1. This is a case stated by agreement of the parties for the opinion of the Court under the provisions of Chapter XXXVIII of the Civil Procedure Code. The circumstances under which the point for determination has arisen are fully set forth in the case. The material facts determining the conclusion at which I have arrived are these : The assured, Mr. R. A. Sterndale, some time previous to 28th September 1894, proposed to the Company to convert his policy, which was then in full force and effect, into a sterling policy; the policy was issued in the year 1865, and all premiums bad been duly paid, the last of such payments having been made on the 1st of September 1894.
2. The Company, on the 21st September, definitely accepted the proposal for conversion. Subsequently, with the object of carrying into effect the agreement arrived at to convert the policy, the Company requested Mr. Sterndale's agents to send them the policy to enable them to make the necessary endorsement.
3. In compliance with this request, the agents sent in the policy and asked that it might be returned to them 'duly endorsed as converted into a sterling assurance.'
4. On the 23rd October 1894, the Company returned the policy to the agents of the assured bearing an endorsement of conversion and accompanied by a letter which referred to the policy as 'duly converted into sterling.' The endorsement on the policy is to the following effect:
Calcutta, this 20th day of October 1894.
'it is hereby declared and agreed that the within assurance of Rs. 12,000 is converted into one of 1,200 in consideration of all future premiums being paid in sterling, 28-4 per quarter, the force, spirit, and intention of the policy remaining otherwise unaltered. 'The first sterling premium payable under the converted policy would fall due on the 1st March 1895. Previous to that date, however, that is to say, on the 12th February, the assured died without having paid, or having been called on to pay, any sterling premium.
5. The question now is, whether the representative of the assured is entitled to call on the Company to pay the amount of the converted policy, or whether her claim ought to be limited to Rs. 12,000, the amount of the original assurance, assuming that the effect of the conversion was to render the Company liable on the death of the assured for a larger assurance in consideration of the payment of a higher rate of premium. It may be conceded that it is a general principle of Insurance law that the risk under a life policy does not attach until payment or tender of the fixed premium; but can it be said on the facts of this case that the parties intended or contemplated that there should be no obligation on the part of the Company to pay the sterling assurance until there had been payment of the sterling premium. There is nothing on the face of the policy to throw light on this question. Conditions 8 and 9, which have been referred to, relate to a different state of things. The eighth condition deals with the case of the premium or assurance becoming payable in England. The ninth condition provides for the reduction of Indian rates to English rates. Neither of these conditions relate to the event of the assurance becoming a sterling claim payable in India.
6. If in this case there had been nothing beyond an acceptance by the Company of the proposal for conversion, there would, probably, in accordance with the opinion expressed in the case of Canning v. Farquhar L.R. 16 Q.B.D. 727, have been no binding obligation on the part of the Company to pay the sterling assurance, until payment or tender of the sterling premium. It is to be observed, however, that there is not in this case, as there was in that, an express stipulation that the insurance should not take effect, until the premium was paid. But the condition for the prepayment of the premium may be waived.
7. It has been held by the American Courts that the delivery of the policy without exacting the payment of the premium, raises the presumption that a credit is intended and is a waiver of the condition of prepayment. The waiver may also be inferred from any circumstances fairly showing that the insurers did not intend to insist upon the prepayment of the premium as a condition precedent. May on Insurance, 2nd Ed., p. 526.
8. Here, with the object and purpose of giving effect to the agreement to convert the policy the Company made an endorsement of the fact of conversion on the policy, stating that such conversion was made in consideration of all future premiums being paid quarterly in sterling, and the policy so converted was delivered to the assured without any demand for the prepayment of the sterling premium falling due in the following month of March and without any proviso or condition postponing its operation till such payment. There is also the fact that the assured had already paid a large amount by way of premiums in respect of the original policy.
9. Under these circumstances it is, I think, fair and reasonable to infer that the Company did not intend to insist upon the prepayment of the sterling premium falling due in March as a condition precedent, and that such prepayment was in fact waived.
10. The result is that, in my opinion, the conversion of the policy was duly and completely effected during the lifetime of the assured, and that the plaintiff is, therefore, entitled in terms of the agreement between the parties to recover from the defendant Company the sum of 1,200 payable at the current rate of exchange at the time of payment. There must be a decree accordingly. The parties will bear their own costs to be taxed on scale No. 2.