Upon the showing made by the court of appeals, it is clear that
that court had jurisdiction, and should have proceeded to dispose
of this case on its merits instead of dismissing it for want of
jurisdiction.
The plaintiff in error is a corporation, organized under the
laws of the New York and doing business as life insurers in the
City of New York. It had an agent in the Washington, to whom
Phinney, a resident in that state applied for a policy on his life.
The application stated that it was made subject to the charter of
the company and the laws of New York. A policy was issued which
provided that, on its maturing, payment was to be made at the home
office of the company in New York, and on its receipt, Phinney paid
the first premium. The policy provided that he should pay a like
premium for twenty years, if he should live so long, and that the
policy should become void by nonpayment of the premium, with a
forfeiture of previous payments. Phinney failed to make the next
annual payment. Then he surrendered the policy to the local agent.
He died without having made that payment or the next one which
matured before his death. His widow was appointed his executrix.
She presented to the company a claim for the amount of the
insurance under the policy. It was rejected. This suit was
thereupon brought. In its answer, the company set up that the
contract was not to be taken as a contract under the laws of the
New York, but under the laws of the Washington, and the company
asked this instruction, which the court declined to give.
"If you find from the evidence in this case that the said Guy C.
Phinney stated to the representative of the defendant in the State
of Washington that he could not pay the premium falling due
September 24, 1891, and that he did not pay nor tender the same,
and that he thereafter surrendered said policy to the defendant's
representative, they mutually believing and understanding that the
same was of no force or validity then or thereafter by reason of
the nonpayment of the said premium, this would constitute an
abandonment and rescission of this contract by both parties
thereto, and would put an end to the same, and if you find the
facts so to be, you must find a verdict for the defendant."
The jury trial resulted in a verdict and judgment for the
plaintiff. This was taken in error to the Court of Appeals for the
Ninth Circuit, which dismissed the writ of error on the ground that
it had no jurisdiction by reason of a failure on the part of the
plaintiff in error to file the writ in the office of the trial
court.
Held:
Page 178 U. S. 328
(1) That the court of appeals had jurisdiction.
(2) That, without deciding it, the court would hold for the
purposes of this case that the contract was made under the laws of
the New York, and was governed by the laws of that state.
(3) That it is to be presumed that each party knew what the laws
of New York were, and neither could be misled by any statement in
respect thereto on the part of the other.
(4) That there is nothing in the New York statute (if
controlling at all) to prevent the parties from dealing with that
as with any other contract, and if they chose to abandon it, their
action is conclusive.
After the company had once excepted to the refusal of an
instruction which it had asked, and excepted to those which were
given, it did not lose the benefit of such exceptions by a request
that the court repeat the instructions excepted to in connection
with certain answers made to questions propounded by the jury.
On September 22, 1890, Guy C. Phinney, a resident of the State
of Washington, applied to the Mutual Life Insurance Company of New
York for a policy of insurance on his life for the sum of $100,000
payable to his executors, administrators, or assigns. This
application was forwarded by the local agent at Seattle to the
general agent of the company at San Francisco, and by him to the
home office of the company in New York city. By reason of such
application, a policy was issued to Phinney bearing date September
24, 1890, forwarded to the general agent at San Francisco, by him
to the local agent at Seattle, and by the latter delivered to
Phinney, who received it, and at the same time paid the first
year's premium, amounting to $3,770. The policy provided that
Phinney should pay the annual premium of $3,770 on September 24 of
each year thereafter for twenty full years, provided he should live
so long, and also
"this policy shall become void by nonpayment of the premium; all
payments previously made shall be forfeited to the company, except
as hereinafter provided."
This last exception referred to certain provisions as to
surrender value and readjustment of the amount of insurance on the
payment of a certain number of payments, none of which is material
to the question at issue in this case. Prior to September 24, 1891,
notices were sent by both the general agent at San Francisco and
the local agent at Seattle to Phinney that his premium would be due
on September 24, 1891. Twice between the time
Page 178 U. S. 329
of the receipt of this notice and the 24th of September, 1891,
Phinney met Stinson, and requested him to accept his notes for the
payment of the premium. This proposition was declined by Stinson,
who declared at the time that he was unable to advance the premium
for Phinney. Sometime after September 24, 1891 (the exact date
being unknown, but, according to the testimony, from four to six
weeks thereafter), Phinney again met Stinson, and stated that he
was prepared to pay the premium, but was told that it could not be
accepted unless a certificate of health was furnished. No
certificate of health was ever furnished. Phinney stated that he
could not obtain it, as he had been rejected by another company a
few days before, nor was there ever any formal tender of the
premium. In December, 1891, or January, 1892, Stinson requested
Phinney to allow him to have the policy to use for canvassing
purposes, and Phinney thereupon surrendered the policy to the
agent, with the statement that, as the same had lapsed, he had no
further use for it. Stinson received the policy, and never returned
it to Phinney. On September 24, 1892, the premium falling due on
that day was neither paid nor tendered by Phinney, nor did he after
the surrender of the policy in December, 1891, or January, 1892,
ever take any action in regard thereto, or pay, or offer to pay,
any premium thereon. On September 12, 1893, Phinney died, leaving
his last will and testament, wherein he nominated the plaintiff as
executrix. Nothing was done by her under this policy until July,
1894, although Phinney held policies in two other companies at the
time of his death, proofs in respect to which were presented by the
executrix within one month after his death. At that time, she wrote
to the insurance company a letter in which she stated as
follows:
"Seattle, Wash.,
July 11, 1894"
"The Mutual Life Insurance Co. of New York:"
"Gentlemen: On September 24, 1890, my husband, Guy C. Phinney,
took out a policy, No. 442,198, in your company in the sum of one
hundred thousand dollars. He died in this city last September 12,
1893. Not being familiar with his affairs, and the policy being
mislaid, I was not aware that he held such
Page 178 U. S. 330
a policy until a few days ago, when the matter was brought to my
attention."
In addition, it appears that, on the 16th day of September,
1893, in her application for probate of her husband's will, she
filed an affidavit, which contained these statements:
"Real estate, consisting of lands in said King County, of town
lots in the City of Seattle, and of improved city property, the
exact description of all which is at this time unknown to your
petitioner, but which is entirely community estate, the value of
which is about $300,000; that there is personal property of various
kinds, all of the same being community property of the value of
about $50,000; that the total estate of said deceased, including
the community interest of your petitioner, who is the widow of the
said deceased, does not exceed in value the sum of about
$350,000."
In July, 1894 (evidently at the suggestion of counsel), she
presented her claim under the policy, which was rejected, and
thereupon this suit to recover thereon was brought in the Circuit
Court of the United States for the District of Washington.
At the time the application was made and the policy issued, the
following statute was in force in the State of New York:
"Section one of chapter 341 of the laws of eighteen hundred and
seventy-six, entitled 'An Act Regulating the Forfeiture of Life
Insurance Policies,' is hereby amended so as to read as
follows:"
"SEC. 1. No life insurance company doing business in the State
of New York shall have power to declare forfeited or lapsed any
policy hereafter issued or renewed by reason of nonpayment of any
annual premium or interest, or any portion thereof, except as
hereinafter provided. Whenever any premium or interest due upon any
such policy shall remain unpaid when due, a written or printed
notice stating the amount of such premium or interest due on such
policy, the place where said premium or interest should be paid,
and the person to whom the same is payable shall be duly addressed
and mailed to the person whose life is assured, or the assignee of
the policy, if
Page 178 U. S. 331
notice of the assignment has been given to the company at his or
her last-known post office address, postage paid by the company, or
by an agent of such company, or person appointed by it to collect
such premium. Such notice shall further state that, unless the said
premium or interest then due shall be paid to the company or to a
duly appointed agent or other person authorized to collect such
premium within thirty days after the mailing of such notice, the
said policy and all payments thereon will become forfeited and
void. In case the payment demanded by such notice shall be made
within the thirty days limited therefor, the same shall be taken to
be in full compliance with the requirements of the policy in
respect to the payment of said premium or interest, anything
therein contained to the contrary notwithstanding, but no such
policy shall in any case be forfeited or declared forfeited or
lapsed until the expiration of thirty days after the mailing of
such notice. Provided, however, that a notice stating when the
premium will fall due, and that, if not paid, the policy and all
payments thereon will become forfeited and void, served in the
manner hereinbefore provided at least thirty and not more than
sixty days prior to the day when the premium is payable, shall have
the same effect as the service of the notice hereinbefore provided
for."
"SEC. 2. The affidavit of anyone authorized by section one to
mail such notice, that the same was duly addressed to the person
whose life is assured by the policy, or to the assignee of the
policy, if notice of the assignment has been given to the company,
in pursuance of said section, shall be presumptive evidence of such
notice having been given."
Laws 1877, c. 321.
In 1892, and after the first default in the payment of premium
by Phinney and the surrender of his policy to the agent, Stinson,
the following statute was substituted for the act of 1877:
"SEC. 92. No forfeiture of policy without notice. -- No life
insurance corporation doing business in this state shall declare
forfeited, or lapsed, any policy hereafter issued or renewed, and
not issued upon the payment of monthly or weekly premiums, or
unless the same is a term insurance contract for one year or less,
nor shall any such policy be forfeited, or lapsed, by reason
Page 178 U. S. 332
of nonpayment when due of any premium, interest, or installment
or any portion thereof required by the terms of the policy to be
paid, unless a written or printed notice stating the amount of such
premium, interest, installment, or portion thereof, due on such
policy, the place where it should be paid, and the person to whom
the same is payable, shall be duly addressed and mailed to the
person whose life is insured, or the assignee of the policy, if
notice of the assignment has been given to the corporation at his
or her last-known post office address, postage paid by the
corporation, or by an officer thereof, or person appointed by it to
collect such premium at least fifteen and not more than forty-five
days prior to the day when the same is payable."
"The notice shall also state that, unless such premium,
interest, installment, or portion thereof, then due, shall be paid
to the corporation or to a duly appointed agent or person
authorized to collect such premium by or before the day it falls
due, the policy and all payments thereon will become forfeited and
void except as the right to a surrender value or paid-up policy as
in this chapter provided."
"If the payment demanded by such notice shall be made within its
time limited therefor, it shall be taken to be in full compliance
with the requirements of the policy in respect to the time of such
payment, and no such policy shall in any case be forfeited or
declared forfeited or lapsed until the expiration of thirty days
after the mailing of such notice."
"The affidavit of any officer, clerk, or agent of the
corporation, or of anyone authorized to mail such notice, that the
notice required by this section has been duly addressed and mailed
by the corporation issuing such policy, shall be presumptive
evidence that such notice has been duly given."
Laws 1892, c. 690.
The application made by Phinney for the policy contained this
statement:
"This application is made to the Mutual Life Insurance Company
of New York, subject to the charter of the company and the laws of
the State of New York."
The policy stipulated that, on its maturing the insurance
company would "pay at its home office in the City of New York." It
also stipulated that the annual premium should be payable "to
the
Page 178 U. S. 333
company at its home office in the City of New York." The policy
also contained this provision:
"Payment of premiums. -- Each premium is due and payable at the
home office of the company in the City of New York, but will be
accepted elsewhere when duly made in exchange for the company's
receipt, signed by the president or secretary. Notice that each and
every such payment is due at the date named in the policy is given
and accepted by the delivery and acceptance of this policy, and any
further notice required by any statute is thereby expressly
waived."
In its answer, the company pleaded that the contract was to be
taken as a contract made in the State of Washington, and not
controlled by the laws of the State of New York, because he
application stipulated that the contract "shall not take effect
until the first premium shall have been paid and the policy shall
have been delivered." In fact, the policy was delivered and the
premium paid in the State of Washington. It also pleaded the other
provisions in reference to the failure to pay the annual premium,
and the waiver, abandonment, and rescission of the contract by the
assured under the circumstances hereinbefore named.
The case came on for trial on these pleadings before the court
and a jury, and resulted in a verdict and judgment for the
plaintiff for the amount of the policy, less the unpaid premiums.
The case was thereupon taken on error to the United States Circuit
Court of Appeals for the Ninth Circuit, which court dismissed the
writ of error on the ground that it had no jurisdiction by reason
of a failure on the part of the plaintiff in error to file the writ
of error in the office of the clerk of the trial court. 48 U.S.App.
78. Thereupon application was made to this Court, and the case
brought here on certiorari.
Page 178 U. S. 334
MR. JUSTICE Brewer delivered the opinion of the Court.
The first question naturally is in respect to the jurisdiction
of the circuit court of appeals. The transcript filed in that
court, in addition to the record of the proceedings on the trial,
which trial culminated in a judgment on October 17, 1895,
contained: first, a petition for a writ of error filed by counsel
for the insurance company, on December 14, 1895; then an order by
the trial judge, allowing the writ of error and fixing the
supersedeas bond at $125,000; an assignment of errors; a
supersedeas bond, approved by the trial judge; a citation signed by
him, and service admitted by counsel for the plaintiff, all these
on the same day. In addition, a return by the marshal, showing
personal service on the plaintiff of the citation; the writ of
error allowed by the trial judge, and an indorsement thereon by the
clerk of the trial court (by deputy) in the following language:
"Received a true copy of the foregoing writ of error for
defendant in error. Dated this 14th day of December, 1895. A.
Reeves Ayres, Clerk of the United States Circuit Court for the
Ninth Circuit, District of Washington. By R. M. Hopkins, Deputy
Clerk."
On the hearing in the court of appeals, an affidavit of the
deputy clerk of the trial court was filed, which, after averring
that the petition and assignment of errors, the orders granting the
writ of error, and fixing the amount of the bond, and the bond,
were each on file in his office and all bore the following
indorsement: "Filed December 14, 1895. In the U.S. Circuit Court.
A. Reeves Ayres, Clerk. By R. M. Hopkins, Deputy Clerk" -- stated
that, upon the filing of these papers he prepared a writ of error,
issued and delivered it to R. C. Strudwick, one of the attorneys of
the insurance company, who took the same from his office, and
added:
"That a few minutes thereafter, the said Strudwick returned to
my office, and delivered to and lodged and filed with me said writ
of error, with the allowance thereof indorsed thereon by the
before-mentioned judge, and at the same time delivered to
Page 178 U. S. 335
and lodged and filed with me a copy of said writ for the use of
defendant in error."
"That said original writ of error remained in my office and in
my custody from said 14th day of December, 1895, until the 4th day
of January, 1896 at which time I transmitted the same, with my
return thereto, to this honorable court."
"That the original citation herein, a copy of which appears on
pages 395 and 396 of the printed record herein, was returned to and
filed with me by a deputy marshal of the United States for the
District of Washington, on the 18th day of December, 1895, and the
same remained in my office and in my custody and control from said
date until the same was transmitted to this honorable court,
together with the writ of error and return thereto on the 4th day
of January, 1896. It has not been my custom to indorse original
citations and writs of error at the time they are filed with or
served upon me, for the reason that I have deemed the same as writs
of the circuit court of appeals to be indorsed by the clerk of said
court upon his receipt of the same with my return thereto; but, as
a matter of fact, the writ of error and citation herein were
actually delivered to and filed and lodged with me as above
stated."
Upon these facts, we are clearly of opinion that jurisdiction
was vested in the court of appeals. The majority of that court, in
sustaining the motion to dismiss, relied on the following decisions
of this Court:
Brooks v.
Norris, 11 How. 204,
52 U. S. 207;
Mussina v.
Cavazos, 6 Wall. 355;
Scarborough v.
Pargoud, 108 U. S. 567;
Polleys v. Black River Improvement Co., 113 U. S.
81;
Credit Company, Limited v. Arkansas Central
Railway Co., 128 U. S. 258, in
the first of which it was said by Chief Justice Taney:
"It is the filing of the writ that removes the record from the
inferior to the appellate court, and the period of limitation
prescribed by the act of Congress must be calculated accordingly.
The day on which the writ may have been issued by the clerk or the
day on which it is tested are not material in deciding the
question."
In that case, the question presented was one of limitations, and
not what was necessary to constitute a filing. The statute
requiring writs of error to be brought within a certain time,
the
Page 178 U. S. 336
question determined was whether the mere allowance or issue of
the writ constituted a bringing of the writ of error within the
meaning of the statute, or whether, as was held, it was not
brought, had not performed its office, until it had been filed with
the clerk of the trial court. In this case, there is no question of
time. All the proceedings with a view of taking the case to the
appellate court were had within less than three months from the
date of the judgment. The transcript filed in the court of appeals
made it clear that everything which the trial judge was required to
do was done, the writ of error was allowed, the citation signed and
bond approved, and also that the citation was duly served upon the
counsel for the plaintiff, and service accepted. It also showed
that a copy of the writ of error was received and filed by the
clerk of the trial court, and while it is true that it did not show
that the original writ of error was filed in his office, yet the
affidavit made by the deputy clerk (which is not disputed)
disclosed that it was so filed, and on the same day with the other
proceedings for perfecting the transfer of the case to the court of
appeals. Now while it may be technically true, as said by the
majority of the court of appeals, that the indorsement on the copy
of the writ of error of its receipt for the benefit of the
defendant in error, plaintiff
brk:
below, was under section 1007 of the Revised Statute, with a
view to a supersedeas, and may not itself be sufficient evidence of
the filing of the original writ, yet the affidavit of the deputy
clerk, who had charge of the office, shows positively that it was
left with him and filed. If it was left with him and he failed to
indorse it as filed, can it be that his omission defeats the
party's right to transfer the case to the appellate court? Is it
within the power of a clerk to overrule the action of the judge,
and prevent an appeal or writ of error which he has allowed? When
the judge has done all that is necessary for him to do to perfect
the transmission of the case to the appellate court, and the party
seeking review has done all that is required of him, can it be that
the omission of a clerk (if there was such an omission) can prevent
the jurisdiction attaching to the appellate court? Obviously not.
"When deposited with the clerk of the court, to whose judges it is
directed, it is served."
Page 178 U. S. 337
Mussing v.
Cavazos, 6 Wall. 355,
73 U. S. 358.
While we have always been careful to see that the required order of
procedure has been complied with before any case shall be
considered as transferred from a lower to a higher court, that the
party seeking a review must act in time and must make a substantial
compliance with all that the statute prescribes, at the same time
we have been equally careful to hold that no mere technical
omission which did not prejudice the rights of the defendant in
error should be made available to oust the appellate court of
jurisdiction. We are clear that, upon the showing made the court of
appeals had jurisdiction, and should have proceeded to dispose of
the case upon its merits.
Coming now to the merits, many questions have been exhaustively
discussed by counsel in brief and argument. One is to what extent,
if at all, the law of New York controls in respect to the policy
sued on.
By the insurance company it is contended that it does not apply;
that it operates only upon contracts of insurance consummated
within the State of New York; that it commences, "No life insurance
company doing business in the State of New York shall have power,"
etc.; that it thus includes foreign as well as local insurance
companies, and, as it confessedly cannot control the operations or
modify the contracts of foreign insurance companies made outside
the state, the true construction is that it applies to both foreign
and local companies only as to business done within the state; that
as the application was signed by the insured in the State of
Washington, and when received by the company in New York was there
accepted only conditionally, and as the policy which was prepared
and forwarded to an agent of the company in Washington contained an
express stipulation that it should "not take effect until the first
premium shall have been paid and the policy shall have been
delivered," and as the premium was in fact paid and the policy
delivered in the State of Washington, the contract was a Washington
contract, and governed by the laws of that state, and not by the
laws of New York,
Equitable Life Assurance Society v.
Clements, 140 U. S. 226,
140 U. S. 232;
that the statement in the application signed by Phinney that it was
made "subject
Page 178 U. S. 338
to the charter of the company and the laws of New York," by its
terms, refers only to the application, and does not make the laws
of New York controlling in reference to the terms of the contract,
which was evidenced by the policy subsequently issued, and that
being a Washington contract, and there being no legislation in that
state in respect to matter of forfeiture, by its terms, it became
forfeited on the nonpayment of the second annual premium.
On the other hand, it is contended by the executrix that
whatever may be the effect of the statute upon foreign companies
which may happen to be doing business within the limits of New
York, it is as to local companies practically a modification of
their charters, and a statutory rule thereafter controlling all
contracts made by them, whether within or without the state; that,
even if this be not true, yet, as the policy refers to the
application and makes it a part of the contract, and as there is no
law of New York which affects in any way an application as such,
the statement therein, that it is made subject to the charter of
the company and the laws of New York, must be understood as
directly incorporating the laws of New York into the contract, or
at least referring to them as containing the rules for its
construction and enforcement, and also, inasmuch as, by its terms,
final performance (that is, the payment of the policy) is to be
made in New York, the law of the place of performance is the law
which governs as to the validity and interpretation of the
contract.
Washington Central Bank v. Hume, 128 U.
S. 195,
128 U. S. 197,
128 U. S. 206;
Coghlan v. South Carolina Railroad, 142 U.
S. 101,
142 U. S. 109,
and cases cited in the opinion.
We are not insensible of the importance, as well as the
difficulty, of the question thus presented in these various
aspects, but think that the case may properly be disposed of
without any consideration or determination thereof.
We shall assume, without deciding, that the law of New York does
control in respect to this contract, and still are of the opinion
that the judgment must be reversed for error occurring on the
trial, and error of such a character as in view of the testimony
may render it unnecessary ever to consider the question to which we
have referred. Confessedly, the insured did not pay
Page 178 U. S. 339
the annual premium due September 24, 1891, nor that due
September 24, 1892, although he lived until September 12, 1893. It
appears from the undisputed testimony that the insured knew when
the premium became due in September, 1891. Twice he spoke to the
local agent seeking to arrange for the payment of the premium by a
note, and some three or four months thereafter he surrendered the
policy to such agent. It is true that, at the time of the
surrender, the agent told then insured that the policy was
forfeited, or words to that effect, and that the insured said to
him that, as the policy had lapsed, it was no good to him, and the
agent might take it if he wanted it. But never thereafter until the
time of his death, more than a year and a half, was anything done
or said by the insured in respect to the policy; no suggestion of
payment of premium or anything of any kind in respect to it. He
treated the matter as abandoned, and gave up to the agent of the
company the instrument by which the contract was evidenced.
Further, after his death, his widow, the plaintiff, filed an
affidavit that the personal property of her husband's estate
amounted only to $50,000, which, of course, was not true if she had
a $100,000 policy in the defendant company. Not only that, she
ignored the policy altogether for nearly ten months, although she
promptly presented claims under other policies. As she testified
that she knew of the existence of this policy, her conduct is
explainable only on the theory that she understood that, which the
evidence affirms, her husband had abandoned the policy and
surrendered it to the company. Upon these facts, the defendant
asked this instruction, which the court declined to give:
"If you find from the evidence in this case that the said Guy C.
Phinney stated to the representative of the defendant in the State
of Washington that he could not pay the premium falling due
September 24, 1891, and that he did not pay nor tender the same,
and that he thereafter surrendered said policy to the defendant's
representative, they mutually believing and understanding that the
same was of no force or validity then or thereafter, by reason of
the nonpayment of the said premium, this would constitute an
abandonment and rescission of this contract by both parties
thereto, and would put an end to the
Page 178 U. S. 340
same, and if you find the facts so to be, you must find a
verdict for the defendant."
In lieu thereof the court charged as follows:
"Now it is contended that Mr. Phinney and this company, acting
through Mr. Stinson as its agent, arrived at an understanding and
agreement that the policy should not continue longer in force;
Phinney was to pay no more money, and that his rights and the
policy were abrogated. Notwithstanding the provision of the statute
of New York that a provision in the policy itself waiving notice
has no effect, and that the company can only forfeit the policy for
nonpayment of premium by mailing the prescribed notice, still it
would be competent, and it was competent, for the parties mutually
to agree to the cancellation of a life insurance policy if they saw
fit to do so. And if the evidence in the case shows that Mr.
Phinney did voluntarily, without being induced by any false
representations or deceit to give up the policy, rescind the
contract and give up the policy, rather than to continue to pay the
premiums provided for in the policy, that agreement would have the
effect to terminate this policy, so that it would no longer be a
continuing contract. There is testimony in the case tending to
prove that Mr. Phinney was unable to meet the second payment when
it fell due, and by reason of his failure to make that payment, he
voluntarily delivered up the policy to Mr. Stinson as an agent of
the company, with the understanding, expressed at the time, that it
was lapsed, that it was no longer a continuing contract in his
favor. If there was a full and fair understanding between these two
men in that matter, and they both treated it as an abrogated and
annulled contract, and each relied upon that, understanding, it
would have the effect to terminate the policy, and the company
would have the right to consider itself absolved from any
obligation to give the statutory notice in order to forfeit the
policy, because it would be unnecessary for the company to forfeit
by legal proceedings what the opposite party had voluntarily
relinquished. It is a question of fact, therefore, for you to
determine from the evidence in the case whether there was a full,
complete understanding and meeting of minds between Mr. Phinney and
Mr. Stinson, and such an
Page 178 U. S. 341
agreement and understanding entered into between them, whether
the policy was surrendered and delivered up to Mr. Stinson, with an
understanding, and whether, relying upon that understanding, the
defendant company subsequently acted."
In view of the facts heretofore narrated, it is obvious not only
that there was error in the action of the court in declining to
give the instruction requested by the insurance company, and giving
that which it did, but also that the error was material. The
instruction given suggested a matter in respect to which there was
no testimony, yet which, in view of other language in the charge,
was quite sure to mislead. In reference to this matter of
abandonment and rescission, the court in effect declared that it
was binding unless induced by false representation or deceit. There
is not the slightest syllable in the testimony to suggest that the
agent deceived the insured, nor that he made a false representation
in the sense in which a false representation may avoid a contract.
And yet, as the court had already ruled that the law of New York
controlled, that there was no forfeiture until the notice
prescribed by the statute of that state had been given, the jury
must have understood that, when the agent said that the policy had
lapsed, he made a false representation, and therefore that the
action of the insured, based upon that false representation, did
not amount to an abandonment. But whether that statement of the
agent was correct in matter of law is doubtful; whether true or
false, or, more accurately, whether correct or not, in its
interpretation of the law applicable to this contract, is
immaterial. It was merely a statement of what he supposed the law
was, and the insured was under the same obligations to know the law
that the company, or its agent, was. The jury evidently proceeded
upon the supposition that the insurance company, located in New
York, knew what the law of that state was; the insured, residing in
Washington, did not, and when the agent stated what the condition
of the contract was, he misrepresented the law of New York, of
which the insured was ignorant, and, being ignorant, was not bound
by any act based thereon in the way of abandonment or rescission.
But surely no such rule as that obtains. When two
Page 178 U. S. 342
parties enter into a contract, and make it determinable by the
law of another state, it is conclusively presumed that each of them
knows the law in respect to which they make the contract. There is
no presumption of ignorance on the one side and knowledge on the
other. Reverse the situation. Suppose the insurance company had
made this contract as a Washington contract, and there had been
some peculiar provision of that state controlling all contracts
made within the state: could the company, a corporation of New
York, thereafter be permitted to say that it did not know what the
law of Washington was; that the insured, as a resident of that
state, must be presumed to have known it; that he did not
communicate his information, and therefore it was not bound by that
law, and that, if he said anything in reference to it, it was a
case of false representation or deceit? No one would contend this.
And so when these two parties, the insurance company and the
insured, dealing, as we are now supposing, in a contract which they
mutually agreed should be determinable by the laws of New York, it
is an absolute presumption that each knew those laws, and that
neither one could be misled by any statement in respect thereto on
the part of the other. Whatever opinion either might express in
reference to those statutes was a mere matter of opinion. He was
chargeable with knowledge, just exactly as the insurance company
was.
Sturm v. Boker, 150 U. S. 312, is
decisive of this question. In that case, the statement of the
insured as to a question of law was insisted upon as conclusive,
but this Court said (p.
150 U. S.
336):
"Both the defendants and the insurance companies had the written
contracts before them, and were presumed as a matter of law to know
their legal effect and operation. What the complainant said in his
testimony was a statement of opinion upon a question of law, where
the facts were equally well known to both parties. Such statements
of opinion do not operate as an estoppel. If he had said in express
terms that, by that contract, he was responsible for the loss, it
would have been, under the circumstances, only the expression of an
opinion as to the law of the contract, and not a declaration or
admission of a fact
Page 178 U. S. 343
such as would estop him from subsequently taking a different
position as to the true interpretation of the written
instrument."
"In
Brant v. Virginia Coal & Iron Co., 93 U. S.
326,
93 U. S. 337, it was said: 'Where
the condition of the title is known to both parties, or both have
the same means of ascertaining the truth, there can be no
estoppel.'"
"So, in
Brewster v. Striker, 2 N.Y. 19, and
Norton
v. Coons, 6 N.Y. 33, and approved in
Chatfield v.
Simonson, 92 N.Y. 209, 218, where it was ruled 'that the
assertion of a legal conclusion, where the facts were all stated,
did not operate as an estoppel upon the party making such
assertion.'"
So whatever the local agent may have said as to the condition of
the contract was mere expression of opinion as to a matter of law
in respect to which both parties were equally chargeable with
knowledge. It seems to us clear that only because of the inference
to be drawn from the rejection of the instruction asked by the
defendant, and the giving of the instruction with this suggestion
of false representation or deceit, can the verdict of the jury be
accounted for.
Nor can we think that the action of the defendant in requesting,
after the jury had returned and asked certain questions, which were
answered by the trial judge, that he repeat the instructions
theretofore given in respect to waiver and abandonment is to be
taken as an indorsement of those instructions. After it had once
excepted to the refusal of an instruction which it had asked, and
excepted to those that were given, it did not lose the benefit of
such exceptions by a request that the court repeat the instructions
excepted to in connection with certain answers made to questions
propounded by the jury. It meant simply that if the court answered,
as it did, the questions propounded by the jury, it ought to
supplement those answers with a restatement of the instructions
theretofore given, and asking that restatement was not an admission
that they were correct, but simply a request that they should be
restated so as to qualify the answers given to the questions.
In this connection, we may be permitted to suggest that no
afterthought of ingenious and able counsel should be permitted to
disturb the understanding and agreement of the parties based
Page 178 U. S. 344
upon their belief as to what the law is, or to enforce a
contract which both parties concluded to abandon.
A single further matter requires notice, and we mention it
simply to indicate that we have considered, although we do not
decide, the question involved therein: the contract of insurance is
a peculiar contract, especially when made with a mutual insurance
company, for although in terms a contract with a corporation, it is
in substance a contract between the insured and all other members
of that company. The character of this contract was fully
considered and discussed by this Court in
New York Life
Insurance Co. v. Statham, 93 U. S. 24, and to
that case we refer without quotation. Now whether the insurance
company, if the law of New York be applicable, could insist upon a
forfeiture without giving the notice prescribed by the statutes of
that state, and, enforcing it, forfeit all premiums paid, all
obligation for the return of the surrender value, all right of the
insured by subsequent payments to continue the policy in force, is
one question. But it is a very different question whether the
executrix of the insured, after his long delinquency in the payment
of premiums, can enforce the contract as against the other insured
parties, thereby diminishing their interest in the accumulated
reserve. Ordinarily no one can enforce a contract unless on his
part he performs the stipulated promise, and it may be that this
rule is operative in this case. We do not care to decide the
question, and only mention it for fear that it should be assumed we
had overlooked it. It is a question which may never arise in the
future litigation of this case, and until it necessarily arises, we
do not feel called upon to decide it.
For these reasons, the judgments for the Court of Appeals of
the Ninth Circuit and of the Circuit Court of the United States for
the District of Washington are reversed, and the case remanded to
the latter court with instructions to award a new trial.
MR. JUSTICE PECKHAM did not sit at the hearing, and took no part
in the decision of this case.
