Opinion
No. 34258.
October 28, 1940.
1. INSURANCE.
A life insurance company must have notice of claim of accidental injury to or death of insured within such reasonable time as to permit fair investigation of facts involved in order to relieve itself from payment of fraudulent claims.
2. INSURANCE.
"Due proof" of insured's total permanent disability within employees' group insurance policy means proof within reasonable time or timely proof.
3. INSURANCE.
An insured, not making proof, or serving notice on insurer, of insured's total permanent disability within employees' group insurance policy until nearly five years after time at which he claimed to have become so disabled, failed as matter of law to make "due proof" of such disability within reasonable time, so as to bar his recovery of disability benefits under such policy.
APPEAL from the circuit court of Jones county; HON. F. BURKITT COLLINS, Judge.
Wells, Wells Lipscomb, of Jackson, and Welch Cooper, of Laurel, for appellant.
The defendant was entitled to a directed verdict. The defendant had filed a special plea of late notice in bar of the plaintiff's action. On the former trial this plea was held to be good against demurrer. The plaintiff then filed a replication to the special plea, taking issue thereon. The proof in support of the plea showed that the Gilchrist-Fordney Company had gone out of business; that its charter had been surrendered; that many of its records had been destroyed; that the saw mill foreman under whom plaintiff worked, the mill superintendent, the outside superintendent, the mill wright, the shipping clerk, the master mechanic, the mill blacksmith, and the foreman of the green chain and other persons thus calculated to know of the physical condition of plaintiff, are now in Oregon. Other employees are dead or scattered to the four corners of the world. In other words, as we see it, the material allegations of the special plea were established by competent testimony and were undisputed. The fact that some of the former employees of the Gilchrist-Fordney Company are here, does not prove anything. It must be obvious to the court that if defendant had known at any time prior to July 27, 1937, that plaintiff was claiming a total disability since sometime in 1932, that defendant would have been in infinitely better position to establish its defense.
In consideration of this case when it was first before this court, the court speaking through Mr. Justice Anderson, said: "It follows from what has been said that the judgment must be reversed and the cause remanded for another trial. The court erred in sustaining the demurrer to the plea. If the plea is established without substantial conflict in the evidence, appellant will be entitled to a directed verdict. Putting it differently: if on another trial it should appear to the court, without any substantial conflict in the evidence, that it was unreasonable and unfair to appellant for appellee to delay nearly five years in making proof of disability, a verdict should be directed for appellant. On the contrary, if there is substantial conflict in the evidence as to that issue, its decision should be left to the jury." Metropolitan Life Ins. Co. v. Lindsey, 184 Miss. 359, 185 So. 573.
Now was it unfair for the plaintiff to wait from November 15, 1932 until October, 1937, before making proof of disability. If it was unfair and placed an undue burden on the defendant, then a verdict should have been directed for the defendant. Who can doubt that it was imcensely core difficult for defendant to ascertain the facts as to plaintiff's condition five years prior to notice under the admitted facts of this case. It will be remembered that plaintiff admitted that he worked but he undertook to show that his work was not substantial. Plaintiff seems to have gotten over to the jury the fact that his job was in the nature of a pension, that he was a piddler and that his employer so recognized. How would have been the best way to refute this? Manifestly, by the mill foreman, mill superintendent and foreman of the green chain. We briefed this feature of the case at length on the former appearance of the case and we do not repeat the argument here. We accept the holding of the court on the first trial of this case and we invoke the holding of the court, believing that we have shown that the burden of the defendant was unduly and unfairly increased by the failure of the plaintiff to make within a reasonable time proof of his disability.
Leonard B. Melvin, of Laurel, for appellee.
The appellee is unable to understand how there could be any better authority presented to this court than the opinion of this court, written by this court in the identical case that is now before the court, involving the same propositions, with the exceptions of the pleadings, in that in the former trial the special plea was demurred to and sustained, which this court held was error. In the second trial the plaintiff filed its replication to the special plea and issue was joined. This is the only difference between the two trials. The same insurance policy was involved and almost identical evidence introduced by the same witnesses.
When this case was before this court before, this court then said: "What is proof within a reasonable time is ordinarily a question for the jury. `But there must come a point where the matter becomes one for the decision of the court, where a delay, by reason of its duration and lack of attendant excusing circumstances, is clearly unreasonable, it is the duty of the court so to declare.' Metropolitan Life Ins. Co. v. Walton, 83 S.W.2d 278, and the authorities cited in the opinion . . . It follows from what has been said that the judgment must be reversed and the cause remanded for another trial. The court erred in sustaining the demurrer to the plea. If the plea is established without substantial conflict in the evidence, appellant will be entitled to a directed verdict. Putting it differently: If on another trial it should appear to the court, without any substantial conflict in the evidence, that it was unreasonable and unfair to appellant for appellee to delay nearly five years in making proof of disability, a verdict should be directed for appellant. On the contrary, if there is substantial conflict in the evidence as to that issue, its decision should be left to the jury."
Metropolitan Life Ins. Co. v. Lindsey, 185 So. 573; Universal Life Ins. Co. v. Ford, 180 So. 823; N.Y. Life Ins. Co. v. Duncan, 115 So. 43; American Bankers Ins. Co. v. White, 158 So. 346; Provident Life and Acc. Ins. Co. v. Anding, 109 So. 670; Killings v. Met. Life Ins. Co., 192 So. 577.
When this case was before this court on a former trial this court held, if I am able to understand the language of this court, in Metropolitan Life Insurance Company v. Lambert, 128 So. 750, that this would be a jury case if there was an issue of fact on the special plea filed or unless the appellant established its plea without substantial conflict on another trial. Now the question before this court is not whether or not the appellee is totally and permanently disabled, because that issue was properly submitted to the jury and was decided by the jury in favor of the appellee, but the question before this court is — did the appellant establish its special plea without substantial conflict in the evidence. It is the contention of the appellee here that appellant utterly failed to establish its plea. Not only did appellant fail to establish its plea, but appellant utterly failed to introduce any testimony whatever to substantiate its plea and on the contrary, the appellee by Mr. Addison showed beyond a doubt that it was not unreasonable and unfair to appellant for appellee to delay nearly five years in making proof of disability, but on the other hand showed that the appellant was in just as good a position on the date of the trial as they would have been had the trial been four or five years earlier.
This is a second appeal of this case, it having been before the court on appeal by the Metropolitan Life Insurance Company and reported in 184 Miss. 359, 185 So. 573. In the report of that case, the provisions of a group policy of insurance issued by the insurance company to Gilchrist-Fordney Company for the benefit of the latter's employees were set out, and these provisions of the policy will not be set forth again in this opinion.
In the former case, the appellant had filed a plea to the declaration to which the lower court had sustained a demurrer. That plea is set forth in extenso in the former opinion.
On the former hearing, this court reversed the case because the lower court erred in sustaining a demurrer to the plea. The effect of that plea was that the insured, appellee, had not made due proof of his total and permanent disability within the meaning of the policy. In other words, he had not made proof or served notice of any kind on the insurer until a lapse of about five years after the time he claimed he became totally and permanently disabled.
We will not review all of the evidence in the case, but think it best to state it in brief outline.
It is undisputed that the master policy was written in 1920, and at that time the insured was furnished with a certificate which contained the provision that he was required to furnish "due proof" of his total and permanent disability to the insurer. Until December, 1926, Lindsey was an employee of the Gilchrist-Fordney Company as a "dogger" in and about the saw mill. In that month, Lindsey had his hands severely burned in undertaking to rescue persons from a burning house, and was unable to return to work for a period of at least eight months. The evidence is in conflict as to whether or not the employer had eliminated, by improved machinery, the work of a "dogger." At any rate, he was given a place as a sweeper, and continued to be so regularly employed from some time in 1927 until 1932 and so thereafter until July, 1937. He and his witnesses say that in that year his hands became swollen and bled so that he could not perform all of the duties of sweeper, which necessitated the sweeping of debris from certain parts of the plant and to lift objects left upon the floor so that they could be transported from the building. They undertook to show that his hands were in such condition as to be totally and permanently disabled from about November of that year until the date of the trial. The evidence shows that he received a third-degree burn, and that his fingers were to an extent immobile, and that manipulation of his fingers beyond the point where they were mobile caused pain. For some months prior to the last trial, he had been employed as a janitor in a colored school, but had the assistance of the students thereof.
Upon the remanding of this case, the appellee filed a replication to the plea, the effect of which was that the insurer appellant was not injured by the long delay in making proof of his injury.
The pertinent evidence on the plea in replication is that on February 5, 1933, appellee had become sixty years of age. He had had in his possession, since 1920, the certificate issued and delivered to him, but did not have or know the contents of the master policy.
The evidence delivered by him showed that he had not been educated, but had taken some adult instruction and could read to some extent and write his name. The evidence further shows that in July, 1937, the employer, Gilchrist-Fordney Company, surrendered its charter and ceased to operate, and that its force of employees had been disbanded and scattered, many of whom were in the State of Oregon. He was not asked as to whether he knew he was required to make due proof of total and permanent disability under the terms of his certificate and the master policy. In fact, there is not a line or word of evidence which tends to show any reason for his long delay in making the proofs. It was agreed that no notice of any kind or proofs were ever brought to the attention of the insurer until October 4, 1937, after the insured had ceased to be an employee of Gilchrist-Fordney Company. He was not questioned as to any reason he might have had for failure to make proof during the well-nigh five years intervening between the time he discovered his total and permanent disability and the time that fact was brought to the attention of the insurer.
On the former hearing of this case, this court held that due proof means proof within a reasonable time, considering all of the surrounding facts and circumstances, and cited authorities in support thereof. In the first opinion of this court, the case of Metropolitan Life Ins. Co. v. Walton, 19 Tenn. App. 59, 83 S.W.2d 274, 278, was cited and this language quoted: "But there must come a point where the matter becomes one for the decision of the court, where a delay, by reason of its duration and lack of attendant excusing circumstances, is clearly unreasonable, it is the duty of the court so to declare." [ 184 Miss. 359, 185 So. 575.] In the Walton case, supra, the Tennessee court held that four years was an unreasonable delay on the part of the insured, and that upon the facts, a directed verdict should have been given, or there was no liability because due proof had not been made within a reasonable time. We have examined many cases from many courts bearing upon what is considered a reasonable period of time, as a matter of law, and we have read no case that held that so long a time as five years was considered a reasonable time for "due proof." See Cooley's Briefs on Insurance, p. 5914 et seq.
Appellee contends that there is no proof to sustain the plea. In this, we think he is in serious error. The length of time is shown to be about five years, — certainly considerably more than four years. In that time, the witnesses who were co-workers of Lindsey's and who had knowledge of his condition, had removed themselves far from Mississippi. Also, the great lapse of time would cause witnesses cognizant of the facts to fail to remember. To await five years to undertake to make proof gives the insured an advantage as to the appellant's right to investigate and to develop in court the facts at issue, as pointed out in the former opinion in quoting from the case of Berry v. Lamar Life Insurance Company, 165 Miss. 405, 142 So. 445, 145 So. 887. It is absolutely necessary that life insurance companies, who are doing a business which is affected with a public interest, have notice of a claim of injury or death in such reasonable time as to permit a fair investigation of the facts involved in order to relieve itself from payment of fraudulent claims. It was most material to the insurer to have an opportunity, within a reasonable time, to examine the physical condition of appellee when he claims his injury received in 1926 culminated into a total and permanent disability. In other words, an insurer must have some reasonable notice of its liabilities. If, for no reason at all, the insured is permitted to delay five years or more in making due proof, there would never be any limit on what is considered a reasonable period of time within which to make the proof, and the element of time would be eliminated from the contract. Due proof means reasonable time. It means timely proof. We think the delay in this case is wholly unexplained, wholly unexcused, and under the facts and circumstances of the case, the insured, by his delay, had a decided advantage in the development of the facts of the extent of his disability.
Under the evidence in this case, we are of opinion that due proof was not made within the meaning of the contract, as construed in the former opinion, and that the long delay was not attempted to be excused or accounted for by the insured, appellee.
Without reference to the fact that this is still a "feather-edge" case, the peremptory instruction should have been granted on the ground that due proof of the disability had not been made within a reasonable time and that there was no question for the jury; and the court below should have held, as a matter of law, that the length of time, as shown here, was not a reasonable time within which to make due proof of the loss or injury.
Reversed, and cause dismissed.
I concur in the result reached on the facts of this case; but I think that what constitutes a reasonable time is a question of fact; and that before the court can take the decision on that fact from the jury the delay must be such that reasonable men could not reasonably disagree; and the court should, by analogy, follow the statute of limitations in each case.