Bergholm v. Peoria Life Ins Co of Peoria, Iii

• Citation: 52 S.Ct. 230,76 L.Ed. 416,284 U.S. 489
• Decision Date: 15 February 1932
• Docket Number: No. 297,297
• Parties: BERGHOLM et al., v. PEORIA LIFE INS. CO. OF PEORIA, III
• Court: United States Supreme Court

284 U.S. 489

52 S.Ct. 230

76 L.Ed. 416

BERGHOLM et al.,

v PEORIA LIFE INS. CO. OF PEORIA, III.

No. 297.

Argued Jan. 18, 1932.

Decided Feb. 15, 1932.

Messrs. E. L. Klett, of Lubbeck, Tex., and Tom Connally, of Marlin, Tex., for petitioners.

Mr. J. I. Kilpatrick, of Lubbock, Tex., for respondent.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

This is an action brought to recover the sum of $5,000 life insurance and specified disability benefits upon a policy issued by the respondent to Carl Oscar Bergholm on March 13, 1926. Judgment upon a verdict for peti- tioners in the trial court was reversed by the court of appeals. 50 F.(2d) 67. We granted certiorari, 284 U. S. 605, 52 S. Ct. 30, 76 L. Ed. —, because of a supposed conflict with Minnesota Mut. Life Ins. Co. v. Marshall (C. C. A.) 29 F.(2d) 977.

Beginning with February 27, 1927, premiums were to be paid quarterly, with a grace period of one month from any due date, during which period the policy was to continue in full force. In case of total and permanent disablement there was a provision for payment of a monthly income for life of one per cent. of the amount of the principal sum. The policy expressly provided that 'if any premium is not paid on the date when due, this policy shall cease and determine, except as hereinafter provided.' The income disability clause, which follows this language, provides:

'Upon receipt by the Company of satisfactory proof that the Insured is totally and permanently disabled as hereinafter defined the Company will

'1. Pay for the Insured all premiums becoming due hereon after the receipt of such proof and during the continuance of the total and permanent disability of the Insured and will also

'2. Pay to the Insured a Monthly Income for life of 1% of this Policy; The first payment of such income to be paid immediately upon receipt of such proof. * * *

'3. * * * To entitle the Insured to the above Total and Permanent Disability Benefits this policy at the time of making claim for such benefits must be in full force and all premiums becoming due prior to the time of making claim must have been duly paid. * * *'

The insured died on April 18, 1929. Judgment was sought for disability benefits from December 1, 1927, to April 1, 1929, at the rate of $50 per month, with interest. The last premium paid was due on May 27, 1927. The next, allowing a month's period of grace, should have been paid not later than September 27, 1927. Neither that nor any subsequent premium was ever paid. Long prior to the death of the insured, the policy therefore had lapsed, unless saved by the terms of the disability clause above quoted. There is evidence in the record from which it reasonably may be found that the insured was totally and permanently disabled from a time before the premiums first became in arrears, and that this condition continued until his death; but no proof thereof was furnished to the company.

The petitioners, nevertheless, contend that this is enough to bring into effect the promise of the company to pay the premiums which became due after the disability began. In support of this contention, Minnesota Mut. Life Ins. Co. v. Marshall, supra, is cited. The pertinent provisions of the policy there, however, differ from those found in the policy here under consideration. There the policy provided that if the insured, while the policy is in force and before default in payment of premiums, 'shall become totally and...