Ray v. New York Life Ins. Co.
| Decision Date | 15 December 1938 |
| Docket Number | No. 2804.,2804. |
| Citation | 28 F. Supp. 988 |
| Parties | RAY v. NEW YORK LIFE INS. CO. |
| Court | U.S. District Court — Western District of Louisiana |
John R. Hunter & Son, of Alexandria, La., for plaintiff.
Harold W. Hill, of Alexandria, La., and Montgomery & Montgomery, of New Orleans, La., for defendant.
Plaintiff was the holder of a policy of the defendant in the sum of $1,000, issued July 22, 1918, which contained a provision to pay one-tenth of its face, or $100 per annum, in event of total and permanent disability, and further providing that all subsequent premiums would be waived. His petition alleges that since December 19, 1929, he "has been suffering with alcoholic paralysis; that he is affected in his lower extremities and his hands; that he cannot walk without the aid of sticks, or crutches, and his hands are in such condition that he is unable to use them to any avail"; and is therefore totally and permanently disabled within the meaning of said policy. Further, that from December 19, 1929, petitioner was mentally unbalanced and therefore unable to give the notice of his condition required by said policy; but that "since 1931, petitioner's mental condition has improved to such extent that he is no longer suffering from any mental incapacity, and has fully recovered the use of his said faculties"; that petitioner's brother and family physician, learning that petitioner was the holder of said policy, gave notice to the defendant and asked that forms for proof of loss be sent, but which was refused by the defendant, as well as the benefits due under said policy; and that plaintiff's wife also "took the matter up with the Company" but it denied liability and refused to make payment. Further, because of his said condition he failed to pay the premium maturing January 22, 1930, and defendant attempted to forfeit the policy, but under the circumstances he was relieved from giving the notice until a reasonable time after the recovery of his mental faculties.
He prayed that because of the willful and unjustified refusal of the defendant to make the payment of $100 per year that he have judgment for double that amount annually, beginning with 1930, and for the additional sum of $500 as attorney's fees, as provided by the State statute. Further, that the policy be held to have matured, relieving him from paying further premiums, and that he is entitled to receive annually the said disability benefits through the remainder of his life.
Defendant answered, admitting the issuance of the policy, but averred that it had lapsed for the "nonpayment of the premium due January 22, 1930, and the said policy is in force as term paid-up insurance in the amount of One Thousand and twenty-three Dollars ($1,023.00) up to December 15, 1959". It further admitted that plaintiff's brother and family physician had given notice of his disability but averred it was not done "until November 3, 1932, and at that time the policy had lapsed for non-payment of premiums, as above set out", and that said extended insurance did not include the disability or double indemnity features of said policy. Otherwise, the allegations of the petition were denied and defendant prayed that plaintiff's demands be rejected.
John J. Ray took out a policy of life insurance with the defendant, in the sum of $1,000 on January 22, 1918, paying the premiums semi-annually, but failed to make the one due January 22, 1930. The policy contained the following provision: "* * to pay to the insured one twentieth of the face of this policy per annum during the life-time of the insured, if the insured becomes wholly and permanently disabled before the age of sixty, subject to the terms and conditions contained in Section 1 hereof."
Section 1 of the policy reads as follows:
No subsequent premiums have been paid.
Plaintiff was stricken with alcoholic paralysis, commonly known as "Jac" paralysis, about the middle of December, 1929, consulted a physician and within a few days was confined to his bed, unable to talk or to use his hands or limbs. He could not make himself understood until approximately the middle of the year 1930. About April 1st he was taken to Hot Wells, Louisiana, remained there some ten days, was given hot baths at this resort and brought home. Later he was taken there once or twice more, but had to be handled as he was helpless. Some three or four months after the premium of January 22, 1930, became due plaintiff's brother, J. G. Ray, found among his mail, which had been allowed to accumulate in a basket on the plaintiff's desk in his brother's office, a premium notice that $17.85 was due on January 22, 1930, and to which was attached notice of dividend and credit, reading as follows:
"Notice of Dividend for 1930
(Provided policy is in full force on the anniversary date)
New York Life Insurance Company
51 Madison Avenue, Madison Square, New York, N. Y
-----------------------------------------------------------------------------------------
When Due Policy Number Cash Dividend
Jan. 22 6249724 11.22
Cash Value previous credits 11.35
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