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This US Supreme Court case involved a dispute between Piedmont and Arlington Life-Insurance Company and Ewing, the administrator of the estate of a deceased policyholder. The policyholder had taken out a life insurance policy with the company, and upon his death, the company refused to pay the death benefit to the estate. The company argued that the policyholder had failed to pay the premiums due on the policy, and thus the policy had lapsed. The Supreme Court held that the policyholder had not failed to pay the premiums due on the policy, and thus the policy had not lapsed. The Court found that the policyholder had made payments to the company, but that the company had failed to credit the payments to the policyholder's account. The Court held that the company was liable to the estate for the death benefit, and ordered the company to pay the benefit to the estate. The Court's decision established that insurance companies must credit payments made by policyholders to their accounts, and that failure to do so can result in liability for the death benefit. The decision also established that policyholders are not required to pay premiums in order to keep their policies in force, as long as the payments are credited to their accounts.
In Piedmont and Arlington Life-Insurance Company v. Ewing, Administrator, the Supreme Court was asked to decide whether a life insurance policy issued by an out of state company could be enforced in a Virginia court. The majority opinion held that it could not because the policy violated Virginia's public policy against such contracts being made with nonresidents. In his dissenting opinion, Justice Field argued that this decision would create an unfair burden on out of state companies who were unable to comply with all 50 states' laws regarding life insurance policies due to their lack of physical presence in each one. He further argued that if the contract had been valid under Virginia law when it was entered into then there should be no reason why it couldn't still be enforced despite its violation of current public policy since nothing else had changed between when the contract was formed and now other than changes in public sentiment about such contracts which are beyond any party's control or responsibility for complying with them at time they enter into them.