Illinois Bankers Life Ass'n of Monmouth, Ill. v. Palmer
| Decision Date | 26 November 1935 |
| Docket Number | 24942. |
| Citation | 56 P.2d 370,176 Okla. 514,1935 OK 1159 |
| Parties | ILLINOIS BANKERS LIFE ASS'N OF MONMOUTH, ILL., v. PALMER. |
| Court | Oklahoma Supreme Court |
Rehearing Denied April 7, 1936.
Syllabus by the Court.
1. A provision in a life insurance policy to the effect that "if this policy shall lapse by nonpayment of any premium when the same shall become due, it may be reinstated by the holder furnishing satisfactory evidence of insurability to the Association," does not operate to confer arbitrary or discretionary power upon the officials of the association to refuse reinstatement, and where the holder furnishes evidence which is sufficient to show insurability and tenders payment of past-due premiums, and the officials refuse to reinstate said policy, held, that said refusal is wrongful and a cause of action arises upon said policy.
2. Where the holder of a policy of life insurance has, by its terms, a contractual right to reinstatement, conditioned only upon payment of arrears of premiums on the policy, and "upon evidence of insurability satisfactory to the company," such right cannot be impaired or limited by subsequent conditions contained in the application for reinstatement furnished by the insurer.
3. In a law action, where a cause is tried to the court without a jury, the finding of the trial court will not be reversed on appeal when there is competent evidence reasonably tending to support such finding.
Appeal from District Court, Carter County; Asa E. Walden, Judge.
Action by J. H. Palmer against the Illinois Bankers Life Association of Monmouth, Illinois. Judgment for plaintiff, and defendant appeals.
Affirmed.
Rehearing denied; WELCH, J., dissenting.
Potter & Potter, of Ardmore, for plaintiff in error.
Sigler & Jackson, of Ardmore, for defendant in error.
This action was filed in the district court of Carter county by J H. Palmer, hereinafter referred to as plaintiff, against the Illinois Bankers Life Association, hereinafter referred to as defendant, for damages arising by the wrongful failure of defendant to reinstate a life insurance policy. The cause was tried to the court and a judgment rendered for plaintiff from which defendant has appealed.
The policy was issued on February 28, 1919, for $1,000. The annual premium was $35.64, payable quarterly. All premiums were paid until April 1, 1932. The thirty days' grace period expired May 1, 1932, and the premium was received in the home office of defendant May 5, 1932. Plaintiff was notified by the company that the policy had lapsed for nonpayment of the premium and was furnished a blank to make application for reinstatement and was directed to submit himself to Dr. W. M. Johnson of Ardmore for physical examination. Plaintiff filled out the blank and was given an examination by Dr. Johnson, but the medical director of the company refused reinstatement of the policy for the reason that the evidence of insurability was insufficient.
At the trial of this cause Dr. Johnson testified that at the request of defendant he examined plaintiff twice and plaintiff was in reasonably good health for a man of his age, and that his examination disclosed that plaintiff was insurable. Dr. J. R Ebersole, vice president and medical director of the company, who was charged with the responsibility of passing upon applications for insurance and applications for reinstatement, testified that he had made an investigation and in his opinion plaintiff was not insurable on account of some hypertension, a trace of albumen, and a confidential report relating to moral character and habits of living.
At the conclusion of the evidence, the trial court found that the defendant had acted arbitrarily in the refusal to reinstate the policy and rendered judgment for plaintiff. This includes a finding that plaintiff had furnished satisfactory evidence of insurability.
It is the theory of defendant that the officers of the company were vested with discretionary powers and that the evidence fails to show an abuse of such discretion in refusing to reinstate the policy. Defendants rely upon the case of Conway v. Minnesota Mutual Life Insurance Company, 62 Wash. 49, 112 P. 1106, 1107, 40 L.R.A. (N.S.) 148. That case does not support defendant's contention. In that case the contract specifically provided for reinstatement "in the discretion of the officers of this association." In that case it was held that such a provision in the policy was not contrary to public policy and that the officers of the company did not abuse their discretion in refusing reinstatement, but the case specifically holds that "compliance with the conditions imposed by the contract gives insured an absolute right to reinstatement if the contract does not make reinstatement optional with the company."
The provision of the policy involved herein relating to reinstatement is as follows:
It is noted that said provision does not purport to invest any officer of the company with discretionary powers, but specifically grants the insured the right to reinstate upon the furnishing of satisfactory evidence of insurability. This contractual right of reinstatement is a substantial property right. Rocky Mount Savings & Trust Co. v. Ætna Life Ins. Co., 201 N.C. 552, 160 S.E. 831. The facts in this case are quite similar to the facts involved in the case of Thompson v. Postal Life Ins. Co., an opinion prepared by Mr. Justice Cardozo, reported, 226 N.Y. 363, 123 N.E. 750. It is held in the first syllabus (123 N.E. 750) as follows: "Where a life insurer agreed to waive a forfeiture of the policy on condition insured should apply for its restoration, before a medical examiner, and furnish 'satisfactory' evidence of his insurability, and insured did so, his medical examination disclosing no defect in health, he satisfied the condition on which the waiver was dependent, though the insurer's taste, fancy, or caprice was not satisfied."
In the body of the opinion, the court uses the following language ...
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