Opinion
March 3, 1915.
W.F. Dowling, for the plaintiff.
Warnick J. Kernan, for the defendant.
The plaintiff seeks to recover upon a life insurance policy of $500, issued by the defendant March 31, 1908, upon the life of her husband, who died February 14, 1910, in which she is named as the sole beneficiary.
The case comes here for the second time. Upon the first trial the jury rendered a verdict of no cause of action, but upon appeal this court granted a new trial upon the exception of plaintiff's counsel to the refusal to charge that the non-payment of a premium and the forfeiture of a policy are affirmative defenses which must be established by the defendant by a preponderance of evidence. ( 147 App. Div. 253.) Upon the second trial a verdict was rendered for the plaintiff, and the material questions of fact submitted to the jury were (1) whether the premiums except the first one were left unpaid, as claimed by the defendant, and (2) whether notice of the due date for the payment of the premium was mailed by the defendant as provided by section 92 of the Insurance Law (Gen. Laws, chap. 38 [Laws of 1892, chap. 690], § 92, as amd. by Laws of 1897, chap. 218, § 2, and Laws of 1906, chap. 326, § 29; now Consol. Laws, chap. 28 [Laws of 1909, chap. 33], § 92). The jury found a verdict for the plaintiff, but under the charge the verdict may rest upon an affirmative finding upon either of the two propositions stated.
The learned trial judge charged the jury, in effect, that even though there had been default in the payment of premiums the verdict must be for the plaintiff if the notice had not been given, and the defendant's exception thereto raises the precise question presented by this appeal. That question was not raised on the first trial or upon the appeal to this court.
The policy by its express terms makes the payment of the premiums when due a condition of keeping the policy in force, but section 92 of the Insurance Law ( supra), effective when the policy was issued, provides that no life insurance corporation doing business in this State shall within one year after default in payment of any premium, interest or installment declare forfeited or lapsed a policy such as this, nor shall any such policy be forfeited or lapsed by reason of non-payment when due of any premium, interest or installment or any portion thereof, required by the terms of the policy to be paid, within one year from the failure to pay such premium, interest or installment, unless the notice therein provided for shall have been mailed as therein specified to the person whose life is insured or the assignee of the policy, at least fifteen and not more than forty-five days prior to the day when the same is payable. Among other things the notice is required to state that unless such premium then due shall be paid by or before the day when it falls due, the policy will become forfeited and void, except as to the right to a surrender value or paid-up policy, as provided in the chapter of which section 92 is a part. And the section further provides that no such policy shall in any case be forfeited or declared forfeited or lapsed until the expiration of thirty days after the mailing of the notice. The final paragraph provides: "No action shall be maintained to recover under a forfeited policy, unless the same is instituted within two years from the day upon which default was made in paying the premium, instalment, interest or portion thereof for which it is claimed that forfeiture ensued." Until 1897 this section provided absolutely that no such policy should be forfeited or lapsed or declared forfeited or lapsed without mailing the notice; but in that year by chapter 218 of the Laws of 1897, the section was amended by making the time limit of one year after default during which the policy should not be forfeited or lapsed, and also incorporating the provision for limiting the time for commencing an action to recover under a forfeited policy to one year from the time of default, now two years. (Laws of 1906, chap. 326.)
The trial court held that the essence of the statute as it stood before the extension of the time to two years lay in the prohibition against maintaining an action unless the same was instituted within one year from the day upon which default was made in paying the premium, and that the effect of extending the period within which to bring the action from one year to two years was to permit a recovery where it was shown that no notice was given, if the action upon the policy was brought within two years from the date upon which default was made in paying the premium; and hence, as two years had not expired after the premium of September 30, 1908, fell due, before the action was brought, the action was timely. ( 86 Misc. Rep. 650.)
Just what is meant by "forfeited policy" is not clear. As has been seen, by the amendment of 1897 the one-year period of grace before a policy could be forfeited or lapsed after the premium became due, without mailing notice, was exactly the same as the time within which the action must be brought upon a forfeited policy; that is, one year after the premium became due. It is not apparent how an action could be brought upon a forfeited policy within one year from the time the premium became due if it was not forfeited until the expiration of that period of time. It is possible that the expression means a defaulted policy, that is, a policy which has accrued by the death of the insured after the premium became due and before the expiration of the non-forfeiture time limit, as is suggested by Mr. Justice DE ANGELIS in his opinion delivered upon the motion for a new trial ( supra). Counsel for the appellant suggests that it applies to a recovery under a policy which has become forfeited or lapsed but which has been sufficiently long in force to have a surrender value or entitle the holder of the policy to paid-up insurance under section 88 of the Insurance Law. (See Gen. Laws, chap. 38 [Laws of 1892, chap. 690], § 88, as amd. by Laws of 1906, chap. 326, § 27; now Consol. Laws, chap. 28 [Laws of 1909, chap. 33], § 88, as amd. by Laws of 1909, chaps. 301, 595; since amd. by Laws of 1910, chap. 614.)
But that question need not now be decided. Whatever view may be taken of this expression, the action was timely brought. I am, however, of the opinion that the time limit contained in this section is more than a mere statute limitation for bringing an action; it also establishes a non-forfeiture time limit, and I think it reasonably clear that the non-forfeiture time limit without mailing notice is one year and not two years. This section was under consideration in Schuell v. Mutual Life Insurance Co. ( 53 App. Div. 172) and in Adam v. Manhattan Life Insurance Co. ( 204 N.Y. 357). While neither of these cases was precisely in point, the reasoning of Judge HAIGHT in the latter case, I think, bears out the conclusion which I have reached. I am of the opinion that this policy became forfeited and lapsed one year after default in the payment of the premium without mailing the notice specified in section 92 of the Insurance Law. If that conclusion is correct, it follows that the judgment and order must be reversed.
As regards the plaintiff's appeal from that part of the order which overrules her objection to the trial judge entertaining the motion for a new trial, upon which she succeeded by the denial of the motion, it is sufficient to say that we think the point is not well taken.
The judgment and order so far as appealed from by the defendant should be reversed and a new trial granted, with costs to the appellant to abide the event.
All concurred.
Judgment and order reversed and new trial granted, with costs to appellant to abide event.