Stukes v. Life Ins. Co. of Va. ( 1931 )

This action was commenced in a Magistrate's Court, on April 9, 1931, for $100, which the plaintiff as a beneficiary claimed under a policy issued upon the life of her husband, Barney Stukes, dated in 1910, in the principal sum of $445. The premiums were 25 cents per week, payable in advance, on Monday of each week; they were paid from the date of the policy, in 1910, to November 28, 1921, about 11 years, at which time default occurred, and since that date nothing has been paid. The insured died in 1930.

The plaintiff claims that under the provisions of the policy the insured upon default was entitled to a paid-up policy for a conceded amount of $95, payable to her upon his death, which occurred nearly 10 years after default. Her contention is to be determined by a construction of the policy provisions.

Quoting from the transcript of record: "The policy provides that in the event of default in the payment of premiums within four weeks from the time same became due, it shall become void, and premiums forfeited, subject to the provisions and conditions of the Paid-up Life Policy provision and Cash Surrender Value provision."

The premium due November 28, 1921, not having been paid, the policy, according to the above provision, continued of force for four weeks, until December 23d, when the default became operative and the policy void; subject to the provision for a paid-up policy. I do not perceive the slightest ambiguity in that provision. It seems perfectly plain that, the default having been consummated on December 23, 1921, the insured was entitled, without any action on the part of the company, to a paid-up policy, according to the table, for a period of thirteen weeks; that, if the insured should die within that period, the paid-up policy would be cashed; but that, if within that thirteen-week period he should comply with the regulations required, the paid-up policy would be good as long as he lived and be cashed at his death.

The provision was as follows: "Paid-Up Life Policy — If, after the payment of the weekly premium hereon for three or more years, this Policy shall become void by reason of default in the payment of premiums, it will, without any action on the part of the Insured, become paid-up for a period of thirteen weeks from the date of said default, for an amount computed according to the table below. If within said period, this Policy, with its Premium Receipt Book is surrendered to the Company, the Company will, on written application made on the blank furnished by the Company issue a Non-Participating Paid-Up Life Policy for said amount, on which no further premiums will be required."

It is conceded that this requirement was not complied with. It appears to me, therefore, that the plaintiff has no claim whatever under the policy.

In 3 Joyce, Ins. (2d Ed.), § 1184, it is said: "The stipulation of the policy must determine when the right of election must be exercised. The policy may contain no limitation as to the time of election, but may provide only that upon default in the payment of the premiums the party will be entitled to a paid-up policy, or it may stipulate for compliance with certain conditions, such as surrender and demand within a limited specified time, or that demand and surrender must be made while the policy is in force."

And at Section 1185: "If it is expressly stipulated that the policy must be surrendered and receipted in full within a specified time after default in payment of a premium to entitle the assured to a paid-up policy, such provision must be complied with, and the option must be exercised within the time designated, otherwise it is lost, for time is of the essence of the contract" — citing cases from United States Supreme Court, Alabama, Georgia, Illinois, Kentucky, Maine, Mississippi, Missouri, New Jersey, Pennsylvania, Texas and Virginia. See notes to Blume v. Pittsburgh Life Trust Co. (Ill.), 51 L.R.A. (N.S.), 1044.

I think, therefore, that the judgment should be reversed and the complaint dismissed.

MR. JUSTICE BONHAM concurs.