1. The only case where a representation as to the future can
operate as an estoppel is where it relates to the purposed
abandonment of an existing right, and was intended to influence,
and has influenced, the conduct of the party to whom it was made. A
promise as to future action, touching a right dependent upon a
contract to be thereafter entered into, does not create an
estoppel.
2. The promise of an insurance company, that if a party will
take out a policy he shall be notified when to pay the annual
premiums before he shall be required to pay them, will not,
although such notice is not given, estop the company from setting
up the forfeiture which, according to the terms of the policy
subsequently accepted, was incurred on the nonpayment of the
premium when due.
3. The policy issued by the company and accepted by the assured
must, in a court of law, be taken as expressing the final agreement
of the parties, and as merging all previous verbal
stipulations.
4. The court in this case holds that the authority of the local
agent of the company was limited to countersigning the policy and
receiving the premiums.
This was an action by Daniel A. Mowry, upon a policy of
insurance for the sum of $10,000, issued to him, for his sole
benefit, by the Union Mutual Life Insurance Company -- a
corporation created by the laws of Maine -- upon the life of Nelson
H. Mowry.
The facts of the case and the instructions to the jury are
stated in the opinion of the Court.
The concluding clause of the policy is as follows:
"But the same [the policy] shall not be binding until
countersigned and delivered by John Shepley, agent at Providence,
R.I., nor until the advance premium is paid."
There was a verdict for the plaintiff; and, judgment having been
rendered thereon, the defendant sued out this writ of error.
Page 96 U. S. 545
MR. JUSTICE FIELD delivered the opinion of the Court.
This was an action on a policy of insurance, issued by the Union
Mutual Life Insurance Company, a corporation created under the laws
of Maine, upon the life of Nelson H. Mowry, for the sum of $10,000.
The insurance was effected by a nephew of the insured, for his sole
benefit. The nephew was at the time a creditor of the insured to
the extent of $6,000, and had agreed to embark with him in an
enterprise requiring the expenditure of considerable capital, and
depending for its success upon the
Page 96 U. S. 546
knowledge and skill of the insured in business. These
circumstances gave the nephew such an interest in the life of the
insured as to prevent the policy from being a wager one. The
insurance effected was from the 9th of March, 1867, and the policy
recited the payment of the first annual premium on that day, and
stipulated for the payment of the subsequent premiums on the same
day of that month each year. The payment of the insurance money,
after notice and proof of the death of the insured, was made
dependent upon the punctual payment, each year, of the premium. The
policy, in terms, declared that it was made and accepted by the
insured and the nephew, upon the express condition that if the
amount of any annual premium was not fully paid on the day and in
the manner provided, the policy should be "null and void, and
wholly forfeited." And it declared that no agent of the company,
except the president and secretary, could waive such forfeiture or
alter that or any other condition of the policy.
The second premium, due on the 9th of March, 1868, was not paid,
and the insured died on the 8th of April following. Forty-five days
after it was due, and fifteen days after the death of the insured,
this premium was tendered to the company, and was refused. The
question for determination is whether a tender of the premium at
that time was sufficient to hold the company to the payment of the
insurance money.
By the express condition of the policy, the liability of the
company was released upon the failure of the insured to pay the
premium when it matured, and the plaintiff could not recover,
unless the force of this condition could in some way be overcome.
He sought to overcome it by showing that the agent, who induced him
to apply for the policy, represented to him, in answer to
suggestions that he might not be informed when to pay the premiums,
that the company would notify him in season to pay them, and that
he need not give himself any uneasiness on that subject; that no
such notification was given to him before the maturity of the
second premium, and for that reason he did not pay it at the time
required. This representation before the policy was issued, it was
contended
Page 96 U. S. 547
in the court below, and in this Court constituted an estoppel
upon the company against insisting upon the forfeiture of the
policy.
But to this position there is an obvious and complete answer.
All previous verbal arrangements were merged in the written
agreement. The understanding of the parties as to the amount of the
insurance, the conditions upon which it should be payable, and the
premium to be paid, was there expressed, for the very purpose of
avoiding any controversy or question respecting them. The entire
engagement of the parties, with all the conditions upon which its
fulfillment could be claimed, must be conclusively presumed to be
there stated. If, by inadvertence or mistake, provisions other than
those intended were inserted, or stipulated provisions were
omitted, the parties could have had recourse for a correction of
the agreement to a court of equity, which is competent to give all
needful relief in such cases. But until thus corrected, the policy
must be taken as expressing the final understanding of the assured
and of the insurance company.
The previous representation of the agent could in no respect
operate as an estoppel against the company. Apart from the
circumstance that the policy subsequently issued alone expressed
its contract, an estoppel from the representations of a party can
seldom arise, except where the representation relates to a matter
of fact -- to a present or past state of things. If the
representation relate to something to be afterwards brought into
existence, it will amount only to a declaration of intention or of
opinion, liable to modification or abandonment upon a charge of
circumstances of which neither party can have any certain
knowledge. The only case in which a representation as to the future
can be held to operate as an estoppel is where it relates to an
intended abandonment of an existing right, and is made to influence
others, and by which they have been induced to act. An estoppel
cannot arise from a promise as to future action with respect to a
right to be acquired upon an agreement not yet made.
The doctrine of estoppel is applied with respect to
representations of a party, to prevent their operating as a fraud
upon one
Page 96 U. S. 548
who has been led to rely upon them. They would have that effect,
if a party who, by his statements as to matters of fact, or as to
his intended abandonment of existing rights, had designedly induced
another to change his conduct or alter his condition in reliance
upon them, could be permitted to deny the truth of his statements,
or enforce his rights against his declared intention of
abandonment. But the doctrine has no place for application when the
statement relates to rights depending upon contracts yet to be
made, to which the person complaining is to be a party. He has it
in his power in such cases to guard in advance against any
consequences of a subsequent change of intention and conduct by the
person with whom he is dealing. For compliance with arrangements
respecting future transactions, parties must provide by
stipulations in their agreements when reduced to writing. The
doctrine carried to the extent for which the assured contends in
this case would subvert the salutary rule, that the written
contract must prevail over previous verbal arrangements, and open
the door to all the evils which that rule was intended to prevent.
White v. Ashton, 51 N.Y. 280; Bigelow, Estoppel 437-441;
White v. Walker, 31 Ill. 422;
Faxton v. Faxon, 28
Mich. 159.
The learned judge who tried this case in the circuit court
instructed the jury in substance that if they could find from the
language of the agent that there was an agreement between him and
the assured, made before the policy was executed, that the latter
should have notice before he should be required to pay the annual
premium, then that the company, not having given such notice, was
estopped from setting up the forfeiture stipulated by the policy
for nonpayment of the premium when due. For the reasons we have
stated, we think the court erred in this instruction.
There is nothing in the record which shows that the agent was
invested with authority to make an insurance for the company. In
representing himself as an agent, he only solicited an application
by the assured to the company for a policy. That instrument was to
be drawn and issued by the company, and it shows on its face that
the authority to the agent was limited to countersigning it before
delivery and to receiving the premiums.
Page 96 U. S. 549
But even if the agent had possessed authority to make an
insurance for the company, and he made the agreement pretended,
still the assured was bound by the terms of the policy subsequently
executed and accepted by him.
The judgment must be reversed, and the cause remanded for a new
trial, and it is
So ordered.