Penn Mut. Life Ins. Co. of Philadelphia v. Bobbitt

• Decision Date: 16 May 1939
• Citation: 137 Fla. 838,188 So. 843
• Parties: PENN MUT. LIFE INS. CO. OF PHILADELPHIA v. BOBBITT.
• Court: Florida Supreme Court

188 So. 843

137 Fla. 838

PENN MUT. LIFE INS. CO. OF PHILADELPHIA v. BOBBITT.

Florida Supreme Court

May 16, 1939

Rehearing Denied June 1, 1939.

Error to Circuit Court, Pinellas County; John I. Viney, Judge.

Action on life policy by Rita Belle Bobbitt, a widow, against the Penn Mutual Life Insurance Company of Philadelphia, a foreign corporation. To review a judgment for the plaintiff, the defendant bring error.

Reversed.

COUNSEL Kelly & Casler, of Clearwater, for plaintiff in error.

Thomas Hamilton and Sheldon A. Lindsey, both of Clearwater, for defendant in error.

OPINION

BUFORD Justice.

The writ of error brings for review judgment in favor of the plaintiff.

The record shows that the policy was issued to Aubrey M. Bobbitt on the 9th day of September, 1930, in the sum of $5,000.

The amended declaration filed September 29th, 1936, alleged:

'On the ninth day of September, A. D. 1930, in consideration of the payment by Aubrey M. Bobbitt of the sum of $59.05 and of the like sum on the ninth day of December, March, June and September in each year thereafter during the continuance of the policy of insurance, the defendant made and delivered to Aubrey M. Bobbitt, in the sum of $5,000.00, said policy made payable to Rita Belle Bobbitt wife of the said Aubrey M. Bobbitt; that the said Aubrey M Bobbitt duly fulfilled all the conditions of said insurance on his part, including the payment of premiums as aforesaid. On the fourth day of May, A. D. 1934, Aubrey M Bobbitt died at Clearwater, Florida, leaving as beneficiary of the above described policy his wife, Rita Belle Bobbitt, the plaintiff herein; that upon the death of Aubrey M. Bobbitt, as aforesaid, there became due and payable under the terms of the said policy of insurance from the said defendant the sum of $5,000.00 to be paid as provided in said policy; together with a reasonable sum as fees and compensation for the plaintiff's attorney in prosecuting this suit, all of which will more fully appear by copy of said policy of insurance, which is attached to the Bill of Complaint, heretofore filed in this cause and made a part of this amended declaration.

'But this plaintiff has not been paid the said sum, or sums of money, or any part thereof, by the said defendant, wherefore, she brings this her suit and claims the sum of $10,000.00 damages.'

The amended third plea was as follows:

'That on or about the 9th day of September, 1930, it made and delivered its policy of insurance on the life of Aubrey M Bobbitt, and that by the terms of said policy the defendant agreed to pay to the beneficiary designated in said policy in event of the death of the said Aubrey M. Bobbitt, the sum of $5,000.00, only upon the condition that the premiums thereon were duly paid on or before the respective dates when due, and that insured perform all the other conditions required in said policy to be performed by him; and that said sum was to be paid at the home office in the City of Philadelphia, or to its agent; And defendant avers that said contract was made in consideration of the written application of the insured which was made a part thereof, and in further consideration of the sum of $59.05, to be paid in advance, the payment of a like sum on the 9th day of December, 1930, and the payment of a like sum on the 9th day of March, June, September and December in every year thereafter, during the continuance of said policy, and for no other consideration, as will more fully appear by copies of said policy of insurance attached to the Bill of Complaint, in chancery action No. 17,591, and by reference thereto made a part hereof, the same as if incorporated herein. The defendant says that before the lapse of said policy hereinafter alleged on, to-wit: the 7th day of March, 1933, the said Aubrey M. Bobbitt obtained from said defendant loans on said policy in the amount of $203.16, which said amount was determined in the following manner; the said insured borrowed from defendant, on the 30th day of April, 1932, sufficient funds to pay the premiums due on said policy in December, 1931, and March 1932, which amount was $118.10, less $18.48 dividend accruals, or a total of $99.62, as represented by a Certificate of Outstanding Lien, duly signed by insured, a true copy of same being attached to Pleas to Declaration filed by the defendant in this cause, and by reference thereto made a part hereof, the same as if incorporated herein; the quarterly premium of $59.05 due June 9th, 1932, was paid by a loan of said amount to plaintiff by this defendant, pursuant to a request for lien note settlement, duly signed by insured, a true copy of said request being attached to Pleas to Declaration filed by the defendant in this cause, being marked Defendant's Exhibit 'B', and by reference thereto made a part hereof, the same as if incorporated herein; the quarterly premium due September 9th 1932 of $59.05 was paid by a loan of asid amount to plaintiff by this defendant, pursuant to a request for lien note settlement, duly signed by insured, a true copy of said request being attached to Pleas to Declaration filed by the defendant in this cause, being marked Defendant's Exhibit 'C' and by reference thereto made a part hereof, the same as if incorporated herein; subtracted from the last two notes were dividend accruals of $9.24 and $9.82 respectively, and interest of $4.50 added, making a total of $203.16 which amount was never repaid to defendant. Defendant further says that the premium payment of $59.05 due on December 9th 1932, was never paid, either by loan or otherwise, nor was any payment made to defendant, by loan or otherwise, on account of the premiums accruing on said policy subsequent to the loan for the premium due September 9, 1932. The defendant avers that it was provided by the terms of said policy that, in case of default in the payment of premium after two years premium had been paid in full, the insurer would, subject to existing indebtedness, extend authomatically the face amount of policy as Term Insurance, without participation, for such period as provided by the table included in, and made a part of, said policy; or purchase paid up participating life insurance under proper written application within one month from date of lapse; or pay the cash value of the policy upon proper release and delivery of this policy within one month from the date of lapse, and it was further provided that, if at the time of default in the payment of any premium there should be any indebtedness on account of the policy, then the said options of settlement should be correspondingly reduced; and defendant says that at the time of said default in the payment of premiums there was an indebtedness on account thereof in the amount hereinbefore stated, whereby the term of extended insurance was reduced to the period hereinafter mentioned. Defendant further avers that on March 7th, 1933, it sent a notice of lapse to said insured; that said insured did not demand the cash value of the policy, or paid up participating life insurance, but elected to take advantage of the provision thereof to have the same automatically extended for the period therein provided, which, in the event there had been no indebtedness against the policy, would have been for such period as provided by the table included in and made a part of, said policy, * * * but defendant says that the option of settlement by way of extended insurance for such period was applicable only in case there was no indebtedness against the policy, it being (31c) * * * which said term would have been for a term of three (3) years 152 days from December 9, 1932, expressly provided in said policy that '* * * the extended insurance shall be for the face amount of this policy, less any indebtedness and for such a term as such increased or diminished cash value will provide', and that at the time of the lapse of said policy there was an indebtedness on account thereof amounting to $203.16, plus interest in the amount of $3.05, or a total of $206.21 for loans and interest thereon from the defendant to the insured, that upon lapse of the policy for failure to pay the said December 1932 quarterly premium there remained, on account of the aforesaid indebtedness, the sum of $58.20 to the credit of the said policy to purchase extended insurance, the said $59.20 cash value being determined upon a basis that two and one quarter years premiums had been paid, as hereinbefore alleged, which gave the said policy a cash surrender valud of $234.95, to which was added $29.46 in cash dividends, or a total cash value of $264.41, less the indebtedness of $206.21; the said method of computation being outlined in the following paragraph of section three of the said policy: 'The stated cash value will be increased by any individual credits and by full reserve on any paid up insurance purchased by dividends and diminished by any existing indebtedness.' By reason of the aforesaid and of the terms of said policy providing for reduction in the value of said option of settlement, the period of extended insurance was reduced accordingly, and term insurance, without participation, was granted, to insured in the amount of $5,000.00, less the amount of indebtedness as aforesaid, or $4,794.00 (using the even dollars) which said amount of insurance was extended for the period of time which the said $58.20 would buy insurance for a man 52 1/4 years of age (the age of the insured at the time of lapse), or for a term of 293 days, which extended the said insurance for a period ending September 28th, 1933. Defendant says that by reason of the foregoing facts said policy had entirely lapsed and become void long prior to the death of the insured, on May 4th, 1934, and plaintiff is not entitled to...