an insurance policy, on request of the insur-cuted and delivered December 12, 1893, and ance agent, of a provision contrary to that set forth: the insured, and evidence of the agent's as which had been agreed upon between him and "2. This defendant, for further answer, surance, in response to an inquiry by the in- says that said application is dated the 12th sured at the time when the policy was deliv-day of December, 1893, and asked the issuered. to the effect that the policy conformed ing of five policies of $1,000 each upon the te their agreement, is admissible on the question whether the insured was or was not bound by the inserted provision, elther on the ground that he had requested it or that he was negligent in not reading the policy. 2. The omission of the insured to read a life insurance policy when delivered to him and the effect that the annual premium should be rather than forfeit the contract. [No. 29.] Argued March 18, 1901. Decided October 28, 1901. WRIT of Certiorari to the United life of the said *Frank E. McMaster, de [27] "This defendant grants to the insured in said defendant company a grace of one month on the payment of premiums, which extended the day of payment of premiums from December 12th, 1894, as in the policies issued to said Frank E. McMaster, deceased, late as the 12th day of January, 1895, but not later. "3. This defendant, for further answer, says that payment of the premiums due upon said policies were not paid within the time prescribed as aforesaid, and that said Frank E. McMaster died on the 18th day of January, 1895, six days after said policies had lapsed and were forfeited for nonpay ment of premiums as required. "6. This defendant, further answering said petition, says that said application is a part of said policies, in each case, that said assured received and accepted said poli 0 Circuit his lifetime, Eighth Circuit to review a decision affirming a judgment in favor of defendant in an action on policies of life insurance. Reversed, and remanded with direction of judgment for plaintiff. them his possession for a long time, and was aware and knew, or could have known, the contents in each policy. "That said assured had paid the premiums when said policies were delivered to him; See same case below, 40 C. C. A. 119, 99 that by reason of said assured's acceptance Fed. 856. Statement by Mr. Chief Justice Fuller: [26] *This was an action brought by Fred. A. McMaster, administrator of the estate of Frank E. McMaster, deceased, against the New York Life Insurance Company on five policies of insurance of $1,000 each upon the life of Frank E. McMaster. The applications were dated December 12, and the policies December 18, 1893. The premiums for a year in advance were paid and the policies delivered December 26, 1893. McMaster died January 18, 1895, and the defense was that the insurance had been forfeited by failure in payment of the second annual premiums on or before January 12, 1895, that is to say, within thirty days after December 12, 1894, when the company contended they became due. of said policies, his representative, the plaintiff herein, is estopped from denying the date of said policies or claiming that said policies should have a different date from the application, and is estopped for the reasons above stated from claiming that said words, to wit, 'Please date policy same as application,' were not in said application when insured signed same, for by accepting said policies the assured waived said right to object, if said words were inserted, as alleged in petition, after the signing of the application, which this defendant denies." The case was tried by the circuit court without a jury; special findings of fact made; and judgment rendered in favor of defendant. 90 Fed. 40. Plaintiff prosecuted a writ of error from the circuit court of appeals, and the judg-[28] ment was affirmed. 40 C. C. A. 119, 99 Fed. 856. The writ of certiorari was then al The company alleged in a substituted and amended answer that the policies were exe-lowed. knowledge of assured-see note to Union Mut. L. Ins. Co. v. Wilkinson, 20 L. ed. U. S. 617. On the effect of knowledge by insurer's agent of the falsity of statements in application see Clemans v. Supreme Assembly R. S. of G. F. (N. Y.) 16 L. R. A. 33, and note. As to the effect of riders or slips attached to insurance policies-see Jackson V. British America Assur. Co. (Mich.) 30 L. R. A. 636, and note. Upon the question when an insurance agent is the agent of the insured-see Michigan Pipe Co. v. Michigan F. & M. Ins. Co. (Mich.) 20 L. R. A. 277, and note. That forfeiture of an insurance policy is not favored in law-see Gunther v. New Orleans Cotton Exch. Mut. Aid Asso. (La.) 2 L. R. A. 118, and note. And see note to Dennis v. Massachusetts Ben. Asso. (N. Y.) 9 L. R. A. 183. Pending the trial below, plaintiff filed a | December 12, 1893, of the form which is bill in equity for the reformation of the poli- made part of the policies sued on and atcies, and the circuit court granted the relief tached to the petition, the same being made prayed. 78 Fed. 33. On appeal this decree part of this finding of facts. was reversed (30 C. C. A. 532, 57 U. S. App. 638, 87 Fed. 63), and an application to this court for certiorari was denied. 171 U. S. 687, 18 Sup. Ct. Rep. 944. The circuit court of appeals expressed the opinion in that case that no recovery could be had at law or in equity, and accordingly the circuit court in this case, although of opinion that plaintiff was entitled to recover, gave judg-Please date policy same as application." ment for defendant. Separate opinions were given by the judges of the court of appeals, Sanborn and Thayer, JJ., concurring in affirming, and Caldwell, J., dissenting. The findings of fact by the circuit court were as follows: "5th. In the application when signed by Frank E. McMaster it was provided that the amount of insurance applied for was the sum of $5,000, to be evidenced by five policies for $1,000 each, on the ordinary life table, the premium to be payable annually. "6th. There now appears on the face of the application, interlined in ink, the words, These words were not in the application when it was signed by McMaster, but after the signing thereof they were written into the application by F. W. Smith, the agent of the New York Life Insurance Company, without the knowledge or assent of Frank E. McMaster, and were so written in by the agent in order to secure to the agent a bonus which the company allowed to agents for business secured during the month of De "1st. The plaintiff, Fred A. McMaster, was when the suit was brought and is now the lawfully appointed administrator of the estate of Frank E. McMaster, deceased, hav-cember, 1893; and it does not appear that ing been appointed administrator of the named estate by the probate court of Woodbury county, Iowa; and furthermore said plaintiff was when this suit was brought and is now a citizen of the state of Iowa, and a resident of Woodbury county, Iowa. "2d. That the defendant, the New York Life Insurance Company, was when this suit was brought and is now a corporation created under the laws of the state of New York, having its principal office and place of business in the city of New York, in the state of New York, but being also engaged in carrying on its business of life insurance in the state of Iowa and other states. Frank E. McMaster ever knew that these words had been written into the application, and it affirmatively appears that he had no knowledge thereof when the application was forwarded to the home office of the company and was acted on by the company. "7th. By the express understanding had between F. W. Smith, *the agent of the New [30] York Life Insurance Company, and Frank E. McMaster, when the application for insurance was signed, it was agreed that the first year's premium was to be paid by MeMaster upon the delivery to him of the policies, and that the contract of insurance was not to take effect until the policies were delivered. "3d. That in December, 1893. F. W. Smith, an agent for the New York Life Insurance "8th. The defendant company, at its home Company, residing at Sioux City, Iowa, so- oflice in New York City, upon receipt of the licited Frank E. McMaster to insure his life application, determined to grant the insurin that company, and, as an inducement to ance applied for, and issued five policies each taking the insurance, pressed upon McMas- for the sum of $1,000 dated December 18th, ter the provision adopted by the company, 1893, and reciting on the face thereof that and set forth in the circular issued by the the annual premium on each policy was company, and printed on the back of the poli- $21.00, and forwarded the same to its agent cies issued by the company, under the head- F. W. Smith, at Sioux City, Iowa, for de ing, 'Benefits and Provisions referred to in livery to Frank E. McMaster. These five this Policy,' in the following words: 'After policies are in the form of the one attached this policy shall have been in force three to the petition in this case, which is hereby [29]*months, a grace of one month will be allowed made a part of this finding of fact, and each in payment of subsequent premiums, subject policy contains the recital: "This contract to an interest charge of 5 per cent per annum is made in consideration of the written apfor the number of days during which the pre-plication for this policy, and of the agreemium remains due and unpaid. During ments, statements, and warranties thereof, said month of grace the unpaid premium, which are hereby made a part of this conwith interest as above, remains an indebted-tract, and in further consideration of the ness due the company, and in the event of sum of twenty-one dollars and cents, death during said month, this indebtedness to be paid in advance, and of the payment of will be deducted from the amount of the in- a like sum on the twelfth day of December surance.' in every year thereafter during the continu. "4th. Relying on the benefits of this pro-ance of this policy.' vision and in the belief that if he accepted "9th. The five policies inclosed in envel a policy of insurance upon his life from the opes on or about December 26th, 1893, were New York Life Insurance Company, paying taken by F. W. Smith, the agent of the dethe premiums thereon annually, the com- fendant company, to the office of Frank E. pany could not assert the right of forfeiture McMaster, who asked the agent if the poliuntil thirteen months had elapsed since the cies were as represented, and if they would last payment of the annual premium, the insure him for the period of thirteen months, said Frank E. McMaster signed an applicato which the agent replied that they did so tion for insurance in said company, dated insure him, and thereupon McMaster paid the agent the full first annual premium, or the sum of $21 on each policy, and, without reading the policies, he received them and placed them away. The agent did not in any way attempt to prevent McMaster from reading the policies, and he had the full opportunity for reading them, but in fact did not read them, and accepted them on the statement of the agent of the company, as hereinabove set forth. "10th. That not later than November 17th, 1894, notice was sent to Frank E. McMaster [31]of the coming due of the premiums on the policies issued to him by the defendant company, in accordance with the requirements "15th. That Frank E. McMaster died at Sioux City on the morning of January 18th, 1895. "16th. That up to the time of his death the said Frank E. McMaster had not paid the second year's premiums on the policies issued to him by the defendant company, nor have the same been paid since his death, nor had the said McMaster received or paid for the policies issued by the Union Central Company, and the same had not been delivered or become effectual. 17th. That due and sufficient notices and proofs of the death of said Frank E. McMaster were immediately sent to and received by the defendant company, and due demand for the payment of the five policies sued on was made by the plaintiff, as administrator of the estate of Frank E. McMaster, and refused by the defendant com. pany on the ground that the policies in question had lapsed and were not in force at the time of the death of said Frank E. McMaster, by reason of the failure to pay the second year's premiums coming due on said policies. of the statutes of the state of New York. "11th. The renewal receipts for the second annual premium on the five policies held by Frank E. McMaster in the defendant company were sent for collection to Mary A. Ball, at Sioux City, Iowa, who on the 11th or 12th day of December, 1894, called on said McMaster for payment of the premiums in question. At that time McMaster declined making payment thereon, saying that he had seen other policies which promised better results, and that he did not think he would "18th. That the defendant company has renew the insurance in the defendant com- not paid said policies or any part thereof, pany. Miss Ball told him the New York and, assuming the same to be valid, there is contracts had some nice provisions, like thir-due thereon November 1, 1898, the sum of ty days of grace and loans, and, in reply to an inquiry from McMaster, stated that his policies entitled him to the month's grace in the payment of the premiums, and that, as she understood it, the grace on the second premiums would expire January 11, and McMaster said if he concluded to keep any of the insurance he would call and pay for it before the grace expired. ($5,965) five thousand nine hundred and sixty-five dollars, after deducting from the face of the policies the amount of the second premiums, with interest thereon to March 14, 1895." The policies were dated December 18, 1893, and provided: Premium ty-one dollars and This contract is made in "12th. That in November or December, consideration of the written 1894, Frank E. McMaster was examined for Annual the purpose of obtaining life insurance by application for this policy, and the agents of the Union Central Insurance of the agreements, statements, Company, it being understood between the and warranties thereof, which parties that the policies were not to issue are hereby made a part of this contract, and until in January, 1895, and it being the pur-in further consideration of the sum of twencents, to be paid pose of McMaster to take $1,000 or $2,000 insurance in the Union Central Company, in advance, and of the payment of a like at the expiration of his insurance in the de- sum on the 12th day of December in every fendant company, but also to continue part of year thereafter during the continuance of the policies held in the defendant company. this policy. "13th. That on or about January 15th, 1895, the agent of the Union Central Com- Incontestapany, meeting McMaster on the street inbility. Sioux City, told him the policies issued by the Union Central Company had been received, and in reply McMaster said: 'All right. Just hold them. There is no hurry about them.' And in the same conversation he stated that he had other insurance,-re ferring to the policies in the defendant company. "14th. That the action of Frank E. McMaster shows, and the court so finds the fact to be, that the said McMaster believed that the policies issued to him by the defendant [32] company would continue in force for the period of thirteen months from the date of the policies, and his action with respect to the policies in the defendant company and the proposed insurance in the Union Central Company was based upon and governed by this belief on his part. *After this policy shall have{$3] been in force one full year, if it shall become a claim by death the company will not contest its payment, provided the conditions of the policy as to payment of premiums have been observed. The benefits and provisions placed by the company on the next page are a part of this contract as fully as if recited over the signatures hereto affixed. Benefits and provisions referred to in this policy. Ac Benefits at If the insured is living on the 12th day of December in the year nineteen hundred and thirteen, on which date the accumulation period of this policy ends, and if the premiums have been paid in full to said date, the insured shall be entitled to one of the six benefits following: [cash value; annuity; [34] (Any indebtedness to the company, including any balance of the current year's premium remaining unpaid, will be deducted in any settlement of this policy or of any benefits thereunder.) paid-up policy, etc., etc.] If the insured statements and representations referred to, made no selection dividends were to be ap- no statements, representations, promises or portioned as provided. information made or given by or to the person soliciting or taking this application for a policy, or by or to any other person, shall be binding on said company, or in any manner affect its rights, unless such statements, representations, promises, or information be reduced to writing and presented to the officers of said company, at the home office in this application. 4. That any policy which may be issued under this ap-[35] plication shall not be in force until the actual payment to and acceptance of the premium by said company or an authorized agent, during my lifetime and good health. Powers not No agent has power in behalf of the company to make Delegated. or modify this or any contract of insurance, to extend the time for paying a premium, to waive any forfeiture, or to bind the company by making any promise or making or receiving any representation or information. These powers can be exercised only by the president, vice president, second vice president, actuary, or secretary of the company, and will not be delegated. Mr. Henry J. Taylor argued the cause, and, with Messrs. Frank E. Gill and Eric A. Burgess, filed a brief for petitioner: The statements of the agent in reference to existing terms of the policies were known to him to be false, and were relied on by the assured to his damage. That the guilty party may not render his fraud effectual, the parolevidence rule must yield to the rule of equi All premiums are due and Payment of payable at the home office of Premiums. the company, unless otherwise agreed in writing, but may be paid to agents producing receipts signed by the president, vice president, second vice president, actuary or secretary, and counter-table estoppel. signed by such agent. If any premium is not thus paid on or before the day when due, then (except as hereinafter otherwise provided) this policy shall become void, and all payments previously made shall remain the property of the company. Grace. *After this policy shall have been in force three months, a grace of one month will be allowed in payment of subsequent premiums, subject to an interest charge of 5 per cent per annum for the number of days during which the premium remains due and unpaid. During the said month of grace the unpaid premium, with interest as above, remains an indebtedness due the company, and in the event of death during the said month this indebtedness will be deducted from the amount of the insurance. The applications were dated December 12, 1893, and contained, among other things, the following: Sum to be insured, $5,000. Please date policy same as application. [It was averred in the complaint and found by the circuit court that these words in italics were inserted by the agent after the applications were signed and without applicant's knowledge.] Annually. Premium payable Seminually. Note: Strike out the rates not desired. On what table Ordinary Life. in....years. Union Mut. L. Ins. Co. v. Wilkinson, 13 Wall. 222, 20 L. ed. 556; Equitable Safety Ins. Co. v. Hearne, 20 Wall. 494, 22 L. ed. 398. The party responsible for the fraud or other vice inherent in a contract estops himself from setting it up, and parol evidence is admissible to establish and furnish the basis for the estoppel. Under the rule of estoppel the statement. "Please date policy same as application," is not the direction of the assured, but of the company itself, and the company must bear all the consequences naturally, reasonably, or actually flowing from its conduct. Continental L. Ins. Co. v. Chamberlain, 132 U. S. 304, 33 L. ed. 341, 10 Sup. Ct. Rep. 87: American L. Ins. Co. v. Mahone, 21 Wall. 152, 22 L. ed. 593: Union Mut. L. Ins. Co. v. Wilkinson, 13 Wall. 222, 20 L. ed. 94 U. S. 610, 24 L. ed. 268: North American 617; New Jersey Mut. L. Ins. Co. v. Baker, F. Ins. Co. v. Throop, 22 Mich. 146, 7 Am. Rep. 638; Patten v. Merchants' & F. Mut. F. Ins. Co. 40 N. H. 375; McMaster v. New York L. Ins. Co. 78 Fed. 36; Marston v. Ken nebec Mut. L. Ins. Co. 89 Me. 266, 36 Atl. 389. Above the rule of parol evidence against written contract is the doctrine that one varying or contradicting the terms of the cannot use provisions procured through mistake, fraud, or deceit to perpetuate the same. Union Mut. L. Ins. Co. v. Wilkinson, 13 Wall. 222, 20 L. ed. 617; Continental L. Ins. Co. v. Chamberlain, 132 U. S. 304, 33 L. ed. 341, 10 Sup. Ct. Rep. 87; American L. Ins. Co. v. Mahone, 21 Wall. 152, 22 L. ed. 593; Etna Live Stock, Fire, & Tornado Ins. Co. v. Olmstead, 21 Mich. 251, 4 Am. Rep. 483; I do hereby agree as follows: Kausal v. Minnesota Farmers' Mut. F. Ins. That inasmuch as only the officers at the Asso. 31 Minn. 21, 47 Am. Rep. 776, 16 N. home office of said company, in the city of W. 430: New Jersey Mut. L. Ins. Co. v. BakNew York, have authority to determine cr, 94 U. S. 610, 24 L. ed. 268; North Amerwhether or not a policy shall issue on any lican F. Ins. Co. v. Throop, 22 Mich. 146, 7 application, and as they act on the written Am. Rep. 638. 2. The case in controversy would have been the same, in substance, if the agent had wrongfully, and without the knowledge or consent of the assured, inserted in the application, instead of the words, "Please date policy same as application," the words "The contract of insurance issued hereunder shall be in force for the first annual premium not to exceed twelve months and seventeen days," and the company had copied into the policy this exact provision. Parkhill v. Brighton, 61 Iowa, 103, 15 N. W. 853; Iowa Code 1897, § 23, p. 125; N. Y. Laws 1892, chap. 677, § 26. The Iowa statute providing that the company shall be forever precluded from the benefit of any application unless it attaches a true copy thereof to the policy, and that the insured is entitled to the full benefit thereof whether annexed or not, does not require that the insured examine the copy of the application indorsed on the policy. Phenix Ins. Co. v. Allen, 109 Ind. 272, 10 Donnelly v. Cedar Rapids Ins. Co. 70 Iowa, N. E. 85; Howe v. Provident Fund Soc. 7 396, 28 N. W. 607; Ellis v. Council Bluffs Ind. App. 586, 34 N. E. 830; Plumb v. Cat-Ins. Co. 64 Iowa, 507, 20 N. W. 782; Waltaraugus County Mut. Ins. Co. 18 N. Y. 392,lace v. Council Bluffs Ins. Co. 66 Iowa, 139, 72 Am. Dec. 52; Michigan Mut. L. Ins. Co. v. 23 N. W. 302; Cook v. Federal Life Asso. 74 Leon, 138 Ind. 636, 37 N. E. 584; Sullivan v. Iowa, 746, 35 N. W. 500; Iowa Code 1897, Phenix Ins. Co. 34 Kan. 170, 8 Pac. 112; §§ 1749, 1815, 1819. Kausal v. Minnesota Farmers' Mut. F. Ins. Asso. 31 Minn. 21, 47 Am. Rep. 776, 16 N. W. 430. Even if it should be granted that it was McMaster's duty to read the policies, still. his neglect to do so can bind him only to what the company had a right to insert therein. Equitable Safety Ins. Co. v. Hearne, 20 Wall. 494, 22 L. ed. 398; Supreme Lodge K. of P. v. Withers, 177 U. S. 260, 44 L. ed. 762, 20 Sup. Ct. Rep. 611; Kister v. Lebanon Mut. Ins. Co. 128 Pa. 553, 5 L. R. A. 646, 18 Atl. 447; Fitchner v. Fidelity Mut. Fire Asso. 103 Iowa, 276, 72 N. W. 530; Dryer v. Becurity F. Ins. Co. (Iowa) 82 N. W. 494; Hartford Steam Boiler Inspection & Ins. Co. ▼. Cartier, 89 Mich. 41, 50 N. W. 747. The respondent ought not to be allowed to plead its own wrong to forfeit and defeat the policies. The provision of the policy, "if any premium is not thus paid on or before the day when due. then (except as hereinafter otherwise provided) this policy shall become void, and all payments previously made shall remain the property of the company," contravenes the New York statute, and is void. Hurst Home Ins. Co. v. Muir, 21 Ky. L. Rep. 828, 53 S. W. 3; Mutual L. Ins. Co. v. Hill, 49 L. R. A. 127, 38 C. C. A. 159, 97 Fed. 263; Mutual L. Ins. Co. v. Dingley, 49 L. R. A. 132, 40 C. C. A. 459, 100 Fed. 408; Equitable Life Assur. Soc. v. Nixon, 26 C. C. A. 620, 48 U. S. App. 482, 81 Fed. 796; Equitable Life Assur. Soc. v. Trimble, 27 C. C. A. 404, 48 U. S. App. 565. 83 Fed. 85; Osborne v. Home L. Ins. Co. 123 Cal. 610, 56 Pac. 616; May, Ins. 4th ed. § 356 A, note (a); Johnson v. New York L. Ins. Co. 109 Iowa, 711, 50 L. R. A. 99, 78 N. W. 905. The "due date" is not fixed by the nominal date of premium payment on the face of the policy, but by the expiration of thirty days after giving the statutory notice. Continental L. Ins. Co. v. Chamberlain, 132 U. S. 304, 33 L. ed. 341, 10 Sup. Ct. Rep. 87; Union Mut. L. Ins. Co. v. Wilkinson, 13 Wall. 222. 20 L. ed. 617; American L. Ins. Baxter v. Brooklyn L. Ins. Co. 119 N. Y. Co. v. Mahone, 21 Wall. 152, 22 L. ed. 593; | 454, 7 L. R. A. 293, 23 N. E. 1048; Johnson New Jersey Mut. L. Ins. Co. v. Baker, 94 U.v. New York L. Ins. Co. 109 Iowa, 711, 50 L. S. 610, 24 L. ed. 268. R. A. 99, 78 N. W. 905; May, Ins. 4th ed. § Forfeitures are odious in law, and are en-356 A, note. forced only where there is clear evidence that that was what was meant by the stipulation of the parties. There must be no cast of management or trickery to entrap the party into a forfeiture. Supreme Lodge K. of P. v. Withers, 177 U. S. 260, 44 L. ed. 762, 20 Sup. Ct. Rep. 611; Kister v. Lebanon Mut. Ins. Co. 128 Pa. 553, 5 L. R. A. 646, 18 Atl. 447. Inasmuch as this construction had been given to the identical language of these policies prior to their issue, and the company permitted the language of its policies to remain unchanged, it must be held to have acquiesced in that construction; for otherwise it would have changed the language of its policies in respect thereto. Fidelity & C. Co. v. Loewenstein, 46 L. R. A. 450, 38 C. C. A. 29, 97 Fed. 17. Whatever may be the effect of the date, December 12, upon renewals for insurance When policies of insurance contain ambigin subsequent years, having accepted and re- nous, contradictory, conflicting, or inconsis tained the first full annual premium under tent provisions, effect will be given to the the written and oral agreement that the in-provisions most favorable to the assured, surance should not begin until the delivery and that construction will be adopted which of the policies and the payment of the pre- is most favorable to the assured. mium, the assured should not now be subjected to a forfeiture which in effect forfeits insurance already paid for. Methrin v. Fidelity Mut. Life Asso. (Cal.) 58 Pac. 387. If the second annual premium had been made payable on the date corresponding to the date of the policy, to wit, on December 18, then this controversy could never have arisen. First Nat. Bank v. Hartford F. Ins. Co. 95 U. S. 673, 24 L. ed. 563; Grace v. American Cent. Ins. Co. 109 U. S. 278, 27 L. ed. 932, 3 Sup. Ct. Rep. 207; Moulor v. American L. Ins. Co. 111 U. S. 335, 28 L. ed. 447, 4 Sup. Ct. Rep. 466; American Surety Co. v. Pauly, 170 U. S. 133, 42 L. ed. 977, 18 Sup. Ct. Rep. 552: Travellers' Ins. Co. v. McConkey, 127 U. S. 661, 32 L. ed. 308, 8 Sup. Ct. Rep. 1360; Thompson v. Phenix Ins. Co. |