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Kaeppel v. Mutual Life Ins. Co.

July 8, 1935

KAEPPEL
v.
MUTUAL LIFE INS. CO. OF NEW YORK



Appeal from the District Court of the United States for the Eastern District of Pennsylvania; William H. Kirkpatrick, Judge.

Author: Davis

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

DAVIS, Circuit Judge.

This is an appeal from a judgment of the District Court against the plaintiff in a suit to recover on an insurance policy, forfeited for the nonpayment of the premium, and the question is whether or not the company could forfeit the policy without giving notice to the insured of the amount of the dividend.

The Mutual Life Insurance Company of New York issued its policy insuring the life of Charles W. Kaeppel, father of plaintiff, on September 5, 1922, for $20,000 on a ten-year term policy. The annual premium was $405.60. It had been paid each year for nine years, so that there was only one premium to be paid, the one in question, before the expiration of the policy. If the insured had died at any time during the term of the policy, while it was in force, the beneficiary, who is the plaintiff in this case, would have received the amount of the policy of $20,000.

Among other things the policy provided that: "The policy shall participate in the surplus of the Company and the proportion of the surplus accruing herein shall be ascertained and distributed * * * at the end of the second and of each subsequent policy-year."

It further provided that:

"At the option of the Insured each such dividend shall be either * * *

"(1) Paid in cash; or

"(2) Used toward the payment of any premium, if the above specified period of grace for such premium has not expired and if the remainder of the premium is duly paid."

On August 18, 1931, the insured wrote the company asking if there was "any value in the policy to my benefit which I could use in paying the premium falling due September 5th next." Two days later, on August 20th, the company, answering, said: "Replying to your letter of August 18th I am inclosing notice of the premium due September 5, 1931 on your policy, No. 3,043,427 and dividend voucher. It will be satisfactory if we receive your remittance on or before October 6, 1931, as the Grace Period will expire on that date. I wish to advise you that there is no loan value on your policy. The policy is written on the ten-year term plan and a term policy has no loan or cash value."

The secretary of the insured, who regularly handled his mail, testified that the dividend voucher was not in the letter when it was received. Apparently nothing further was done in the matter. The 31 days of grace on the policy expired on October 6, 1931. Six days later, October 12, 1931, the insured died. The defendant refused to pay the policy on the ground that it lapsed or was forefeited at the close of the day of October 6, 1931. The plaintiff says that it did not lapse on that day because the defendant in not furnishing the insured with the amount of the dividend, which the policy had earned, waived its right to forfeit or lapse the policy until it had informed the insured of the amount of the dividend so that he would know how much in addition to the dividend he would have to pay in order to satisfy the premium.

The case was tried to the court and jury. At the conclusion both sides asked for binding instructions. The court thereupon dismissed the jury, took the case under advisement, and thereafter rendered a verdict for the defendant and entered judgment thereon.

The case is here on appeal from that judgment. The defendant says that since the verdict found by the trial judge has the force and effect of a verdict by a jury, the facts found by him must be sustained if there is any evidence to support them. It infers that the court found that the dividend voucher giving the amount of the dividend was inclosed in the letter, for that is the disputed fact upon which, under the law, the right to a verdict depends. It further contends that even if the voucher was not in the letter ...


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