Lillian Slocum v. New York Life Insurance Company

Citation33 S.Ct. 523,57 L.Ed. 879,228 U.S. 364
Decision Date21 April 1913
Docket NumberNo. 20,20
CourtU.S. Supreme Court

[Syllabus from pages 364-366 intentionally omitted] Messrs. George E. Shaw and Daniel B. Henderson for petitioner.

Messrs. James H. McIntosh and George B. Gordon for respondent.

Mr. Justice Van Devanter delivered the opinion of the court:

This was an action in the circuit court for the western district of Pennsylvania on a policy of insurance on the life of Alexander W. Slocum. The policy was for $20,000, was an ordinary life contract on the twenty-year accumulation plan, was payable to the executors, administrators, or assigns of the insured, became effective November 27, 1899, and called for the payment of a premium of $579.60 on each anniversary of that date. It made provision for interest-bearing loans by the company to the insured on terms stated, and also contained the following stipulations:

'This policy is automatically nonforfeitable from date of issue, as follows:

'First. If any premium is not fully paid, and if there is no indebtedness to the company, this policy will be indorsed for the amount of paid-up insurance specified in the table on the second page hereof, on written request therefor within six months from the date to which premiums were duly paid. If no such request is made, the insurance will automatically continue from said date for $20,000 for the term specified in said table, and no longer.

'Second. If any premium or interest is not duly paid and if there is an indebtedness to the company, this policy will be indorsed for such amount of paid-up insurance as any excess of the reserve held by the company over such indebtedness will purchase according to the company's present published table of single premiums, on written request therefor within six months from the date to which premiums were duly paid. If no such request for paid-up insurance is made, the net amount that would have been payable as a death claim on the date to which premiums were duly paid will automatically continue as term insurance from such date, for such time as said excess of the reserve will purchase according to the Company's present published table of single premiums for term insurance, and no longer.

'Grace in payment of premiums.—A grace of one month, during which the policy remains in full force, will be allowed in payment of all premiums except the first, subject to an interest charge at the rate of 5 per cent per annum.

'General provisions.—(1) Only the president, a vice president, the actuary, or the secretary has power in behalf of the company to make or modify this or any contract of insurance, or to extend the time for paying any premium; and the company shall not be bound by any promise or representation heretofore or hereafter given by any person other than the above. (2) Premiums are due and payable at the Home Office, unless otherwise agreed in writing, but may be paid to an agent producing receipts signed by one of the above-named officers and countersigned by the agent. If any premium is not paid on or before the day when due, or within the month of grace, the liability of the company shall be only as hereinbefore provided for such case.'

The insured died December 31, 1907, and the action was brought by his executrix. In the plaintiff's statement of claim recovery was sought upon two grounds: First, that all premiums prior to the one of November 27, 1907, had been duly paid; that the premium of that date had been adequately adjusted on December 27, 1907, the last day of grace, by an agreement between the insured's wife, acting in his behalf, and a duly authorized agent of the company, whereby the wife made, and the agent accepted, a payment of $264.20, which was to carry the policy along until May 27, 1908, and whereby the agent was to accept from the insured a 'blue note' for $434, payable May 27, 1908, as covering the balance of the premium; and that the company had adopted and confirmed the acts of its agent in that regard; second, that, independently of the adjustment of that premium, the company, on November 27, 1907, held a reserve on the policy sufficiently exceeding any indebtedness of the insured to the company to continue the policy in force, under the latter part of the automatic nonforfeiture provision before quoted, beyond the date of his death, and that in consequence of this the policy was in full force when he died. The company entered a plea of nonassumpsit, and also filed an affidavit of defense, denying the alleged adjustment of the premium of November 27, 1907, as also the existence of any reserve on the policy in excess of the indebtedness of the insured to the company, and otherwise adequately setting up the defenses presently to be noticed. The issues so presented were tried before the court and a jury. At the conclusion of all the evidence, the defendant requested the court to direct a verdict in its favor, which the court declined to do, and the company excepted. A general verdict for the plaintiff was returned, assessing the recovery at $18,224.02, which sum was ascertained by deducting from the amount of the policy a loan of $2,360 from the company to the insured and $434, the amount of the intended blue note, and then allowing interest on the remainder from the date when proofs of death were submitted to the company to the date of the verdict.

The company moved for judgment in its favor on the evidence, notwithstanding the verdict, but the motion was denied, the company excepting, and judgment was entered for the plaintiff. A bill of exceptions, embodying all the evidence with the rulings and exceptions was seasonably presented and allowed, and the case was taken on writ of error to the circuit court of appeals, where error was assigned on the refusal to direct a verdict for the defendant and on the denial of the motion for judgment notwithstanding the verdict. That court reversed the judgment, with a direction to sustain the latter motion, on the ground that the evidence did not legally admit of the conclusion that the policy was a subsisting contract of insurance at the date of the insured's death. 101 C. C. A. 56, 177 Fed. 842. A writ of certiorari then brought the case here.

The questions now to be considered are, first, whether the circuit court of appeals erred in reversing the judgment, and, second, if it did not err in that regard, whether it should have awarded a new trial instead of directing a judgment for the defendant on the evidence notwithstanding the verdict for the plaintiff.

As a preliminary to the consideration of the first question it may be well to repeat what this court often has said, that when, on the trial of the issues of fact in an action at law before a Federal court and a jury, the evidence, with all the inferences that justifiably could be drawn from it, does not constitute a sufficient basis for a verdict for the plaintiff or the defendant, as the case may be, so that such a verdict, if returned, would have to be set aside, the court may and should direct a verdict for the other party. Randall v. Baltimore & O. R. Co. 109 U. S. 478, 27 L. ed. 1003, 3 Sup. Ct. Rep. 322; Delaware, L. & W. R. Co. v. Converse, 139 U. S. 469, 35 L. ed. 213, 11 Sup. Ct. Rep. 569; Southern P. Co. v. Pool, 160 U. S. 438, 40 L. ed. 485, 16 Sup. Ct. Rep. 338; Patton v. Texas & P. R. Co. 179 U. S. 658, 45 L. ed. 361, 21 Sup. Ct. Rep. 275. The recognized mode of invoking the application of this rule is by preferring, at the conclusion of the evidence, a request for a directed verdict, and the ruling on such a request is subject to re-examination and approval or disapproval on writ of error in like circumstances and in like manner as are other rulings in matter of law during the course of the trial.

The case made by the evidence, in that view of it which is most favorable to the plaintiff, was as follows:

The plaintiff's right to recover if the policy was a subsisting contract of insurance at the date of the insured's death, and the latter's compliance with the terms and conditions of the policy other than the payment of the premium of November 27, 1907, were conceded. The month of grace allowed for the payment of that premium expired four days before the insured died. He had been seasonably and regularly notified of the time when the premium would fall due and of the consequences which would follow a default in its payment. But it had not been paid or adjusted, unless a payment or adjustment was effected by the negotiations and transactions presently to be recited.

When the premium fell due the insured was indebted to the company in the sum of $2,360 for money theretofore borrowed under the policy, and that sum represented the full amount of the reserve on the policy. If there had been no loan, the automatic nonforfeiture provision before quoted and the reserve would have entitled the insured, if he so elected, to a paid-up insurance of $4,000 for the full period of his life, and in the absence of such an election would have operated to continue the policy in force for the full sum of $20,000 for a period of seven years and seven months, without payment of further premiums. But as the insured had borrowed the full amount of the reserve, there was no excess applicable to a continuance of the insurance in either mode. Thus the policy expired according to its own terms before the death of the insured, unless a pay- ment or adjustment of the premium of November 27, 1907, was effected in the manner already suggested.

While the policy provided that only the president, a vice president, the actuary or the secretary of the company had power in its behalf to modify the terms of that or any other policy, or to extend the time for paying any premium, the company had qualified this provision by adopting a plan of adjusting the payment of premiums, whereby its agents were authorized to...

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