Ellis v. Anderson

Citations

• 49 Pa. Super. 245
• 1912 Pa. Super. LEXIS 316

Syllabus

<p>Insurance — Life insurance — Payment of first premiums — Payment in notes — Waiver—Act of May S, 1909, P. L. 405.</p> <p>1. The action of the general agent of a life insurance company in delivering a policy to the insured, and accepting his interest bearing notes for the amount of the first premium, constitutes a waiver of the provisions of the policy requiring the payment of the first premium in advance.</p> <p>2. A policy of life insurance provided that “all payment of premiums shall be payable in advance. . . . The failure to pay any of the first three premiums, or installments thereof shall avoid and annul this policy.” The policy stated the amount to be paid in case of the death of the insured thus: “Five thousand dollars less the unpaid balance of the current year’s premium, if any, and any other indebtedness on the policy.” Held, that the latter provision indicated that it was in the contemplation of the parties, that the policy might still be in full force even though the current year’s premium had not been fully paid.</p> <p>3. The Act of May 3, 1909, P. L. 405, was a penal statute, and must be construed strictly. The statute does not enact that all insurance premiums must be paid in cash, nor forbid the extension of credit for premiums due upon the policies. The intention of the act was to make it unlawful for insurance companies to give rebates out of premiums, or to agree to pay under a policy any dividends more than the policy specified, or to give to any assured anything of value not specified in his policy. It did not make it unlawful for an insurance company to accept upon the issuing of the policy the note of the assured for the full amount of the premium with interest from the date thereof at the rate fixed by law, in the absence of any suggestion that the maker of the note was not financially responsible, or of any understanding or agreement that the note should not be paid in full with interest.</p> <p>4. Where an interest bearing note is acce