Peoria Life Ins. Co. of Peoria, Ill. v. Bergholm, 6042.

• Decision Date: 05 June 1931
• Docket Number: No. 6042.,6042.
• Parties: PEORIA LIFE INS. CO. OF PEORIA, ILL, v. BERGHOLM et al.
• Court: U.S. Court of Appeals — Fifth Circuit

50 F.2d 67 (1931)

PEORIA LIFE INS. CO. OF PEORIA, ILL, v. BERGHOLM et al.^*

No. 6042.

Circuit Court of Appeals, Fifth Circuit.

June 5, 1931.

J. I. Kilpatrick and Roscoe Wilson, both of Lubbock, Tex., for appellant.

E. L. Klett and Geo. R. Bean, both of Lubbock, Tex., for appellees.

Before BRYAN, FOSTER, and WALKER, Circuit Judges.

WALKER, Circuit Judge.

This was an action on a life insurance policy in the sum of $5,000, issued by appellant to Carl Oscar Bergholm, and naming his wife, Iris Christine Bergholm, as the beneficiary. That policy contained the usual provisions as to the payment of premiums, as to the policy ceasing and determining if any premium is not paid on the date when due, except as provided in the policy, and as to the policy continuing in force for the term of one month, of not less than thirty days, if any premium after the first one is not paid on the date when due. After the first year the premiums were made payable quarterly; the first quarterly premium being due on February 27, 1927. In addition to the above-mentioned provisions, the policy contained the following, called "Income Disability Clause":

"Upon receipt by the Company of satisfactory proof that the Insured is totally and permanently disabled as hereinafter defined the Company will

"1. Pay for the Insured all premiums becoming due hereon after the receipt of such proof and during the continuance of the total and permanent disability of the Insured and will also

"2. Pay to the Insured a Monthly Income for life of 1% of this Policy: The first payment of such income to be paid immediately upon receipt of such proof and subsequent payments to be made on the first day of each month thereafter as long as the Insured shall live and be totally and permanently disabled as hereinafter defined and

"3. In addition to the payment of premiums and a Life Income as above set forth the Company, in accordance with the terms of the policy, will pay the full face of this policy, together with all additions thereto, upon receipt of due proof of the death of the Insured, and the premiums and Life Income paid by the Company in conformity with this provision will not be an indebtedness on this policy, and the values in the tables herein will increase and progress from year to year, and this policy will be credited with dividends from the surplus, in like manner as if the premiums were being duly and regularly paid by the Insured.

"To entitle the Insured to the above Total and Permanent Disability Benefits this policy at the time of making claim for such benefits must be in full force and all premiums becoming due prior to the time of making claim must have been duly paid by the Insured, and the Total and Permanent Disability of the Insured must be due to bodily injuries or disease occurring while this Policy is in full force, and before the Insured shall have attained the age of sixty years, and must be such as to prevent the Insured then and at all times thereafter from performing any work or conducting any business for compensation or profit; provided that, notwithstanding proof of disability may have been accepted by the Company as satisfactory, the Insured shall at any time, on demand, furnish the Company satisfactory proof of the continuance of such disability, and if such proof is not furnished, or if it shall appear to the Company that the Insured is able to perform any work, or to conduct any business for compensation or profit, then the Company shall cease to pay or allow the above benefits and the Insured shall immediately resume the payment of premiums hereon."

The appellees asserted claims based on the above set out provision. It appeared that the last premium paid by or for the insured was the quarterly one due May 27, 1927, and that the insured died in April, 1929. The claims that appellant became liable to pay to the insured a monthly income of $50, beginning September 1, 1927, and continuing so long as he lived, and to pay the amount of the face of the policy to the beneficiary, were based on allegations to the effect that, during the spring and summer of the year 1927, and prior to September 27, 1927, while the policy was in full force and effect, all premiums having been paid when due, the insurer became totally and permanently disabled as a result of a disease occurring while the policy was in full force and effect, which disease was such as to prevent the insured then and at all times thereafter until his death from performing any work or conducting any business for compensation or profit. Pleading duly raised the questions whether the appellant did or did not incur the liability asserted if the insured did not, before the expiration of the thirty days allowed for the payment of the unpaid quarterly premium which was due August 27, 1927, make claim for the benefits stipulated for by the above set out provision and furnish to appellant satisfactory proof that the insured was totally and permanently disabled as defined in that provision.

Evidence adduced in the trial showed that at the time the policy was issued the insured was appellant's district manager at Plainview, Tex., his duties being to solicit and write life insurance for the appellant, to employ agents, to look after the appellant's business and build it up in that part of Texas; that the insured held...