Jeffers v. BANKERS'LIFE CO.

• Decision Date: 14 July 1934
• Docket Number: No. 6996.,6996.
• Citation: 71 F.2d 603
• Parties: JEFFERS v. BANKERS' LIFE CO.
• Court: U.S. Court of Appeals — Fifth Circuit

71 F.2d 603 (1934)

JEFFERS v. BANKERS' LIFE CO.^*

No. 6996.

Circuit Court of Appeals, Fifth Circuit.

June 14, 1934.

Rehearing Denied July 14, 1934.

James B. Lewright, of San Antonio, Tex., for appellant.

Sam C. Eldridge, of San Antonio, Tex., Ireland Graves, of Austin, Tex., and R. B. Alberson, of Des Moines, Iowa, for appellee.

Before BRYAN, SIBLEY, and HUTCHESON, Circuit Judges.

HUTCHESON, Circuit Judge.

The suit is on a five-year term policy. The defense, lapse for failure to pay the second premium, prevailed below. Plaintiff here, complaining of the instructed verdict she suffered, insists that, notwithstanding his failure to pay the second premium as agreed, the policy was in force on October 13, 1925, when her husband died. Her claim is that on September 12, 1925, the date to which, by extension agreements, the right to pay the second premium had been carried, a dividend or dividends had accrued to the policy sufficient to purchase extended insurance beyond the death of the insured, and the company was in duty bound to so apply these sums. She claims, further, that, the policy not having been delivered until one month after its due date, the first premium the insured paid actually carried the policy until February, instead of January, of the following year, and that the eight extension payments he made, applied from February 12th instead of January 12th, would have carried the policy beyond the date, October 7th, when the full premium was tendered. She claims, too, that the dealings in the form of extension agreements and the reinstatement of the policy, which the company had carried on with the insured, had reasonably led him to believe that the provisions of the extension agreements would be waived, and that he would have a reasonable time after September 12th to pay the full premium.

Defendant points to the fact that the policy does not provide at all for extension insurance; that it specifically conditions the accrual and credit of dividends upon payment of the second premium; that the options for use of dividends were limited by the policy to three, payment of the premium, withdrawal in cash, to be left to accumulate to the credit of the policy. It points to the fact that the extension agreements are special contracts granted upon payment of less than half of the premium rate and upon the express condition that the policy will lapse unless the full premium is paid at the end of the extension period, and that the dating back of the policy was at the request and for the benefit of the insured. It urges that the positions plaintiff takes are all hypothetical, and without support in the facts. A reading of the record makes it clear that the case is not one for a jury verdict; that the question here is not whether a verdict should have been instructed, but whether it should not rather have been instructed for plaintiff than for defendant.

On the face of the papers there is no doubt that defendant should have had the verdict, but plaintiff insists that it is not the way the contracts the parties made do in fact, but the way they should in law, read, which controls here. She argues that the statutes of Texas are all read into the policy contract. She insists that these statutes not only write into it the provision for extended insurance and the provision for the accrual and application of dividends contrary to the policy terms for which she contends, but they also compel the defendant to treat the extension payments, though less than half of the amounts required, as in effect installment premium payments sufficient to carry the policy to the last extension date, and to require it to use the dividends she claims had accrued to purchase extended insurance from that time. This claim is made in the face of the fact that to allow it would be to make the extension agreements, special contracts outside of the policy agreement, operate directly contrary to their express provisions and as installment premium payments. This claim is made in the face of the fact that each of these extension agreements on its face provides that at the end of the extended time, unless the premium is paid, all rights under the policy shall be the same as if each of the extensions had not been made. We think a simple statement of the facts refutes appellant's claims.

To obtain an annual saving in premium payments of $164,23, the policy sued on, though not delivered and paid for until January 12, 1924, was by agreement dated back to December 12, 1923. The policy was for $138,000, the premium $2,600 per year, a little less than $2 per month per thousand. On the date the second premium...