BANKERS'LIFE CO. v. Burns
| Decision Date | 19 February 1929 |
| Docket Number | No. 5335.,5335. |
| Citation | 30 F.2d 327 |
| Parties | BANKERS' LIFE CO. v. BURNS. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Charles L. Black and Ireland Graves, both of Austin, Tex., for appellant.
James H. Hart, of Austin, Tex. (W. C. Wofford, of Taylor, Tex., and Hart, Patterson & Hart, of Austin, Tex., on the brief), for appellee.
Before WALKER, BRYAN, and FOSTER, Circuit Judges.
The beneficiary of an insurance policy brought suit upon it, and recovered judgment. This appeal is taken by the insurance company on the ground that the policy had lapsed before the death of the insured.
The premiums on the policy were payable annually, and were paid up to November 25, 1923. The premium due on the last-mentioned date was not paid, but the policy had a cash surrender value of $58.09, which was sufficient to pay for extended insurance for one year and 73 days. By several extension agreements the time for payment of the premium in default was extended until September 25, 1924, upon the following terms and conditions: If the difference between the deposit the insured was required to make and the amount of the annual premium, with interest, should be paid on or before the extended date, the policy should be continued as if the premium had been paid when due; but if such payment should not be made within the extended period, without demand or notice, the insurance company should retain out of the amount deposited an amount equal to 75 cents per thousand dollars of insurance for each month of extension beyond the grace period as compensation for the privilege of extension and repay the balance to the insured, and "after such extended date all rights under the policy shall be the same as if this agreement and deposit had not been made, except that the time for electing any option upon lapse granted by the policy shall begin to run from the extended date and not from the due date of the premium." Under the terms of the policy, in the event of default in the payment of the premium in question, the insured had the right at his option to receive the surrender value in cash, or a paid-up policy, or extended insurance. If he failed to make an election, it was provided that the insurance would be automatically extended from the date of default for such period of time as would be paid for by the cash surrender value. The insured did not elect to receive the cash surrender value or a paidup policy, and having failed...
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