Aetna Life Ins. Co. v. Dodd

• Decision Date: 16 May 1939
• Docket Number: No. 11171.,11171.
• Citation: 103 F.2d 793
• Parties: ÆTNA LIFE INS. CO. v. DODD.
• Court: U.S. Court of Appeals — Eighth Circuit

103 F.2d 793 (1939)

ÆTNA LIFE INS. CO. v. DODD.

No. 11171.

Circuit Court of Appeals, Eighth Circuit.

April 25, 1939.

Rehearing Denied May 16, 1939.

E. L. McHaney, Jr., and S. Lasker Ehrman, both of Little Rock, Ark. (J. Paul Ward, of Batesville, Ark., and Grover T. Owens, of Little Rock, Ark., on the brief), for appellant.

Shields M. Goodwin, of Little Rock, Ark. (John C. Ashley, of Melbourne, Ark., on the brief), for appellee.

Before GARDNER and WOODROUGH, Circuit Judges, and OTIS, District Judge.

GARDNER, Circuit Judge.

This was an action at law brought to recover on a life insurance policy issued by appellant December 9, 1931, upon the life of Isaac L. Dodd. His wife, Flora B. Dodd, appellee here, was named as beneficiary. The policy contains provision that: "During the lifetime of the insured, the right to receive all cash values, loans and other benefits accruing hereunder, to exercise all options, and privileges described herein and to agree with the Company to any change in or amendment to this policy shall vest alone in the insured."

The policy also contains provision that the beneficiary may be changed as often as desired, and that if any beneficiary dies before the insured, the interest of such beneficiary shall vest in the insured, unless otherwise provided.

The premiums as stipulated were paid in full so as to maintain the policy in effect until June 9, 1934. On that date a quarterly payment became due. Prior to the expiration of the days of grace, the insured paid the sum of $6.20 on this quarterly premium, and requested an extension of time for the payment of the balance due. The company issued an extension agreement, extending the time to August 9, 1934, but the payment was not made within that time. On August 25, 1934, an agency for the company received a check from insured in the sum of $12.20. On August 27, 1934, the agency wrote insured, advising him that his check was received too late to prevent lapsing the policy and enclosed with this letter a blank application for reinstatement. The insured was also advised by the same letter that his remittance of $12.20 was being held subject to his order, pending the company's decision on the matter of reinstatement.

On September 6, 1934, the insured executed an application for reinstatement and sent it to the agency, which in turn forwarded it to the home office of the company. The home office, on September 14, 1934, in response to this application, wrote to the agency requesting a medical examination of insured. On September 19, 1934, an additional check for $18.20 was received by the agency from the insured, and this was placed in a suspension account together with the previous payment. On September 20, 1934, the agency wrote the insured requesting a medical examination in support of his application for reinstatement. Insured not having answered this notification, the agency again wrote him on October 18, 1934, urging him to furnish proof of medical examination, but this request was not complied with.

On November 10, 1934, the agency sent to the insured, through its local agent, its check for $30.40, payable to the insured. The local agent delivered this check to the insured and advised him why it was being returned to him. On the face of the check appears the typewritten words, "Return payment on reinstatements $12.20 and $18.20 on policy N929 — 418, Dodd." The insured accepted the check, endorsed it and cashed it on November 14, 1934. On the back of the check, just above the endorsement of the insured, appears the following: "Endorsement of this voucher check constitutes a receipt in full for account stated on reverse side." Nothing further was done with reference to any attempt to reinstate the policy. The insured retained the money received on cashing the check, and some five months later, on April 9, 1935, died.

At the conclusion of all the testimony, both parties moved for a directed verdict, and the court granted plaintiff's motion, directing a verdict in her favor for the full amount of the policy. From the judgment entered, defendant prosecutes this appeal, seeking reversal on the ground that (1) the policy lapsed and was not reinstated; (2) there was no cash loan or surrender value in the policy which could be used in payment of the premium due; and (3) the parties rescinded the contract by mutual agreement. In our view of the issues, it will only be necessary to consider appellant's third contention.

The parties seem to have been in agreement during the life of the insured as to the relative rights of the parties. The insured was advised that the policy had lapsed and on the theory that it had lapsed he accordingly made application for its reinstatement. This was declined because he failed to furnish evidence of medical examination. After frequent requests had been made of him to submit evidence of such examination, the amount of the payments tendered pending the application for reinstatement was returned to him and accepted and retained by him. No further negotiations were had with reference to the matter. No claim was asserted nor protest made by the insured although he lived for approximately five months after this event.

As has been observed, the policy contained provision for a change of the beneficiary or for an assignment upon request of the insured. The consent of the beneficiary not being required, she acquired no vested right in the policy and the insured was at liberty to change the beneficiary, assign the policy, or to make settlement and cancel it. Morgan v. Penn Mutual...