Penn Mut. Life Ins. Co. v. Fiquett
Decision Date | 17 May 1934 |
Docket Number | 5 Div. 170. |
Citation | 229 Ala. 203,155 So. 702 |
Parties | PENN MUT. LIFE INS. CO. v. FIQUETT. |
Court | Alabama Supreme Court |
Rehearing Denied June 28, 1934.
Appeal from Circuit Court, Chilton County; F. Loyd Tate, Judge.
Action on a policy of life insurance by William Fiquett against the Penn Mutual Life Insurance Company. From a judgment for plaintiff, defendant appeals.
Reversed and remanded.
Cabaniss & Johnston and L. D. Gardner, Jr., all of Birmingham, and Lawrence F. Gerald, of Clanton, for appellant.
Huddleston Glover & Jones, of Wetumpka, G. C. Walker, of Clanton, and Steiner, Crum & Weil, of Montgomery, for appellee.
This is an action of assumpsit by the beneficiary named in an "ordinary life policy, annual dividend," issued by the defendant to William Fiquett, on the 18th of September 1916, in consideration of a premium of $57.90 paid on the date of the issuance of the policy, and an agreement to pay a like sum on each anniversary of the policy.
The evidence is without dispute that the annual premiums were paid on the policy up to and including the premium due September 18, 1926, but the insured failed to pay the premium due September 18, 1927. On the date of the default in payment of the last-mentioned premium, there was an indebtedness of $268.84 due from the insured to the insurer, advanced as a loan under the loan clause of the policy.
The policy had a cash surrender value, as of said last-mentioned date, of $365.34, and had accredited to it a dividend of $17.54, making the total cash value of the policy $382.88.
The policy contained the following stipulations:
The insured did not make written application for "paid-up insurance" under option "Second," nor for payment of the cash surrender value as provided in option "Third." The insurer, however, credited the cash value of the policy with the indebtedness, leaving a balance of $114.84 to be applied under option "First" to extended insurance.
If, under the facts of this case, the stipulations of paragraphs VII and IX are applicable, the effect of these provisions, in the absence of efficacious exercising of one of the other options, was to automatically extend the insurance for a term of five years and twenty-six days, up to and including October 14, 1932. The insured died on April 28, 1933.
Appellant's contention is that under the facts of this case, as shown by the undisputed evidence, the policy lapsed on September 18, 1927, because of the failure of the insured to pay the annual premium then due, and in the absence of an election by the insured to exercise one of the other options, the stipulations contained in the first option automatically extended the insurance for the term of five years and twenty-six days, at the expiration of which the insurance under the policy ceased.
The appellee, on the other hand, contends that under the terms of the contract expressed in paragraph VI, governing loans, that paragraph having been put in operation by the loan obtained thereunder by the insured, the insurance could not be terminated "until one month after notice shall have been mailed by the company," as provided for in the italicized proviso of paragraph VI, citing in support of this contention, Protective Life Ins. Co. v. Thomas, 223 Ala. 106, 134 So. 488.
The cited case involved a paid-up policy, and the controlling question presented in that case was whether or not the insurer could successfully claim a forfeiture of the insurance without strict compliance with the loan agreement under which it claimed such forfeiture. The question of the lapse of the policy for nonpayment of premiums was not there...
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