67 Id. 451; but the intent of the testator does not control where it would violate law: Brattle Square Church v. Grant, 63 Id. 725.

CHANGING ONE WORD TO ANOTHER IN CONSTRUING WILL: See Goode v. Goode, 66 Am. Dec. 635, note; construction of "and" for "or," or vice versa. Janney v. Sprigg, 48 Id. 557, and note 565.

CONSTRUCTION OF WILL- "DYING WITHOUT ISSUE": Matter of New York etc. R. R. Co., 59 Am. Rep. 478; Quackenbos v. Kingsland, 55 Id. 771, and extended note 774.

HOLMAN V. CONTINENTAL LIFE INS. Co.

[54 CONNECTICUT, 195.]

LIFE INSURANCE-FORFEITURE OF PAID-UP POLICY.- A policy of life insurance provided that it should become void on failure to pay any annual premium, or interest annually in advance on any outstanding premium notes; but that, after the payment of two or more annual premiums, on default in the payment of any subsequent premium, the company would convert the policy into a "paid-up" one for as many tenth parts of the sum originally insured as there had been complete annual payments when default was made, provided application was made for such conversion within one year after default. The insured paid two annual premiums, a portion in cash, and the balance in premium notes still outstanding, made default in the payment of the next premium, and applied for a "paid-up" policy. Thereupon the company indorsed upon the policy that it was recognized as binding for two tenths thereof, "subject to the terms and conditions expressed in the policy." Thereafter the insured paid the interest on the outstanding premium notes, annually, in advance, for two years, and then ceased to pay the same. In an action to recover the amount due on the policy, held, that the company's indorsement upon the policy was equivalent to a "paid-up" policy, and that the failure to pay interest on the outstanding premium notes worked a forfeiture thereof.

"PAID-UP" POLICY OF LIFE INSURANCE MAY BE FORFEITED BY NON-PAYMENT of interest on premium notes, given for premiums accruing while the original policy remained in force.

NAMING POLICY OF INSURANCE NON-FORFEITABLE does not render inapplicable the rule that a writing must be construed by its terms, and if by these it is forfeitable, a defense showing the existence of facts, which by these terms create a forfeiture, must be sustained.

THE plaintiff was the beneficiary in a policy of insurance upon the life of W. W. Holman. The annual premiums were paid partly in cash and partly in premium notes, the interest of which was payable annually in advance. After making two annual payments of the portions of the premium due in cash, he made default, and applied for and received a paid-up policy for two hundred dollars, with conditions as shown in the opinion. The premium notes for the first two years remained outstanding. Interest was paid on them until 1876,

AM. ST. REP., VOL. I.-7

when default was made in paying such interest, and the question was, whether this default forfeited the policy.

H. B. Freeman, for the plaintiff.

T. M. Maltbie, for the defendant.

By Court, LOOMIS, J. The complaint in this case seeks to recover the amount due under a so-called "paid-up" policy of insurance on the life of William W. Holman, for the benefit of his wife. The demurrer to the defendant's answer raises the question whether the defense therein set forth is sufficient in law to prevent a recovery by the plaintiff, and this depends entirely upon the contract of the parties. By the terms of the contract as originally made, the defendant was to receive an annual premium of $108.72 during the continuance of the policy for the term of ten years, payable, as appears from the margin, partly in cash and partly by note. At the end of the term, or upon the previous death of the insured, the defendant was to pay one thousand dollars, "deducting therefrom all indebtedness to the said company on account of this policy, if any, then existing," subject to sundry express conditions and agreements mentioned in the policy, the third and fourth of which only are involved in this case. These are as follows:

"3. If the said assured shall not pay the said annual premiums on or before noon of the several days hereinbefore mentioned for the payment of the same, and the interest annually in advance on any outstanding premium notes which may be given for any portion thereof, or shall not pay, at maturity, any notes or obligations given for the cash portion of any premium or part thereof, - then, and in every such case, this policy shall cease and determine, and said company shall not be liable for the payment of the sum insured, or any part thereof, except as hereinafter provided.

"4. If, after the receipt by the company of two or more annual premiums upon this policy, default shall be made in the payment of any subsequent premium when due, then, notwithstanding such default, this company will convert this policy into a 'paid-up' policy for as many tenth parts of the sum originally insured as there shall have been complete annual premiums paid when such default shall be made; provided, that this policy shall be transmitted to and received by this company, and application made for such conversion within one year after such default."

The defendant's answer, after admitting the issuing of the policy, its terms and demand and refusal to pay, as alleged in the complaint, further alleged that,

"2. On the first day of April, 1874, the plaintiff had paid to the defendant in cash a portion of two annual premiums, and had given to the defendant premium notes for the remaining portion of said premiums, which notes were then and are now outstanding and unpaid.

"3. Thereafter the plaintiff made default in the payment of premiums, and transmitted said policy to the defendant, and with his wife, Rebecca J. Holman, applied to the defendant to adjust the insurance under said policy, according to the stipulations thereof, by reducing the amount thereof to two hundred dollars; and in said application agreed to pay the defendant, annually, in advance, the interest on all outstanding notes given in part payment of annual premiums.

"4. Thereupon the defendant made the following indorsement upon said policy of insurance: This policy having lapsed after two annual payments is hereby recognized as binding upon the company for two tenths thereof, or two hundred dollars, subject to the terms and conditions expressed in this policy and in the quitclaim to this company, bearing even date with this entry'; and returned said policy to the plaintiff, who accepted the same.

"5. Thereafter the plaintiff paid the interest on said outstanding premium notes, annually, in advance, until the year 1876, when he ceased to pay the same, and has not since paid the same.

"6. Said policy provided that if the assured should not pay the interest annually in advance, on any outstanding premium notes given for any portion of the annual premiums on said policy, then said policy should cease and determine, and said company should not be liable for the payment of the sum insured or any part thereof.

"7. By reason of the failure and neglect of the plaintiff to pay the interest annually, in advance, on said outstanding premium notes in the year 1876 and thereafter, said policy of insurance has ceased and determined, and the defendant is not liable for the payment of the sum insured, or any part thereof."

The plaintiff's reply was as follows: "The plaintiff demurs to the answer of the defendant, as the facts therein stated are insufficient in the law, because the paid-up policy upon which

complaint is brought was non-forfeiting by its terms, and contained no provision that the failure to pay interest on the outstanding premium notes should work a forfeiture of said paid-up policy, and the same is nowhere averred in said answer."

The special ground of this demurrer presents the precise question involved in the case, namely: Does the paid-up policy contain a provision that the failure to pay interest on the outstanding premium notes shall work a forfeiture of the policy?

This question is different from the one considerably discussed in other jurisdictions, namely: What will entitle the insured to a paid-up policy, and what provisions as to forfeiture should it contain? The parties have settled these questions themselves by giving and accepting the reduced insurance; and if the policy thus accepted contains a provision whereby the failure to pay interest will make it void, then the plaintiff by his pleadings impliedly admits that he has no case, even though he would have been entitled to a different policy under the original contract.

The new contract, whereby the insurance was reduced to two hundred dollars, states that the company recognize the policy binding for that sum, "subject to the terms and conditions expressed in this policy and in the quitclaim to this company bearing even date with this entry." This, in effect, is the same thing as a new policy, containing the terms and conditions of the old one as far as applicable. Now, among these conditions is the clear stipulation that "if the assured shall not pay the interest annually, in advance, on any outstanding premium notes, this policy shall cease and determine." In what manner did this provision become eliminated from the paid-up policy?

It cannot be claimed to be inapplicable, because there is a subsisting obligation to pay this interest annually in advance, recognized not only in the original policy but in the quitclaim, whereby the plaintiff and his wife, when they applied for the reduced insurance, made a fresh promise and agreement to pay this interest, and this quitclaim is referred to and made part of the new contract, and the promise on the part of the company is made subject to it as a condition.

But a specious argument always urged against this view by counsel for the insured and sometimes sanctioned by courts is founded upon what is called the absurd paradox of forfeiting

a non-forfeitable policy. The name "non-forfeiting" has undoubtedly been sometimes used to mislead applicants for insurance, and some of the cases refer to the fact that agents for insurance companies have made declarations and issued circulars to the effect that, after the payment of two annual premiums, the policy would be binding on the company without any further attention on the part of the holder.

But no such fact appears in this case, and upon the admitted facts it is certain that the insured was not misled, for he voluntarily offered to pay and did actually pay interest annually in advance on the paid-up policy until the year 1876. It is manifest that both parties at the time, and for several years subsequently, construed the contract alike. There was no trap, therefore, into which the plaintiff was unwarily led.

But courts need not be misled by mere appeals to prejudice. The contract is not to be construed by its mere label, but by its writter terms, and upon referring to these we see at once that the policy is non-forfeitable only to a very limited extent.

No one has ever claimed that it extends beyond the payment of an annual premium and interest, and even in these respects it is non-forfeitable only at the option of the holder, who must transmit the policy to the company and make application for its conversion into a paid-up policy within one year after default. But a glance at the policy will show that even after the conversion the insured can have. no security against forfeiture except by observing the conditions If without the consent of the company he travels outside of the prescribed limits mentioned, if he engages in certain specified hazardous occupations, if he becomes intemperate or is addicted to vice of any kind to the extent of permanent impairment of his health, if he is convicted of felony, if he dies by his own voluntary act or in consequence of a duel or under the sentence of the law, the paid-up, non-forfeitable policy could not for a moment avail, but would thereby become null and void.

Any argument, therefore, founded merely upon the use of the term "non-forfeitable" is of little weight. We must, as in all other cases, construe the contract by the language used in it. In this case the question is confined to the language of the saving clause, which is the fourth. Does that save the insured from the consequences of a failure to pay interest, the same as it does in the case of failure to pay future annual