Home Life Insurance Co. v. Couch

• Decision Date: 03 June 1940
• Docket Number: 4-5983
• Citation: 141 S.W.2d 20,200 Ark. 783
• Parties: HOME LIFE INSURANCE COMPANY v. COUCH
• Court: Arkansas Supreme Court

141 S.W.2d 20

200 Ark. 783

HOME LIFE INSURANCE COMPANY v. COUCH

4-5983

Supreme Court of Arkansas

June 3, 1940

Appeal from Columbia Circuit Court; L. S. Britt, Judge; reversed.

Judgment reversed and cause dismissed.

A D. DuLaney and Wade Kitchens, Jr., for appellants.

Dave McKay, E. M. Arnold and U. A. Gentry, for appellee.

OPINION

MCHANEY, J.

Appellee is the widow of Chester Lee Couch and was the named beneficiary in a policy of life insurance issued to him by appellant Home Life Insurance Company, hereinafter called the Home Life, dated January 2, 1919, for $ 5,000. The Home Life became insolvent and, on April 3, 1931, reinsured all of its business, including this policy, if in force, with the other and real appellant herein, Central States Life Insurance Company, hereinafter called Central States.

Mr. Couch paid all premiums on said policy falling due up to, but not including that which fell due January 2, 1931. The policy had at that time no reserve value, as he had, on August 2, 1930, borrowed $ 1,150 thereon, same being the full cash and loan value, and had pledged said policy as security therefor. On January 20, 1931, within the grace period, Mr. Couch executed and delivered to the Home Life his note, commonly called a "blue note", for $ 199.45, covering the premium and loan interest then due, to become due and payable June 1, 1931, in which he agreed that his policy had lapsed on January 2; that if he paid said note his policy would remain in force to January 2, 1932, and if he did not pay it, his policy would lapse June 1, 1931, and be void, and said note would be void, without notice. He did not pay the "blue note" on June 1, 1931, or at any other time, and neither appellant ever heard from him thereafter. He died October 22, 1937.

Said policy contained a disability provision which waived payment of premiums as follows: "It is especially agreed that if the insured, while less than sixty years of age, and after the first year's premium has been paid to the company on account of this policy, shall furnish proof satisfactory to the company, while the policy is in full force and effect, that he from any cause whatsoever shall have become permanently disabled or physically or mentally incapacitated to such an extent that he by reason of such disability or incapacity is rendered wholly and permanently unable to engage in any occupation or perform any work for any kind of compensation of financial value, the company upon receipt and acceptance of such proof will by indorsement hereon waive the payment of any premium or premiums that may become payable thereafter under this policy. Provided, however, that if the insured at any time after such waiver shall recover his physical or mental ability or capacity for work as above defined, any premium or premiums falling due thereafter shall be paid by the insured in accordance with the terms of the policy."

Demand was made on Central States to furnish forms for proofs and to pay said policy, less the loan and interest, on...