taken by the defendant as defined in tlie notice mentioned may be looked to as aiding in the construction' of the contract. — Comer v. Bankhead. 70 Ala. 136; Haddock v. Wood, 46 Iowa 433; Paige v. Banks, 80 U. S. 607; St. Louis Gas Light Co. v. St. Louis, 46 Mo. 121; Webster v. Clark, 34 Fla. 637; 27 L. R. A. 126.

Upon these considerations avc are brought to the'conclusion, that the payment of the note was not a condition precedent, to plaintiff’s right to insurance for the time limited by the table embodied in the contract; and that tlie trial court did not err in giving the affirmative charge for the plaintiff.

Affirmed.  