Lincoln Nat. Life Ins. Co. v. Hammer

• Decision Date: 19 April 1930
• Docket Number: No. 8623.,8623.
• Citation: 41 F.2d 12
• Parties: LINCOLN NAT. LIFE INS. CO. OF FORT WAYNE, IND., v. HAMMER et al.
• Court: U.S. Court of Appeals — Eighth Circuit

41 F.2d 12 (1930)

LINCOLN NAT. LIFE INS. CO. OF FORT WAYNE, IND., v. HAMMER et al.

No. 8623.

Circuit Court of Appeals, Eighth Circuit.

April 19, 1930.

COPYRIGHT MATERIAL OMITTED

Herbert G. Nilles, of Fargo, N. D., and F. B. Shoaff, of Fort Wayne, Ind. (R. F. Baird and Clyde J. Cover, both of Fort Wayne, Ind., and M. W. Murphy and Aubrey Lawrence, both of Fargo, N. D., on the brief), for appellant.

Francis Murphy, of Fargo, N. D. (W. H. Shure, of Fargo, N. D., on the brief), for appellees.

Before STONE and VAN VALKENBURGH, Circuit Judges, and DAVIS, District Judge.

As Modified.

VAN VALKENBURGH, Circuit Judge.

Halvor S. Halvorson, a resident and citizen of the state of North Dakota, died intestate on the 24th day of December 1926. Appellee Hammer is administrator of his estate; the remaining appellees are his widow and children. November 24, 1922, appellant, a life insurance company of Fort Wayne, Ind., and a citizen and resident of that state, issued to the deceased a five-year term policy of life insurance by which, in consideration of an annual premium of $213, it agreed to pay, subject to certain conditions and stipulations, and upon proof of death of the insured, the sum of $15,000 to his estate. Among other things, this policy provided that, if the annual premium accruing should not be paid when due, nor within thirty-one days thereafter, said policy should lapse, become null and void, and of no legal effect. The policy also contained the following reinstatement clause:

"Should this policy lapse it may be reinstated at any time upon the insured furnishing evidence of insurability satisfactory to the Company and paying all premium arrears with interest at six per cent per annum compounded annually."

The premium on said policy of $213 which fell due on November 24, 1925, was not paid; and on or about November 25, 1925, the insured applied to and requested of appellant an extension of time for the payment of said premium; at the same time he executed a certain agreement, in writing, subject to approval by appellant, which was submitted to appellant at Fort Wayne, Ind., and was there accepted by it. This agreement was in the following terms:

"Nov. 25, 1925.

"On or before February 24, 1926, for value received, I promise to pay to the order of The Lincoln National Life Insurance Company, at its Home Office in Fort Wayne, Indiana, Two Hundred Thirteen and No/100 Dollars, with interest at the rate of six per cent per annum from December 24, 1925.

"This note, together with ....... Dollars in cash, is tendered to said Company by the maker upon the understanding and agreement that it shall not be binding upon the maker until it is accepted by the Secretary or an Assistant Secretary of said Company, and if and when accepted, such acceptance shall be upon the following express agreement, to-wit:

"That although the ...... annual premium due on the 24th day of November, 1925, on Policy No. 115466 has not been paid, the insurance thereunder shall be continued in force until midnight of the due date of this note. That if this note is paid on or before the date it becomes due, or within fifteen days thereafter, such payment, together with said cash, if any, will then be accepted by the Company as payment of said premium, and all rights under said policy shall thereupon be the same as if said premium had been paid when due. That if said Company, in its discretion, should hereafter extend the time of payment of this note or if in its discretion it should hereafter accept any payment on this note less than the full amount due hereon, and in consideration thereof, extend the time of payment of this note, such extension and/or payment shall not be considered as a payment upon any premium due under said policy, unless and until payment in full of the amount due under this note, with interest, shall have been received on or before the expiration of such extension or within fifteen days thereafter, and such part payment, if accepted, and/or extension if granted, shall have no effect except as stated in the extension agreement or receipt for such payment then issued by the Company. That if this note is not paid on or before the date it becomes due, or within fifteen days thereafter or within fifteen days after the expiration of any extension hereof, it shall thereupon automatically cease to be a claim against the maker and said policy shall become void and shall be deemed to have ceased and terminated on the date when said premium was due and payments thereon forfeited, except as to the right to a surrender value, or a paid-up policy or other rights as in the policy provided on and from the day when said premium became due, and said Company shall retain said cash, if any, and/or any part payment on this note, if accepted, as a part compensation for the rights and privileges hereby granted, and all rights under said policy shall be the same as if said cash, if any, and/or any part payment on this note, if accepted, had not been paid, nor this agreement made. That said Company has duly given every notice required by its rules, or by the laws of any state in respect to said premium, and in further compensation for the rights and privileges hereby granted, the maker hereof has agreed to waive, and does hereby waive, every other notice with respect to said premium or this note, or any extension thereof, it being well understood by the said maker that said Company would not have accepted this agreement if any notice of any kind were required as a condition to the full enforcement of all its terms.

"$213.00 "Form No. 391 "Name "Address "Name Halvor S. Halvorson "Address .........................."

This so-called "blue" note was not paid on or before the period of extension, nor within fifteen days thereafter. Appellant at once forwarded to the insured notice that his policy had lapsed, and offered him opportunity for reinstatement as follows:

"Dear Sir:

"Your Policy No. 115466 has lapsed for non-payment of the premium note due February 24, 1926.

"We cannot believe you desire to lose the protection this policy has afforded you and your dependents, and therefore we now offer you the opportunity to reinstate it. The application for reinstatement on the reverse side of this letter may be used if you act promptly. It will not be necessary for you to consult a physician in filling out this form, your own signed statements will be sufficient. If your application indicates that you are in an insurable condition satisfactory to the company, the Policy will be reinstated upon payment of the past due premium with interest.

"If it is impossible for you to remit the full premium with your application for reinstatement, send us such an amount as you are able to, advising us when you can remit the balance. We will undoubtedly be able to take care of it in a manner satisfactory to you.

"We await your reply with interest. "Very truly yours "E. A. Schmallen "Cashier."

Halvorson immediately executed the form inclosed to him, and forwarded it to appellant at Fort Wayne, Ind. It reads thus:

"Application to the "Lincoln National Life Insurance Company "Home Office, Fort Wayne, Indiana "For reinstatement of Policy No...... which lapsed on the...... day of ...... 19..

"I hereby apply for the reinstatement of the above numbered Policy and, for the purpose of obtaining this reinstatement and as a basis of such reinstatement, I make the following statements and I represent to said Company that, since the issuance of this Policy, there has been no change in my customary occupation nor deaths in my immediate family from tuberculosis; that no application for life insurance or for the reinstatement of life insurance has been made without the issuing or reinstating of such insurance; and that no application for insurance on my life is now pending:

"(If there is any exception to the above, write it out here fully)

...............................

"I further represent that I am now in good health and of temperate habits and that since the date of issuance of this Policy I have had no injury, ailments, nor illness, neither have I consulted a physician for any cause except as noted below:

..............................

"Illness or injury Date Physician and his address ..............................

"I agree that I have stated all exceptions to the above statements and that, if at any time within two years any of the statements herein shall be found to be untrue in any respect, the Company shall have the right to declare null and void and of no effect the reinstatement of said Policy, if granted by the Company upon this Application.

"I also further agree that this Policy shall not be considered reinstated until this Application shall be approved by the Company at its Home Office, and that any payment of premium made by me in advance shall not be binding upon the Company until this Application is so approved. If said Policy is not reinstated, I agree to accept the return of all advance payments in connection with this Application without interest and to surrender the receipt received for such sums.

"Dated at Cooperstown this 16 day of March, 1926.

"Halvor S. Halvorson "Signature of Applicant. "H. J. Kolstead "Witness"

As stated, the insured died in the following December. The physician who attended the deceased in his last illness certified that the cause of death was "Uraemic Coma-Nephritis." In answer to the question, "When did health first become impaired?" the physician answered: "1 yr. ago following after pneumonia then got the Flue & this Nephritis followed." This certificate was executed January 14, 1927. The record contains the testimony of two physicians, who attended deceased in October and November, 1925, that he was then suffering from pneumonia, following influenza; that there were expectorations of blood, severe cough, rales in the lungs, shortness...