COFFEY V. UNIVERSAL LId INS. co.
COFFEY V. UNlVERS.u. LIFE INS. Co.
(O'ircuit Oourt, B. D. Wisconsin. May 20, 1881.)
The plaintiff was the holder of a policy issued by the defendant company, which provided that In case of default in any payment of premiums after two full years' payment had been made, the policy might be exchanged for a paid-up endowment policy for a certain amount, subject to the condition that the policy, duly receipted,. .. shall have been transmitted to and received by the company within 60 days after such default." The premium due AuguSt 23,1877, was unpaid, and no offer to surrender the original policy for a paid-Up policy was made by the plaintiff until March, 1879. Held.: (I) That failure to transmit the policy to the company within the ilO days after default, in' the a'l\sence of. circumstances adequate' to excuse non-compliance with this' condition, involved 'the loss 'of aU right of the plaintiff to the policy. if ,,'; .' . . (2) Th.at tbe company, Iritbe' light of :all- the faoUl and 'circum.stances of the case-havi'iig'retri.ed, by itS"agent, to accept the pr&. mium on the day it was due, of 'proceedings It for dissolution and theappointfueJit ofareoeiver, and tiot htiving thereafter given 'the plaintiff 'any Jlotice Of ail. opportunitY' to' pay the premIum elsewhere;' and'hBving; in reply to' higlettets of inquiry"denie<i his right to nny' iilforfuatiotl, 'and hivirig led him,to . sUppose that his policy had w!iolltiapsed, i1nd tbMitcould do noth" , big towards revivIng the same:tintilelear of .the' court' pl"Oceedlngs" , and then only an' a.ct 'gra'Ce'ol'favor..:,1,.'Were 1!8topped to' aSSel'" , that the plaintiff hadforfeltlld to'thepaid-up pd1iCy by , :thilure to transmit the origirialpolicy within '60'dats after'lion-pay'" . ment of the premium <in AUgUSt'23, 1877. . .' .
Dixon ,J; Noye3, for complaina.nt. Sleeper et Whiton, for defendant.
This is & bill to -cc)1npel the defendant company t which is a corporation of the state of New York, to issue to the complainant & paid-up policy of life insurance of the amount of $600; and the controversy between the pa.rties arises upon the following state of facts: .
On the twenty-third day of May, 1868, the complainant procured from the defendant company a policy ot insurance on his own life, for the sum of 11,000, payable to Honora Coffey on the twenty-third day of May, 1883, or in case of complainant's death before that day, then within 30 days after notice and proof of death. The policy required the premiums to be
paid in four instalments, of $14.26 each, on the twenty-third day of May, August, Novemb/lr, and,February, in each year, and contained a condition tnat in case'of default in the payment of either of the premiums the policy should become. void, and all payments made thereon should be forfeited, except as further provided. By the terms of the policy it was further stipulated, that, in case of default in any payment after two full. years' payments had been made thereon, the.policy might be exchanged for a paid-up endowment policy for an amount stated in a table given in the original policy, subject to the condition that the policy, duly receipted, " shall have been transmitted to and received by the company within 60 days after. such default, and that no condition of the policy shall have been violated." By the table annexed it was made to appear that the payment of premiums,would entitled, complainant, after nine under the conditions before stated, to a paid-up term policy for $600. All premiums were paid to the twenty-third day of May, 1877, inclusive, covering a period of nine years from the date of the policy. Payments were made to local agents of the company in Wisconsin. On the twentythird day of August, 1877,the complainant went to the company's agent in Milwaukee, as usual, and desired io pay the premium due on that day, but was told. by JIogent that the buainess of the company was in the hands of a receiver,. or would be, and that he had no authority to receive the money. The complainant testjfies that heolIered to pay the premium due on tliat day, but was advised by the agent not to make any more payments until the busine!lll of the company was settled. It apPl'lar8 that on the twelfth. day of July, 1877, the attorney general of the state of NewYo.rk filed an information against the company, in the supreme court of tha(. state, alleging its insolvency,and cause why its business should not be closed, praying for an order to and for a decree dis8Qhing the company and appointing a receiver. On the eighteenth day 1877, an order was entered by the court in those proceedings permitting any policy-holder, until further order, to pay to the United States Company any premiums thereafter becoming due on policies issued by the insurance company, with the same elIect as if paid to said company. Afterward, and on the twenty-third day of August, 1877, which was the day when the premium on complainant's policy was due, the court made. an oider restraining the company from exercising any of its corporate rights, privileges, and franchises, except receiving and paying. moneys as thereinafter allowed, and from paying o'ut,or in any way or delivering, to any person, any of the effects, moneys, or property of the company, except salaries of employes and officers then· due, and· from collecting or receiving any debts or der.nands except interest, agents' balances, and premiums, until the court should otherwise order, This remained in force until October 29, 1878, with curtain modifications,-such of which as are material here will !Ie presently referred. to, On the 1.Jlt day of September a further motion was made for the appointment of a receiver. Orders were duly entered postp()ning ;I,1eari1Jg of this from September 4th to September and iromtb,e latter date to September 14, 1877, on condition that "Qone of the policies .company should be decreed to have lapsed nor
<JOFFEY V. UNIVERSAL LIFE .INS. <JO.
become forfeited by reason of the noncpaymerit of preihiums due after September 3d and, before the decision of the motion for a recei'rer; to which condition the company consented. Again; on the fourteenth of September, the hearing of all motions in said proceedings was adjourned until November 17, 1877. On the thirteenth day of October of that year an order was entered permitting the company to accept payment of debts due to it, including payments on mortgages, and restraining all persons and corpo·' rations from commencing any action or proceedings against it. On the eighth day of December, 1877, an order was made postponing the hearing of the motion for a receiver until such time as it might be brought on by' the attorney general, on five days' notice. This order alBo provided that the time of payment of all premiums due and to become due on outstanding policies be extended 30 days after the entry of the final order on the motion fora receiver; and all injunctions theretofore granted were continued in force until the final order of the court, except in particulars further specified, but not material hertl. Various proceedings were thereafter had, until, on the twenty-ninth day of October, 1878, an order was made vacating the order of August 23, 1877, so far as it restrained the company and its officers from exercising any of the corporate rights, privileges, and franchises of the company, and the company, and its trustees and officers, were authorized to resume their powers in the business of the corporation and their control over its assets. This order required that a to every policy-holder, witli a notice declaring copy of the same be the company solvent, and requiring such policy-holder to pay his premiums, past due and unpaid, within 90 days from the 'day of mailing a copy of the order and notice, and provided that the company should not forfeit any insurance, by reason of the non-.payment of past-due premiums, until after the expiration of said 90 days; the court J;eserving the. power to relieve from any forfeiture by reason of the non-receipt of a copy of the. order and notice, on good cause shown.' . . . ,. It appears that about the twenty-first day 'or-July, 1877, the company deposited in the mail at New York a postalcard,upon which was printed so much of the order of the court in New York, of date July 17,1877, as permitted policy-holders to pay premiums thereafter becoming due on their policies to the United States Trust Oompimy,which was undoubt. edly intended to be sent to the complainaut, but" was in fact addressed to Honora Coffey, Milwaukee, Wisconsin.P,rior to t877, a postal card was also mailed, giving notice. of the amount of tl}.e premium falling due on the. complainant's policy on August 234,'anli of, the time when due, and that it could be paid at the' 'office of· ilie company, or to an agent, when such a,gentproduced a receipt signed by an o.fllcel' of the company; but this was also addressed tollonora .Coffey., of these postal cards was received by the complainant, but he'was iUformed by letter from the secretary of the company, of date March 9, IS78, of the order of July 17; theattorMysfor complainant and com,pan;v, eltendiI!-g trt¥Il3, 18]78", ,to; March 29, 1879, shows .Hlat about tweI)-.ty-ufthofFebru8:ry" J,879',tb,e former were informed of the entry of the order of the court, of (late ber 29, 1878, and that about the seventeenth day of 1879, the com.
plainant formally offered to receIpt and transmit his policy to the company, and requested the issuance of a paid-up policy to him, or an opportunity to pay the back premiums then unpaid. The company declined to comply with either of these requests, on the ground that the notices before mentioned were duly sent; that the complainant was advised of the situation of affairs when the proceedings against the company.were pending, and failed to seasonably take any steps either to keep his policy in force, or by receipt and transmission of the same to procure a paid-up policy. The complainant, in his testimony, says that he did not receipt and transmit the policy within 60 days after August 23, 1877, because he did not think the company was in existence, and because he had no instructions so to do.
Upon this state of facts it is contended in behalf of the that by the payment of nine years' premiums he purchased paid-up insurance to the amount of $600; that the transmission and receipt of the policy within sixty days after default in any payment of premium was not a condition precedent to the right to have a paid·up policy; that by the proceedings against the company in New York it was then disabled to issue such a policy, even if the original pol. icy had been receipted and transmitted within the sixty days, and therefore strict performance of the condition by the complainant was excused; that, under all the circumstances, the ultimate offer to receipt and return the policy, and the demand of a paid.up policy, were seasonably made; and that the court ought not to make such a decree as would operate to enforce a forfeiture of the complainant's rights under his policy. The grounds for relief thus urged are all combated by counsel for defendant, who insists that time wal:! of the essence of the condition requiring transmission and receipt of the policy within sixty days after default in the payment of any premium; that by the failure to mak;e payment, and then the further failure to receipt and transmit the policy within the required time, the policy lapsed, and all right to a paid·up policy was lost; that the temporary disability of the company did not excuse non-compliance with the condition requiring action on the part of the insured within the prescribed time; and that the offer to receipt and return the policy after such disability was removed was not seasonably made. The case has been argued rather upon bare propositions of
UNIVERSAL LIP-E INS. CO.
ldw touohing the proper oonstruotion of the olauses in the polIcy, and the striot rights of the parties under the literal letter of the policy, than in the light of the exceptional faots and circumstanoes of the case. Looking alone at the polioy, it may be said of it, in substantially the language of the court in N. Y. Life Ins. Co. v. Statham, 93 U. S. 30, that the contraot is not an assuranoe for a single year, with a privilege of renewal from year to year by paying the annual premium, but that it is an entire oontract of assurance for 15 yeaJ;s, or for life, if the assured should die before the expiration of that period, subject to disoontinuance and forfeiture for non-payment of any of the stipulated premiums, exoept that in oase of default in any payment after two full years' payments had been made, the policy might be exchanged for a paid-up polioy for a oertain amount, on transmission of the original policy, duly to the company within sixty days after suoh default. This was the oontract. In the absence of anything to save the oase from the operation of the letter of the policy, it was undoubtedly the duty of the assured, if he wished to keep the policy in continuing foroe, to pay the premium due August 23, 1877, on that day. If, on the other hand, he wished to secure a paid.up polioy, he could make default in the payment of the premium, and then his duty was to transmit the original policy, duly receipted, to the company within sixty days after such default. These were conditions precedent in the one case to the maintenance of his rights under the original polioy, and in the other to his right to a paid-up policy. Failure to perform either, if there were no circumstances adequate to excuse non-compliance with these oonditions, involved a lapse of the policy and 108s of all rights thereunder. This conclusion is sustained by the better authorities on the subjeot. But oases of the general charaoter of this, sometimes arise, in which the circumstances are deemed adequate to justify the courts in relieving a party from suoh oonsequences, and in whioh suoh relief is deemed oonsonant with proper observanoe of the rights of parties under their contraot. Does this case fall within that category? v.7,no.3-20
On the twenty-third day of August, 1871, the assured applied· to the company's agent to pay the pr&.ium then due. Re had paid the premiums in all previous years to local .agents. The company had autl10rized it, or at least had sanciioned it, by 8:cceptance of the payment. With reference to ihe premium due August 23, 1877, he received no notice to do otherwise. A notice that the premium would be due on that day, and that the holder of the policy might pay it at the office of the company in New York, or to an agent who should produce a receipt signed by an officerof the company, was mailed by the company, but it was not addressed to the ,complainant, and was not received by IJim. This was no fault of his. The agent to whom he offered to pay the premium refused to accept it. This, under the circumstances, was the refusal of the company. In. the beginning, then, we find that the assured was deprived of the qpportunity to pay his premium on the day it was due, and thereby keep his policy in force, by refusal of the company to acc,ept the premium. Moreover, the agent informed the assured that the business of the company would be or then was in the hands of a receiver, and advised him not to make any more payments until the business of the company should be settled. Perhaps the agent was not authorized thus to speak for the company, but it is still a material fact that this information and advice emanated from one with whom the assured was authorized to deal as the local representative of the company; and the assured, it appears, was led to rely and rest upon this information. Meantime, the fact was that proceedings had been instituted and were then pending in the courts (If New York for a dissolution of the corporation; and,ou the very day the assured was seeking to paythe premium on his policy in Wisconsin, the company was enjoined in New York from -exercising its corporate rights, privileges, and franchises, except in certain very limited particulars. It is true ,that on July 18, 1877, an order was made permitting policy-holders to' pay their premiums to the United States Trust Company ; but .again, by the fault of the insurance company, notice of this <order was mailed under the wrong address, and was nevel
OOFFEY V. UNIVERSA.L LIFE INS. 00.
received by the complainant, nor, so far as the proofs show, did he know that such an order had been entered until March, 1878, when mention was made of it in a. letter which he received from the secretary of the company. Under the circumstances stated, the complainant rested from August, 1877, until February, 1878, when it appears he wrote a letter, addressed to the receiver of the Universal Life Insurance Company, which the proofs indicate was a letter of inquiry, and which was probably thus addressed because he had been led to suppose, from statements made by the local agent of the company in August previous, that a receiver was in charge of the affairs of the company. To this letter the secretary of the company made answer by communication of date Pebruary18, 1878, as follows:
"We beg leave to state to you that no receiver has been appointed for this company, and, further, to state to you that we think it is quite unnec. essary to answer the questions you propound to the receiver, for the rea· SOD that your policy No. 4472 became absolutely forfeited, according to its terms, for the Don-payment of the premium dU!l August, 1877. You have, therefore, no such interest in the company's atIairs as would warrant any reply to your questions."
Thus, after. the company, by its own agent, had refused to accept the premium offered on the day it was due, and had' given the assured no notice of opportunity to pay it elsewhere, and he had been led to rest inactive for months, when first he sought information to which he was, under the circum. stances, then clearly entitled, he was curtly told, in substance, by the secretary of the company, that his policy had become absolutely forfeited for non-payment of the August premium, and that therefore he had no such interest in the company's affairs as would warrant a reply to his inquiries. In this manner was the assured dealt with at a time when, upon a showing of the facts then existing, no court deserving the name of a court of equity would have hesitated to compel either the acceptance of the unpaid premiums for the purpose of keeping the policy in force, or the acceptance of a. surrender of the policy as the basis of a right, to a paid-ul> policy, as the policy-holder might elect. But the complainant, still persistent in efforts to obtain
information, on the fifth of March, 1878, addressed a. letter to the superintendent of insurance of the state of New York, which, it seems, was put into the hands of the secretary of this company, and he replied, stating, among other things, that prior to the date when the premium of August, 1877, became due the company had mailed to the complainant a notice that that premium could be paid to the company direct, or to the United States Trust Company; that, if paid to the trust company, it would be subject to the order of the court in the matter, and that an order to that effect was made by the court on the seventeenth day of July, of which 8.11 the policy-holders had due notice. This statement was incorrect in several particulars. No such notice had been sent to the complainant, nor did the notice which the company misdi·. rected, according to its own proof, state that the premium could be paid to the company direct, nor did the order itself so proVide. The was then informed that he had chosen to actupon reports .and publica,8!?ertions in reference to the affairs of, the company, instead ..afmaking,inquiry di.' rect at the office. And this was saidin'the'face of the taryl',8 letter of. February 18th, in which the was infOJ1wedthah,j],ispoliey was forfeited, and, his, requests ,for information were summarily refused, and( treated as ,ihe, in.. quiries of an impertinent intruder., In the letter of, Match 9th .the secretary further says:
"As the matte.r now stands the company is still, under the,oroer of the court, prevented from entering into any agreement Or rllvi\,ing any policies which. have lapsed, or doing anything except to the ex'tent permitted by the special order of the court issued in reference thereto. However much disposed we might be, to re-instate your policy, we cannot do 80 untt1 we are clear of the COU?'t proceedings. Then we can give the matter further consideration. We, of course, can make no promise to' hereafter restOre the policy on the payment of the premium, and can only say that we will consider such facts as you may have to present when we are able to act as a company."
Here the matter was left to rest until August, 1878, when correspondence began between the company and the complainant's solicitors. Now, if it be said that in March, 1878, the complainant was thus advised that the court in New York had in July, 1877, authorized the payment of premiums to
COFFEY V. UNIVERSAL LIFE .INS. CO.
the United States Trust Company, and that the complainant should then either have made payment, or within sixty. days thereafter have transmitted his policy, duly receipted, and asked for a paid-up policy, it may well be replied that in the preceding February the secretary of the company had as· serted to the complainant that· his policy was already for. feited; and the statements in the letter of March 8th, just recited, were such as to naturally lead the assured to under. stand that his policy had wholly lapsed, and that, if anything was thereafter done in the way of reviving it, it could only be done after the company was clear of the court proceedings, and after it .could act as a company, and,then only as an act of grace or favor. And thus the action of the company II).lJ.qe it natural to suppose that nothing could be done by either if;. or the complainant uutil after its power alld authority to act to it; and it was upon this tl:).eory, evidently, that the. complainant's counsel acted from Augu.st, 1878, to March,.1879, as is ·by their)etters of inqu4'y) in evidence, written to the comp.any." . It is noticeable, also, that although the. of thecQurt in New York, made OctolJer 29, 1878, by which the compauy was authorized to resume husines,B,l'equired of the order to be sent to policy-holders, and.gave the day!! after suchnQtice in which to pay past-due pr13miums, no notice in obedience to that order was sent to the complainant, and it was not until about February 26, 1879,-nearly a month after the ninety days had expired;that the complainant, by his counsel, was informed of. that order, although his counsel had been in correspondence with the company since August, 1878. Finally, in March, 1879, the company was requested either to recognize the policy by accepting the past-due premiums or to issue a paid-up policy on transmission of the original, duly receipted. The reasons assigned by the company for refusing so to do were that the notices before mentioned were duly sent to the complainant; that he did not write to the company; and that he made no attempt to ascertain the facts, either from the company or its loeal agent in Milwaukee,-most of which reasons were,
as we have seen, unfounded in fact. And further, as late 0.9 March 14, 1879, it was represented by the company that it was still in the hands of the court, with the order of October 29th yet in force and the application for a receiver still pending. Now, undoubtedly, if the circumstances were such as to excuse the complainant from literal compliance with the condition of the policy as to its transmission, duly receipted, it was his duty, if he would avail himself of the right· to a paid-up policy, to act with requisite promptnesR after those circumstances ceased to exist. And I think such action was taken when a surrender was offered, in 1879. In the light of all the facts and circumstances of the case, I have no hesitation in holding that the complainant had at that time a right to take the necessary steps to secure a paid.up policy. After all that transpired between the com· plainant and the company, from August 28, 1877, 1879, I think the company should be held estopped to assert that the complainant forfeited his rights by failing either t() pay the premium on the twenty.third day of August, or to transmit the policy receipted and to demand a paid-up policy within sixty days after such default. I have carefully examined and thoroughly considered the authorities cited on the argument, and especially the case of Whitehead v. Universal Life Ins. Co., decided by the supreme court of Mississippi, unreported, and in which a manuscript copy of the opinion has been furnished. In that case the cotirt held that the clause in the policies of this company requiring the policy to be transmitted, duly receipted, within sixty days after default in the payment of any premium, if a paid-up policy was desired, was a condition precedent; that time was·of the essence of the contract, and that, to entitle the assured to a paid-up policy, he must have strictly com- . plied on his part with the literal terms of that condition. notwithstanding the company was disabled by the proceedings against it in the courts of New York to issue a paid-up polioy. The question arose in that case on demurrer to a bill to enforce the issuance of a paid-up policy, filed by the representative of the assured after the latter's death; and it wal!
COFFEY V. UNIVERSAJ,. LIFE INS. CO.
undoubtedly well decided that the election to take a paid-up term policy should have been made during the life of the assured, and on that ground alone the demurrer was sustainable. But, on the general question decided, it is to be observed that the case does not show that the bill set out the proceedings in New York against the company, further than to state the institution and general character of the proceedings, the injullctional order of the court of August 23, 1877, and that such order continued in force until October 29, 1878. In view of the manner in which the question there arose, the fact that the bill was filed after the death of the assured by his representative, and of the absence of many of the most material facts brought out in the case at bar, I do not regard the decision in the Mississippi case as an authority that should be deemed controlling here. Referring again to the proceedings in New York, it is, perhaps, worthy of observation that it appears from the order of the court made October 29, 1878, by which the company was declared solvent, that pending those proceedings the company procured releases of policies from the holders to the extent of over $7,000,000, and that policies which had become claims by the death of the insured and matured endowments, to the extent of over $600,000, had been released one-half by the holders thereof. These facts were recited in the order, in con· nection with the judgment of the court, that the company had become solvent, and show that there was cause for the institution of the proceedings, and that the disability of the company to act arose from its financial condition and the consequent intervention of the court; and that it was (lnly removed when solvency was brought about by the cancellation of a large amount of its liabilities. A decree will be entered requiring the defendant to issue and deliver to the complainant a paid-up policy for $600, on surrender of the original policy, properly receipted,-the speterms of which decree can be settled hereafter.
NOTE. The cases cited on the argument were ChalllJ v. PhmniaJ ;M'-ut. Life Ins. Co. 7 Ins. L. J. 93; Dorr v. Same, Id. 368; Montgomeryv. Same,' 8 Ins. L. J. 300; v. lllut. J;Jenefit Life Ins. Co. 7 Ins. L. J. 926 ;
Knickerbocker Life In,. Co. v. Dietz, 8 Ins. L. J. 544; Winchell v. · Tohn Hancock Hut. Life Ins. 00. Id. 651; Johnson v. Southern Mut. Life Ins. 00. 9 Ins. L. J. 189; Anderson v. St. LouiB Mut. Life Ins. 00. 5 Bigelow Ins. Rep. 527; Seamans v. No W. Mut. Life Ins. Uo. 3 FED. REP. 32lj: and Whitehead v. Univer8al Life Ins. 00., decided by supreme court of Mississippi, unreported.
(Oircuit Oou'l't,D. Kansas. January, 1881.)
The jurisdiction of a general court-martial may always be inquired into by the civil courts, upon the application of any party aggrieved by its judgment, and if such a court exceeds its authority, and undertakes to try and punish a person not within its jurisdiction, its judgment is void, and may be so declared by any court having jurisdiction of the proper parties and of the SUbject-matter.
2. SAME--HABEAS CORPUS. Where a soldier in the army of the United States was arrested for a
crime, and his term of enlistment expired before his trial and conviction by court-martial, it was held that the jurisdiction of the court having once attached by the arrest, it retained jurisdiction for all the purposes of the trial, judgment, and execution.
Petition for Habeas Corpus. The petitioner was, on the sixth of September, 1878, an enlisted soldier in the army of the United States, on duty in Wyoming territory, and on that day unlawfully assaulted and shot another soldier. For this offence he was arrested and held in custody, under charges properly preferred, awaiting the appointment and convening of a court-martial until the following March, 1879, when he was bronght before a court martial, convicted, and sentenced to five years' imprisonment in the Kansas penitentiary, where he is now confined, in the custody of respondent, as warden, in pursuance of said sentence. Between the time of the commission of said crime and the prisoner's arrest and the commencement of his trial his term of enlistment expired. He petitions for release from imprisonment upon the ground that the court-martial had no jurisdiction to try and convict him after the expira-