Wolfberg v. State Mut. Life Assur. Co.
| Decision Date | 18 November 1929 |
| Docket Number | No. 8423.,8423. |
| Citation | 36 F.2d 171 |
| Parties | WOLFBERG v. STATE MUT. LIFE ASSUR. CO. OF WORCESTER, MASS. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Harry L. Jacobs, of Kansas City, Mo. (I. J. Ringolsky, M. L. Friedman, William G. Boatright, and Ringolsky, Friedman, Boatright & Jacobs, all of Kansas City, Mo., on the brief), for appellant.
Richard S. Righter, of Kansas City, Mo. (George J. Mersereau, John H. Lathrop, and Lathrop, Crane, Reynolds, Sawyer & Mersereau, all of Kansas City, Mo., on the brief), for appellee.
Before BOOTH, Circuit Judge, and SANBORN and DEWEY, District Judges.
The suit is based on a contract of insurance issued by the State Mutual Life Assurance Company of Worcester, Mass., to and on the life of William J. Wolffsky.
The petition is in two counts. The first, an action at law, seeking to recover damages for the wrongful cancellation of the policy; and the second, an action in equity, seeking to have the policy declared in force at the time of the death of the insured, and for judgment thereon.
The suit came to trial on the first count before a jury, and by agreement of parties the issues raised by the second count to be decided by the trial judge upon the evidence offered in the law action.
The evidence introduced by the plaintiff establishes that the policy was dated and issued from the home office of the company in Worcester, Mass., on the 28th day of February, 1922, and insured the life of William J. Wolffsky for $5,000; the annual premium of $178.50 to be paid in quarterly installments in advance.
The first installment was paid March 23, 1922, and quarterly installments were paid in advance or within the grace period of each quarter, up to and including the payment due November 28, 1924.
In December, 1924, while the November 28, 1924, premium was due, but within the grace period, the insured applied for a loan on this policy. The same was granted to him in the sum of $255, with interest at 6 per cent. per annum payable semiannually on the 15th days of June and December. The loan was effective from January 8, 1925, and on or about this date, and from the proceeds thereof, the insured paid the November, 1924, premium.
Records of the company show no other payments, but do show that an effort was made to collect the premium due February 28, 1925, by a first and second notice and lapse notice, and telephone calls from the Kansas City office of the company, in which city Mr. Wolffsky resided.
On April 1, 1925, this office wrote the insured a letter addressed to his Kansas City, Mo., home address, advising him of the default in payment of the premium due February 28, 1925, and offering to reinstate him within a period of 30 days after such lapse if he could establish his insurability by a health certificate. No response having been received, the home office was advised on April 28, 1925, that the policy had lapsed for failure to pay the premium when due.
The policy contract provided for 31 days of grace, and the practice of the company was to allow the agent to collect the premium 30 days beyond that time if a health statement was signed by the insured, and upon the insured's failure to so do, the records were sent to the home office of the company for final disposition.
The record in this case of the lapse of the policy for failure to pay the premium due February 28, 1925, came to the attention of the officers of the home office of the company on May 4, 1925, which was a normal period for such records to be sent to the home office and for them to act thereon.
The actuary of the company in May, 1925, figured:
The cash surrender value of the policy as of
February 28, 1925, as ..................... $263 50
Loan ............................... $255 00
Int. from 1/9/25 (81 days) ......... 3 40
_______
$258 40
_______
$ 5 10
And he certified that this provided extended insurance of $4,742 for 34 days from February 28, 1925, up to and including April 4, 1925.
The insured committed suicide August 11, 1925.
At the time of the execution of the policy, the insured elected that in the event of a default in the payment of a premium when due after two years' premiums had been paid, he should have the insurance continued in force as extended insurance from the anniversary last past, for its face amount, less any indebtedness to the company thereon or secured thereby.
The policy provided, among other things, that: "The term for which this policy will be continued as Extended Insurance or the amount of Paid-up Insurance, as given in the accompanying table, is such as the Cash Value will purchase as a net single premium at the attained age of the insured, according to the American Experience Table of Mortality, with interest at three per cent. per annum, but no provision contained herein shall operate to continue this policy in force beyond the term for which it was originally written."
The accompanying table provided, among other things, that the cash surrender or loan value, where the premium had been paid for three full years, was $244.75. This had been increased by the board of directors to $263.50.
Also, as a part of the policy, and following the above table, the policy provided: "The above values are computed * * * upon the assumption that the premiums required by this policy (less current dividends) have been paid in full and that there is no indebtedness to the company on account of this policy."
The policy further provides: "The said values will be increased if there are any outstanding paid-up additions to this policy and diminished if there be any indebtedness hereunder."
The yearly dividends were paid in cash to the insured, and there were no dividends due him at the time the accounting was had at the home office.
In the policy loan certificate above referred to is the following provision:
Plaintiff's evidence therefore establishes that the insured, after borrowing a sum practically equal to the cash surrender value of the policy, permitted the same to lapse; that the company sent notices to the insured at all stages of the proceedings, and not hearing from him, the account was sent to the home office, an accounting made by the actuary of the company according to the terms of the policy, and the balance of $5.10 applied for the payment of extended insurance as directed by the insured for 34 days from February 28, to April 4, 1925.
Plaintiff's cause of action in both counts is based on deceit; the grounds therefor, as alleged, being that the defendant fraudulently refrained from notifying insured of his rights...
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