OPINION
MEHAFFY, J.
On
January 22, 1920, the AEtna Life Insurance Company issued to
the appellee its policy No.
N-234913 for $ 2,500. It was agreed in said policy
that if the appellee should become wholly, continuously and
permanently disabled the defendant would, if all premiums
previously due had been paid, waive the payment of all
premiums falling due thereafter during such disability, and
if such disability was sustained before the insured attained
the age of 60 years, the company would pay him the sum of $
25 on each and every month thereafter, during the lifetime
and during the disability of the insured.
Suit on
said policy was begun in the Sebastian circuit court alleging
the issuance of the policy, the payment of all premiums; that
on May 1, 1936, the insured became and has been since said
date, wholly, continuously and permanently disabled by reason
of tuberculosis, and that he furnished the required proof of
loss in December, 1936; that six months has elapsed since the
proof was made, and the insurance company has failed and
refused to pay disability benefits. The insured further
alleged that he was compelled to pay an annual premium of $
38.15 on January 28, 1937, because the insurance company
refused to waive payment of said premium; that at the time of
filing the complaint there was due the appellee from the
appellant twelve months' disability benefits, and one
year's premium, making a total of $ 338.15. He prayed
judgment for this amount, together with 12 per cent. penalty
and a reasonable attorney's fee.
Appellant
filed answer, admitting the insurance policy, but denied that
the provisions of said policy were as alleged in
appellee's complaint. The appellant set out in its answer
the provisions in the policy with reference to disability,
and alleged that the consideration for said provisions was
the sum of $ 1.35 per year; it admitted that appellee, on
December 22, 1936, submitted proof of permanent and total
disability, and that after the receipt of the proof the
appellant accepted same and on June 22, 1937, tendered to the
insured $ 25, that being the amount due under the terms of
the policy at that time; appellee refused to accept this; the
appellant claimed that under the terms and conditions of the
policy the appellee was entitled to recover disability
benefits commencing six months after receipt
of proof of loss, and it had offered to make said payments in
accordance with the terms of said policy, but that appellee
had refused to accept same.
The
appellant stated that the only question for decision was
whether, under the terms of the policy, appellee was entitled
to recover disability benefits from the beginning of his
disability, or from a period dating six months after receipt
of proof at the home office of the company. It tendered into
court with its answer $ 25.
Appellee
filed an amendment to his complaint in which he prayed
judgment for $ 25 per month from May 1, 1936, to the date of
filing the complaint, plus one year's premium of $ 38.15,
plus 12 per cent. penalty and reasonable attorney's fee.
Jury
was waived, and a trial was had before the court, sitting as
a jury, upon the following agreed statement of facts:
"It
is hereby agreed and stipulated by and between counsel for
plaintiff and counsel for defendant in the above cause that
the facts in this case are as follows:
"That
on the 22nd day of January, 1920, the AEtna Life Insurance
Company, defendant herein, issued policy No. N-234913,
insuring the life of Clyde W. Lynch, plaintiff, in the
principal sum of twenty-five hundred dollars ($ 2,500).
Plaintiff was at that time nineteen years of age. The
annual premium on said policy was $ 38.15. The policy
contains a rider as follows:
"'Six
months after proof is received at the home office of the
company, that the insured has become wholly, continuously and
permanently disabled and will for life be unable to perform
any work or conduct any business for compensation or profit,
or has met with the irrecoverable loss of the entire sight of
both eyes, or the total and permanent loss by removal or
disease of the use of both hands or of both feet, or of such
loss of one hand and one foot, the company will, if all
premiums previously due have been paid, waive the payment of
all premiums falling due thereafter during such disability,
and if such disability was sustained before the insured
attained the age of sixty years, the company will pay to the
life beneficiary the sum of ten dollars for
each thousand dollars of the sum insured and will pay the
same sum on the same day of every month thereafter during the
lifetime and during such disability of the
insured.'"
"'Any
premium waived or monthly payment made by the company on
account of permanent disability as herein described will not
be deducted from the sum insured at death or maturity, and
loan and cash surrender values will increase in the same way
as if the premiums waived had been paid in cash.
"'The
foregoing benefits for disability are conditioned upon the
medical examiner of the company being permitted to examine
the insured before acceptance of proof.
"'The
consideration for disability provision above described is an
additional premium of one and 35/100ths dollars, which
consideration is included in the premium named in this
policy, but will be reduced to__, and 38/100ths dollars after
the insured attains the age of sixty years.
"'The
above provision for permanent total disability may be
annulled upon written request of the life beneficiary, the
assignee, if any, and the return of this policy for proper
indorsement, and the premium thereafter required for this
policy will be reduced by the consideration charged for such
provision.
"'This
provision is a part of policy No. N-234913 issued by the
AEtna Life Insurance Company on the life of Clyde W. Lynch.
"'Hartford
Conn., this 22nd day of January, 1920.
"'AEtna
Life Insurance Company.'
"That
on the 1st day of May, 1936, the insured became totally and
permanently disabled as the result of tuberculosis, and has
continued to be totally disabled up until the time this suit
was filed; that the policy of insurance hereinbefore
mentioned was on the first day of May, 1936, in full force
and effect and it has been continued in full force and effect
up until the time this suit was filed; that an annual premium
of $ 38.15 was paid on said policy on the 28th day of
January, 1937; that on December 21, 1936,
plaintiff filed with the defendant a claim for permanent and
total disability benefits; that thereafter, and as of June
21, 1937, the defendant approved said claim and did on the
21st day of June, 1937, tender to plaintiff its check for
twenty-five dollars ($ 25) covering disability benefits for
the month commencing June 21, 1937; that plaintiff refused to
accept said check and that defendant has been ready and
willing since said tender and refusal to pay said sum of
twenty-five dollars ($ 25) for the month commencing June 21,
1937, and has been ready and willing and offered to pay
twenty-five dollars ($ 25) per month for each monthly period
after June 21, 1937, and that plaintiff has refused to accept
said payments.
"That
the plaintiff is a resident of the county of Sebastian, city
of Fort Smith, state of Arkansas. That the defendant is a
corporation...
