
    Matthews v. Insurance Co.
    A fire insurance policy for five years required the insured to pay $16 cash, and give a note, payable, according to the terms of the policy, in equal installments, annually, for four years without interest; and stipulated that if any installment should not be paid within thirty days after due, the policy should be null and void until payment by the assured of the installment; but such revivor should not make the insurer liable for any loss occurring during the default.
    
      Held: While the policy was so null and void, no premium was earned by the insurer, and the insured is entitled to a credit on the note for the aggregate of such unearned premium.
    Error. Reserved in the District Court of Lorain County.
    Martin Matthews made a written application to'the American Insurance Company for insurance on his property for the term of five years from the first day of December, 1873, stipulating “ if any installment upon the premium shall remain due and unpaid thirty days, then the policy issued upon the application, in consideration of such installment, shall be null and void until the same is paid.” A policy making said application part • of itself was issued to him: he paid $16 cash premium and gave a note, promising to pay to the,company $16 on the first day of December, 1874, and-a like sum on said day in each of the three years next following. ' The policy provided for default in payment of any installment thus:
    “ This company shall not be liable * * * * * if default shall have been made.by the assured in the payment of any installment of premium due upon the installment note aforesaid, of the assured (or in case of the assignment of the policy, upon the installment note of the assignee,) for the space of thirty days after such installment shall become due by the terms of such note; provided, however, that on payment by the assured or assigns, of all installments of premium due under this policy and the installment note given thereon, the liability of this company on this policy shall again attach, and this policy be in force from and after such payment, unless this policy shall be void or inoperative from some other cause. Bat this company shall not be liable for any loss happening during the continuance of such default of paj-ment. * * * The application and description referred to in this policy, shall be considered part of this contract. * * * If the cash premium shall be unpaid, then and in every such case, this policy shall be void, and the assured shall not be entitled to recover from the company any loss or damage which may occur to the property hereby insured, or any part or portion thereof. When a promissory note is given by the assured, for the cash premium, it shall be considered a payment, provided such note is paid at or before maturity; but it is expressly understood and agreed, by and 'between the parties hereto, that should any loss or damage occur to the property hereby insured, and the note given for the cash premium or any part thereof remain unpaid and past due at the time of such loss or damage, then this policy shall be void. It is further provided that ho attempt by law or otherwise, to collect any note given for the cash premium, or any installment of premium due upon any installment note, shall be deemed a waiver of any of the conditions of this policy,, or shall be deemed in any manner to revive this policy; but upon the payment by the assured or his assigns, of the full amount due upon such note, and costs if any there be, this policy shall thereafter be in full force, unless the same be inoperative or void from some other cause than the nonpayment of such note.”
    The final clause of the policy read thus: “ This policy is made and accepted upon the above express conditions, and the charter of this company, which is to be resorted to and used to explain the rights and obligations of the parties hereto, in all eases not herein otherwise specially provided for, and which is hereby made part of this policy.”
    Matthews paid the-$16 due December 1, 1874, but made no other payment. About.September 5,1878, the company began suit before a justice of the peace, claiming $48 and interest. After judgment the ease was appealed and the companj1, recovered a judgment in the common pleas, on June 13, 1879, for $50.09. A motion for a new trial was overruled, exception noted, a bill of exceptions taken, and a petition in error filed in the district court, where the case was reserved for decision here.
    
      Metcalf f Weller, for plaintiff in error,
    relied on Yost v. Ins. Co., 39 Mich.,-; Ins. Co. v. Stoy, 41 Mich., 389.
    
      N. L. Johnson, C. 3. Doolittle and F. F. D. Allery for defendant in error.
    The condition in an insurance policy, declaring it void or suspended during default of payment of a premium note, is a valid condition, but subject to waiver. Williams v. Albany Ins. Co., 39 Mich., 451; Wall v. Ins. Co., 36 N. Y., 157; Balcer v. Ins. Co., 43 lb., 283; Pitts v. Ins. Co., 100 Mass., 500; Beadle v. Ins. Co., 3 Hill, 161; Jolliffe v. Ins. Co., 39 Wis., 111.
    The same form of contract declared on in this case, is held valid, and the premium note unpaid, at the time of default in payment by the assured, collectable. American Ins Co. v. 3enley, 60 Ind., 515; Same v. Klinlc, 65 Mo., 78.
   Gbangeb, O. J.

In the absence of an express agreement to the contrary, whenever the insurance ceases in favor of the company, the premium ceases to accrue against the insured. Tyric v. Fletcher, Cowp., 668; May on Ins., sec. 4; Am. Ins. Co. v. Stoy, 41 Mich., 394.

Here the company claims that such an agreement existed, by reason of the reference to the charter and its incorporation into the contract. But the charter was to be “ used to explain the rights and obligations of the parties hereto in all cases not herein otherwise specially provided for.” The policy itself specially provided for the case of a default in the payment of any installment of the premium note, giving full effect to the stipulation set out in the application. Taking policy and application together they told Matthews that, if he should fail to pay an installment when due, or within thirty days thereafter, the policy would be void, subject to revivor by payment — the company to be free from liability for any loss occurring during the interval of default. To add thereto an additional penalty, to require full payment.of premium for years in which the company was free from liability, would provide “ otherwise ” than as stated in the policy. A majority of the court are of Opinion that so much of the charter as makes the whole note due in case of a default in the payment of one installment did not form a part of the contract in this case. The supreme court of Michigan in American Ins. Co. v. Stoy, 41 Mich., 395, thus construed a similar policy, holding that the charter was “made apart of the policy for the purpose of explaining such rights and obligations of the parties as are not otherwise provided for by the terms of their agreement,” and that the application and policy fully and specially provided for the case of a default in the payment of an installment of premium, and the charter could neither enlarge, vary nor change' the written obligation.

The stipulations of the application and policy made the-policy null and void during the whole period of default. No provision was-made for a revivor save by the act of payment by the insured. Unless he should by his act restore its vitality it was to remain void. The premium note was part of the contract made by the policy, and was additional evidence of what the insured agreed to pay in consideration of the promises of the company. So soon as the policy became void the premium ceased to accrue, and the company lost the right to recover the unearned installments of the premium note. The policy constituted the contract between the parties. The application and notes were parts of it. To make the policy void was to, leave no contract between them in existence. To make it void until Matthews should pay the installments in default was to leave no contract between them except the stipulation, that he, by payment, might restore the contract. This suit was begun while the policy was in 'this state of suspended animation. A majority of the court are of opinion that the insured was entitled to a credit on his note for the aggregate unearned premium, to wit, so much of the premium originally contracted for as covered the time dining which the policy was null and void.

The judgment of the district court and common pleasure reversed.

Dickman and Martin, JJ., dissented.  