New York Life Ins. Co. v. Viglas, 297 U.S. 672 (1936)

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New York Life Insurance Co. v. Viglas

No. 602

Argued March 6, 1936
Decided March 30, 1936
297 U.S. 672

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FIRST CIRCUIT

Syllabus

1. A policyholder, entitled by his policy to monthly benefit payments and suspension of premiums if totally and permanently disabled, and who had been in the enjoyment of these rights upon the assumption that such disability existed, was notified by the insurance company that it would no longer make the payments or waive premiums because it appeared to the company that, for some time past, he had not been continuously totally disabled within the meaning of the policy, and, upon his failure to pay a premium on the next due day, the company noted on its records that the policy had lapsed. By its terms, even if the policy had lapsed, the insured would still be entitled to stipulated surrender privilege cash, or new insurance, and to full reinstatement upon proof within six months that the disability existed at the time of default.

Held:

(1) That the action of the insurance company, bon fide though mistaken, did not amount to a repudiation, renunciation, or abandonment of its entire contract but only to a breach of the obligation to pay benefits. P. 676.

(2) The damages recoverable by the insured did not exceed the benefits in default at the commencement of suit. P. 678.

2. In determining whether a breach of contract, short of repudiation or intentional abandonment, avoids the contract as a whole, the relation between the maintenance of the contract and the frustration of the ends it was expected to serve is of much importance, and that which is necessary to work out reparation in varying conditions must be considered. P. 679.

3. Strictly speaking, an "anticipatory" breach of contract is one committed before there is a present duty of performance. P. 681.

78 F.2d 829 reversed.

Certiorari, 296 U.S. 571, to review the reversal of a judgment dismissing, on demurrer to the complaint, an action for breach of an insurance contract. The ground of dismissal was that the possible recovery was less than the jurisdictional amount.