Appeal from the District Court of the United States for the Northern District of Illinois; Michael L. Igoe, Judge.
Before EVANS, SPARKS, and TREANOR, Circuit Judges.
On March 4, 1930, appellant issued its policy for $10,000 upon the life of John T. Fitzsimmons. The first annual premium was paid, and the insured died on July 21, 1933. Appellee, his wife, was the beneficiary under the policy and brought this action to recover the full amount thereunder. The cause was tried to a jury. Appellant moved for a directed verdict at the close of appellee's evidence, and again at the close of all the evidence, and both motions were overruled. A verdict for appellee was returned in the sum of $8,000, and judgment was entered thereon. The appeal is from that judgment.
The question presented is whether, under the evidence, appellee or the insured, was entitled to rely upon the provision of the policy with respect to waiver by appellant of the payment of premiums in case of total and permanent disability of the insured.*fn1
The specific questions presented are whether the insured became totally and permanently disabled before the policy lapsed for non-payment of premiums, and whether or not due proof of total and permanent disability was made to the Company for the purpose of securing a waiver of premiums before the policy lapsed.
The evidence discloses that for more than twenty years prior to his death the insured had been president of and sole salesman for the Plumbing Sales Company, which had its place of business in Chicago. He also did its purchasing and was very active in the business. Until May of 1931, he lived many miles from his place of business.
On February 21, 1930, he applied to appellant for two policies of $10,000 each on his own life, upon one of which this action is brought. The other upon his death was paid in full and is not involved here. In his application for these policies, he stated that he had never had syphilis. Both policies were issued on March 4, 1930, and on June 5, 1930, the first year's premiums were paid. Both policies were incontestable after one year.
On May 6, 1930, the insured consulted his physician who found after certain tests that he was suffering from syphilis, and at the trial the doctor gave it as his opinion that decedent had contracted the disease ten years previous to the examination. At the time of the examination decedent denied all history of venereal diseases.
When the second annual premiums on both policies were about to come due, notices were sent to the insured of that fact, but he showed a definite lack of interest. Therefore, his wife, the beneficiary, went to the appellant's office, exhibited the premium notices on both policies to its cashier and told him her husband was ill; that be cause of their financial condition she had come to the conclusion that they would have to drop one of the policies, but wanted to make new arrangements about meeting the premium on the other policy. The cashier tried to get her to continue both policies, but she insisted that they were financially unable to do so. He then prepared the necessary forms to enable her to pay the premiums on both of the policies on a quarterly basis, and told her to take them home and have the insured sign them. She told the appellant's cashier that her husband was nervous and mentally ill, that he was not tending to his business, and that he was in no condition to do so. She told her husband nothing about his trouble or his ailment, and said that she did not then know that he had syphilis. At that time she did not ask for a waiver of premiums.
The record does not disclose that appellee advised appellant's agents that the insured was totally and permanently disabled. She had never seen either of the policies during her husband's lifetime and did not know about the provisions therein relating to waiver of premiums on the ground of total and permanent disability until two years after the insured's death. Appellee took the forms, which the cashier had given her, to her home and had her husband sign them on April 4, 1931, and she returned them to the appellant's office on April 6, 1931. At that time she told the cashier that she was of the opinion that they could carry only one policy, that she had sufficient funds to pay only on one policy and would have to drop the other. On May 6, 1931, she met the quarterly payment on the policy which she kept in force, and she made no payment upon the policy sued upon. No payment other than the first year's premium was ever made on the policy in suit, and it was lapsed by the Company as of April 5, 1931, at the end of the grace period.
At the time the policies were issued the insured was alert, prosperous, and quite popular in his business. He was an exceptionally successful salesman, well posted in the prices of the products in which he dealt, and greatly esteemed by his friends, associaties and customers.
Toward the end of the year 1930, the insured appeared less alert on quoting prices in his business, sometimes having to check up on the current price. At times he would walk away from customers with whom he had been conversing without completing his conversation. He seemed to tire more quickly, and came home earlier in the afternoons, and he often telephoned his customers instead of calling on them in person, as he had formerly done. He lost interest in his business and seemed listless. He continued to drive his car as usual but seemed to be not as proficient in that respect as formerly, and had some minor accidents.
Around Christmas of 1930, he took less than his usual interest in the season's festivities. His dress was not as immaculate as previously. He mumbled to himself, showed lack of attention to the conversation of his friends; he laughed excessively at trivial matters, or for no apparent reason; and he exhibited a lack of his ...