Fauer v. Aetna Life Ins. Co., 384.

• Decision Date: 30 April 1934
• Docket Number: No. 384.,384.
• Citation: 70 F.2d 693
• Parties: FAUER v. ÆTNA LIFE INS. CO.
• Court: U.S. Court of Appeals — Second Circuit

70 F.2d 693 (1934)

FAUER v. ÆTNA LIFE INS. CO.

No. 384.

Circuit Court of Appeals, Second Circuit.

April 30, 1934.

J. Emanuel Ankus, of New York City (Joseph Pickholtz, of New York City, of counsel), for appellant.

James B. Henney, of New York City (Daniel Miner and William S. O'Connor, both of New York City, of counsel), for defendant-respondent.

Before MANTON, L. HAND, and CHASE, Circuit Judges.

CHASE, Circuit Judge.

This suit was brought by the plaintiff, a resident of New York, against the Ætna Life Insurance Company, a Connecticut corporation, doing business in New York, to recover as the beneficiary named in the policy, the principal sum of a policy of life insurance for $5,000 dated September 9, 1929, and issued by the defendant on the life of her husband, Samuel Fauer.

For the purposes of this action, though for such purposes only, the parties have agreed as to all essential facts. They are as follows:

When the policy was issued to Samuel Fauer, who was a resident of New York, it was written on the basis of the yearly payment of premiums. The first such premium was paid on October 21, 1929. The next premium was due September 9, 1930, but a grace provision of thirty-one days prevented a lapse for nonpayment of premium until October 10, 1930. No notice as to the September 9, 1930, premium was sent the insured. On October 8, 1930, the insured and the defendant agreed, in accordance with the terms of a written instrument they then executed, to change the method of premium payment from an annual to a monthly basis. The insured thereafter paid each monthly premium up to and including that for the month of April, 1931. The defendant sent him a written notice more than fifteen days and less than forty-five days before the May 9, 1931, premium was due, but neither that nor any subsequent premiums were paid.

On February 9, 1931, the insured became totally and permanently disabled. No notice was sent to the defendant until after the insured died. His death occurred October 27, 1931, and before he had attained age 60. On November 7, 1931, attorneys in New York representing the plaintiff wrote a letter to the defendant in Hartford, Conn., which follows:

"November 7, 1931 "Ætna Life Insurance Company Hartford, Connecticut "Re: Policy No. N811061

"Gentlemen: Would you kindly let us know by return mail the status of the above numbered policy. We enclose proof of death of Samuel Fauer who has died after a lingering attack of cancer which lasted about a year, we are informed.

"Please inform us immediately whether we are entitled to anything.

"Very truly yours "Martinson & Pickholtz."

And on November 10, 1931, the defendant replied by letter saying:

"Re Policy N811061 — lapsed Samuel Fauer

"Gentlemen: We regret to inform you that the above numbered policy, referred to in your inquiry of November 7, lapsed for non-payment of the premium due May 9, 1931 and has had no value since date of lapse.

"Very truly yours "Life Claim Division "E. H. Tulman, Examiner."

The policy contained a provision which so far as it is claimed to be applicable is as follows:

"Permanent Total Disability Provision.

"If, before default in payment of premium, the insured becomes totally and permanently disabled by bodily injuries or disease and is thereby prevented from performing any work or conducting any business for compensation or profit, the following benefits will be available:

"When Such Disability Occurs before Age Sixty.

"A waiver of the payment of premiums falling due during such disability, and an income of ten dollars a month for each one thousand dollars of the sum insured payable to the life owner each month in advance during such disability.

"If before attaining the age of sixty years the insured becomes totally disabled by bodily injuries or disease and is thereby prevented from performing any work or conducting any business for compensation or profit for a period of ninety consecutive days, then, if satisfactory evidence has not been previously furnished that such disability is permanent, such disability shall be presumed to be permanent. In such a case, benefits shall accrue from the expiration of the said ninety days, but not from a date more than six months prior to the date that evidence of such disability satisfactory to the Company is received at its Home Office. No benefit shall accrue prior to the expiration of said ninety days unless during that period evidence satisfactory to the Company is received at its Home Office while the insured is living that the total disability will be permanent, in which event benefits will accrue from the commencement of disability."

The first error urged on the part of the plaintiff is a claimed failure of the trial court to give effect to section 92 of the Insurance Law of New York (Consol. Laws, c. 28), which provides that no life insurance company doing business in New York may, within one year from the failure to pay such premium, declare a policy, not issued upon the payment of monthly or weekly premiums or unless it is a term insurance contract for one year or less, lapsed for failure...