Illinois Bankers Life Assur. Co. v. Payne

• Decision Date: 14 March 1936
• Docket Number: No. 11901.,11901.
• Parties: ILLINOIS BANKERS LIFE ASSUR. CO. v. PAYNE.
• Court: Texas Court of Appeals

Page 576

93 S.W.2d 576

ILLINOIS BANKERS LIFE ASSUR. CO. v. PAYNE.

No. 11901.

Court of Civil Appeals of Texas. Dallas.

March 14, 1936.

Rehearing Denied April 18, 1936.

Appeal from District Court, Henderson County; Ben F. Dent, Judge.

Action by Maude A. Payne against the Illinois Bankers Life Assurance Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

See, also, (Tex.Civ.App.) 62 S.W.(2d) 315.

Ramey, Calhoun & Marsh, of Tyler, for appellant.

Bishop & Holland, of Athens, for appellee.

LOONEY, Justice.

Mrs. Maude A. Payne, appellee, sued the Illinois Bankers Life Assurance Company, appellant, to recover damages for the alleged wrongful forfeiture by it of a life policy for $2,000 theretofore issued on the life of appellee. Following a general denial appellant pleaded specially that the quarterly premium due October 30, 1930, on the policy was not paid on that date, nor within the 31 days of grace allowed, and that, as authorized by the contract, appellant declared the policy forfeited; and further that appellee had borrowed against the policy and still owed appellant the sum of $822, which was pleaded as an offset in the event of recovery by appellee.

At the conclusion of the evidence, the court directed a verdict for appellee in the following language: "Gentlemen of the jury: It being conclusively shown that defendant has in its hands funds belonging to plaintiff which could have been applied by it on the payment of the premiums which became due October 30, 1930, and a part of which has been so applied, its act in cancelling and declaring forfeited the plaintiff's policy was wrongful and a breach of its contract. And it being also conclusively shown that plaintiff's policy would under its terms have matured on the 30th day of April, 1939, and that after deducting the sum of money owing by plaintiff to defendant the value of said policy at the time of its breach is the sum of $898.81 for which plaintiff is entitled to recover, you are instructed to return a verdict in favor of plaintiff for said sum of $898.81."

The material questions presented for our consideration are these: (1) Did the evidence justify the assumption that the forfeiture of the policy declared by appellant was unjustified? And if so, (2) did the evidence present a jury question as to the amount of damages?

We think it inferable that the two corporations, the Illinois Bankers Life Association and the Illinois Bankers Life Assurance Company, represented the same interests; that on April 30, 1919, the predecessor company, the Illinois Bankers Life Association, issued its policy for $2,000, insuring the life of appellee, which was in good standing on July 30, 1930, when appellant, having theretofore perfected organization, induced appellee to exchange said policy for the policy in suit, under the terms of which appellee was obligated to pay a quarterly premium of $28.02, on the 30th days of July, October, January, and April, 31 days of grace being allowed.

With reference to the payment of the premium, the policy provides: "All premiums are due and payable in advance at the Home Office of the Company, in the City of Monmouth, Illinois * * *. Upon default in payment of any premium * * * this policy shall be null and void and all premiums forfeited to the Company except as herein provided. Premiums may be paid in advance in semi-annual or quarterly installments at the Company's rates therefor, but except as herein provided, the payment of any premium or installment thereof shall not maintain the policy in force beyond the date when the next premium or installment thereof is payable."

In the adjustment resulting from the exchange of the policies, appellee was entitled to a credit of $34.98, left in the hands of appellant available for the payment of the current year's premiums. This is shown by appellant's letter of August 20, 1930, addressed to appellee, as follows: "Dear Madam: Enclosed herewith please find your new Legal Reserve Insurance policy #308069. The Interim Receipt given you by our Special Representative is to be returned in the self-addressed envelop herewith. In accordance with the terms of the contract of insurance, the Association members have been apportioned a fund from the Assessment Association, and there is available as a credit on your exchange policy, in connection with the current year's premimium, the sum of $34.98 which will be applied as follows: Used in the current premium settlement $8.74. $8.74 is to be used to reduce the premium due 10-30-30 to $19.28. $8.75 is to be used to reduce the premium due 1-20-31 to $19.27. $8.75 is to be used to reduce the premium due 4-30-31 to $19.27. Thereafter, the regular premiums as shown in the policy will be payable. In event notices which you may receive relative to payment of premiums fail to indicate the credits as shown above, we will appreciate your writing us."

Thus, it appears that after appropriating $8.74 of the fund as a partial payment of the premium due July 30, 1930, there remained in the hands of appellant, unexpended, the sum of $26.24, which had been allocated, but not yet used, to the payment of premiums to mature October 30, 1930, January 30, and April 30, 1931. The premium due October 30th, under the arrangement above set out, was automatically credited with the sum of $8.74, but the balance on this premium was not paid at that time, and with reference to its payment, appellee's son, who transacted her business, testified that on November 26, 1930, he mailed check payable to appellant for $19.28, balance due on the October premium, the evidence also showing that in due course of mail the check should have reached its destination within 48 hours after being mailed, justifying the belief that the premium was fully paid on or prior to October 30th. But the evidence for appellant would have justified a finding that the check was not received until December 6, 1930, seven days after the maturity of the premium; however, for the sake of the discussion, we will assume that the check was not actually received until December 6, 1930, as contended by appellant. Mr. Lilley, head of the conservation department of appellant, wrote appellee December 9th stating that, as the check was received after the grace period allowed, the policy had lapsed, inclosing with the letter a blank application for reinstatement, and retained the check with the intention of accepting same in payment of balance due on the premium should the policy be reinstated. On November 30, 1930, the expiration of the 31 days' grace allowed, appellant had in its possession, belonging to appellee, $26.24, lacking only $1.78 of being the full amount of the October premium, which, in order to avoid forfeiture, we think, should have been applied on the premium then due. If thus applied, the amount would have paid for insurance for practically the full quarter ending January 30, 1931. We do not think appellant is in position to say that it was not compelled to accept anything less than the full premium, as the arrangement formulated, evidenced by...