New York Life Insurance Co. v. Moose
Decision Date | 14 January 1935 |
Docket Number | 4-3648 |
Citation | 78 S.W.2d 64,190 Ark. 161 |
Parties | NEW YORK LIFE INSURANCE COMPANY v. MOOSE |
Court | Arkansas Supreme Court |
Appeal from Conway Circuit Court; A. B. Priddy, Judge; reversed.
Judgment reversed.
Strait & Strait and Rose, Hemingway, Cantrell & Loughborough, for appellant.
Dean Moore & Brazil, for appellee.
OPINION
Appellee sued appellant to recover total and permanent disability benefits under the terms of such provisions in a policy of life insurance held by him and issued by appellant. The policy was for $ 5,000 and was dated April 5, 1928. Premiums of $ 130.55 were payable annually on January 2, each year, with 30 days of grace. The premium due January 2, 1932, was not paid when due, nor within the days of grace, and the policy lapsed for nonpayment of this premium as of said date. On said date the policy had a cash value of $ 150, to which was added a cash dividend of $ 29.60 and dividends on deposit with appellant in the sum of $ 33.84, or a total cash value of $ 213.44. Appellee was indebted to appellant on a premium note for $ 130.55 and $ 7.19 interest thereon or a total of $ 137.74, which, deducted from the total cash value as above, left a net cash value of $ 75.70. The policy provided, in event of default in payment of premium after three full years' premiums have been paid, for the following privileges or benefits:
(A) Temporary insurance for the face of the policy
(B) If, within three months after such default, but not later, the insured desired to do so, he could surrender the policy and, instead of temporary insurance, have his policy indorsed for participating paid-up insurance in such amount as the net cash surrender value would purchase at his age at default, based on the same tables and interest rate.
(C) If the insured does not want option (B) as next above set out, he may surrender the policy for its net cash surrender value within three months but not later.
Appellee having failed to exercise either option (B) or (C) within three months, the automatic provisions of clause (A), the temporary insurance clause, continued in effect, and on May 2, 1932, appellant wrote appellee the following letter:
Appellee received this letter in due course, but made no reply to it and did nothing further in regard to same. About February 5, 1933, the agent who took the application for the policy, but who severed his connection with appellant in September, 1929, wrote appellant a letter advising it that appellee had been afflicted with tuberculosis since May, 1931, but had made no disability claim under his policy. He asked that the company do anything for him that was possible, and that appellee told him he had let his policy lapse and took extended insurance. To this letter appellant replied denying any liability on the claim because not filed within six months after default in payment of premium due January 2, 1932. On November 1, 1933, appellee wrote appellant requesting blank forms to make proof of total disability, to which appellant replied declining to consider favorably the claim and declining to send blanks.
Thereafter appellee filed this action to recover the accrued total disability benefits at the rate of $ 50 per month. Trial resulted in an instructed verdict for appellee, and the case is here on appeal.
The disability provisions of the policy are: "Upon receipt at the company's home office, before default in payment of premium, of due proof that the insured is totally disabled as above defined, and will be continuously so totally disabled for life, or if the proof submitted is not conclusive as to the permanency of such disability, but establishes that the insured is, and for a period of not less than three consecutive months immediately preceding receipt of proof has been, totally disabled as above defined, the following benefits will be granted:
The complaint alleged that appellee became disabled by reason of tuberculosis on or about June 1, 1932, and has been continuously disabled since said date. Disability, according to the complaint, occurred after default in the payment of the premium due January 2, 1932. There is no provision in the policy covering disability occurring after default. The policy provides for disability insurance in two situations or on two conditions: 1st, the receipt of proof of disability at the home office of appellant before default in the payment of premium. and, 2nd, the receipt of proof within six months after default of a disability which occurred before default. In the first case, premiums are thereafter waived during disability as defined in the policy and income payments of $ 10 per month per $ 1,000 of insurance are payable. In the second case, "the policy will be restored and the benefits shall be the same as if said default had not occurred." But proof must be made within six months after default that insured is and has been continuously from date of default so totally disabled, etc. Appellant therefore contends that the judgment should be reversed because appellee has not brought himself within either condition because he made no proof of disability before January 2, 1932, the date of default; and because he made no proof of disability occurring before January 2, 1932, within six months from that date. But appellee insists that appellant should have applied the net cash value of the policy on January 2, 1932, $ 75.70, to the payment of a semi-annual premium, so that there would not have been a default until six months later, and that, had it done so, the notice given on February 5 would have been timely. A sufficient answer to this contention is that the policy very definitely provides a different application of said sum as hereinbefore stated with two options on the part of appellee regarding same. Appellant complied strictly with said automatic provision (A) for temporary insurance. In this respect the case is ruled by the recent case of Life & Casualty Ins. Co. of Tenn. v. Goodwin, 189 Ark. 1073, 76 S.W.2d 93. The contract having expressly provided for the disposition of the net cash value in the hands of appellant after default, "we have no authority to change it, nor have we the right to refuse to enforce it," as we said in the case last cited. Therefore appellant had no right to apply it other than as provided in the policy. Cases relied upon by appellee are not in point.
It is finally insisted by appellee that there is some substantial proof that he became totally and permanently disabled in 1931, before default in premium payment, and that the matter of giving notice and making proof of disability became unimportant, as it was a...
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New York Life Ins. Co. v. Moose, 4-3648.
... 78 S.W.2d 64 NEW YORK LIFE INS. No. 4-3648. Supreme Court of Arkansas. January 14, 1935. Rehearing Denied February 18, 1935. Appeal from Circuit Court, Conway County; A. B. Priddy, Judge. Suit by Melbourne Moose against the New York Life Insurance Company. From a judgment for the plaintiff......
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