National Life & Accident Ins. Co. v. McGhee, 6 Div. 525.

Decision Date12 October 1939
Docket Number6 Div. 525.
Citation191 So. 884,238 Ala. 471
CourtAlabama Supreme Court

Rehearing Denied Nov. 9, 1939.

Appeal from Circuit Court, Jefferson County; Gardner Goodwyn, Judge.

Action on contracts of insurance by Emma McGhee against the National Life & Accident Insurance Company. From a judgment for plaintiff, defendant appeals. Transferred from Court of Appeals under Code 1923, § 7326.


McEniry & McEniry, of Bessemer, for appellant.

Ross Bumgardner, Ross & Ross, of Bessemer, for appellee.

THOMAS Justice.

The suit was in two counts based on separate insurance contracts. Count 1 declared upon an alleged renewal of accident contract of insurance on application of insured for loss alleged to be due directly and independently of all causes from a bodily injury which was sustained while, it is alleged, said policy was in force; and which was affected accidently and through external and violent means, which resulted in death within ninety days from the date of said accident.

Count 2 was upon a contract based on an application for life insurance with benefits amounting to four hundred dollars in event of death and a binder receipt providing that the benefits in effect in event of death before delivery of policy should be paid after application had been approved in the home office.

The verdict was for plaintiff for amounts sued for under both counts of the complaint.

The case, under respective policies, is thus stated by appellee:

The appellant issued its accident policy to one Senior McGhee deceased bearing date of February 22, 1937, for the sum of $175, being policy No. 16109245. There is some evidence though disputed by the appellee, that this policy lapsed for nonpayment of premiums on September 27, 1937. On November 20, 1937, Senior McGhee paid to the appellant $2.24 and made application for revival of this policy and was given a revival receipt on the regular form of the company. "The $2.24 was arrived at as follows: 5 weekly premiums at 35 cents or $1.75 to November 1, 1937, 20 per cent of two succeeding 35 cent premiums or 14 cents, and the next premium in full, totaling $2.24 and paying the premiums on this policy to November 22, 1937." This amount was paid to the appellant's agent P. P. Herring and P. P. Herring gave the insured the company's official revival receipt as follows:

"Revival Receipt
"The National Life & Accident Insurance Company, Inc.
"Home Office, Nashville, Tenn.


11-20, 1937.

"Received of Senior McGhee 2 Dollars 24 cents.

"Being premium arrears on Policy No. ______ which is accepted only as a deposit on the following conditions which are acknowledged by the applicant by acceptance of this receipt, to-wit:

"(1) Except in case of Death, or Disablement resulting from Accident occurring between the date of this receipt and date of revival the Company assumes no liability whatever until the policy is revived on the books of the Company, this to be evidenced by endorsement on the policy.
"(2) That the statements contained in the application for revival are true.
"(3) If the revival application is not approved, the amount of this deposit shall be returned to the applicant.
"(Signed) P. P. Herring.

"NOTE.--If policy is not revived by the Company the amount deposited for such revival shall be returned upon surrender of this receipt."

On this same date, November 20, 1937, Mr. Herring took Senior McGhee's application for a policy of life insurance in the sum of $400 and issued the Company's receipt therefor, in consideration of the further sum of eighty cents paid to him, as follows:

"National Life & Accident Insurance Company. Shields You.
"Received of Senior McGhee Date paid Month--11 Day--20 Year--37 Premium Received 80 Signature of Representative P. P. Herring,
"For a premium deposit on account of application for insurance to The National Life and Accident Insurance Company, made this date, the weekly premium for which is to be 40 cents per week. If the application is accepted and a policy issued, this sum will be applied to the payment of the premium thereon. If the application is rejected the amount will be returned to the applicant. No obligation is incurred by said Company by reason of this deposit, unless and until a policy is issued upon said application and delivered, and unless at the date of the delivery of said policy the person proposed to be insured is alive and in sound health, except that if the person proposed to be insured is now alive and in sound health and the amount paid by or for such person at the time the application is written is not less than the amount of two weekly premiums, and this receipt covering said payment, is surrendered to the Company, the Company agrees, if the application is approved at the Home Office in Nashville, Tennessee, that should death occur prior to the issuance and or delivery of the policy or should applicant by reason of accident be totally disabled within the meaning of the policy applied for prior to the issuance and or delivery thereof, or should the applicant by reason of accident suffer dismemberment within the meaning of the policy applied for, or by reason of accident suffer the loss of sight of both eyes prior to the issuance and or delivery thereof, it will nevertheless pay such amounts as would have been due under the policy if issued and delivered, provided, however, such death or accident, resulting in any of said disabilities, occur within twenty-one (21) days of the date and signing of this application, otherwise, this receipt and the insurance granted hereunder shall be null and void, and the premium paid will be returned. No obligation is assumed by the Company unless the application is so approved, and the person proposed for insurance is now alive and in sound health.
"Disability benefits for illness, if provided for in the policy applied for, are payable only if such disability begins or occurs after the date of delivery of the policy.
"The National Life & Accident Insurance Company, Inc.

"Be Careful of This Receipt, It Is Valuable.

"If the holder of this receipt does not receive a Policy of Insurance or the return of the money herein receipted for, within three weeks, write, stating name of Agent and particulars, to The National Life & Accident Insurance Company, 301 Seventh Avenue, North, Nashville, Tennessee."

The evidence shows that on November 20, 1937 (Saturday), Mr. Herring took Senior McGhee's application; that on the following Wednesday Senior McGhee left his home in Jefferson County, stating that he was going to Georgia for a hunting trip over Thanksgiving and November 24, 1937, was the last day that the appellee, who is his wife, saw him alive. Thanksgiving day in 1937 was on November 25th, and, as usual, was on a Thursday. The appellee next saw her husband on November 27, 1937, and he was then dead, and when she saw him on the 27th some men were bringing him out of the creek near their home.

Mr. Herring testified that he received notice after Senior McGhee's death that the accident policy for $175 was revived. As to this the agent testified as follows:

"This is the revival receipt (indicating) that I gave him. I can't recall which one I gave that receipt to, but this is the receipt I written out there. It shows receipt of $2.24. I figured that $2.24 as five weeks in full arrears which would be $1.75, and 20 per cent of the remaining weeks up until the date it is supposed to be revived, and then one advance week. We do not charge a 20 per cent penalty, but we gave him a 20 per cent discount on the remaining weeks; he was then five week up to date. This is that revival application that he signed (indicating); he signed it himself. There is printed on that revival application the following: 'I hereby declare that I have collected all the arrears on the above policy; that I have personally seen the party formerly insured under that policy; that he appears to be the age stated above and in good health. I therefore advise the Company to revive the policy.' I signed that statement. I also wrote on there that the premiums on the policy were paid up to November 22, 1937. The Lapse Sheet shows that Senior McGhee was delinquent on September 27th. There is no reason why this payment of $2.24 would not pay him up to November the 22nd. If I can get a calendar with the Mondays on it I can figure that out. Here is the 9th, 27th, that would be $1.75 full arrears up to November the first. I collected two weeks at seven cents, or 20 per cent of the face of the premium; that would be 14 cents; that put it up to the 14th. I collected one advance premium which is stated on the application, and that put it up to November the 22nd. When I had the revival receipt signed I did not take up the old policy, and I wasn't supposed to. It is true that the policy contains this clause: 'Policies having lapsed may be revived at the option of the Company upon written application of the insured showing satisfactory evidence of insurability, and upon payment of all premiums in arrears; provided that the Company's consent to such revival shall appear by endorsement in the space provided, and that there shall be no liability whatever under this contract for any disability or accidental death or any specific losses mentioned in Schedule A resulting from an accident occurring or illness contracted or commencing prior to the date of the revival endorsement hereon as aforesaid.' But the company sends the endorsement, and we had it here a while ago, or sample of it; that is their official stamp, and it is put on the policy itself whenever it is revived. The Revival Endorsement is supposed to be pinned on the policy on the date it is received. ...

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