MUTUAL LIFE INS. CO. OF NEW YORK v. HILL et al., 97 F. 263

HAWLEY, District Judge, after stating the facts as above, delivered the opinion of the court. This action was brought upon a policy of insurance issi-ed by the plaintiff in error, April 29, 1886, insuring the life of George Dana Hill for $20,000, upon which the first annual premium of $814 was paid when the policy was delivered. No other premiums were ever paid or tendered upon this policy.

No notice was ever given by the insurance company to the insured as required by the laws of the state of New York to the effect, among other things, that unless the said premium or interest due on said policy shall be paid the company within 30 days after the mailing of such notice, “the said policy and all payments thereon will become forfeited and void.” On December 4, 1890, George Dana Hill died. His surviving beneficiaries under the policy are defendants in error. Judgment was entered in their favor upon the pleadings on January 18, 1899, for $24,086.61, with interest and costs.

The policy of insurance, and all the circumstances in relation thereto and in connection therewith, and all the facts concerning the action of the court in sustaining the demurrer of the defendants in error and ordering judgment, are set forth in the statement of the case. There is no controversy as to the facts. The determination of the case rests solely upon the principles of law that are to be applied to the facts. These are important, and deserving of careful, painstaking, and deliberate consideration.

It is contended by the plaintiff in error that the court erred in bolding that the contract is to be governed by the statute of the state of New York. This question is not a new one in this court. It has been twice before presented, discussed, considered, and decided. Society v. Nixon, 26 C. C. A. 620, 81 Fed. 796; Same v. Trimble, 27 C. C. A. 404, 83 Fed. 85.

After due deliberation upon the facts, and careful examination of the authorities, this court arrived at the conclusion that the contract there in question— which, in so far as the legal principles ¿re involved, cannot be distinguished from the facts of this case — was a new York contract; citing in support thereof Wayman v. Southard, 10 Wheat. 48; Pritchard v. Norton, 106 U. S. 124, 136, 141, 1 Sup. Ct. 102; Bank v. Hume, 128 U. S. 195, 206, 9 Sup. Ct. 41; Coghlan v. Railroad Co., 142 U. S. 101, 109, 12 Sup. Ct. 150; Hall v. Cordell, 142 U. S. 116, 120, 12 Sup. Ct. 154. In Society v.

Nixon, as in this case, it was contended that the statement made by the insured, when requested to pay the premium due upon the policy, that he did not intend to keep the policy in force, amounted in law to a waiver on the part of both the insured and the company, of the notice required to be given by the statute of New York. Beplying to this contention, the court said: “That the statute of New York prescribes the condition upon which a policy may be forfeited for the nonpayment of a premium. The statute is mandatory, and controls the contract.

Its provisions are not subject to be set aside or waived either by the company or the assured, or by both together. Society v. Clements, 140 U. S. 226, 233, 11 Sup. Ct. 822; Hicks v. Insurance Co., 9 C. C. A. 215, 60 Fed. 690; Griffith v. Insurance Co. (Cal.) 36 Pac. 117; Warner v. Association, 100 Mich. 157, 58 N. W. 667.” Entertaining no doubt of the correctness of the conclusions therein reached, we respectfully decline to further discuss the same identical questions. It is enough to say that we adhere to the views therein expressed.

It is next contended by the plaintiff in error that the judgment of the circuit court should be reversed because it is rendered, not upon the cause of action alleged, in the amended complaint, but upon a cause of action entirely different, in its scope, effect, and meaning, from the one alleged in the complaint; that, in point of fact, the right of the plaintiffs in the action to recover must be determined by the allegations of their complaint; that courts should not permit them to allege one ground of recovery in their complaint, and then afterwards to rely upon another ground; that to permit such a course constitutes a departure not recognized by the law; that it is equally a departure where the plaintiffs bring an action relying upon the common or general law, and then attempt to recover by virtue of a statute; that the one is a departure from fact to fact, the other a departure from law to law.

To quote from counsel’s brief: “A party who pleads a specific contract, and performance on his part of its conditions, as his right to recover, is not permitted, after performance has been controverted, to confess his noncompliance, and shift his right of recovery to an unpleaded statute of a foreign state, and assert noncompliance, with its provisions on the part of defendant, and adopt the defendant’s noncompliance with the nnpleaded statute as his own excuse for noncompliance with the conditions of the contract alleged in his complaint.

The right of action alleged and abandoned is the act of the party; that not alleged, but relied upon, is the act of the legislature of New York. With performance of the conditions alleged, the right of action is perfect, -regardless of. the New York statute. Without performance of the conditions alleged, there is no right of action whatever, unless it can be established through the statute of New York.

If the statute of New York, instead of performance of the conditions of the contract by defendant in error, affords the ground of recovery, then pleading of the statute is indispensable.” In line with tbis contention, it is also argued by the plaintiff in error that the defendants in error were not entitled to judgment after the demurrer had been sustained to the affirmative answers and defenses, because issue was joined upon the allegations of performance of the conditions precedent on the part of the insured, entitling defendants in error to a recovery.

Of course, the complaint should allege the actual performance of every condition precedent to the plaintiff’s right of recovery. The rights of the parties must be determined upon the facts which are put in issue by the pleadings. There is always a departure when a party quits or departs from the case which he first made, and has recourse to another, and the court is not justified in rendering judgment in favor of a plaintiff not warranted by the facts set forth in his pleadings. The general principles of law contended for by counsel are undoubtedly correct. .

But, in so far as it is sought to apply' them to the case in hand, it becomes our duty to carefully consider the allegations of the complaint, and therefrom, in connection with the affirmative defenses set up in the answer, determine whether or not the court erred in rendering judgment upon the pleadings. In the first place, the cases cited and relied upon by the plaintiff in error are clearly distinguishable in their facts from the case at bar, in this: that the plaintiffs right of recovery therein rested solely upon another separate and distinct cause of action from the one stated in their complaint.

In the present case the right of the defendants in error to recover is based exclusively upon the contract set out in their complaint, to wit, the policy of insurance The cause of action set out in the complaint was based upon the identical facts upon which the court gave judgment. There was therefore no departure in this case either from fact to fact, or from law to lav, and hence the principle contended for has no application to this case. There was no necessity for the defendants in error to plead the statute of New York.

The United Btates courts take judicial notice of all the public statutes of the several states. -Moreover, -the question of forfeiture was solely a matter of defense. It is not considered good pleading to anticipate matters of defense. In the second place, the complaint did not allege that the insured luid, during his lifetime, complied with each and every covenant on his pari: to be performed.

The allegation is “that said George Dana Hill during his lifetime duly performed all the conditions of said contract necessary by him to be performed.” The natural effect and legal conclusion to be drawn from ibis averment are that lie had only done those things which he was required to do in order to keep the policy alive, of binding force and effect, and to chow that it was an existing, valid contract: at the time of mil's death, and that he had not during his lifetime done any act, or failed io perform any act, that forfeited his rights under, said policy, or which would in any manner deprive the beneficiaries of their rights thereunder.

There is no allegation in the complaint that the insured paid any other than the first premium. The position taken by the defendants in error was that it was only necessary for them to show this fact in order to entitle them to recover. They never made any departure from this position. They never claimed that they had any right to recover upon any other ground. They recovered upon that ground alone. This was their first, last, and only contention. Tiie affirmative matters alleged in the answer constituted no defense to the cause of action alleged in the complaint.

The contract of insurance became complete upon the payment of the first premium. It was kept alive by the provisions of the statute of New York, because the contingency of forfeiture, as therein provided for, had not happened. The contract is to be read in (he light of the statute, the same as if the statute had literally been incorporated in the policy. It was not essential to-the right of recovery herein that the defendants in error should have paid, or tendered payment of, the premiums due on the policy before commencing the action.

When Hill died the relation of debtor and creditors existed between the insurance company and the beneficiaries named in the policy. The unpaid premiums, with legal interest from the date they became payable, constituted a claim on behalf of the insurance company to be deducted when the company paid the amount due on the policy; thus leaving it in precisely the same situation in which it would have been if the premiums had been paid when they became due. The complaint stated a good and complete cause of action.

There could not be any forfeiture of the policy unless the insurance company in its answer alleged, and, if a trial was had, proved, nonpayment of a premium due, after regular service of the notice of nonpayment as required by the statute. Carter v. Insurance Co., 110 N. Y. 16, 17 N. E. 396; Phelan v. Insurance Co., 113 N. Y. 147, 20 N. E. 827; Baxter v. Insurance Co., 119 N. Y. 450, 23 N. E. 1048; De Frece v. Insurance Co., 136 N. Y. 144, 32 N. E. 556; Griesemer v. Insurance Co., 10 Wash. 203, 38 Pac. 1031; Griffith v. Insurance Co., 101 Cal. 627, 642, 36 Pac. 113; Osborne v.

Insurance Co. (Cal.) 56 Pac. 616; Hicks v. Insurance Co., 9 C. C. A. 215, 60 Fed. 690, 692; Mullen v. Insurance Co. (Tex. Sup.) 34 S. W. 605. The plea of estoppel, as set forth in the third affirmative defense, is but another name for waiver. There is no question concerning the plea of estoppel that can be distinguished from the- question as to the plea of waiver. As the parties could not waive the requirements of the statute as to the manner in which the policy could be forfeited, how could the beneficiaries, who had vested rights therein, be devested of such rights, except in the manner provided by law?

They certainly could not be bound by any declarations which their father may have made in his lifetime to any agent or officer of the insurance company as to his inability to pay the premium then due upon the policy, or that he did not intend to pay that or any future premium, or that the insurance company might consider the policy forfeited without giving the notice specified in the statute. To so hold would entirely abrogate the provisions of the statute and of the policy. As was said by the court in Baxter v.

Insurance Co.: “When the provisions of this statute are adopted in a contract of insurance, for the purpose of modifying the forfeiture clause and the other strict conditions contained therein, then the clause and these conditions should be so construed as to give to the assured the full benefit contemplated, without altering any other provision of the policy, if this can be done without violating any rule of law.” The judgment of the circuit court is affirmed, with costs.