
    Salentine, Respondent, vs. Mutual Benefit Life Insurance Company of New Jersey, Appellant.
    
      April 10
    
    May 5, 1891.
    
    
      Life insurance: Condition as to election of amount to be paid in case of suicide.
    
    Under a condition in a life policy that it shall be void in case the assured shall die by his own hand; but if it be shown that he was at the time “insane, the company will pay the sum insured, or refund the premiums actually received, with interest thereon, according to its judgment of the equities of the case,” the company is entitled to a reasonable time in which to become fully informed of the facts of the case before mating its election as to -which amount it, will pay, and is not limited to the sixty days in which payment is ordinarily to be made. A few days over three months is not an unreasonable time for that purpose.
    APPEAL from tbe Superior Court of Milwauhee County.
    The case is stated in the opinion.
    The defendant appeals from a judgment in favor of the plaintiff for the amount of premiums paid on one policy and the amount insured by the other policy, with interest.
    Eor the appellant there was a brief by Winhler, Flanders, Smith, Botbvm & Vilas, and oral argument by F. P. Vilas.
    
    For the respondent there was a brief by F. P. Smith wA Rogers c& Mann, and oral argument by F. P. Smith.
    
    They argued that by the terms of the second policy the company was bound to pay, either the full amount insured, or the amount of premiums received by it, within sixty days after notice and proofs of death, and on notice that the death was by suicide, it was bound to make its election and give notice thereof. Stewcvrt v. Donnelly, 4 Yerg. (Tenn.), 177; Oilhncm v. Moore, 14 Vt. 457; Plowman v. Riddell, 7 Ala. 775; Trowbridge v. Halcomb, 4 Ohio Sc. 88; Heywood v. Hey wood, 42 Me. 229; Miller v. MeOlain, 10 Yerg. (Tenn.), 245; 1 Addison on Cont. sec. 320; Irish v. Dean, 39 Wis. 562; Voeohting v. Grau, 55 id. 317.
   Orton, J.

This action is to recover the insurance on two life insurance policies given by the appellant company to Katherine Salentine, the respondent, and wife of Peter Sal-entine) on his life, — the first one dated the 19th day of September, 1881, and numbered 105,844; and the other one dated the 20th day of September, 1883, and numbered 115,218; the first of $2,000, and the other of $3,000.

The first of the above policies had the following conditions : “ That in case he should die by his own hand, etc., this policy shall be, void, null, and of no effect, except that in 'case be-shall die by bis own band while insane tbe amount to bé paid by tbe company on tbis policy shall be tbe amount of the premiums actually paid thereon, with interest.” Peter Salentine, whose life was insured, died by bis own band on tbe 6th day of January, 1884, and notice thereof was given to tbe company on tbe 28th day of tbe same .month. About tbis policy there is no contest, and the plaintiff was entitled to and obtained judgment for tbe premiums paid thereon and interest.

Tbe second policy bad tbe following conditions: “ If be £the insured] shall die by bis own hand, tbis policy shall be void. If, however, it shall be shown that tbe insured at tbe time of taking bis life was insane, tbe company will pay tbe sum insured, or refund tbe premiums actually received, with interest thereon, according to its judgment of tbe equities of tbe case. Tbis option is distinctly reserved by tbe company, and is made a part of tbis contract.” Tbe company stipulated in tbe policy to pay or cause to be paid the sum insured, at their office at tbe city of Newark, to tbe said assured, sixty days after due notice and satisfactory proof of tbe death of tbe assured.

Tbe court found that the first notice given to tbe plaintiff of tbe election of tbe company to pay only by refunding tbe premiums was on tbe 5th day of May, 1884. Tbe sixty days after notice and proofs of death expired on tbe 28th day of March, 1884. The only proofs of tbe death of Peter Salentine by bis own band, while insane, was a certified copy of tbe coroner’s inquest, without any of tbe evidence taken therein. There was no evidence that tbe plaintiff ever made-an election to'take tbe insurance instead of tbe premiums and interest thereon, until after tbe notice of tbe company that it elected to pay only by refunding tbe premiums bad been received by her.

Tbe court held that tbe plaintiff was entitled to recover tbe insurance, on tbe ground that tbe company failed to give the plaintiff notice of its election to pay only the premiums within the sixty days after receiving the notice and proofs of death. On this appeal this is the only question, the learned counsel of the appellant contending that the company made its election in proper time to limit the plaintiff to a recovery only of the premiums and interest thereon.

The language of this condition is peculiar. The election to “ pay the sum insured or refund the premiums ” is to he made by the company “ according to its judgment of the equities of the case.” The learned judge of the superior court seems to have limited the equities of the case to the amount of the premiums paid. But there may be equities in such a case, arising from the circumstances of the death of the person whose life is insured, such as his situation in life, and the causes of his unfortunate mental condition, which might naturally appeal to sympathy and humane feeling, and arising also from the circumstances in which the wife and family had been left by this terrible calamity. To give to the beneficiary of this insurance what in pure justice and fairness she ought to have under the circumstances is a correct definition of equity. It depends upon the consideration of all the circumstances of the case. I speak of this because it is claimed that all the company needed to be informed of to form a judgment of the equities of the case was the death of the insured by his own hand while insane, and the amount of the premiums paid, and that, therefore, but a short time was necessary for the company to make and give notice of such election. The learned superior court held that the time in which notice of the election should be given was the sixty days after the notice and proofs of death. The sixty days mentioned in the policy has not the remotest reference to the time in which such an election should be made. If such notice ought to be governed by any rule, it should be reasonable under the circumstances. “ In. the absence of any statutory or contract provision, the time in which the right of election must be exercised is not limited, except there must not be such unreasonable delay as to injure rights acquired by others.” McCracken v. Finley, Sneed, Dec. (Ky.), 195; Cooper v. Cooper, 77 Va. 198; Tibbits v. Tibbits, 19 Ves. 663.

The election provided for in this policy is different from any that is considered in the cases cited in the brief of the learned counsel of the respondent, or any that is usually found in reported cases, in one respect, and that is that the person to be notified of the election cannot be injured by delay, if notice of the election is given at any time before suit, nor, indeed, if given after that, in time for judgment, except, perhaps, in disappointing an expectation. The plaintiff could acquire no rights which might be injured by the delay. In most of the cases the parties are reversed, and the obligee and not the obligor, and the promisee and not the promisor, is to make the election which affects the rights of the other party. It would seem that the other party ought to be in such condition that his rights would be injured by the delay to complain of it. The plaintiff, by the policy itself, was entitled to nothing, as the policy was void. , By the condition, however, she is entitled to the insurance or the premiums and interest thereon — one or the other — at the option or choice of the company. She cannot know which she is to receive until such election by the company is made, and that is all the possible consequence of the delay. So essential is it that the other party must have rights to be affected by the election that it has been often held that an election may be revoked where the rights of others are not affected by it.” Evans' Appeal, 51 Conn. 435; Dabney v. Bailey, 42 Ga. 521; Sill v. Sill, 31 Kas. 248; Adsit v. Adsit, 2 Johns. Ch. 448; Elbert v. O’Neil, 102 Pa. St. 302; Dillon v. Parker, 1 Swanst. 359.

But notwithstanding this election differs from those most common, by the absence of any rights, to be injured by the delay to make it, yet it is in the form of one kind of election mentioned in the books; and we cannot say that it ought not to be made, and notice thereof given within a reasonable time. “ Election presupposes a plurality of gifts or rights, with an intention, express or implied, of the party who has the right to control one or both, that one should be a substitute for the other.” 1 Swanst. 394, and note; 3 Wood. Lec. 491. This is more like a case of plurality of gifts than of rights, so far as any consequences of delay are concerned. “An election by the obligor or promisor is not common, and it is usually and oftenest used as a legal term, as the choice of one of two things, to each one of which the party choosing has equal right, but both of which he cannot have.” 2 Bouv. Law Dict. 520, “ Election,” in note. In such a case the rights of the other party would be likely to suffer by delay. The party to receive would usually suffer only the displeasure of long waiting, or of disappointment up to the time it becomes necessary to demand that the election be made, or to bring suit to enforce it.

In the view taken above of the full import of what is meant by the “ equities of the case,” the company had the right to postpone its election until it could obtain information of all the facts and circumstances above mentioned necessary to a sound judgment of the election it ought to make. “ An election will not be compelled, until the party has had time and opportunity to become fully informed of the facts affecting its choice.” Macknet v. Macknet, 29 N. J. Eq. 54; Kreiser’s Appeal, 69 Pa. St. 194; Hall v. Hall, 2 McCord, Eq. 269; United States v. Duncan, 4 McLean, 99; 6 Am. & Eng. Ency. Law, 254; Dabney v. Bailey, 42 Ga. 521; Reaves v. Garrett, 34 Ala. 558. Can the court say that a few days over three months was an unreasonable time for the company to become fully informed of all the facts bearing on the question of what would be most equitable for the company to do in making the election? It seems to me not. The plaintiff had not suffered anything in her rights, and had not been pecuniarily injured in the least, and had not changed her condition in any respect by reason of the delay.

See note to this case in 12 L. R. A. 690.— Rep.

It may be that the following principle would obtain and be applicable to such an election: On the failure of a person, who has the right, to make an election in proper time, the right of election passes over to the opposite party.” Co. Litt. 145a; Bac. Abr. and Yin. Abr. tit. Election; ” Hopk. Ch. 337. The plaintiff did not take advantage of this principle, and elect to have the insurance, before she received notice of the election made by the company; nor did she predicate this action for the insurance on the ground of the unreasonable delay of the company to make the election. She has never complained of the delay, either by notice or pleading, or until on the trial of the action. The judgment for the plaintiff for the full insurance on the sole ground of this short delay, which had not injured the plaintiff in the least, was quite too strict a construction of this kind of an election. There does not appear to have been any ground for holding that the delay was unreasonable.

By the Court.—The judgment of the superior court is reversed, and the cause is remanded with direction to render judgment for the plaintiff for only the amount of the premiums paid upon both policies and interest thereon.

Cole, C. J., took no part.  