The charter of A., a mutual life insurance company, provides
that
"Every person who shall become a member of the corporation by
effecting insurance therein shall, the first time he effects
insurance and before he receives his policy, pay the rates that
shall be fixed upon and determined by the trustees."
In August, 1872, C., A.'s agent, received from B. an application
for a policy upon his life for $6,000, duly made out upon a printed
form furnished previously by C. A policy was issued by A. August 24
and forwarded to C. It contains a proviso that it shall
"not take effect and become binding on the company until the
premium be actually paid, during the lifetime of the person whose
life is assured, to the company or to some person authorized to
receive it, who shall countersign the policy on receipt of the
premium."
The premium to be paid by B. amounted to $302.52. The policy not
having been called for, C. returned it October 2 to A., and it was
thereupon cancelled. Nothing beyond the delivery of the application
to C. was done by B., or by
anyone in his behalf. He died September 4. His administrator
tendered the first premium to C., who declined to act in the
matter. Thereupon he transmitted the proofs of B.'s death to A.,
and on the refusal of the latter to accept the premium and deliver
the policy brought this suit against A.
Held that the suit
cannot be maintained, the payment of the premium in the lifetime of
B. being a condition precedent to A.'s liability.
Page 102 U. S. 109
This is a suit in equity by Loren Giddings and Leander Giddings,
administrators of Silas Giddings, deceased, to compel the specific
performance, by the Northwestern Mutual Life Insurance Company, of
its alleged contract, made with him some months prior to his death,
to insure his life in the sum of $6,000. The court below dismissed
the bill, whereupon the complainants appealed here.
The remaining facts are stated in the opinion of the Court.
MR. JUSTICE SWAYNE delivered the opinion of the Court.
The facts of this case necessary to be considered are few and
simple. They are clearly disclosed in the record, and there is no
conflict between the parties about them.
The appellee is a corporation created by the State of Wisconsin.
Its principal office and place of business were at Milwaukee. It
was authorized to insure lives. Dean & Payne were its agents at
Chicago. The extent of their authority was to receive applications,
forward them to the office at Milwaukee, and, when risks were
taken, to receive, countersign, and deliver the policies,
collecting in all cases, before the latter was done, the first
premium from the assured.
On or about the 6th of August, 1872, a member of the firm of
Roberts & Hubbard, of the County of Warren, in the State of
Illinois, at the instance of Silas Giddings, Sen., of the same
county, presented to Dean & Payne, at Chicago, an application,
in due form, for a life insurance policy, insuring Giddings in the
sum of $6,000. The application consisted of a printed form
furnished previously by Dean & Payne. It contained blanks to be
filled with answers of the applicant to the questions propounded,
and was filled up accordingly. Dean & Payne immediately
forwarded it to Milwaukee. On the 24th of the same month, the
company considered the application and decided to issue the policy.
It was issued accordingly, and bears date on that day. The premium
to be paid by the assured was $302.52. The policy was immediately
sent to Dean & Payne. Not being called for, on the 2d of
October
Page 102 U. S. 110
following they returned it to the company, and it was thereupon
cancelled.
At the same time that the policy was applied for, an application
was submitted for a loan by the company to Giddings of $6,000. In
relation to this matter there is some conflict in the evidence, but
as the view which we take of the case before us renders it
unnecessary to consider that subject, we pass it by without further
remark.
The seventh section of the act incorporating the appellee is as
follows:
"Every person who shall become a member of this corporation by
effecting insurance therein shall, the first time he effects
insurance and before he receives his policy, pay the rates that
shall be fixed upon and determined by the trustees, and no premium
so paid shall ever be withdrawn from said company, except as
hereinafter provided, but shall be liable to all the losses and
expenses incurred by this company during the continuance of its
charter."
The policy, as made out, was according to the form issued by the
company in all cases. Among other things it provided:
"7th. This policy shall not take effect and become binding on
the company until the premium be actually paid, during the lifetime
of the person whose life is assured, to the company or to some
person authorized to receive it, who shall countersign the policy
on receipt of the premium."
Giddings was taken ill of acute pleurisy on or about the 15th of
August, 1872, and died of that disease on the 4th of September
following. On the 12th or 13th of November following, the
appellants, by their attorney, tendered to Dean, of the firm of
Dean & Payne, the first premium and demanded the policy. The
attorney had also present proof of the death of Giddings. Dean
"refused to have anything to do with the matter, as he claimed that
the company was not liable." The proof of the death was thereupon
transmitted to the home office at Milwaukee.
Neither a tender of the premium nor a demand for the policy was
made by anyone until the time before mentioned, and no notice was
given by Giddings or by anyone in his
Page 102 U. S. 111
behalf during his life that he intended to consummate the
transaction by paying the premium and receiving the policy. All
action on his part terminated with the delivery of his application
to Dean & Payne for transmission to the company. He did nothing
afterwards. There his connection with the affair ended.
Upon this state of facts, the appellants insist that the company
is liable for the $6,000 specified in the undelivered policy.
A few remarks will be sufficient to dispose of the case.
The presentment of the application to the agents at Chicago, its
transmission to Milwaukee, and its receipt by the company in no
wise committed or bound the latter to anything. It was competent
for the company to pause as long as they might deem proper, and
finally to accept or reject the application as they might choose to
do. If they elected to contract, they had the right to prescribe
the terms, and it was for the other party to assent to or reject
them. His unbroken silence, as would have been such silence by the
company after receiving the application, was necessarily negation.
Neither party in such case would have been bound in any wise to the
other, because there would have been wanting the mutual assent of
the minds of the parties which is vital in all cases to the
creation of a contract obligation. What was done, without something
further, could have no more weight or efficacy, in the view of the
law, than an unexpressed thought or any other unexecuted
intention.
The company prepared the draft of a contract which they were
willing to execute. Among its stipulations was one that the
assurers should not be bound by the instrument until the premium
was paid in the lifetime of the assured, and the policy was
countersigned by the authorized agent of the company. This was a
condition precedent to the liability of the appellee, and necessary
to its safety. There was nothing in it unconscionable or
oppressive, and the company had a clear legal right to make it.
Where a condition is subsequent and it is broken, relief may be
given upon equitable terms; but where it is precedent, and neither
fulfilled nor waived, no right or title vests, and equity
Page 102 U. S. 112
can do nothing for the party in default.
Davis v.
Gray, 16 Wall. 203.
Here there was clearly no performance by the applicant, and it
is equally clear that hence there was no contract or obligation
whatsoever on the part of the company.
It was the business of the applicant if, after sending forward
his application, he continued to desire a policy, to keep up the
proper communication with Dean & Payne and during his lifetime
to avail himself of the offer which the company had made. The
proposition of the company expired with his life. After his death,
his legal representatives could not act vicariously for him. To
allow them to enforce such a claim would be contrary to the
plainest principles of both law and equity. If authorities in so
plain a case are needed, it is sufficient to refer to
Insurance Company v. Young's
Administrator, 23 Wall. 85, and
Piedmont
&c. Life Insurance Co. v. Ewing, 92 U. S.
377.
What the consequence would have been if, after the applicant was
stricken with his mortal disease, the premium had been paid and the
policy delivered, the company being ignorant of his changed
condition, is a point which we do not find it necessary to
consider.
Decree affirmed.