Spiegelman v. Metropolitan Life Insurance

THE COURT.

An appeal from a judgment upon a verdict in an action against the insurer brought by the beneficiary under a policy of life insurance.

The appellant, who was the insurer, contends that the policy had lapsed for failure to pay the premium, and was not reinstated; and that the admission over objection of certain statements by an agent was prejudicially erroneous.

Maurice Spiegelman was the holder of the policy, which was for $10,000, and an annual premium thereon in the sum of $376.10 became due on May 26, 1933. By endorsement on the policy the plaintiff was designated as the beneficiary. Prior to June 30, 1932, the insured had borrowed from appellant upon the policy the sum of $2,508.35, and the interest on the loan to May 26, 1932, was $137.31. There was due the insured on this date a dividend of $69.96. Notice of the due date of the premium, stating the amount of the premium, the dividend and the interest on the loan, was given by the insurer before the due date. One Sims was an agent for the insurer, who the latter admits had authority to collect premiums, solicit insurance, deliver form applications for insurance and loans, and to transmit the same when paid or executed to the insurer. For some time before and after the due date the insured was absent from the state but was represented in San Francisco by his son who, according to the testimony, was authorized “to do whatever was necessary to take care of the premium on the policy”. After the due date, but before the expiration of the grace period under the policy, Sims called on the son, and was informed that the insured wished a premium loan for as much as would be permitted under the policy. Sims thereupon calculated the loan value of the policy, the dividend payable and the amount necessary to meet the premium. He determined the net amount required to be the sum of $57, and this was paid. On June 30, 1933, seven days later and four days after the grace period, the manager of the insurer’s district office in San Francisco, notified the insured that an error in determining the amount necessary to meet the premium had been made by Sims, and that the additional sum of $153.23 was necessary. On August 21, 1933, this amount was also paid. About October 9, 1933, the insured was notified that the

[301]

policy had lapsed and that it would be necessary for him to apply for reinstatement. It was testified that the latter, believing this to be true, signed an application for reinstatement, thereupon the insurer demanded as a condition that he be examined by its physician. It appears that while these negotiations were pending the insured was suffering from the disease which caused his death on March 19, 1934, and no examination by the insurer’s physician was made. On December 27th the insurer sent the insured its check for $213.33, covering the two payments he had made. It was also testified that the insured, still believing the policy to have lapsed, cashed the check.