Hull, Adm'r, vs. The Northwestern Mutual Life Insurance Company. an office, is in by such a color of right, and that he has such possession of the office, as makes him an officer de facto, then his acts as to third persons are valid, and his right to hold the office can only be inquired into in some direct proceeding for that purpose." Here, Mr. Cole was not in possession of the office of judge, and did not claim it. He only accepted a delegation of its functions pro hac vice, acting for the circuit judge in some sort as a judex pedaneus of the Roman law. And those cases are quite in accord with this. The judgment plainly proceeded upon a mistrial, which cannot support it; and the judgment itself is plainly not a proper judgment of the court below. Whether void or voidable, it should be reversed. Sayles v. Davis, 20 Wis., 302; Hays v. Lewis, 21 id., 663. By the Court. The judgment of the court below is reversed, and the cause remanded for trial according to law. HULL, Adm'r, vs. THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY. LIFE INSURANCE. Construction of policy: Forfeiture clause: Premium notes: Application of dividends. 1. A policy of life insurance recites that in consideration of the annual premium therein stipulated, consisting of an annual cash premium, and an annual loan note, with interest, to be paid and given during ten years next after the date of the policy, the company assured the life of plaintiff's intestate to a certain amount for the term of his natural life. It declares that at each distribution of the surplus after its date, a due proportion of such surplus on each year's business during the continuance of the policy, will be returned to the assured, and that if default shall be made in the payment of any premium, the company will pay as many tenth parts of the original sum assured as there shall have been complete annual premiums paid at the time of such default; but that in order to secure such proportion, "all premium notes must be taken up, Hull, Adm'r, vs. The Northwestern Mutual Life Insurance Company. * * or the interest thereon be paid annually in cash, on the date of the annual maturity of the premium or within three months thereafter, until the notes are cancelled by returns of the surplus, or the whole policy will be forfeited, unless one or more annual payments have been made in full, by cash payment or by application of the dividend." One of the conditions of the policy was, that if the premiums, or the interest upon any note given therefor, should not be paid on the day named for their payment, "the company should not be liable for the payment of the whole sum assured, but only upon such part thereof as is stipulated above," and the remainder should cease and determine. There was indorsed on the policy this statement: "At the third annual renewal, the dividend of the first year will be due, and on the cash policies can be applied as cash towards the payment of the third year's premium, and on note policies will be applied first to pay the unpaid interest on the loan notes, and then to the notes themselves. * THIS POLICY IS NONFORFEITABLE. Each complete yearly payment secures its proportion of the policy." The loan note contains a promise by the assured to pay the amount therein named with interest, "which interest shall be paid annually or the policy be forfeited." The assured paid the cash premiums for three years, and gave in each of said years his annual loan note as required; but afterwards made default in a payment due September 29, 1873, by reason of which the policy is admitted to have lapsed as to seven-tenths of its amount. On the 29th of March, 1874, there was due the company as interest on outstanding loan notes $24.80; but on the same day there was due the assured from the company $51.15, dividend earned for the year 1872. The assured died December 14, 1874. Held, that the company is liable to pay to the administrator three-tenths of the amount insured. * 2. Forfeitures are only enforced when it appears that this is the plain intent and meaning of the contract; and the words of a policy must be construed most strongly against the insurer; and if the policy contains repugnant conditions, the court must enforce those which are in favor of the assured and will prevent a forfeiture. 3. By the terms of the policy, the assured was clearly entitled to have the dividend which fell due on the day when interest accrued on his loan note, applied first to the payment of such interest; and even if a forfeiture would have resulted on the failure to pay such interest (a point not decided), there was none in this case. 4. Dividends due the insured are cash, and there is nothing in the policy which justifies the company in refusing to apply them in payment of interest on premium notes in such cases. APPEAL from the Circuit Court for Fond du Lac County. Hull, Adm'r, vs. The Northwestern Mutual Life Insurance Company. Action upon a policy of life insurance, issued to plaintiff's intestate, Alfred Hull. The terms and conditions of the policy, so far as they have any bearing upon the case, are stated at length in the opinion of the court. The policy was issued March 29, 1870, upon the ten-yearpayment plan, premiums payable annually (subsequently changed to semi-annually), partly in cash and partly by premium note. It was claimed on the part of the defense, that the policy had lapsed as to seven-tenths by the nonpayment of the semi-annual premium due September 29, 1873; and that the balance was forfeited by nonpayment of the interest maturing March 29, 1874, upon the first loan or premium note. The company, after the default in paying the semiannual premium due in September, 1873, indorsed a dividend, declared upon the earnings of the year 1872, on the note of the assured, but erased the indorsement upon his failing (as the company claims) to pay in cash the interest upon such note maturing in March, 1874. All the remaining facts, material to the case, will be found in the opinion. Judgment for the plaintiff for the sum of $1,216.75, being three-tenths of the policy, less the amount of the unpaid loan notes. The defendant appealed. Geo. H. Noyes, for appellant, upon the point that a failure to pay the premium, in accordance with the terms of the policy, worked a forfeiture thereof, where the policy so provided, and that the same result followed a nonpayment of a premium note or the interest or an installment due thereon, cited Howell v. Life Ins. Co., 44 N. Y., 276; Ruse v. Life Ins. Co., 23 id., 506; Mut. Ben. Life Ins. Co. v. Ruse, 8 Ga., 534; Shaw v. Life Ins. Co., 103 Mass., 254; Catoir v. Life Ins. & Trust Co., 4 Vroom, 487; Tait v. Life Ins. Co., 2 Ins. L. J., 863; Robert v. Life Ins. Co., 1 Disney, 355; 2 id., 106; Pitt v. Life Ins. Co., 100 Mass., 500; Baker v. Life Ins. Co., 43 N. Y., 283; Russum v. Life Ins. Co., Sup. Ct. Hull, Adm'r, vs. The Northwestern Mutual Life Insurance Company. Mo., decided Feb. 15, 1876; Patch v. Life Ins. Co., 44 Vt., 481; Mut. Ben. Life Ins. Co. v. French, 2 Cin. Sup. Ct. R., 321; 2 Cent. L. J., 618; Mut. Life Ins. Co. v. Young, 11 Alb. L. J., 364; Worthington v. Life Ins. Co., 4 Ins. L. J., 269; Dillard v. Life Ins. Co., 44 Ga., 119. He further argued that, by the terms of the policy, the assured, in order to secure a proportional payment upon it when partially lapsed, was required either to take up all the premium notes, or pay the interest in cash, and that a payment by application of dividends would not answer, as the two methods of payment were clearly distinguished by the terms of the policy; that the assured could not claim such application in this case, because, by the terms of the policy, to entitle him to any dividend, there must have been a policy in force when it became due him, and, his policy having lapsed, no dividend had accrued, and none could accrue until payment of the interest; that the uniform rule and practice of the company had been, in case of lapsed policies, where notes were outstanding, to require the interest to be paid in cash, and to apply the dividends uniformly to the payment of the principal of the notes; that the provision indorsed on the policy, that "at the third annual renewal, the dividend of the first year will be due, and on note policies will be applied first to pay the unpaid interest on loan notes, and then to the notes themselves," was obviously restricted to full policies, and had no reference to those partially lapsed; and that any other construction would defeat the theory upon which the entire system of extending credit by insurance companies for a portion of the premium is based, and would render the notes wholly worthless, and require the company to carry a risk for which it received no compensation. D. Babcock, for respondent, contended that a complete annual premium consisted of the cash paid and note given each year; and that, three such payments having been made, the policy, as to three-tenths thereof, was nonforfeitable (Bliss Hull, Adın'r, vs. The Northwestern Mutual Life Insurance Company. on Life Ins., 273, 284; May on Ins., § 345; New England Mut. Life Ins. Co. v. Hasbrook, 32 Ind., 447; McAllister v. Ins. Co., 101 Mass., 558; Mowry v. Ins. Co., 9 R. I., 346; Baker v. Life Ins. Co., 6 Abb., N. S., 144; Dutcher's case, 2 Cent. L. J., 153; Hodsdon v. Guardian Life, 1 Big. L. & A. Ins. R., 218; 4 id., 670); that the condition as to the payment of interest in cash was fulfilled when the company indorsed the dividend upon the note; that, as the assured was a member of the company, it was bound so to apply the dividend as to protect his interest from forfeiture, and that courts look upon forfeitures with disfavor (Fræhlich v. Life Ins. Co., 2 Big., 81; Mut. Ben. Life Ins. Co. v. French, 4 id., 369; Ohde's case, 2 Cent. L. J., No. 36, Sept. 3, 1875; Grigsby's case, id., Feb. 19, 1875; Story's Eq. Jur., §§ 1314, 1316); that the company was estopped from claiming that the policy was forfeited for nonpayment of the interest, on the ground that, by its own express agreement, the loan notes were only to be paid by the dividends or by deduction from the policy when it matured (Dutcher v. Life Ins. Co., 4 Big., 665; Grigsby v. Life Ins. Co., 2 Cent. L. J., No. 8, p. 123; 4 Big., 633; Smith v. Life Ins. Co., Sup. Ct. of N. Y., unreported; Ohde's case, supra); and that that construction should be adopted which is most favorable to the insured, where there is any uncertainty, and strictly against the insurer. Bliss on Ins., 656. COLE, J. The company defends upon the ground that in consequence of the nonpayment of the interest due on the notes given by the insured for premiums, the policy became forfeited. The action was to recover three-tenths of the sum named in the policy, less the amount of the outstanding loan notes. The policy was on the ten-year-payment plan, and bore date March 29, 1870. The insured paid the stipulated part of the cash premiums for the years 1870, 1871 and 1872, and gave in each of said years his annual loan note, as pro VOL. XXXIX. - 26 |