Ballard v. Beneficial Life Ins. Co

• Decision Date: 03 May 1933
• Docket Number: 5010
• Citation: 82 Utah 1,21 P.2d 847
• Court: Utah Supreme Court
• Parties: BALLARD v. BENEFICIAL LIFE INS. CO

21 P.2d 847

82 Utah 1

BALLARD v. BENEFICIAL LIFE INS. CO

No. 5010

Supreme Court of Utah

May 3, 1933

Appeal from District Court, Third District, Salt Lake County; Wm. H Bramel, Judge.

Action by Bessie Griffin Ballard against the Beneficial Life Insurance Company. Judgment for plaintiff, and defendant appeals.

REVERSED AND REMANDED.

Ashby D. Boyle, of Salt Lake City, for appellant.

Ball Musser & Mitchell, of Salt Lake City, for respondent.

STRAUP Chief Justice. ELIAS HANSEN, FOLLAND, EPHRAIM HANSON, and MOFFAT, JJ., concur.

OPINION

STRAUP, Chief Justice.

The plaintiff, as the beneficiary, brought this action to recover on an insurance policy issued by the defendant on the life of her husband, Willard Russel Ballard. The home office and general place of business of the company was at Salt Lake City, Utah. The residence of the insured was at Logan, Utah. The policy was issued December 15, 1925, in the sum of $ 5,000. The annual premiums amounted to $ 295.35, payable annually, semiannually, or quarterly. The insured died April 13, 1929. The defendant resisted payment on the ground that the policy had lapsed and was forfeited because of nonpayment of premiums. The plaintiff urged that the defendant had waived the making of such payments within the time prescribed by the policy, contended that it had treated the policy as in full force and effect until the death of the insured, and thus was estopped to assert that the policy was not of binding effect. The case was tried to the court, who found the issues in favor of the plaintiff and entered judgment accordingly.

So far as material, the court found that the annual premium to be paid on the policy was $ 295.35; that if paid semiannually the payments were to be made in the sum of $ 153. 58, and if paid quarterly, in the sum of $ 78.26; that the insured was given the right and option to pay the premiums with a 30-day grace; that the insured pursuant to the policy paid "said premium quarterly on the 15th day of December, the 15th day of March, the 15th day of June, and the 15th day of September of each year." The court further found:

"3. That while said insurance policy was in full force and effect and in good standing, said insured died at Logan City, Utah, on or about the 13th day of April, 1929, and thereupon his defendant became obligated under said insurance contract to pay the plaintiff said $ 5,000.00.

"4. That on or about the 28th day of November, 1928, the said insured executed a policy loan agreement with the defendant (a copy of which was attached to the complaint and reference made thereto by the findings), whereby said insured borrowed from said company $ 405.00 and left with said company as security for the payment of said loan said insurance policy.

"5. That under the provisions of said insurance contract said indebtedness of $ 405.00 is to be deducted from said $ 5,000.00; that the insured was given thirty (30) days, and until April 15, 1929, to pay the premium due on said life insurance policy due March 15, 1929. That the amount of said premium amounted to $ 80.91, all of which premium and the interest on said loan the insured paid to the defendant company on or about April 1, 1929, except the sum of $ 10.43, and that there is now due from the defendant to the plaintiff the sum of $ 5,000.00, less the amount of said loan, $ 405.00, less the unpaid amount of the premium on April 15, 1929, amounting to $ 10.43 aforesaid, leaving a balance owing by the defendant to the plaintiff of $ 4,584.57, plus interest thereon from the 13th day of April, 1929, until paid."

Judgment was rendered accordingly, from which the defendant has prosecuted this appeal. No finding was made as to the payment of premium due December 15, 1928. A finding is made that the premium due March 15, 1929, was paid. The findings as to the payment of premiums as well as the finding or conclusion that the policy was in full force and effect and in good standing at the death of the insured are challenged on the ground of insufficiency of the evidence and that they are contrary to the evidence. The principal question presented for review involves the finding that the policy was in force an effect. The affirmative is asserted by the plaintiff, the negative by the defendant. Dependent upon that question is the further question of waiver and of an estoppel. If there was neither, there was no existing policy at the death of the insured.

On November 28, 1928, all prior premiums up to that time had been paid in full, except $ 96.15 unpaid on the first year premium note. On November 28th the insured executed a policy loan agreement for the entire cash surrender value of the policy amounting to $ 405. From the amount of the loan the sum of $ 96.15 together with interest amounting to $ 1.14 on the loan from November 28th to December 15, 1928, the date of the next premium payment, was deducted, and the remainder of the loan amounting to $ 307.71 paid to the insured in cash. That, unless further premiums were paid, or the loan paid as by the terms of the loan agreement provided, exhausted the entire value of the policy. The loan agreement signed by the insured acknowledged the receipt of $ 405 in cash as of November 28, 1928, and as a loan on the policy. By its terms he agreed to pay interest on the loan at 6 per cent per annum payable in advance and pledged the policy as security for the repayment of the loan and interest, and agreed that if any premium on the policy was not paid when due, the policy was to be foreclosed to satisfy the loan.

By the terms of the policy it, among other things, was stipulated that:

"In the event of default in premium payments, unless the cash value has been duly paid, it is agreed that this policy may be reinstated at any time upon evidence of (1) insurability satisfactory to the Company, (2) and the payment of all overdue premiums, (3) and the payment or reinstatement of any other indebtedness to the Company upon said policy, with interest at the rate of not exceeding six per cent per annum."

The policy further provided a period of 30 days' grace for the payment of premiums without interest, during which time the policy remained in full force and effect. The first premium after the loan was due December 15, 1928. About thirty days prior thereto the insured was given the usual notice in writing notifying him of such payment, stating the amount to be paid, and that "unless payment is made as above, your policy will become null and void, except as to any provisions otherwise provided therein." About ten days after the accrual of the December 15th premium payment, the defendant again by letter (referred to in the record as Exhibit 3) notified the insured that recently a notice of payment of premium was sent him, that it evidently escaped his attention, as "our records show no payments received," and informed him that the policy provided "a grace period of Thirty-One Days without interest," during which time or until thirty-one days after December 15th "the policy will continue in full force and effect." In such letter or notice it further was stated:

"Surely you intend continuing your protection. Life is uncertain. Why not send the remittance Now and avoid the dangers of delay? Don't put it off."

The number of the policy and the amount of premium due December 15th, the amount of the policy loan, and the interest due thereon were stated in both such notices.

No reply by the insured having been made to such notices and no remittance made by him, the defendant about January 4, 1929, sent him a further notice (which in the record is referred to as Exhibit 4) wherein the insured was again notified that:

"The grace period provided by your policy expires in a few days. We are therefore anxious to know that the matter has been brought to your attention that prompt payment may be made and your protection continued. If your policy calls for the payment of the premium annually, and it is inconvenient at this time to pay the entire amount we will gladly accept either a semi-annual or quarterly premium. You will find the amount specified upon the front of your policy. When the grace period expires, we of course will be compelled to cancel your protection except as provided under the terms of your policy. We feel confident that your remittance will be made promptly."

The grace period expired January 15, 1929. The premium was not paid and no communication or response whatever made by the insured. Several days thereafter, on January 17, 1929, and after the grace period had expired, the company again wrote the insured (referred to in the record as Exhibit 5) as follows:

"We are anxious to know whether or not we can be of service to you. Reference to our records show that your Life Insurance Premium still remains unpaid.

"Not knowing why you failed to pay this premium, we are unable to advise you.

"We believe, however, that if you will write us, stating frankly what your reasons are, we might be of assistance to you. This information will be appreciated, as often we are able to make suggestions and offer assistance to policyholders, which makes possible the continuance of their insurance.

"You realize, of course, that the value of the insurance is as great and the protection as necessary now as at any time and probably even more so, as each year adds to your age and increases the need of insurance.

"We hope to receive your answer as promptly as possible in order that we can make you a proposition." (Italics added.)

No reply or response whatever having been received to that, the company, on March 20, 1929, more than sixty days after Exhibit 5 was sent the insured and admittedly received by him, wrote him what is termed a surrender or cancellation of the...