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Cincinnati, O., June 16, 1898.
Charles Spinks, Esq.,
Newport, Ky.

Dear Sir:

Your note of $396.80 ($11.90 interest) on policy 114,386 was due and unpaid on the 15th day of June, 1898. Your immediate attention to the above is of the utmost importance to the validity of your policy in the

event of sudden misfortune. Please call and arrange to pay the same at once.

Yours respectfully,

Cincinnati, O., June 21, 1898.
Newport National Bank,
Newport, Ky.
Gentlemen:-
:--

I inclose you the note of Charles Spinks for collection.

Note
Interest

E. W. Jewell,
General Agent.

Yours respectfully,
E. W. Jewell,

The insured paid three of the annual pre-out and pass upon it. miums, and on December 15, 1897, executed to appellant a six months' note for $396.80 for annual premium due on that date. The note was not paid at maturity. On the day following the maturity of the note defendant's general agent at Cincinnati wrote the

insured as follows:

General Agent.

The bank, as agent of the insurance company, presented the note to the insured and demanded payment. But it was not paid. On July 7th following it was returned to appellant. On that day appellant wrote the insured as follows:

$396 80 11 90

$408 70

Cincinnati, O., July 7th, 1898.
Charles Spinks, Esq.,
Newport, Ky.

Dear Sir:

The note given in payment of the annual premium on your policy 114,386 was due and unpaid June 15th, and, according to the rules of the company, you must furnish us a satisfactory certificate of good health before settling this note. If you will kindly take the indorsed health certificate to the medical directors of the company, they will fill it

Yours respectfully,

E. W. Jewell,

It is claimed for appellant that it about the same time forwarded to its local agent at Newport, where insured lived, a formal notice canceling the policy for nonpayment of premium; but there is no evidence that it was ever received by the insured. Omitting, therefore, the last-named act from the proceedings, we have, so far as the insured was advised, that the insurance company held his premium note, was endeavoring and intending to collect it in full, which represented the premium on his policy to December 15th following, and had taken no action looking to a cancelation of the policy. As a matter of fact, it is testified that the company, immediately upon default, when the note was due, marked the policy on its policy register "Canceled." The insured had been in the habit of executing notes to appellant for his premiums, and of paying them some time after maturity. They were always re

The insured made no reply to this letter, ceived, so far as this record shows, without so far as the proof shows. question. The insured, however, died on the 14th of September, 1898. This suit is by the beneficiary of the policy, a son of the insured.

On June 21st the general agent sent the note to a bank, with the following letter of advice:

General Agent.

|

It is the well-settled law of this state | limited to mere contracts of insurance, but that, if an insurer desires to avail itself must incontrovertibly be applicable to all of conditions in its policy to declare it for- contracts; for, if it is a matter of agreement feited for the nonpayment of a premium alone between parties competent to contract, note, it must unequivocally elect to so treat the only inquiry that can ever be made is, it, and in fact then and thereafter so treat Have they agreed upon it? it. It will not be allowed, though, to claim both that it is not bound on the policy, but that the insured is bound to pay the note. Its action must be consistent. While it may retain the note, as evidence of its nonpayment, it must not retain it or treat it as an evidence of that much indebtedness. Moreland v. Union Cent. L. Ins. Co. 104 Ky. 129, 46 S. W. 516; Union Cent. L. Ins. Co. v. Duvall, 20 Ky. L. Rep. 441, 46 S. W. 518; Johnson v. Southern Mut. L. Ins. Co. 79 Ky. 406; Walls v. Home Ins. Co. 24 Ky. L. Rep. 1452, 71 S. W. 650. In the case at bar appellant not only retained the note after its maturity, but repeatedly endeavored to collect it in full thereafter. It thereby claimed that the insured owed to it $396.80 as an enforceable debt. .If he did, then appellant was bound to him, as the consideration for it, upon the policy of insurance. Even though such provisions in policies of insurance are automatic, they may be waived by the parties, and this waiver may be in-cy, and are favorably regarded by the law. dicated by conduct, as well as by express They are not in operation or suspense at the language. The fact that the insured marked mere will of the parties, but in spite of on its private books that the policy was can- them. While the statutes themselves make celed, did not cancel it, if thereafter it con- provision for their suspension, it is to be tinued to assert the note as an enforceable noted that in every instance it is allowed for obligation against the insured, thereby the purpose of continuing or prolonging a evincing to him that it was not canceled. pre-existing right to sue, and never to close Upon principle and authority we hold that the door against suits by any kind of waiver the evidence here shows a waiver by the in favor of an obligee. insurer of the condition of forfeiture in the policy.

Pleas of limitation were allowed long before there was any statute on the subject. The courts applied them upon the theory of a fiction to the effect that after so long a lapse of time, during which the claimant made no assertion of his rights in a personal demand, a presumption was raised that the obligation had been paid or discharged, and, in the case of real estate, that a conveyance had been executed but lost. The fiction was justified in the reasoning of the courts by the evident justness of its effect; it being argued that one who had so long neglected his rights as to allow the other party to suffer by it, by the loss of evidence and the like, ought not to be heard to disturb a condition he had suffered to come about. But statutes of limitation have come to be enacted everywhere. They are not mere rules of evidence, presumptions of the payment or extinguishment of the obligation sued upon, but are statutes expressive of a public poli

Many statutory provisions are made for the protection of personal rights, which the parties may avail themselves of or not, in their transactions, as they may please. But, where the statute is expressive of the public policy, any contract made in contravention of it is ipso facto void. Parties will never be heard to say that they elect to waive the public policy, and are willing to abide by their own substituted policy. The public policy, as the term indicates, is impersonal, and essentially of universal and exclusive application within the territory of the authority declaring it. There could be no public policy otherwise, and the whole people would be powerless to enforce any wholesome general rule of conduct in business transactions, where any number chose to ignore or violate it. Statutes of limitation belong to this class. They pertain to the administration of justice by the courts of the state, a subject of paramount concern to the whole public. That there may be a period of repose against stale claims is provided, recognizing the old idea that, but for the loss of evidence, death or removal of

The more important question is that of special limitation of one year provided for by the policy. The suit was not brought till more than one year after the death of the insured. We are aware that this or a similar provision is contained in nearly all insurance policies, fire and life. We are further aware that the provision is upheld by many courts, including the United States Supreme Court (Riddlesbarger v. Hartford F. Ins. Co. 7 Wall, 386, 19 L. ed. 257), and is approved by text writers. This court has also, though with hesitation and misgiving, followed the other courts in approving it. We therefore have come to the reconsideration of this question with a deep sense of its importance and difficulty, and of our duty in the premises. The legal question is, Can parties by contract substitute a period of limitation, binding upon the courts, for the statutes of limitation enacted by the legislature? If they can, it must be upon some general principle, the breadth and farreaching effect of which cannot logically be

witnesses, forgetfulness, and so on, an apparent condition might have been explained away. The statute means more than that no suit shall be maintained upon the class of claims treated of by it after the lapse of the time fixed by it. It means, also, that until that time has elapsed the courts are open to hear the claim. The statutes are substituted in lieu of the common-law rules of presumptions and practice, and establish the public policy of the state on the subject of limitation of actions. They supersede, not only the fictions of the common law, but also supersede the hitherto uncontrolled capacity of parties to themselves limit the time in which either may rightfully appeal to the courts for redress under their contracts. Agreements in advance to waive statutes of limitation altogether are held void on the grounds that such statutes are for the repose, the peace, and the wel fare of society. Greenhood, Pub. Pol. 504; Kellogg v. Dickinson, 147 Mass. 432, 1 L. R. A. 346, 18 N. E. 223; Trask v. Weeks, 81 Me. 325, 17 Atl. 162; Green v. Coos Bay Wagon Road Co. 10 Sawy. 625, 23 Fed. 67.

tempt an exact definition of the term "public policy." Story says of it (Story, Contr. § 546): "It has never been defined by the courts, but has been left loose and free of definition, in the same manner as fraud. This rule may, however, be laid down, that, wherever any contract conflicts with the morals of the time, and contravenes any established interest of society, it is void, as being against public policy." In Brooks v. Cooper, 50 N. J. Eq. 761, 21 L. R. A. 617, 35 Am. St. Rep. 795, 26 Atl. 978, the subject appears to have been thoroughly considered, and exhaustively treated. In summing up a number of considered cases, the court wrote: "It has been declared that public policy is a variable quality, but the principles to be applied have always remained unchanged and unchangeable, and public policy is only variable in so far as the habits, capacities, and opportunities of the public have become more varied and complex. The relations of society become from time to time more complex, statutes defining and declaring public and private rights multiply rapidly, and public policy often changes as the laws change, and therefore new applications of old principles are required. Davies v. Davies, L. R. 36 Ch. Div. 364. Whatever tends to injustice or oppression, restraint of liberty, restraint of legal right; whatever tends to the obstruction of justice, a violation of a statute, or the obstruction or perversion of the administration of the law; whatever tends to interfere with or control the administration of the law as to executive, legislative, or other official action,— whenever embodied in and made the subject of a contract, the contract is against public policy, and therefore void, and not susceptible of enforcement." "When we speak of the public policy of the state, we mean the law of the state, whether found in the Constitution, the statutes, or judicial records." People v. Hawkins, 157 N. Y. 12, 42 L. R. A. 490, 68 Am. St. Rep. 736, 51 N. E. 257. These citations will serve to show the scope of the principle. Particular instances by

It is old and familiar doctrine that the courts will not enforce a contract by which the parties have bound themselves not to sue at all, or to leave the difference exclusively to arbitrators. If parties by contract can lawfully provide when the suit shall be instituted (or when it shall not be, which is the same thing), why not let them go further within the same principle and stipulate as to the nature of the action; whether it shall be tried by a jury, and what evidence shall be receivable to establish or impeach the right; and, by force of the same logic, why not close the matter consistently by concluding how and out of what estate the execution upon the judgment may be levied, and within what time the judgment of the court may be enforced. If the fact be that by contract one party becomes bound to another, the policy of the law is to regulate in what forums, by what nature of proceedings, by what forms of practice, and within what period it may be enforced. An agree-way of illustration and application will be ment in advance not to apply to any court for redress is admittedly void. An agree ment to confer jurisdiction upon a court not provided with it by law is likewise void. An agreement not to avail oneself of the statutes regulating practice would be held void for the same reasons. Now, the remaining question, Can a party bind himself by an agreement in advance not to sue, not to appeal to the courts having jurisdiction of the matter, for fourteen years of the fifteen which are allowed by statute, thus confining himself to one fifteenth of the time the statutes give?

given further along. We cannot hope to reconcile the public policy of this state with that of other states. Each state necessarily establishes its own public policy, confined to its own territory. That they may not be uniform throughout the Union is neither surprising nor discouraging; for what may be deemed inimical by one may be treated as immaterial by another, and, indeed, may be so.

We will come directly to the question whether statutes of limitation are in this state indications of its public policy. The strength of every contract lies in the right

It is difficult, if not inadvisable, to at- of the promisee to resort to the courts of

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A familiar feature of life insurance poli

public justice for redress for its violation. | in the Eubanks Case, 100 Ky. 604, 36 L. R. It is not enough that the parties may have A. 711, 66 Am. St. Rep. 361, 38 S. W. 1068. voluntarily agreed, nor that there was a sat- it was intimated that the contract was void isfactory consideration, nor that they have for the additional reason that it violated contractual capacity; for, if one has in such 196 of the Constitution, prohibiting a comagreement bound himself to forego some mon carrier from contracting against its positive right given to him by the law by common- law liability. In the later Case of which justice is secured, he should not be Davis, 107 Ky. 527, 92 Am. St. Rep. 371, bound, for to do so is to bind oneself to op- 54 S. W. 849, the decision was rested solely pression, which is contrary to the well-being on the ground that the stipulation was void of society. Courts are established at the because contrary to public policy. It was public expense to redress wrongs, including probably doubted whether the statute of breaches of contracts. They are open at all limitation was any part of a common cartimes for that purpose. Such is the public rier's liability. good. The knowledge of that fact exercises no small influence upon the conduct of indi-ies is the provision that after a given numviduals. It is useless for the oppressor to ber of payments the insured shall be entitled try to get what he knows the courts will not to a paid-up policy proportioned as the numallow. So he regulates his conduct by ber of payments bear to the maximum numknowledge of that fact. Stale claims, if al- ber required to be made by the policy, prolowed, would tend to encourage perjury and vided the insured shall within six months, or fraud. Therefore a statute is passed to re- some such time, surrender his policy and destrict their assertion in the courts. On the mand the paid-up policy. In a number of other hand, claims which are not outlawed, cases it has been held that the provision limfor the reason just assigned, ought to have iting the time within which to demand the a forum in which they may be asserted paid-up policy was not of the essence of the against an unwilling or dishonest obligee. contract, was in the nature of a forfeiture, The existence of that right is of great value and was void. Montgomery v. Phonix Mut. to the claimant, but it is likewise of great L. Ins. Co. 14 Bush, 51; Mutual L. Ins. Co. importance to the public, as by it the weak v. Jarboe, 102 Ky. 80, 39 L. R. A. 504, 80 are assured of their rights against the Am. St. Rep. 343, 42 S. W. 1097 (Overrulstrong, the sum of all government. A con- ing Northwestern Mut. L. Ins. Co. v. Bartract agreeing in advance that the obligee bour, 92 Ky. 427, 15 L. R. A. 449, 17 S. W. will not resort to the courts for its enforce- 796, and Hexter v. United States L. Ins. Co. ment after one year, when the statutes of 91 Ky. 356, 15 S. W. 863); Washington L. the state allow fifteen years within which Ins. Co. v. Miles, 112 Ky. 743, 66 S. W. 740; to begin the action upon it, is merely an Manhattan L. Ins. Co. v. Patterson, 109 Ky. agreement not to resort to the courts, in 624, 53 L. R. A. 378, 95 Am. St. Rep. 393, spite of the policy and laws of the state 60 S. W. 383; New York L. Ins. Co. v. Warwhich give the right. To enforce such is to ren Deposit Bank, 25 Ky. L. Rep. 326, 75 put it in the power of one party to practise S. W. 234; Manhattan L. Ins. Co. v. Savage, oppression, and to close the courts against 23 Ky. L. Rep. 483, 63 S. W. 278; Mutual its relief. L. Ins. Co. v. O'Neil, 25 Ky. L. Rep. 983, 76 S. W. 839.

Under § 700, Kentucky Statutes, it is pro

Now for the instances in which the principle being discussed has been applied in this state. In Wright v. Gardner, 98 Ky.vided that, in case of total loss of an in454, 33 S. W. 622, 35 S. W. 1116, an agree-sured building by fire, the insurer shall pay ment in advance waiving the statute of limi- the amount of its policy, except in case of tation provided for that class of transactions fraud or deterioration in value since the poland extending the time beyond the statutory icy was issued. Contracts attempting in adperiod was held void, because against the vance of loss to waive the statute, and agreepublic policy of the state. ing upon a different basis of settlement, are held void as being against the public policy evinced by the statute, in Caledonian Ins. Co. v. Cooke, 101 Ky. 412, 41 S. W. 279; Hartford F. Ins. Co. v. Bourbon County Court, 24 Ky. L. Rep. 1850, 72 S. W. 739; Thuringia Ins Co. v. Malott, 111 Ky. 917, 55 L. R. A. 277, 64 S. W. 991; Palatine Ins. Co. v. Weiss, 109 Ky. 464, 59 S. W. 509.

An agreement in a contract between a telegraph company and the sender of a message limiting the time to which claims should be | presented and prosecuted against the former for a breach of the contract to a period shorter than that fixed by statute was held void as against public policy in Western U. Teleg. Co. v. Eubanks, 100 Ky. 604, 36 L. R. A. 711, 66 Am. St. Rep. 361, 38 S. W. 1068. This was followed and approved in Davis v. Western U. Teleg. Co. 107 Ky. 527, 92 Am. St. Rep. 371, 54 S. W. 849. It is true that

A contract in advance waiving the statute of exemption is held void in Moxley v. Ragan, 10 Bush, 156, 19 Am. Rep. 61. Agreements to pay attorney's fee in case

of suit to enforce a contract are held void, | to work a forfeiture of the vested interest because in contravention of the public policy, -a property right-because the person enin Thomason v. Townsend, 10 Bush, 114, and titled to it does not sue for it within an Witherspoon v. Musselman, 14 Bush, 214, 29 agreed time, less than the statutory period Am. Rep. 404. of limitation.

The Constitution of this state (§ 59) prohibits the legislature from passing special or local acts concerning quite a number of enumerated subjects, including "(5) to regulate the limitation of civil or criminal actions.". Under this provision, it has been held that a statute limiting actions against cities of the first class in this commonwealth to six months, whether based upon torts or contracts, the general law providing different periods,- -was void. Gorley v. Louisville, 104 Ky. 372, 47 S. W. 263; Louisville v. Kuntz, 104 Ky. 584, 47 S. W. 592. In the last-named case, it was said: "When the Constitution prohibits the legislature from passing special laws upon any given subject, it means that all laws upon that subject shall operate alike upon all whether individual or corporate, public or private. It is a safeguard provided by the Constitution for the protection of the weak as well as the strong."

A contract between an express company and a shipper, limiting its liability for a breach of its bill of lading to six months, when the statutory period was longer, was held void, as contrary to public policy, in Adams Exp. Co. v. Walker, 26 Ky. L. Rep. 1025, 67 L. R. A. 412, 83 S. W. 106.

The statutes of limitation of this state, like statutes of exemption, are enacted, not solely for individual welfare, but for the public well-being. They are, under our Constitution, of general and universal application within the state, and are indications of the state's public policy on those subjects. Contracts in contravention of them are void. In Owen v. Howard Ins. Co. 87 Ky. 571, 10 S. W. 119, the policy contained a provision that suit upon it must be begun within one year from the accrual of the cause of action. The question presented for decision was whether the year had gone. The court decided that it had not, as the last day of the year fell on Sunday, which was excluded by the court so as to allow the 365th day to fall on a secular day, when the suit could be filed. Having decided that the year had not run, it was not necessarily involved whether the stipulation was valid. The court, for the purposes of the case, assumed that it was; and this it might have done, whether it was or was not valid. In Kentucky Mut. Security Fund Co. v. Turner, 89 Ky. 665, 13 S. W. 104, a policy of life insurance contained a similar clause, limiting the cause of action to one year, should a cause arise. A cause of action did accrue upon it. Demand was made of the insurer within one year, and it made a partial payment upon it. Failing to pay the balance, suit was brought upon the policy to recover it. The insurer pleaded the contract limitation. The replication, in avoidance, was that the partial payment had operated to start anew the period of limitation within which suit might be brought. The question presented for decision, and decided, was that a partial payment within the year did operate to start anew the limitation period. A recovery was allowed. Counsel for the plaintiff admitted that the one-year provision was valid. The court likewise assumed that it was. There was no controversy about it in the case. It was passed over in the opinion, without citation of authority or statement of reason for its support. As in the case of Owen v. Howard Ins. Co. 87 Ky. 571, 10 S. W. 119, it was obiter dictum. In Lee v. Union Cent. L. Ins. Co. 22 Ky. L. Rep. 1712, 56 S. W. 724, the question was directly presented, and was finally decided on rehearing by an equally divided court. In Smith v. Herd, 110 Ky. 56, 60 S. W. 841, 1121, the question was again squarely presented, and was decided

Unless these cases are to be followed, and the principle which governed them applied to all cases, we will have it that everybody except express and telegraph companies may by contract abrogate the statutes of limitation by stipulating for a shorter period. Each contract will have its own barrier, which the courts will be bound to observe. And, though the legislature is prohibited by the Constitution from providing any but general and uniform laws of limitation, parties to contracts may have as many different periods as there may be contracts. Railroad operators, merchants, bankers, and employers of labor may all contract for such periods as may suit their whim or avarice, to which the other party may be compelled to submit by his present necessities. It would make the law a subject of barter, and the courts of justice to open or close as the result of a dicker. It seems to us to logically follow that, if part of a contract of insurance is not forfeited by a failure to comply with a stipulation in the policy that it will be unless it is claimed within six months, all of the policy will not be forfeited by a similar failure to sue for it within one year, according to the stipulations of the policy to that effect. In each instance in conformity to the reasoning in Riddlesthe essence of the proviso in the policy is' barger v. Hartford F. Ins. Co. 7 Wall. 386,

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