Saul v. New York Life Ins. Co.

• Decision Date: 08 November 1937
• Docket Number: No. 8402.,8402.
• Citation: 92 F.2d 665
• Parties: SAUL v. NEW YORK LIFE INS. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

92 F.2d 665 (1937)

SAUL v. NEW YORK LIFE INS. CO.

No. 8402.

Circuit Court of Appeals, Fifth Circuit.

November 8, 1937.

A. S. Grove, of Atlanta, Ga., for appellant.

Grover Middlebrooks, of Atlanta, Ga., for appellee.

Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.

SIBLEY, Circuit Judge.

Joseph Saul sought to recover of New York Life Insurance Company disability benefits included in a policy of life insurance, and his petition was dismissed on demurrer.

The pertinent language of the policy is: "Upon receipt at the Company's Home Office before default in payment of premium of due proof that the insured is totally and presumably permanently disabled and that such disability occurred after the insurance took effect and before its anniversary on which the insured's age at nearest birthday is sixty years, the following benefits will be granted: (a) Income payments, (whose details need not be stated); (b) The Company will waive payment of any premium falling due after approval of said proof and during such disability. * * * In the event of default in payment of premium after the insured has become totally disabled the policy will be reinstated upon payment of the arrears of premium with interest at five percent, provided due proof * * * is received by the Company not later than six months after said default, and the benefits under this section shall then be the same as if said default had not occurred." Facts stated in the petition are that total and presumably permanent disability occurred January 1, 1931. The insured was ignorant of the disability provisions in his policy, then about five years old, and he continued to pay his annual premiums until that due January 21, 1933. For that premium he paid some cash, and gave a note for the balance, the terms of which he claims were misrepresented by the local agent. The note was not paid at maturity March 21, 1933, and, in April, Saul was notified that his policy had lapsed. His sons in his behalf had some negotiations concerning this premium, but the premium was never more than one-sixth paid. The premium of January 21, 1934, was not paid. In March, 1934, he was advised by an outsider that he had rights under his policy and he employed counsel, who on March 21 made claim for disability benefits and asked blanks to make formal proofs. These blanks were refused, and liability denied. Physicians' statements were nevertheless submitted, but the claim was formally rejected in May and the suit begun in July, 1934. Neither in the correspondence nor the suit was there any offer to pay arrearages of premium and cure the default under the last provision above quoted. The suit attempted to excuse the filing of proofs of disability by asserting that the local agent knew of it and said that no disability rights existed and that the company had so stated to him, coupled with the ignorance and confidence in the agent of the assured.

It will be noticed that disability income is not promised on the occurrence of disability, of which proof must be made or waived, but only on receipt of due proof at the home office before default in premium. Default in premium occurred January 21, 1933, or at the expiration of thirty days' grace, unless the note in controversy paid that premium. If it did pay that premium, default occurred January 21,...