Dreeben v. Mutual Life Ins. Co.
| Citation | 29 F.2d 963 |
| Decision Date | 13 February 1929 |
| Docket Number | No. 5372.,5372. |
| Parties | DREEBEN v. MUTUAL LIFE INS. CO. OF NEW YORK. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
George S. Wright, of Dallas, Tex. (Thompson, Knight, Baker & Harris, of Dallas, Tex., on the brief), for appellant.
Eugene P. Locke and Albert S. Johnson, both of Dallas, Tex. (Locke, Locke, Stroud & Randolph, of Dallas, Tex., on the brief), for appellee.
Before WALKER, BRYAN, and FOSTER, Circuit Judges.
Appellant was the beneficiary of an insurance policy on the life of her deceased husband, and brought this suit to recover the face amount of such policy; but the insurance company obtained judgment based on its defense to the effect that the insured, by his failure to pay an annual premium that fell due during his lifetime, had permitted the policy to lapse.
The policy was issued January 1, 1921. It was a "yearly renewable term" policy. The premium was payable annually in advance on the 1st day of January and was increased each succeeding year as the age of the insured advanced, but was not more during any year than the current cost of insurance. The policy therefore had no reserve or cash surrender value, and contained no provision for automatic extension of insurance, or for paid-up insurance. A period of grace of 31 days was provided for in the following language:
On December 9, 1924, the insurance company mailed the insured a notice, in which it was stated that the policy would become forfeited and void unless the annual premium should be paid on or before January 1, 1925; "subject, however, to any specific agreements as to time of payment or waiver contained in such contract."
The following transactions occurred between the parties during the year 1925: The annual premium due on January 1 not having been paid, the insured, on January 30, made written application for, and was granted, an extension of time until April 1 for payment thereof. The premium for that year was $170.30. The insured was required to pay an extension fee of $42.58, which it was agreed should immediately become the property of the insurance company and should not be considered as payment in full or in part of the premium; but if the premium with interest thereon should be paid within the period of extension, it was provided that the extension fee would be returned to the insured. It was further agreed that, if the premium with interest thereon should not be paid within the period of extension, the policy should be considered as having lapsed on the due date of the unpaid premium. On March 28 a second extension of time until July 1 for payment of premium was applied for, and granted upon the identical terms and conditions agreed upon for the first extension; the insurance company again requiring the insured to pay the sum of $42.58 as extension fee. On June 27 the insurance company advised the insured by letter that the period of extension for the payment of the premium would expire on July 1; that the amount due, including interest, less the extension fees paid, was $88,21; and that notice was being sent in order that insured might not fail to make payment on or before the date of expiration of the policy. This letter was mailed to the insured at his local address in New York City, which was his last address known to the insurance company. The insured, however, was at that time seriously ill at a sanitarium in Colorado. He mailed a check dated July 2 for $90, payable to the insurance company, to one of its soliciting agents in New York, who, because of absence, did not receive it until the 8th. This agent presented the letter and check to the home office on the next day. On July 9 the insurance company advised the insured by letter that his check was not received within the extension period, and therefore would not be accepted without satisfactory evidence of his insurability. There was inclosed in this letter the following cashier's memorandum:
The check was deposited by the insurance company in a suspense account. On July 13 the insured by telegram requested the return of his check, and on the next day the company mailed to him its own check for $90, which was subsequently indorsed by him and paid.
There was testimony, although it was not undisputed, to the effect that the insured was too ill to be held responsible for his demand for the return of his check and his acceptance of an equal amount represented by the company's check. Unless the company's acceptance and placing of the insured's check in its suspense account, under the circumstances just above stated, constituted payment, the annual premium due January 1, 1925, never was...
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