Eddie v. New York Life Insurance

NOURSE, J.

This action was tried on a stipulation of facts to recover on a policy of life insurance issued by the defendant company to Charlotte F. Eddie, deceased. Judgment went for the defendant and the plaintiff appeals on the judgment-roll and a bill of exceptions.

By the terms of the policy the defendant promised to pay the plaintiff, who was the beneficiary therein, the sum of $5,000 upon proof of the death of the insured. The policy called for the payment of annual premiums of $159.55 each on the twenty-third day of February of each year in advance. The policy contained the usual nonforfeiture clause providing that in case of default of any premium payment the cash surrender value of the policy, including dividends accrued, if any, should be applied as a premium upon paid-up nonparticipating insurance in accordance with the schedule fixed in the policy, and also provided that within three months after default the insured might at her option receive either the cash surrender value or paid-up insurance. Annual premiums on the policy were paid for the first two years in cash. The premium due February 3, 1916, was not paid, but in lieu thereof a lien note for the full amount was executed by the insured and delivered to the defendant. On February 23, 1917, another annual premium became due, as well as interest on this lien note of February 23, 1916. At the same time there became due the insured by way of dividends on the policy the sum of $26.95. The insured was unable to pay the premium for the fourth year and an agreement was thereupon executed between the insurer and the insured which is commonly referred to as the “-blue note.” This note was for the sum of $111 and was made payable on August 23, 1917. The note recited that it was accepted by the insurer at the request of the maker, together with $48.55 in cash paid by the insured, and that this was all done on

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the express agreement between the parties; that, although no part of the premium due on February 23; 1917, had been paid, the insurance under the policy shall be continued in force until midnight of August 23, 1917; that if this note is paid on or before the time it becomes due such payment, together with the cash mentioned, will be accepted as payment of the premium due February 23, 1917, but that if the note is not so paid it shall thereupon automatically cease to be a claim against the maker, the insurer shall retain the cash as part compensation for the rights and privileges granted by the extension of the policy and all rights of the insured shall then be the same as if no part of said premium had been paid, except only that the time within which the insured may make a choice of benefits after the lapse is extended for three months after the due date of the note, but no longer. The insured failed to pay the note, or any part of it, and failed to pay any of the premiums due upon the policy covered by the note and neither the insured nor anyone in her behalf within three months after August 23, 1917, or in fact at any time, made any choice of benefits after the lapse of the policy as provided therein. The insured died on the fifth day of November, 1917, and immediately thereafter demand was made upon the defendant by the beneficiary for full payment of the policy.