66 F.2d 268 | 5th Cir. | 1933
The appeal is from the dismissal on motion of a bill in equity brought by Nellie T. Kincaid against New York Life Insurance Company on two identical policies of $5,000 each on the life of her husband, James Kincaid. The case is the same for each policy, and for simplicity one only will be referred to. The important facts alleged and to be taken as true are as follows: The policy which issued in 19-2.0 required an annual premium payable in advance on June 30t,h of $250.05, including $12.75 for a total disability benefit one feature of which was that premiums would be waived beginning at the next ensuing anniversary of the policy.
Despite its equitable dress this is only a suit on the policy which anticipates defenses and seeks to reply to them. There is a prayer for an accounting, but the plaintiff is not the personal representative of Kincaid. As nominated beneficiary in the policy, she recovers on its promise to pay her or fails altogether. Tho question is whether the policy was of force at his death. We agree with plaintiff that it did not lapse June 30, 1929. After arranging during the grace period for quarterly premiums, the company was bound by the provisions of tho policy and the application for it to apply the dividends to the payment of the premium then due since they were sufficient to pay it. It could not avoid this duty by withholding knowledge of the dividends until after the grace period expired. The premium of $66.30 due in June, 1929', was therefore paid by the dividends of $122.-85, leaving $56.55 for the credit of the next premium due December 30. Premiums were thereafter paid through December 30, 393L. There being no lapse, and no necessity to reinstate, the validity of tho reinstatement is in itself of no importance. The policy was of force when in March, 1931, total disability is claimed. The March premium was tendered and rejected, which counts as payment. No premium was due June 30th if there was total disability, because thereby premiums were waived beginning with the next anniversary date of the policy. If on the other hand there was in fact no total disability, tho surrender value on the policy was ample to carry it as extended insurance until Kincaid’s death in September, 3933. Mrs. Kincaid is therefore entitled to recover unless tho cashing of the
It is alleged that the acceptance of the money in June, 1931, was induced by the company’s false assertion in August, 1929; repeated in its letter of March, 1931, that the policy had lapsed and required reinstatement. The incorrectness of the original statement became apparent a few days after it was made when the company disclosed the existence of the dividends. In March, 1931, whatever confidence ordinarily exists between insurer and insured was broken. The company was then claiming a dissolution of the relationship, and was dealing at arm’s length with Kincaid. He labored under no legal disability or handicap. He fully understood the facts and must be held chargeable with knowledge of the provisions of his policy and his rights under them. If he did not understand them, he ought to have gotten advice. The company’s offer of the eheek for $489.75 as a return of premiums was debated for more than two months. Nothing appears to show that its final acceptance was caused by anything else than a deliberate election to take the money, with such consequences as followed therefrom.
While we thus hold that the present petition shows no cause of action and affirm its dismissal, we have had doubt whether a correct figuring of the extension of $4,068 of the insurance might not carry it beyond the date of death. Because of this doubt we modify the dismissal so as to be without prejudice.
Modified and affirmed.