Before McLAUGHLIN, KALODNER and STALEY, Circuit Judges.
Where a policy of life insurance provides that, if lapsed, "it may be reinstated * * * upon presenting to the Home Office evidence of insurability, including good health," is this condition precedent to reinstatement met upon the mere mailing of an application for reinstatement to the agent of the insurer?
That is the issue presented by this appeal from the judgment of the District Court for the Eastern District of Pennsylvania in favor of the defendant. The stipulated facts are detailed in the opinion of the Court below.*fn1 They may be summarized as follows:
The plaintiff, Gilda M. Fisher ("beneficiary") was the designated beneficiary in a policy of life insurance issued upon the life of John Thomas Fisher, Sr. ("insured") by the defendant, American National Insurance Company ("American") in the amount of $5,000, on October 12, 1951 in Philadelphia, Pennsylvania.*fn2
Beneficiary's check for premium due April 12, 1953, was returned by the drawee bank because of "insufficient funds." Since the premium was neither paid when due nor within the thirty-one day grace period, the policy lapsed. Two additional checks for monthly premiums sent to American by beneficiary on May 15, 1953, were not deposited by American.
About noon, on Saturday, June 6, 1953, beneficiary delivered to a United States postman an envelope properly stamped and addressed to Mr. William Gilvear, 481 Krams Avenue, Philadelphia 26, Penna., an agent of American. American's Home Office, as specifically noted on the face of the policy, is in Galveston, Texas. The envelope contained a monthly premium check and a standard application for reinstatement signed by insured at Camden, New Jersey and dated June 4, 1953. Deposited by the postman and thereafter postmarked at Camden, New Jersey on June 6, 1953, the envelope and its contents were received by the addressee agent after insured's death. The agent forwarded the letter to American. The latter never deposited the check.
Prior to 3:00 P.M., June 6, 1953, insured had made no complaint of any illness or of his physical condition. He suffered his first heart attack on that day at 3:00 P.M. and died the same afternoon between 5:30 P.M. and 6:00 P.M. Beneficiary subsequently filed the requisite proof of death with American.
The District Court ordered entry of judgment for American on the stipulated facts, and after dismissal of beneficiary's motions to amend the conclusions of law and enter judgment in her favor, this appeal followed.
The case turns upon the wording of the reinstatement provision of the policy which is as follows:
"If this policy shall lapse because of default in payment of any premium, it may be reinstated at any time unless the cash surrender value has been paid or the term of any paid-up extended insurance has expired, upon presenting to the Home Office evidence of insurability, including good health, together with a payment (or reinstatement as a loan which complies with the policy loan provision) of all indebtedness and premiums in arrears with interest from the respective due dates at the rate of five percent (5%) per year."
The Pennsylvania courts have never passed upon the precise clause involved in the instant case. That being so we are required to consider such approach to the problem as may be indicated by the Pennsylvania cases in the general field and to resort to general applicable principles to reach a decision consistent with Pennsylvania law.*fn3 Continental Assurance Co. v. Conroy, 3 Cir., 1954, 209 F.2d 539; Aetna Casualty & Surety Co. v. DeMaison, 3 Cir., 1954, 213 F.2d 826.
Beneficiary contends that the reinstatement provision of the policy is in the nature of a continuing irrevocable offer by American which was accepted by the unilateral action of the insured upon mailing the application for reinstatement to a company agent.
American contends (1) that since the insured died after the lapse of the policy and before presenting to the Home Office as specifically required, evidence of his insurability, including good health, and payment of premiums in arrears, the policy was not reinstated at the time of his death; and (2) even if the application for reinstatement had been received by the Home Office prior to insured's death, the policy could not have been reinstated until American, during the ...