Fishman v. Eureka-Maryland Assurance Corp.
| Decision Date | 31 January 1936 |
| Docket Number | 385-1935 |
| Citation | 120 Pa.Super. 490,183 A. 98 |
| Parties | Fishman v. Eureka-Maryland Assurance Corporation, Appellant |
| Court | Pennsylvania Superior Court |
Argued December 12, 1935
Appeal by defendant, from judgment of M. C., Phila. Co., June T. 1933, No. 121, in case of Ida Fishman v. Eureka-Maryland Assurance Corporation.
Assumpsit on insurance policy. Before Gable, J.
The facts are stated in the opinion of the Superior Court.
Verdict and judgment for plaintiff. Defendant appealed.
Error assigned, among others, was refusal of judgment n. o. v.
Reversed.
Kendall H. Shoyer, with him Frederick J. Shoyer, for appellant.
A. Jere Creskoff, with him Louis Sherr, and Michael Edelman, for appellee.
Before Keller, P. J., Cunningham, Baldrige, Stadtfeld, Parker, James and Rhodes, JJ.
This case involves the question whether the life insurance policy in suit, which had lapsed for non-payment of premiums, had been reinstated prior to the assured's death. The court below submitted the case to the jury, which rendered a verdict for the plaintiff. Defendant's motion for judgment non obstante veredicto was refused and judgment was entered on the verdict. It must be reversed.
The clause in the policy relating to the reinstatement of lapsed policies is in substantial accord with the requirements of our statute law then in force on the subject, [1] and reads as follows:
The facts are not in dispute. Accepting them as presented, in the light most favorable to plaintiff, as we are required to do, they may be summarized as follows: On May 20, 1931 the defendant issued to Louis Fishman, plaintiff's husband, a policy of life insurance in the amount of $ 2,000, the assured to pay a quarterly premium of $ 20.20, on the 20th day of May, August, November and February of each and every year during his life. The premium payable August 20, 1932 was not paid when due nor within the thirty-one day grace period allowed by the policy, and as this default occurred within three years of issuance of the policy, there was, under its terms, no paid-up or extended insurance value and the policy lapsed for non-payment of the premium. No steps to reinstate the policy were taken by November 20, 1932, and the quarterly premium due on that date was also not paid. The assured on or about January 31, 1933 made oral inquiry of Franklin, the Company's local agent, as to what would have to be done to reinstate the policy. The latter consulted Sisson, the Company's general agent in Philadelphia, and Sisson, in turn, wrote to the home office in Baltimore on February 1, 1933, and received the following reply:
"Baltimore
February 6th, 1933.
F. P. Sisson, Gen. Agt.
Philadelphia, Pa.
Dear Sir:
69737 -- Louis Fishman
We acknowledge your letter of February 1st in reference to the above policy.
This policy lapsed for non-payment of the quarterly premium of $ 20.20 due August 20th, 1932 and in order to reinstate payment for the August and November, 1932 quarterly premiums would have to be made, totaling $ 40.40.
Application for reinstatement blank is enclosed which should be completed by the assured, signed, witnessed and returned to the medical examiner for his report on the reverse side; the examination at the assured's expense.
Upon receipt of the remittance and approval of the application for reinstatement blank we shall be pleased to revive this insurance.
This letter was shown, or given, the assured not later than February 13, 1933, but he signed no written application for the reinstatement of the policy until March 6, 1933, at which time, under his policy, -- the provisions of which he was bound to know, for it was still in his possession, -- a third premium due February 20, 1933 was overdue, and, under the clause of the policy, above quoted, and the provision of the Insurance Law of 1921, above referred to, had to be paid before the policy could be reinstated. The appellee claims that the clause in the policy allowing a grace of thirty-one days [2] applies to this payment, but it is clear that the 'grace' clause applies only to premiums which are payable while the policy is in force. Once the policy has lapsed for nonpayment of premiums, all overdue premiums, without any 'grace' allowance, must be paid before it can be reinstated. The premiums are due on May 20, August 20, November 20 and February 20 (McDonough v. Prudential Ins. Co., 85 Pa.Super. 63; Ford v. Fidelity Mut. Life Ins. Co., 314 Pa. 54, 170 A. 270). If not then paid they are overdue, but while the policy is in force a grace period of thirty-one days is allowed and the premium is not in default until that period has expired. The policy is too clear for any misunderstanding on the subject.
On March 6, 1933, the assured signed an application for reinstatement of the policy and underwent a physical examination at the hands of the company's examining physician, Dr. Tunitzky. In answer to question 9, "Have you at any time learned anything from a physician or from a representative of an insurance company, that you were not a standard risk for life, health or accident insurance?" the photostatic copy shows that the answer "No" was first written in the doctor's handwriting, and then over it, "Yes, from Eureka, Maryland."
In the blank to be filled by the examining physician, the 13th question, "Does the applicant's general appearance indicate good health?" the photostatic copy shows that the answer began with a "Y", over which "No" was written in the doctor's handwriting. But the doctor, testifying as a witness for the plaintiff, said he wrote "No" and changed it to "Yes" which is what the answer "should have been." We accept his testimony, but it does not change the appearance to the eye, which is what would be presented to the company.
This application was held by the doctor, awaiting receipt of an authorization to make the examination from the Philadelphia office, -- which seems to have been necessary -- and on its receipt, a day or two after the examination, it was mailed by him to the home office in Baltimore.
The assured paid Franklin, the local agent, $ 40.40 about five o'clock of March 6, and the latter gave him a receipt as shown in the margin. [3] The form used was evidently prepared by the company for the receipt of ordinary premiums by the local agent, to be exchanged for an official receipt from the home office. The italics represent the written portions. Franklin was out of town the next day, and by the time he told Sisson, the general agent, that this money had been paid him, Fishman had died. [4] By direction of Sisson, he tendered the plaintiff a return of the money and asked for a return of the temporary receipt, but the plaintiff refused to take the money or return the temporary receipt.
The medical director of the insurance company testified for the defendant that he had not approved the application; that it was his duty to pass on all applications for reinstatement of policies; that this application had not been presented to him -- probably for the reason that the applicant had died before the application was received at the home office -- but that if he had received it, with the answers to question 9 of the application and question 13 of the physician's report, as they appeared in their altered form, he would not have approved the application for reinstatement without further inquiry.
The company refused payment of the policy on the ground that the policy had lapsed for non-payment of premiums and had not been reinstated at the time of Fishman's death, and the plaintiff thereupon brought this action.
In this state of the record, under the ruling of our Supreme Court in Riebel v. Prudential Ins. Co., 319 Pa. 24, 179 A 447, the defendant was entitled to binding instructions. In fact this case is stronger than that one; for in the Riebel case the assured paid the company's agent the full amount of the overdue premiums in arrears, but died before the company had acted on his application for reinstatement. The application was signed May 31, 1932, the arrearages of premiums were paid on June 2, 1932 and the assured died on June 3, 1932. It is true that in that case, the company without knowledge of his death, on June 6, 1932 refused the application for reinstatement, but that was not decisive of the case. The Supreme Court said, Per Curiam: ...
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