Jordan v. John Hancock Mutual Life Insurance Co.

• Decision Date: 29 April 1955
• Docket Number: No. 11341.,11341.
• Citation: 222 F.2d 210
• Parties: Walter S. JORDAN, Plaintiff-Appellant, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

222 F.2d 210 (1955)

Walter S. JORDAN, Plaintiff-Appellant, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 11341.

United States Court of Appeals Seventh Circuit.

April 29, 1955.

Wilbur F. Dassel, Winfield K. Denton, Evansville, Ind., for appellant.

Frederick P. Bamberger, Evansville, Ind., Edmund F. Ortmeyer, William P. Foreman, Evansville, Ind., for defendant-appellee.

Before DUFFY, Chief Judge, and MAJOR and SWAIM, Circuit Judges.

SWAIM, Circuit Judge.

This action was filed July 24, 1951, on two policies of life insurance to recover indemnity payments of $50 per month on each policy for total and permanent disability of the insured, which disability occurred on October 8, 1937.

The defendant, John Hancock Mutual Life Insurance Company, on February 8, 1930, executed and delivered to the plaintiff, Walter S. Jordan, four identical policies of life insurance which were numbered 1808859 to 1808862, both inclusive. These policies are hereinafter sometimes referred to as numbers 59, 60, 61 and 62, respectively. Premiums of $77.95 were payable quarterly on each of these policies on the eighth day of February, May, August and November of each year. Each of these policies insured the life of the plaintiff for $5,000 and, in consideration of an additional yearly premium of $33.25, also provided that:

"If, after the payment of the initial premium under this contract and under the policy, and before default in the payment of any subsequent premium, and during the continuance of the policy in full force, due proof shall be presented during the lifetime of the insured that prior to the anniversary of the policy nearest his sixty-fifth birthday the Insured:

"A. Has become totally and permanently disabled * * *

"the Company will grant the following benefits:

"1. Waive the payment of further premiums due after the commencement of such disability, and

"2. Pay to the Insured, * * * for each completed month from the commencement of disability and throughout its continuance, a sum equal to one percentum of the face amount of the policy exclusive of any policy additions.

* * * * * *

"Within six months after the due date of any premium in default, provided no previously due premium is also in default, this policy will be reinstated and disability benefits shall be the same as if policy had not lapsed if due proof as before provided shall be presented that total disability existed at date of default and will continue for life or has continued for ninety consecutive days."

The parties stipulated the following facts: These four policies were issued by the defendant to the plaintiff on February 8, 1930, and on October 8, 1937, the plaintiff became permanently and totally disabled with a disease of the heart. The quarterly premiums which became due on policies 61 and 62 on February 8, 1940, and all subsequent premiums on those two policies were neither paid by the plaintiff nor by anyone else in his behalf. As of February 8, 1940, each of said policies had a total cash surrender value of $886.96 which was reduced by loans and interest on the loans to a net cash surrender value of $52.03. On March 8, 1940, the plaintiff mailed to Dan W. Flickinger, the General Agent of the defendant in Indianapolis, Indiana, two checks totaling $130.76. This amount was paid and credited to the payment of the quarterly payments due on February 8, 1940, on policies 59 and 60. A letter from Flickinger to the plaintiff, dated March 9, 1940, thanked the plaintiff for the remittance covering "the quarterly premiums and interest due February 8th under policies No. 1808859-60," and there were enclosures of official receipts of the defendant showing the application of these payments to policies 59 and 60. This letter also expressed the hope that the plaintiff would be able to send an additional remittance of $130.76 and that policies 61 and 62 might be reinstated.

The records in the home office of the defendant indicated that policies 61 and 62 had been surrendered, subject to return of contracts, as of April 24, 1940, and the company's check for the amount of the surrender value had been returned thereon on June 5, 1940. On June 17, 1940, Flickinger wrote a letter to the plaintiff, which the plaintiff received, and in which Flickinger made the following statement: "We have your letter of the 14th enclosing your two present policies Nos. 1808861-62, as well as the surrender papers which we are sending to our home office today and, assuming that our records show the correct amount of the surrender value, they will send us a check for $104.04." The defendant then made entries on its home office records showing that policies 61 and 62 had been surrendered on June 1, 1940.

The two policies, numbered 61 and 62, "were surrendered to the defendant and, pursuant to the surrender papers executed by the plaintiff, a check for the total net cash surrender value of both policies, 1808861 and 1808862, in the amount of $104.06 was mailed by the defendant to the said Dan W. Flickinger * * *" who applied that amount to the partial payment of $155.90, the amount of the premiums then due on policies 59 and 60, and the balance of $51.84 was then paid by the plaintiff.

On August 12, 1941, the plaintiff mailed to Flickinger a letter which stated that he (plaintiff) had not worked since October 8, 1937; that at that time he was carrying with the defendant $20,000 life insurance with total disability clause; that plaintiff just kept thinking he would get better and be able to work again so he did not file a claim for disability at that time; and that, rather than file a claim, he dropped $10,000 of the insurance, thinking that he would surely be able to work again and pay for that amount. This letter explained plaintiff's disability and indicated his willingness to leave it to the defendant to figure out the disability payments to which he was entitled. With this letter the plaintiff also submitted statements from a representative of his former employer and from two doctors as to his disability. On August 30, 1941, plaintiff executed and mailed to Flickinger a formal statement of his claim for disability payments on policies 59 and 60. This proof of claim was on a printed form furnished him by the defendant. This proof of claim and the supporting medical statements were forwarded by Flickinger to the claim department of the defendant's home office. The defendant, on September 25, 1941, approved the plaintiff's claim for disability payments on policies 59 and 60, allowed the claim from October 8, 1937, and paid the plaintiff the total sum of $7,194.40, which amount included payments of $100 per month from October 8, 1937, a refund of premiums paid on plaintiff's policies 59 and 60 since the time of his disability and waived the payment of any further premiums on said two policies. Since that time the defendant has waived the payment of any further premiums on policies 59 and 60 and, since said settlement, has paid the plaintiff $100 per month pursuant to the provisions of the policies.

Nothing further happened between the parties until October 21, 1950, nine years later, when the plaintiff wrote the defendant a letter in which plaintiff recited the fact that he had claimed disability benefits under policies 59 and 60 in 1941 and that the company had recognized and allowed his claim for total disability as of October 8, 1937. In this letter the plaintiff asked that the defendant also allow and pay total disability benefits from October 8, 1937, on policies 61 and 62, the two policies which plaintiff had surrendered and on which the company had paid, and plaintiff had received, the net cash surrender value. This request was refused by the defendant, and the plaintiff then filed this action.

In his complaint the plaintiff alleged that he had performed all conditions precedent on his part to be performed under policies 61 and 62 and demanded payments of disability benefits on these two policies, together with interest thereon from the date each of said $50 payments became due.

In its answer to the complaint the defendant alleged the failure of the plaintiff to pay the premiums on policies 61 and 62 due February 8, 1940, the surrender of these two policies by the plaintiff, and the payment to the plaintiff of the full cash surrender value therefor. Defendant denied that plaintiff had performed all conditions precedent on plaintiff's part to be performed under the policies and alleged that plaintiff failed to file due proof of his disability during the continuance of said policies in full force or within six months after the due date of any premiums in default.

The only evidence before the trial court consisted of the above mentioned stipulation by the parties as to the facts, to which were attached, as exhibits, the policies in question, various records, such as receipts for the payment of the premiums, correspondence between the parties as to the policies, records of the defendant as to the surrender and return of the policies, the notice and proof of loss on policies 59 and 60 which were submitted by the plaintiff, and, finally, correspondence between the parties concerning the question as to the defendant's liability on the two surrendered policies.

Pursuant to the...