226   RIGHTS AND POWERS OF INSURER

But, in the same case, the court further said: "In policies of life insurance time is material and of the essence of the contract, and nonpayment at the day involves absolute forfeiture, if such be the terms of the contract."

While conceding this to be the rule which would apply if an action at law were brought upon the policy, the appellant insists that she is entitled to be relieved in equity against a forfeiture, by reason of the excuses for nonpayment of the premium set out in the bill, and this contention raises the sole question in this case. * * *

It was said in New York Life Insurance Co. v. Statham (supra), that "promptness of payment is essential in the business of life insurance. All the calculations of the insurance company are based on the hypothesis of prompt payments. They not only calculate on the receipt of premiums when due, but upon compounding interest upon them. It is on this basis that they are enabled to offer insurance at the favorable rates they do. Forfeiture for nonpayment is a necessary means of protecting themselves from embarrassment. Delinquency can not be tolerated or redeemed except at the option of the company."

If the assured can neglect payment at maturity and yet suffer no loss of forfeiture, premiums will not be punctually paid. The companies must have some efficient means of enforcing punctuality. Hence their contracts usually provide for the forfeiture of the policy upon default of prompt payment of the premiums. If they are not allowed to enforce this forfeiture they are deprived of the means which they have reserved by their contract of compelling the parties insured to meet their engagements. The provision, therefore, for the release of the company from liability on a failure of the insured to pay the premiums when due is of the very essence and substance of the contract of life insurance. To hold the company to its promise to pay the insurance, notwithstanding the default of the assured in making punctual payment of the premiums, is to destroy the very substance of the contract. This a court of equity cannot do. * * *

We are of the opinion that the decree of the Circuit Court is right, and should be affirmed.47

47 Prior to the Civil War a resident of Georgia effected a life insurance policy with a New York Company. The premiums were paid until April, 1862. The Civil War prevented and made illegal the payment of the premiums for the years 1862, 1863, and 1864. These premiums were tendered in December, 1864, but the company refused to receive them contending that the policy had been terminated by virtue of an express provision in the policy. Suit is brought asking that the company be requested to accept the premiums and the policy declared valid or in the alternative that all premiums be refunded. It was held that the policy was not terminated. The court said: "The contracts between the individuals of belligerent States are necessarily suspended during the war of those States, but are not annulled.

" * * * The condition of affairs which made the payment of the premium by the plaintiff during the years named unlawful, and therefore impossible, was