Fidelity Mut. Life Ins. Co. v. Heltsley

• Decision Date: 22 May 1934
• Parties: FIDELITY MUT. LIFE INS. CO. v. HELTSLEY.
• Court: Kentucky Court of Appeals

71 S.W.2d 1017

254 Ky. 453

FIDELITY MUT. LIFE INS. CO. v. HELTSLEY.

Court of Appeals of Kentucky

May 22, 1934

Appeal from Circuit Court, Hopkins County.

Action by Mary E. Heltsley against the Fidelity Mutual Life Insurance Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

William Marshall Bullitt, Bruce & Bullitt, and Charles J. White, all of Louisville, for appellant.

C. J Waddill, of Madisonville, for appellee.

REES Chief Justice.

On April 6, 1926, the Fidelity Mutual Life Insurance Company issued to Albert Newman Heltsley a policy of insurance on his life for $1,000. The insured's mother, Mary E. Heltsley was made the beneficiary. On July 30, 1931, the insured procured a loan of $157 on the policy. On July 7, 1932, the insured and the beneficiary, Mrs. Mary E. Heltsley, executed and mailed to the company the following writing:

"Surrender and Cancellation of Policy Contract. The insured and beneficiary under policy no. 394007, issued on the 5th day of April, 1926 on the life of Albert N. Heltsley of Ky. by the Fidelity Mutual Life Insurance Company of Philadelphia, Pa., do hereby, in consideration of payment of net cash value of $54.95 and cancellation of all indebtedness under the policy, request a cancellation of said policy, and we jointly and severally, for ourselves and our legal representatives, hereby release and forever discharge the said The Fidelity Mutual Life Insurance Company from all actions, causes of action, suits, controversies, claims, and demands whatsoever, for and by reason of said policy No. 394007, or of any matter, cause, or thing connected therewith.

In Witness Whereof, we have hereunto set our hands the 7th day of July; A. D. 1932.

Witnesses:

Willis T. Haywood, as to Albert Newman Heltsley, Insured

Willis T. Haywood, as to Mary E. Heltsley, Beneficiary."

This writing was received by the insurance company at its Philadelphia office July 12, 1932, and on July 15, 1932, it mailed to its Louisville office its check for $54.95, payable to the insured. It is conceded that $54.95 was the net cash surrender value of the policy. On July 18, 1932, the Louisville office of the insurance company mailed to the insured at Madisonville, Ky. the check with a letter of that date which reads: "Enclosed please find check to your order for $54.95 in full for surrender and cancellation of above numbered policy."

The insured died July 17, 1932, the day before the check and letter were mailed from Louisville. The check was returned to the company, which later issued another check for the same amount, payable to the beneficiary. Mrs. Heltsley refused to accept the check, and later brought this suit to recover the face amount of the policy less the amount of the loan with interest thereon.

The action was submitted to the trial court on the pleadings and an agreed stipulation of facts without the intervention of a jury, and a judgment was rendered in favor of the plaintiff, and the insurance company appeals.

It is its contention that the insured and beneficiary availed themselves of the contractual right to surrender the policy when they mailed the policy together with the "Surrender and Cancellation of Policy Contract" to the insurer. The following provisions of the policy are relied upon in support of the company's claim that it was discharged from further liability on the policy when the "Surrender and Cancellation of Policy Contract" was executed and mailed to it: "Upon surrender and discharge of this policy by all parties in interest not later than sixty days after default in payment of premium, the Company will pay the cash value. *** The payment of the cash value may be deferred for not exceeding ninety days after receipt of application therefor."

This provision appears under section 3 of the policy entitled "Non-Forfeiture Provisions" which begins with the following statement: "After three full years' premiums shall have been paid and after default in payment of any subsequent premium, the following provisions shall become operative."

The first of the following two provisions provides for participating paid-up insurance, and the second is the provision quoted above. The policy does not contain a provision permitting the insured to surrender the policy at his election and requiring the company to pay the net cash value where there has been no default in the payment of premiums. Here the policy had been in force more than six years, and all premiums due when the writing of July 7, 1932 was executed had been paid. Provision (b) of section 3 of the policy therefore has no application. The insured could not surrender the policy and require the company to pay the cash value without the consent of the company. An independent contract was necessary in which the minds of the parties met, and, until the request of the insured and...