Northwestern Mut. Life Ins. Co. v. Pickering

• Decision Date: 23 October 1923
• Docket Number: 4137.
• Citation: 293 F. 496
• Parties: NORTHWESTERN MUT. LIFE INS. CO. v. PICKERING. [1]
• Court: U.S. Court of Appeals — Fifth Circuit

293 F. 496

NORTHWESTERN MUT. LIFE INS. CO. v. PICKERING. ^[1]

No. 4137.

United States Court of Appeals, Fifth Circuit.

October 23, 1923

Sam P Maddox, of Dalton, Ga. (H. N. Laflin, of Milwaukee, Wis., and Maddox, McCamy & McFarland, of Dalton, Ga., on the brief) for plaintiff in error.

John D Little, Arthur G. Powell, Marion Smith, and Max F. Goldstein all of Atlanta, Ga. (Chas. N. King, of Chatsworth, Ga., and Little, Powell, Smith & Goldstein, of Atlanta, Ga., on the brief), for defendant in error.

Before WALKER and BRYAN, Circuit Judges, and GRUBB, District Judge.

WALKER Circuit Judge.

This action was brought in July, 1922, by the defendant in error, as administrator of the estate of Ralph M. Harris, deceased, on a policy of life insurance issued by the plaintiff in error to said Harris on July 2, 1920; such policy being payable to the personal representative of the deceased insured. The parties are herein referred to by their designations in the court below. The instrument sued on, a copy of which was attached to and made a part of the petition, contained the following provisions:

'This policy shall be incontestable after one year from its date of issue, except for a nonpayment of premium. * * * This policy may be reinstated at any time within three years succeeding default in premium payment, but not later than five years from its date, upon evidence satisfactory to the company of the insurability of the insured, and payment of the premium arrears, with interest at the rate of 5 per cent. per annum.'

The petition alleged that said insured died on the 7th day of December, 1921, that plaintiff was appointed and qualified as administrator of the deceased's estate on the 11th day of February, 1922, and prior thereto, to wit, on the 16th day of December, 1921, was appointed and qualified as temporary administrator. The defendant excepted to the action of the court in sustaining a motion of plaintiff to strike paragraphs of defendant's answer to the petition which alleged as follows: The insured's application, which was attached to the original policy, stated in substance, in answer to questions, that he occasionally took a social drink, at most three or four drinks a year, that he did not use intoxicating liquors habitually, that he had not used them to the extent of intoxication during the preceding ten years, and that he had never taken treatment for alcoholic habits. At the expiration of the first year after the issuance of said policy, said Harris having failed to pay the second year's premium, the policy lapsed pursuant to its terms.

In accordance with the terms of the policy said Harris, on September 19, 1921, made his written application to defendant for the reinstatement of said policy. In that application, in reply to questions asked as to his habits as to the use of intoxicants, he stated that they were the same as at the time of his application for the policy, he taking an occasional drink. Acting on that statement, and believing the same, and being materially influenced thereby, defendant reinstated said policy, upon Harris paying the premium thereon for an additional term. Said last-mentioned statement was false and untrue, and was known to Harris to be false and untrue, and was made willfully and intentionally, and for the purpose of deceiving defendant and inducing it to reinstate said policy. Defendant did not know of the truth of deceased's habits in the use of intoxicants until plaintiff had submitted proofs of said death. The proofs of death consisted of a certified copy of a verdict of a coroner's jury finding that deceased, having been on a continued spree for some days, his system became depleted and he froze to death.

At once upon the discovery of said fraud, defendant elected to rescind said insurance contract, repudiated its liability on said policy, notified the plaintiff of such repudiation, and tendered him the amount of the premium paid by Harris when the policy was reinstated, with interest thereon. Defendant refused to accept same, and plaintiff has been at all times ready and willing to pay the same to plaintiff, and now tenders the same. The defendant's repudiation of its liability was made by its attorney, on or about April 11 1922, tendering the premium paid by said Harris when the policy was...