Pitt v. Berkshire Life Insurance

The policy of the plaintiff’s intestate was issued and accepted upon the express condition that it should cease and terminate, in case he should not pay the annual premium on or before the several days mentioned for the payment thereof, or should fail to pay when due any notes or other obligations given for premium. Two notes were given for the balance of the premium required to be paid upon the issuing of the policy, one payable on demand for forty dollars, and the other for thirty-three dollars, payable in three, six and nine months, in equal instalments with interest, to the said insurance company or order, to which last note was added a statement that it was for the balance unpaid of the cash premium on the policy and was given with the full knowledge and intent that, if not paid when due without grace, said policy should become absolutely null and void, in accordance with the conditions therein and this agreement. The policy recited, as consideration therefor, the amount of the cash premium in hand paid, and the annual premium of a like sum to be paid in each year during its continuance.

The defence rests upon the failure of the plaintiff’s intestate to pay the first instalment due on the note above described, by which, it is alleged, the liability upon the policy ceased, not having been continued in force by the provisions of the policy or of St. 1861, c. 186. And we are of opinion that it must pretil. The rights of the plaintiff must be determined by the *504terms of the contract to which the assured assented, when such terms do not contravene the principles of law or public policy Here they are perfectly plain and intelligible, and no resort is necessary to the known rules of interpretation to ascertain their meaning. The stipulations in regard to the payment of premium are of the substance of the contract, and were made upon adequate consideration. It is urged that the policy acknowledges the payment of the first year’s premium; that the condition refers only to future premiums, and that the notes in question are, by the decisions of this court, to be regarded as payment of the balance of the cash premium. But the terms include all notes or obligations given for premium. The note and policy are to be construed together, and the note declares that it is embraced within the conditions of the policy in reference to forfeiture. The acknowledgment of payment in the policy is always open to explanation by proof of the actual facts. The decisions of this court, which declare that the giving of a negotiable promissory note is evidence of payment of a preexisting debt, allow it always to be shown, to defeat the inference, that such was not the intention of the parties. It only in effect changes the burden of proof in such cases. And here the papers abundantly show that it was not the intention that the notes given should be considered payment of the premium unless paid when due. Curtis v. Hubbard, 9 Met. 322, 328. It is further argued that the note in question is a single, entire contract and was not due, although the first instalment was not paid as provided. In Vinton v. King, 4 Allen, 562, it is held that a note payable by instalments is overdue when the first instalment is overdue and unpaid so as to affect a subsequent holder with the equities between the original parties. In one sense it is not overdue as to the remaining instalments; but whether, strictly speaking, it is an overdue note or not, it is clearly within the conditions of the policy to be regarded as an overdue obligation given for premium to the extent of the first payment due on the note. Badger v. Titcomb, 15 Pick. 409, 413.

By St. 1861, c. 186, the entire forfeiture of life policies fpi *505nonpayment of premium is provided against, and this policy is expressly made with reference to those provisions. The net value of the policy on the day when the instalment became due is agreed to have been $71.76, an amount which is less than the indebtedness of the assured upon the two premium notes on that day, so that there was nothing to be applied as a single premium of temporary insurance upon his life.

Judgment for the defendants.