A judgment of reversal is not necessarily an adjudication by the
appellate court of any other than the questions in terms discussed
and decided.
The following propositions have been established by prior
decisions of this Court in regard to the construction of policies
of life insurance issued in other states by New York companies:
1. The state where the application is made, the first premium
paid by and the policy delivered to the assured, is the place of
contract.
2. The statutory provision of the New York in reference to
forfeitures has no extraterritorial effect, and does not of itself
apply to contracts made by a New York company outside of the
state.
3. Parties contracting outside of a state may by agreement
incorporate into the contract the laws of that state and make its
provisions controlling on both parties, provided such provisions do
not conflict with the law or public policy of the state in which
the contract is made.
Where a contract contains a stipulation that it shall be
construed to have been made in New York without referring to the
law of that state requiring notice, and also contains another
stipulation by which the assured expressly waives all further
notice required by any statute, the latter stipulation is
paramount, and to that extent limits the applicability of the New
York law in reference to notice to policyholders.
On April 28, 1886, George D. Hill at Seattle, Washington, signed
a written application to the Mutual Life Insurance Company of New
York (hereinafter called the insurance company) for a policy of
$20,000. The application was forwarded to the home office. The
insurance company accepted the application, executed a policy, and
forwarded it to its local agent at Seattle, who there, on June 12,
1886, received the first premium and delivered the policy to Hill.
The beneficiary named in the policy was Ellen K. Hill, the wife of
the applicant. She died on February 14, 1887, leaving four
children, the present defendants in error. A premium receipt for
the second annual premium was, in 1887, forwarded to the local
agent
Page 193 U. S. 552
at Seattle, presented by him to Hill, and not paid. No
subsequent premiums were paid, and on December 4, 1890, Hill
died.
Thereafter this action was commenced in the Circuit Court of the
United States for the District of Washington. The contention of the
plaintiffs is that, although the annual premiums for 1887, 1888,
1889, and 1890 had not been paid, the insurance company was
nevertheless indebted to them for the full amount of the policy and
interest by reason of the fact that it had failed to give the
notice of forfeiture prescribed by chapter 341, Laws 1876, as
amended by chapter 321, Laws 1877, of the State of New York. The
complaint set out a copy of the policy, alleged the payment of the
first annual premium, the death of the insured, and the
relationship of the plaintiffs to the beneficiary. The defendant
relied upon the nonpayment of the premiums other than the first,
and an abandonment of the contract. A demurrer to these defenses
was sustained, and a judgment entered for the plaintiffs, which was
affirmed by the Court of Appeals for the Ninth Circuit. 97 F. 263.
A writ of certiorari was issued by this Court. 178 U.S. 683, the
judgment reversed, and the case remanded for further proceedings.
178 U. S. 178 U.S.
347. An amended answer and a replication were then filed by leave
of the circuit court. A trial was had before the court and a jury
which resulted in a verdict and judgment for the plaintiffs. This
judgment was affirmed by the court of appeals, 118 F. 708, and the
case was again brought here on certiorari. 188 U.S. 742.
Page 193 U. S. 553
MR. JUSTICE BREWER delivered the opinion of the Court.
A preliminary matter is this: when the case was here before, we
held that, upon the record, there was disclosed an abandonment of
the insurance contract by both the insured and the beneficiaries,
and on that ground the judgment was reversed. It is now contended
that "the only question left open by the mandate of this Court was
a submission of this question," that our decision was substantially
an adjudication that the plaintiffs had a right to recover unless
it was shown that there had been an abandonment of the insurance
contract, and that, upon this trial, it was shown that there had
been no such abandonment, the insured having always expressed a
wish to continue the policy, the beneficiary named in the policy
having died before the second premium became due, and her children,
who became entitled thereafter as beneficiaries, being minors and
in actual ignorance of its existence. That decision was based upon
the averments of the pleadings, and these pleadings were amended
after the judgment was reversed and the case returned to the trial
court. Clearly the contention of the plaintiffs is not sustainable.
When a case is presented to an appellate court, it is not obliged
to consider and decide all the questions then suggested or which
may be supposed likely to arise in the further progress of the
litigation. If it finds that, in one respect, an error has been
committed so substantial as to require a reversal of the judgment,
it may order a reversal without entering into any inquiry or
determination of other questions. While undoubtedly an affirmance
of a judgment is to be considered an adjudication by the appellate
court that none of the claims of error is well founded, even though
all are not specifically referred to in the opinion, yet no such
conclusion follows in case of a reversal. It is impossible to
foretell what shape the second trial may take or what questions may
then be presented. Hence, the rule is that a judgment of reversal
is not necessarily an adjudication by the appellate
Page 193 U. S. 554
court of any other than the questions in terms discussed and
decided. An actual decision of any question settles the law in
respect thereto for future action in the case. Here, after one
judgment on the pleadings had been set aside, on amended pleadings,
a trial was had, quite a volume of testimony presented, and a
second judgment entered. That judgment is now before us for review,
and all questions which appear upon the record and have not already
been decided are open for consideration.
Previous decisions in kindred cases have established these
propositions: first, the State of Washington was the place of the
contract.
Equitable Life Assurance Society v. Clements,
140 U. S. 226,
140 U. S. 232;
Mutual Life Insurance Company of New York v. Cohen,
179 U. S. 262.
Second, the statutory provision of the State of New York in
reference to forfeitures has no extraterritorial effect, and does
not of itself apply to contracts made by a New York company outside
of that state.
Mutual Life Insurance Company of New York v.
Cohen, supra. Third, parties contracting outside of the State
of New York may, by agreement, incorporate into the contract the
laws of that state and make its provisions controlling upon both
parties, provided such provisions do not conflict with the law or
public policy of the state in which the contract is made.
Equitable Life Assurance Society v. Clements, supra; Mutual
Life Insurance Company of New York v. Cohen, supra. If it were
necessary, other cases from this and state courts might be cited in
support of these propositions. Applying them, it follows that, as
Washington was the place of the contract, the laws of that state
control its terms and obligations unless the parties thereto have
stipulated for some other laws. Such a stipulation, it is insisted,
is found in this contract. In determining the effect of such a
stipulation, it must be borne in mind that the applicability of
other laws than those of the state of the place of contract is a
matter of agreement, and that the agreement may select laws and
also limit the extent of their applicability. The case is precisely
like one in which
Page 193 U. S. 555
the parties, without mentioning laws or state, stipulate that
the contract shall be determined in accordance with certain
specified rules.
This insurance policy contains these recitals:
"In consideration of the application for this policy, which is
hereby made a part of this contract, the Mutual Life Insurance
Company of New York promises to pay at its home office in the City
of New York, unto Ellen Kellogg Hill, wife of George Dana Hill, of
Seattle, in the County of King, Washington Territory, for her sole
use, if living, in conformity with the statute, and if not living,
to such of the children of their bodies as shall be living at the
death of the said wife, or to their guardian for their use,
$20,000, upon acceptance of satisfactory proofs at its said office,
of the death of the said George Dana Hill during the continuance of
this policy, upon the following condition, and subject to the
provisions, requirements, and benefits stated on the back of this
policy, which are hereby referred to and made part thereof:"
"The annual premium of eight hundred and fourteen dollars and
___ cents shall be paid in advance on the delivery of this policy,
an thereafter to the company at its home office in the City of New
York, on the twenty-ninth day of April in every year during the
continuance of this contract."
"
* * * *"
"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."
"
* * * *"
"Paid-up policy. -- After three full annual premiums have been
paid upon this policy, the company will, upon the legal surrender
thereof before default in payment of any premium,
Page 193 U. S. 556
or within six months thereafter, issue a paid-up policy, payable
as herein provided for the amount required by the provisions of the
Act of May 21, 1879, c. 347, Laws of the State of New York."
In the application are these provisions:
"If said policy be issued, the declarations, agreements, and
warranties herein contained shall be a part thereof, and the
contract of insurance when made shall be held and construed at all
times and places to have been made in the City of New York."
"
* * * *"
"4th. Policyholders must not expect to be notified when their
premiums will be due. It is a practice of the company to send these
notices, as reminders when the address is known, but no
responsibility is assumed on the part of the company in consequence
of their nonreception."
The statute of New York, relied upon as controlling, forbids the
forfeiture of any life insurance policy unless
"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 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."
Now to what extent were the statutes of New York made by these
stipulations controlling? It is stated in the application that the
contract of insurance is to "be held and construed at all times and
places to have been made in the City of New
Page 193 U. S. 557
York." It might with some plausibility be contended that this
general provision is limited to the matter which precedes it in the
same sentence, to-wit, the "declarations, agreements, and
warranties herein contained." This contention is reinforced by the
fact that elsewhere in the contract there is special mention of one
statute of New York -- to wit, c. 347, Laws 1879 -- which is made
controlling in reference to a single matter.
But assuming that the general declaration that the contract is
to be held and construed to have been made in the City of New York
would, if there was nothing else, make controlling all the
applicable statutes of that state, it is limited by other express
agreements of the policy. Among these are that
"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,"
and also that
"policyholders must not expect to be notified when their
premiums will be due. It is a practice of the company to send these
notices, as reminders when the address is known, but no
responsibility is assumed on the part of the company in consequence
of their nonreception."
Language could not be clearer to the effect that the party
accepting the policy admits thereby the receipt of every notice in
respect to the payment of premium which can be implied from any
other part of the policy or required by any statute. The contention
is that this express stipulation in reference to notice is
nullified by the general provision that the contract is to be
construed to have been made in the City of New York. It is urged
that the laws of New York control in the construction of any
contract made in that state, that they require notice as a
condition of forfeiture, and forbid a waiver of such notice, and
therefore that the agreement in the policy in respect to notice is
overthrown by the law of the state. But that assumes that the
contract was made in New York, whereas it was in fact made in
Washington, and the laws of New York are controlling in any
respect
Page 193 U. S. 558
only because the parties have so stipulated, and, as we have
indicated, the stipulation in respect thereto is to be harmonized
with the other stipulations in the contract. The ordinary rule in
respect to the construction of contracts is this: that, where there
are two clauses in any respect conflicting, that which is specially
directed to a particular matter controls in respect thereto over
one which is general in its terms, although within its general
terms the particular may be included. Because, when the parties
express themselves in reference to a particular matter, the
attention is directed to that, and it must be assumed that it
expresses their intent, whereas a reference to some general matter,
within which the particular may be included, does not necessarily
indicate that the parties had the particular matter in thought.
Here, when the parties stipulate that no other notice shall be
required, attention is directed to the particular matter of notice.
When the stipulation is that the contract shall be construed to
have been made in New York, no particular statute is referred to,
and the attention may not be directed to the matter of notice or
any other special feature of New York law. The special controlled
the general; that which must have been in the minds of the
contracting parties controls that which may not have been, although
included within the language of the latter stipulation. This is the
general rule in the construction of all documents -- contracts as
well as statutes.
Bock v. Perkins, 139 U.
S. 628, and cases cited;
Rodgers v. United
States, 185 U. S. 83, and
cases cited;
Winebrenner v. Forney, 189 U.
S. 148; Sedgwick on the Construction of Statutes and
Constitutional Law, 2d ed., p. 360 and note; 2 Parsons on
Contracts, 6th ed., p. 501 and note.
Obviously the express stipulation in the policy as to the matter
of notice must be held paramount, and to that extent limiting the
provision of the New York law in reference to notice which was not
specially referred to in the contract, and can be invoked only
because it is one of the various statutes of New York applicable to
insurance policies.
Beyond the proposition that, by the terms of the policy, the
Page 193 U. S. 559
insured was bound to take notice of the time when the payment of
the second premium was due, it was also shown by the testimony that
the renewal receipt was forwarded to the local agent at Seattle and
by him presented to the insured, so that there was notice in fact
as well as notice implied from a receipt of the policy. Under those
circumstances, the insured failed to pay, and continued such
failure for four years prior to his death. Yet, notwithstanding his
failure to perform his part of the contract -- and performance by
the insured underlies the obligation of the insurance company to
perform on its part -- this action was brought to compel the same
performance by the company that would have been due if he had
performed. It is simple justice between two parties to a contract
containing depending stipulations that neither should be permitted
to exact performance by the other without having himself first
performed. It is true, cases arise in which one party is enabled to
take advantage of some statutory provision and exact compliance
from the other without having himself first complied, and courts
may not ignore the scope and efficacy of such statutory provisions;
but nevertheless, a judgment for failure to perform against one
party in favor of the other, when the latter was the first
delinquent, is offensive to the sense of righteousness and fair
dealing. We have had before us a series of cases coming from the
same jurisdiction in which, when the insured had, for a series of
years, neglected to pay their insurance premiums or perform their
parts of the insurance contract, their heirs or beneficiaries have,
on their deaths, sought to obtain judgments against the insurance
company for the amounts which would have been due on the policies
if the insured had performed their stipulations in respect to the
payment of premiums. Courts have always set their faces against an
insurance company which, having received its premiums, has sought
by technical defenses to avoid payment, and in like manner should
they set their faces against an effort to exact payment from an
insurance company when the premiums have deliberately been left
unpaid. We cite with approval
Page 193 U. S. 560
the decision of the Supreme Court of Washington in a recent
case,
Lone v. Mutual Life Insurance Company of New York,
decided December 21, 1903, and reported in 74 P. 689, in which, as
in this case, the insured made payment of one premium and then
lived years without making further payment, and in which the court
said, in reference to the New York statute here relied upon and the
conduct of the insured:
"The statute, it is true, provides that no life insurance
company shall have power to declare forfeited or lapsed any policy
by reason of the nonpayment of any annual premium unless notice be
given in a specified manner, but a statute must be construed, and
its provisions enforced, with reference to its objects, and the
legislature, taking into consideration the infirmities of memory,
enacted this statute for the purpose of preventing insurance
companies from taking what, in homely phrase, is termed 'snap
judgment' on its patrons, thereby depriving them of the benefit of
contracts by reason of slight negligence on their part, and when
there was no real intention to rescind -- a beneficent and just law
if enforced in the spirit of its enactment, but oppressive and
unjust if construed with narrow and literal exactness."
"
* * * *"
"We are satisfied that the thought never occurred to Rex during
his lifetime that he had a claim against this company on the policy
which had been issued so many years before, or, if he did, after
the lapse of any appreciable time, it was a dishonest thought, for
he knew that he had not performed the duties which devolved upon
him under the contract, and that he had no rights thereunder, and
there seems to be no just reason why his administrator should
demand rights which he had virtually waived. In
Shutte v.
Thompson, 15 Wall. 151, where a party was standing
upon his statutory right in relation to the notice concerning the
depositions, the Court said that it was not doubted that all the
provisions of the statute respecting notice to the adverse party
could be waived by him; that a
Page 193 U. S. 561
party could waive any provision, either of a contract or of a
statute, intended for his benefit, and that, if a course of action
on his part had misled the other party, he ought not to be allowed
to avail himself of his original rights, because, under such
circumstances, he would be availing himself of what was
substantially a fraud, and that he should not be allowed to reap
any advantage from his own fraud."
"
* * * *"
"From every consideration of justice and fair dealing, we think
the respondent should not be allowed to recover in this case."
The judgments of the circuit court and of the circuit court of
appeals will be reversed, and the case remanded to the circuit
court with instructions to set aside the verdict and grant a new
trial and to proceed further in accordance with the views expressed
in this opinion.
MR. JUSTICE PECKHAM took no part in the consideration and
decision of this case.