YOUMANS, District Judge.
The appellee, who will hereafter be called plaintiff, sued appellant, the Prudential Insurance Company of America, which will hereafter be called defendant, on two certificates or policies of insurance. The suit is based on the clauses in the certificates which insure against total and permanent disability. The insurance was termed group insurance, and was limited to employees of defendant under group insurance policy No. 1690 dated October 1, 1924. The group policy provided for additions to the number insured. It also provided that individual insurance should "cease and determine upon termination of the employment of such person with the employer."
On April 25, 1928, defendant issued to plaintiff certificate No. 59788, which, so far as applicable here, reads as follows:
"The Prudential Insurance Company of America in accordance with and subject to the terms and conditions of its Group Policy No. 1690, insuring the lives of a group of the employees of the Prudential Insurance Company of America, Newark, New Jersey, has insured the life of Glenn E. Wolfe, an employee included in the said group of employees, for the amount of Four Thousand Dollars payable to the Beneficiary designated by said employee upon receipt of due proof of the death of said employee while the insurance on the life of said employee under said policy is in force. * * *
"Total and Permanent Disability. If the said employee, while less than sixty years of age, and while the insurance on the life of said employee under said policy is in full force and effect, shall become totally and permanently disabled or physically or mentally incapacitated to such an extent that he or she by reason of such disability or incapacity is rendered wholly, continuously and permanently unable to perform any work for any kind of compensation of financial value during the remainder of his or her lifetime, said amount of insurance will be paid to said employee either in one sum six months after the company has received due proof of such disability or incapacity, or in monthly instalments during five years, the first instalment to be payable immediately upon receipt by the company of due proof of such disability or incapacity; in accordance with the provisions of said policy. The disability benefits will be granted subject to cessation, in accordance with the provisions of the policy, should such disability or incapacity prove to be temporary and not permanent. The entire and irrecoverable loss of the sights of both eyes, or of the use of both hands, or of both feet, or of one hand and one foot, will be considered total and permanent disability or incapacity within the meaning of the provisions of said policy.
"Conversion of Insurance. When the insurance on the life of said employees shall terminate by reason of termination of employment for any reason whatsoever, the company will issue, upon application by said employee within thirty-one days after the date of such termination, without evidence of insurability, a policy on his or her life on any of the forms customarily issued by the company, except a policy of Term Insurance, for the same amount for which said employee was insured under said group insurance policy at the time of the termination of employment, subject to the payment of premium for such policy at the then current rates of the company according to the occupation of and at the age attained by said employee at that time."
On June 1, 1928, defendant issued to plaintiff certificate No. 59788-B, which, so far as applicable here, contains the same provisions as were contained in certificate No. 59788.
On August 18, 1928, plaintiff wrote a letter addressed to Mr. Thomas Husk and the Prudential Insurance Company. That letter, omitting address and signature, reads as follows: "I have been advised by my family physician that my lungs are weak and for that reason I should locate in a higher altitude. I therefore regret to inform you that I feel that it is necessary for the sake of myself & family that his instructions be followed. I will appreciate if you will order my final for the week of Aug. 20th, 1928. However this does not mean I want to sever connection with the Prudential Ins. Co. that I would appreciate your recommendation personal & through the Home Office for reemployment should I locate where this Co. operates. My association with you & your staff has been very pleasant and I regret very much that I must leave."
Plaintiff's services with the Kansas City office of defendant terminated August 23, 1928. After that date plaintiff went to Colorado. He made application for employment to the Denver office of defendant. He was not successful. Under date of December 7, 1928, Edward Gray, vice president of defendant, wrote to plaintiff at Denver, Colo., a letter which, omitting address and signature, reads as follows:
"We are sorry to know that you are unable to attend to business on account of the condition of your health. The company has considered your case and arranged with Superintendent Showalter to pay you regular compensation up to two weeks, the maximum that may be granted to one of your length of employment under the terms of the Service Disability allowance plan.
"It is with regret we have to advise you that the amount of benefits payable to you under the company's disability plan was exhausted with the payment for the period ending September 8, 1928, and that your connection with the Prudential will have to be regarded as terminated as of the date mentioned and your name removed from the roll of employees. This is solely a matter of business routine in order that our records may be correct, as it can not be said with accuracy that you are an employee when our plan makes no provision for payment to you, and, in turn, you can render no service.
"Manager Thatcher of our Service Allowances Department is, under even date, writing Mr. P. H. Showalter, Superintendent in charge of our Denver #1 office and suggesting that he take up with you the matter of undergoing a course of treatment at the expense of the Prudential in the Cragmor Sanitorium, Colorado Springs, Colo. If you decide to take the cure in an approved sanitorium the discontinuance of the regular disability allowance will not, however, affect your taking the cure, the cost of which will be borne by this company until further notice.
"We are hopeful that you will not only accept our offer but that the opportunity to follow the instructions of physicians, who are experts in the handling of cases such as yours, will result in the arrestment of your ailment and the recovery of your strength in a comparatively short time."
Under date of December 8, 1928, E. H. Thatcher, manager of the defendant at Kansas City, wrote to plaintiff a letter, which, omitting address and signature, reads as follows:
"Before we were provided with information as to your address we communicated with Mr. P. H. Showalter, Superintendent in charge of our Denver 1 District, as to paying you regular compensation for the weeks of August 27 and September 3 and as to the Company's assuming your expenses for treatment at the Cragmor Sanatorium, Colorado Springs, Colo.
"Our plan of Service Disability Allowances makes it possible to provide tuberculosis employees with institutional care at an approved sanatorium and to pay their traveling expenses in going to and from that place. It is apparent from reports received in your case that you need the attention and care that you would have in a sanitorium such as Cragmor which is in charge of Dr. Alexius M. Forster, Physician in Chief, a recognized expert in the handling of cases such as yours. We therefore, strongly urge that you give consideration to taking the cure there and in the event of your deciding to avail yourself of such an opportunity the Prudential will assume your expenses for treatment and pay for your personal railroad and Pullman fares from Kansas City, Mo., to Colorado Springs, as well as your meals while en route, and the transportation of your baggage.
"If you favor going to Cragmor please communicate at once with the Physician in charge with a view to ascertaining whether you can be provided with accommodations and stating that this Company will take care of your expenses for treatment. As soon as you receive a favorable reply you should make immediate arrangements to leave and prior to doing so Supt. Husk of the Kansas City, Mo. #3 district under whom you formerly worked, and to whom we are under even date writing, will advance you a sum slightly less than will be required to cover your traveling expenses.
"As soon as we hear from you as to your decision we will, if it is favorable, communicate at once with those in charge at Cragmor so that they will understand what the Prudential will do for you."
Under date of December 21, 1928, E. H. Thatcher, manager of defendant at Kansas City, wrote another letter to the plaintiff which, omitting address and signature, reads as follows:
"Your letter of December 10 has been considered by our Service Allowances Committee. The Committee has taken note of the fact that you do not care to enter a sanitorium for treatment as you feel that you could do just as well outside of the sanitorium in Denver, Colo., or some part of New Mexico.
"It is the opinion of our medical advisers that since you have not had the benefits of...
