for paying the cash premium until its maturity, and if not paid at maturity did not relieve the policy from forfeiture for nonpayment of the cash premium. Wilmot v. Charter Oak L. Ins. Co. (1878) 46 Conn. 483.

In Beezley v. Des Moines Life Asso. (1896) 100 Iowa, 436, 69 N. W. 549, where the first quarterly premium was paid in cash when the policy was issued, and a note was taken at the same time for the three remaining instalments, payable at quarterly intervals, it was held that the taking of the note under such circumstances did not operate to prevent the insurer from relying upon a provision of the policy "that if the quarterly payments are not received by

the association within sixty days from date of the notice, then this policy shall be null and void and of no effect."

Where as a matter of favor to the insured credit is extended to him for some portion of a cash premium, the failure to pay the note representing such portion is regarded as a failure to pay the premium, and the policy will be forfeited. St. Louis Mut. L. Ins. Co. v. Grigsby (1874) 10 Bush, 310.

The execution of a note for an annual premium does not constitute a waiver of the right to forfeit the policy upon the part of the insurer, but is an agreement not to enforce the consequences of the forfeiture during the currency of the note, and until it should become due. Johnson v. Southern Mut. L. Ins. Co. (1881) 79 Ky. 403.

The right to forfeit a policy for nonpayment of a premium under a provision therein that it should become null and void unless the moneys required to be paid by it should be actually paid when due is not waived by the acceptance of a note, the effect being simply to extend the time for the payment of the premium,-especially where the note contains a stipulation that if not paid at maturity the policy shall become null and void. Fidelity Mut. L. Ins. Co. v. Price (1903) 117 Ky. 25, 77 S. W. 384.

Where the policy, in addition to the usual condition that it should become void if the annual premiums should not be paid on the day when they severally become due, contained a provision avoiding the policy in case of nonpayment of any notes given in payment of premiums, the taking of a note, while a waiver of the primary condition of forfeiture for nonpayment of the annual premium, brings into operation the secondary condition by which the policy is to be void if the note is not paid at maturity. Thompson v. Knickerbocker L. Ins. Co. (1881) 104 U. S. 252, 26 L. ed. 765.

As to the effect of an express provision covering the case of failure to pay a note given for a premium, see also IV., post.

IV. Effect of express stipulation suspending or avoiding policy in case of nonpayment of note at maturity.

a. In general.

Like the makers of armor plate, who, when a new gun is invented, are driven to devise a heavier armament, the insurance companies have been compelled by the course of the decisions to insert in their contracts a stipulation to the effect that failure to meet at maturity a note given for a premium will work a suspension or forfeiture of the policy. Such a stipulation has been universally treated, and sometimes explicitly characterized, as a valid and reasonable one.

Thus in Barnes v. Continental Ins. Co. (1888) 30 Mo. App. 539, it was said that insurance contracts are voluntary ones, and the insurers have the same right to incorporate and impose a condition suspending liability for loss so long as any premium note or instalment thereon shall remain unpaid as they have other conditions, and if the assured objects to it he is under no obligation to enter into the contract. And see also, as expressly affirming the validity of such a provision, Palmer v. Continental Ins. Co. (1900) 6 Cal. Unrep. 455, 61 Pac. 784; Michigan Mut. L. Ins. Co. v. Custer (1890) 128 Ind. 25, 27 N. E. 124; Watrous v. Mississippi Valley Ins. Co. (1872) 35 Iowa, 582; Harle, H. & Co. v. Council Bluffs Ins. Co. (1887) 71 Iowa, 401, 32 N. W. 396; Continental Ins. Co. v. Daly (1885) 33 Kan. 601, 7 Pac. 158; Hodge v. Continental Ins. Co. (1890) 12 Ky. L. Rep. 138; Robinson v. Continental Ins. Co. 76 Mich. 641, 6 L.R.A. 95, 43 N. W. 647; American Ins. Co. v. Klink (1877) 65 Mo. 78; Sauner v. Phænix Ins. Co. (1890) 41 Mo. App. 480; Phenix Ins. Co. v. Bachelder (1891) 32 Neb. 490, 29 Am. St. Rep. 443, 49 N. W. 217; Phenix Ins. Co. v. Rollins (1895) 44 Neb. 745, 63 N. W. 46; Home F. Ins. Co. v. Garbacz (1896) 48 Neb. 827, 67 N. W. 864; Houston v. Farmers' & M. Ins. Co. (1902) 64 Neb. 138, 89 N. W. 635; McEvoy v. Michigan Mut. L. Ins. Co. (1888) (Ohio), 2 Ohio C. D. 329; St. Paul F. & M. Ins. Co. v. Cooper (1909) 25 Okla. 38, 105 Pac. 198; Joliffe v. Madison (1875) 39 Wis. 115, 20 Am. Rep. 35.

So, also, a provision in a note given for an insurance premium that if the note is not paid at maturity the entire premium shall be considered as earned, and the policy shall be null and void so long as the note remains past due and unpaid, is not invalid (New Zealand Ins. Co. v. Maaz (1899) 13 Colo. App. 493, 59 Pac. 213), or opposed to any rule of law or principle of public policy; but, on the contrary, is both reasonable and valid, it being competent for the parties to agree that the period of time to be covered by the insurance, and for which the stipulated amount of premium shall be paid,

may be made shorter upon any contingency the parties see fit to agree upon without altering the amount of the premium, especially upon any contingency which the insured has it in his own power to prevent, and which it is his moral and legal duty to prevent (Williams v. Albany City Ins. Co. (1870) 19 Mich. 451, 2 Am. Rep. 95). And a stipulation in a policy of insurance, in a note for the premium, or in any other instrument evidencing the contract of insurance or a part of it, to the effect that the policy or the insurance shall become void if the premium is not paid on the agreed day, is conscionable, valid, and enforceable. Manhattan L. Ins. Co. v. Wright (1903) 61 C. C. A. 138, 126 Fed. 82.

A provision in a contract of insurance that where a note given for a premium is not paid when due the failure to pay shall work a forfeiture of the contract is a valid one, and will be enforced. Travelers' F. Ins. Co. v. Mercer (1912) 32 Okla. 503, 122 Pac. 134.

A provision in a policy of insurance that the failure to pay any premium, or any notes or interest upon notes given to the company for any premium, on or before the dates upon which such premiums, notes, or interest shall become due, shall avoid and nullify the policy without action on the part of the company, or notice to the insured or beneficiary, is valid and binding. Neal v. Gray (1905) 124 Ga. 510, 52 S. E. 622.

It is competent for an insurance company to provide in its policies that if a premium note be not paid within sixty days after maturity, and suit be commenced for its collection, the policy shall be considered canceled and the whole premium shall be then earned, due, and payable, and that collection of such note by legal proceedings shall not in any case revive or bring into force such policy or any liability of the company thereunder. Shultz v. Hawkeye Ins. Co. (1875) 42 Iowa, 239; Shakey v. Hawkeye Ins. Co. (1876) 44 Iowa, 540.

Though an insurer accepting a note in lieu of a cash premium may stipulate that the policy shall become void if the note is not paid at maturity, such a stipulation is not valid where inserted in a note given for a loan out of which a premium is paid. This is because an agreement to forfeit or to lose money or property much in excess of interest during the delay on account of a failure to pay a loan on the stipulated day is a contract for a penalty for a failure to pay money, and is void because compensation is the basic rule for measure of damages, and interest during the delay is, under the law, full compensation therefor. Manhattan L. Ins. Co. v. Wright (1913) 61 C. C. A. 138, 126 Fed. 82.

It has been said that though the law does not forbid, it certainly will not favor, but rather lean against, a forfeiture of an insurance

policy for a want of promptness in paying the premium note. Sims v. State Ins. Co. (1870) 47 Mo. 54, 4 Am. Rep. 311.

As to the effect of such stipulations to show that a note was not taken as payment, see Wood v. Confederation L. Ins. Co. (1901) 2 N. B. Eq. Rep. 217; Manhattan L. Ins. Co. v. Myers (1900) 109 Ky. 372, 59 S. W. 30; Sexton v. Greensboro L. Ins. Co. (1911) 157 N. C. 142, 72 S. E. 863; Union Cent. L. Ins. Co. v. Whetzel (1902) 29 Ind. App. 658, 65 N. E. 15; Occidental L. Ins. Co. v. Jacobson (1914) 15 Ariz. 242, 137 Pac. 869; Citizens' Nat. L. Ins. Co. v. Morris (1912) 104 Ark. 288, 148 S. W. 1019; Continental Ins. Co. v. Dorman (1890) 125 Ind. 189, 25 N. E. 213; Thompson v. Knickerbocker L. Ins. Co. (1881) 104 U. S. 252, 26 L. ed. 765; set out under II. a, supra; Satterfield v. Fidelity Mut. L. Ins. Co. (1911) 171 Ala. 429, 55 So. 200; Manhattan L. Ins. Co. v. Myers (1900) 109 Ky. 372, 59 S. W. 30; under II. b, supra.

As to the effect of an acknowledgment in the policy of the receipt of the initial premium to preclude the insurer from claiming the benefit of such a stipulation, see cases under II. e, supra.

As to the effect of the delivery of a receipt for the premium upon the right of the insurer to avail himself of such a stipulation, see under II. f, supra.

As to the effect of such a stipulation upon policy provisions for extended or paid-up insurance, or for payment of surrender value, in case of default in payment of premiums, see II. d, supra.

Grant of extension of time for payment of premium, by accepting note as sufficient consideration for stipulation for forfeiture of benefits of policy in case of nonpayment at maturity, see Seeley v. Union Cent. L. Ins. Co. (1899) 10 Pa. Super. Ct. 270, under II. d, supra.

The fact that a policy provides that it and the application should constitute the entire contract does not, as between the insurer and the insured or his administrator, preclude a stipulation in notes given for a portion of the initial premium, executed simultaneously with the policy and referring thereto, giving the insurer a right of forfeiture in case of nonpayment of the notes at maturity, from being considered a part of the contract; but the meaning to be attributed to such clause of the policy in order to bring it into harmony with the other stipulations, and especially those in the note, is that it prohibits future alterations of the contract save in the mode prescribed. Marshall v. Missouri State L. Ins. Co. (1910) 148 Mo. App. 669, 129 S. W. 40.

The delivery of a policy of insurance and the payment of the premium are reciprocal or concurrent considerations, and therefore a notice upon the back of a premium receipt that if a note is given for payment of premium and is not paid at maturity the policy shall

determine constitutes a part of the contract of insurance, where such receipt states on its face that it is subject to the terms of the contract and the conditions on the back, which the assured is directed to read. Iowa L. Ins. Co. v. Lewis (1902) 187 U. S. 335, 47 L. ed. 204, 23 Sup. Ct. Rep. 126.

A provision in a policy of insurance authorizing the deduction from the amount payable in the event of the death of the insured, of any balance of the premium for the year remaining unpaid, or any indebtedness on the policy, is not inconsistent with a provision that the policy should not longer be in force or binding upon the insurer if a note taken for a premium or any part thereof should not be fully paid when due, as such a provision would be applicable in the event of the death of the insured before the maturity of a premium note, or in case of a waiver by the insurer of the payment of the whole or a part of the premium at the time it was due. Imperial L. Ins. Co. v. Glass (1892) 96 Ala. 568, 11 So. 671.

There is no essential repugnancy between a note given for a part of the first premium of a life insurance policy which provides that failure to pay it at maturity will render the policy void, and the provisions of the policy itself, which recite that it was granted in consideration of the payment of a certain amount as the initial premium and the annual payment of the same sum each year thereafter for a certain period, that it should be incontestable one year after its date provided the premiums are duly paid, that after it has been in force for one year a grace of one month will be allowed in the payment of premiums, that after three annual premiums are paid if the policy remains in force the company will make a certain loan thereon, and that it will give insured an option in a table of loan values. Marshall v. Missouri State L. Ins. Co. (1910) 148 Mo. App. 669, 129 S. W. 40.

A provision in a policy that the omission to pay the annual premium on or before 12 o'clock noon on the day or days fixed for the payment thereof, or failure to pay at maturity any note other than the annual premium note given for premium, interest, or other obligation, shall then and thereafter cause the policy to be void, does not have the effect to require the payment of a note given for a portion of a premium on or before noon of the day of its maturity, although the note states that the policy "is to be void in case this note is not paid at maturity according to contract in said policy," such expression having reference to the effect of nonpayment at maturity rather than to the hour at which the note must be paid. Leigh v. Knickerbocker L. Ins. Co. (1874) 26 La. Ann. 436.

A provision in a policy of insurance that if the insured shall fail to pay annually in advance the interest on any unpaid note or loan which may be owing to the company on account of any premium, the