Thomas v. Prudential Ins. Co. of America
| Decision Date | 12 June 1939 |
| Docket Number | No. 4440.,4440. |
| Parties | THOMAS v. PRUDENTIAL INS. CO. OF AMERICA. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Before NORTHCOTT and SOPER, Circuit Judges, and WAY, District Judge.
Kemp D. Battle, of Rocky Mount, N. C. (W. L. Thorp, I. D. Thorp, Thorp & Thorp, Francis E. Winslow, and Battle & Winslow, all of Rocky Mount, N. C., on the brief), for appellant.
J. L. Emanuel of Raleigh, N. C. (James H. Pou, Jr., and Pou & Emanuel, all of Raleigh, N. C., on the brief), for appellee.
The policy of life insurance in suit in this case was held by the District Court to have expired prior to the death of the insured by reason of his failure to pay the premium in accordance with the contract, and we are called on to decide whether this decision was correct in view of the receipt of the insured's check by the Insurance Company before the expiration of the grace period and in view of the subsequent circumstances now to be set out, which the testimony of the plaintiff tends to show.
On March 4, 1936, the company issued its policy of life insurance upon the life of Thomas Thomas for the sum of $5,000, payable at death to his wife, who was the plaintiff in this action. The policy provided for the payment of the annual premium of $218.45 on the 4th day of March, and provided a grace period of 31 days. The payment of the initial premium kept the policy alive to April 5, 1937. As that day approached, the insured found himself unable to pay the second annual premium, and therefore made application on April 3 to W. E. Batts, the company's local agent at Rocky Mount, North Carolina, for a change in the mode of payment of premium from an annual to a monthly basis; and accompanied his application with his policy and a check for $19.30, the amount of the monthly premium, drawn upon the Wolfeboro National Bank of Wolfeboro, New Hampshire, where he had an account. Batts sent the policy, application and check to J. E. Sebrell, the company's manager in North Carolina in the territory east and north of Charlotte, where they were received on Monday, April 5. Sebrell deposited the check in a Charlotte bank to the credit of the company and sent the policy and application for change in the method of payment to the home office of the company at Newark, New Jersey. On April 7 the application was granted and the change was endorsed on the policy which was then returned to Sebrell.
The insured died suddenly on April 8, 1937, from coronary embolism. On April 9, 1937 the check reached the New Hampshire bank in due course, and at the close of business on that day was dishonored on account of insufficient funds. As a matter of fact there was only $4.70 to the credit of the account from and after April 1, 1937, and hence this was the condition of the account when the check was drawn and tendered in payment of the monthly premium.
On the morning of the same day that the check reached the New Hampshire bank, M. R. Robbins, acting on behalf of the beneficiary of the policy, called on Batts at his office in Rocky Mount and informed him of the death of the insured. Robbins was also an insurance agent and was anxious to know whether the policy was in force. He testified that he told Batts that he was authorized to act for Mrs. Thomas, and wanted to send his check to protect the premium in the event that the insured's check should come back, and if necessary, he would telegraph funds to the New Hampshire Bank to cover the insured's check. In Robbins' presence Batts called Sebrell by telephone and the latter said that in his opinion the policy would be in force even if the Thomas check was returned unpaid, and that it was not necessary for a new check to be sent, for the amount of the check, if dishonored, would be deducted from the death claim. On account of this conversation Robbins refrained from telegraphing funds to New Hampshire, but did give his own check to Batts for the amount of the premium and Batts forwarded it to Sebrell to hold in the event that the insured's check should prove to be no good. Sebrell received the check but returned it to Batts, saying that it was not necessary, but that if the Thomas check came back, he would notify Batts and Batts could then return the Robbins check. On April 14, the Thomas check having been returned unpaid, Sebrell notified Batts who returned Robbins' check. On the same day, Sebrell made good the Thomas check in the company's account and was reimbursed by the Robbins' check when it was received.
On July 2, 1937, Sebrell, acting upon instructions from the company, sent Robbins a check for the amount previously received from him, stating that it was the company's view that the policy had lapsed at the time of Thomas' death, and that the company would not accept the Robbins' check in place of the Thomas check in payment of the premium.
The insurance policy contained the following provision: "No agent has power on behalf of the company to make or modify this or any other contract of insurance, to extend the time for paying a premium, to waive any forfeiture, or to bind the company by making any promise, or by making or receiving any representation or information."
The contract between the company and Sebrell contained the following provision: ...
To continue reading
Request your trial
-
Wilson v. Commercial Finance Co., 749
...v. Proctorville Warehouse, 189 N.C. 533, 127 S.E. 540; Federal Land Bank v. Barrow, 189 N.C. 303, 127 S.E. 3; Thomas v. Prudential Ins. Co. of America, 4 Cir., 104 F.2d 480. It necessarily follows that where the seller contracts to sell a chattel to the buyer for cash, and the seller accept......
-
State Farm Mutual Automobile Ins. Co. v. West
...(Fountain & Herrington, Inc., v. Mutual Life Insurance Co. of N. Y., 4 Cir., 1932, 55 F. 2d 120, 125-126; Thomas v. Prudential Insurance Co. of America, 4 Cir., 1939, 104 F.2d 480, 483). For these reasons, and on the foregoing opinion which embodies the essential findings of fact and conclu......
-
North American Specialty Ins. Co. v. Savage, Civil Action No. CCB-95-2891.
...two months between discovering a reason for rescission and the date of actual rescission acceptable. See Thomas v. Prudential Ins. Co. of America, 104 F.2d 480, 483 (4th Cir. 1939). In this case the delay was not unreasonable, particularly in light of the fact that the company mailed two le......
-
Charter Oak Fire Co. v. Am. Capital, Ltd.
...for rescission and the date of actual rescission acceptable." Savage, 977 F.Supp. at 732 (citing Thomas v. Prudential Ins. Co. of Am., 104 F.2d 480, 483 (4th Cir. 1939)). Defendants have not shown as a matter of law that any delay here was unreasonable in light of American Capital's apparen......