Bostick v. Life Ins. Co. of Virginia, 8099.

• Decision Date: 19 December 1936
• Docket Number: No. 8099.,8099.
• Citation: 93 F.2d 557
• Parties: BOSTICK v. LIFE INS. CO. OF VIRGINIA.
• Court: U.S. Court of Appeals — Fifth Circuit

93 F.2d 557 (1936)

BOSTICK v. LIFE INS. CO. OF VIRGINIA.

No. 8099.

Circuit Court of Appeals, Fifth Circuit.

December 19, 1936.

Hamilton Phinizy and Abram Levy, both of Augusta, Ga., for appellant.

C. Baxter Jones, of Macon, Ga., and W. D. Lanier, of Augusta, Ga., for appellee.

Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.

FOSTER, Circuit Judge.

Appellant brought this suit as beneficiary to recover on a policy of life insurance issued to her husband, Nathaniel Holcome Bostick, by appellee, in the sum of $3,000, reduced to $2,408.77 by a loan against the policy; for a penalty of 25 per cent. thereon for failure to promptly pay the claim; and for attorneys' fees, a total exceeding $3,000. The suit was dismissed on general demurrer.

The facts disclosed by the pleadings and annexed exhibits are these: The policy issued on November 27, 1925, as a twenty-year, limited payment, nonparticipating life policy on a quarterly premium basis, the first quarterly premium of $29.94 payable in advance and a quarterly premium of the same amount payable every three months thereafter. On December 28, 1933, the insured negotiated a loan on the policy of $645, which was the full amount he was entitled to borrow at the end of the 8th policy year. Out of this he paid the quarterly premium due November 27, 1933, which had become delinquent but was paid within the grace period. No further premiums were paid, the insured did not apply for an additional loan and did nothing at all to keep the policy in force. He died on December 7, 1934. The policy contained the following provisions, in addition to the usual clauses providing for nonforfeiture, incontestability, and lapse for nonpayment of premiums.

"Loans — At any time after three full years' premiums have been paid, and while this Policy is in force, the Company will advance to the Insured as a loan on this Policy upon proper assignment and on the sole security hereof, an amount not exceeding the loan value of this Policy at the end of the then current policy year, as shown in the Table of Loans and Surrender Values below."

"If this Policy shall lapse for the nonpayment of any premium, after premiums have been paid for at least three full years of insurance and there is no indebtedness to the Company on account of this Policy, the Company will grant one of the following options:

"Automatic Extended Insurance — The Company, without any action on the part of the Insured, will carry the face amount of this Policy as Non-Participating Extended Insurance, from the date to which premiums have been paid for the term shown in the Extended Insurance column in the Table of Surrender Values opposite the number of full years for which premiums have been paid; (Other options are not material).

"In case there is any indebtedness on account of this Policy, the insurance payable under the Extended Insurance Option shall be the face amount of this Policy, less the amount of such indebtedness, and the term for which such insurance shall be extended shall be for such time as the cash surrender value of this Policy herein specified, after deducting such indebtedness, will carry the modified amount according to the Table of Net Single Premiums for Term Insurance, computed by the American Experience Table of Mortality with three and one-half per cent. interest; the insurance payable under the Paid-up Life Policy shall be reduced in the same proportion as such indebtedness bears to the Cash Surrender Value. If a Cash Surrender Value is chosen, the said indebtedness shall be deducted from the cash value that might otherwise be claimable, and the balance, if any, paid in cash."

"Table of Loans and Surrender Values

"Provided No Notes or Loans...