Opinion
27816.
DECIDED NOVEMBER 8, 1939. REHEARING DENIED NOVEMBER 24, 1939.
Complaint on disability policy; from Whitfield superior court — Judge Mitchell. June 9, 1939. (Application for certiorari denied by Supreme Court.)
R. Carter Pittman, Matthews, Owens Maddox, for plaintiff in error.
D. W. Mitchell, W. E. W. G. Mann, contra.
1. The petition as amended set forth a cause of action, and the court did not err in overruling the defendant's general demurrer. The special demurrers, not being argued or insisted on, are treated as abandoned.
2. The evidence demanded a finding, as a matter of law, that the plaintiff did not comply with the provision of the policy as to filing due proof of disability with the home office of the defendant, a condition precedent to recovery, and the court erred in overruling the defendant's motion for new trial.
DECIDED NOVEMBER 8, 1939. REHEARING DENIED NOVEMBER 24, 1939.
Robert O. Trundle sued out an attachment against Union Central Life Insurance Company and caused a levy to be made on certain land owned by it, and thereafter filed a petition, in aid of the attachment, seeking to recover under a policy of insurance issued to him under date of June 8, 1928. The petition as amended alleged that the defendant was indebted to him in the principal sum of $3000 and interest at 7 per cent. per annum from April 1, 1933, amounting to $700, on a contract of insurance, a copy of which was attached to the petition as exhibit A and made a part thereof; that on April 1, 1933, plaintiff became and ascertained definitely that he was totally and permanently disabled by reason of paralysis of his right side and impairment of his speech, so that he could not pursue his occupation of salesman and service manager of Oliver Chill Plow Company of Memphis, Tennessee, or any other gainful occupation; that prior to plaintiff's becoming totally and permanently disabled as aforesaid he had been engaged for more than ten years with the Memphis branch of Ford Motor Company, and was then service manager for Whitney Harb of Little Rock, Arkansas; that he worked with Walter A. Stone, Oliver Farm Equipment Company, Louisville, Kentucky, worked with Southern Tractor Company until about April 1, 1932, and then worked for Oliver Chill Plow Company; that he was earning the sum of $315 per month and capable of earning such sum until he became totally and permanently disabled, which condition incapacitates him from pursuing said occupations; that at the time he became so disabled he was forty-six years of age; that as soon as he ascertained his total and permanent disability, and while the said contract was in full force and effect, and while he was totally and permanently disabled by paralysis as aforesaid, plaintiff made proof thereof and submitted same to the defendant as provided by said contract; that on or about October 1, 1933, he furnished due proof of his disability in writing to the home office of the defendant at Cincinnati, Ohio; that he has no copy of said notice but the original is in the possession of the defendant and was given during the continuance of his total and permanent disability, and on October 7, 1933, the defendant denied in writing liability on said policy and claim; that on or about October 1, 1933, plaintiff went to the office of the defendant in Memphis, Tennessee, and reported to Tom Jones, its agent, in the Sterrick building, his permanent disability, and the said Jones in writing did in turn notify the home office of defendant at Cincinnati, Ohio, of said disability for the plaintiff, and on October 7, 1933, plaintiff received from the defendant's agent at Memphis a letter in which all liability was denied under said policy, the letter being dated at Memphis, Tennessee, written on a letterhead marked "Agency of the Union Central Life Insurance Company, M. E. Brooks, Manager," signed "M. E. Brooks, Manager, by Tom Jones," and reading as follows: "Although you have not provided us with the letters from the Little Rock physicians who attended you during your illness, we wrote directly to our company and submitted your case. Their reply is that disability clause 6, the clause attached to your policy, provides that proof of disability is to be submitted while the insured is totally disabled. Indeed we regret that it is impossible for the company to take any action at this belated date on your case;" that plaintiff calls upon the defendant to produce and have in court, upon the trial of the case and from term to term thereafter until the case is finally disposed of, the said letter written by the defendant's agent at Memphis, Tennessee, to the defendant's home office at Cincinnati, Ohio, dated on or about October 1, 1933, to be used as evidence in behalf of the plaintiff upon the trial of this case and any and all correspondence in reference to this claim on or about said date; that plaintiff has been and is now totally and permanently disabled and that said condition has existed since April 1, 1933; that in November, 1934, he came to Wood Station and has lived on a farm in Catoosa County, Georgia, and on account of his disability aforesaid had to give up his occupations of salesman, sales manager and service manager, etc. which he had been pursuing up to the time of his disability; that under the contract sued on plaintiff is entitled to the sum of $50 per month from April 1, 1933, for a period of sixty months, amounting to $3000, and interest at 7 per cent. per annum on each monthly payment to this date, amounting to $700, for which verdict and judgment are prayed, and plaintiff also prays for the sale of the defendant's land levied on by attachment and that the proceeds arising therefrom be applied to the payment and satisfaction of said debt.
The policy sued on contained, among others, the following provisions: "2. Definition of Total and Permanent Disability. If the insured, while this policy is in force and before default in any premium payment, shall become totally disabled by accident or disease, so that he is and presumably will be continuously prevented thereby, during his life, from performing any work, or following any occupation, or engaging in any business for wages, remuneration or profit (the injuries specified in article 5 alone excepted), he shall receive the benefits stated, subject to all the conditions hereinafter stated. 3. Accrual of Benefit. On receipt by the company at its home office of due proof that the insured is totally disabled, as defined above, and will be continuously so totally disabled for life, the disability benefit shall accrue as of the beginning of such total disability, but not more than six months prior to such receipt of such proof. If such proof does not establish that such total disability will continue for life, but establishes that the insured is and, for a period of not less than three consecutive months immediately preceding receipt of such proof, has been so totally disabled, the disability shall be deemed to be permanent, subject to the provisions of article 10 hereof, and the benefit shall accrue at the end of the first three consecutive months of such total disability, but not more than six months prior to such receipt of such proof. . . 4. Proof. Due proof of such disability must be submitted during the lifetime of the insured prior to or within three months after default in any premium payment. . . 10. Recovery from Disability. On failure to furnish proof of the continuance of disability, or refusal to permit such examination, as provided in article 9, or if the insured shall perform any work or follow any occupation, or engage in any business for wages, remuneration or profit, no further premium shall be waived and no further disability benefit shall be paid. On due proof that the insured has again become totally and permanently disabled, as defined above, the disability benefits shall be paid as if no prior disability had occurred."
The policy provided that if the death of the insured occurred before he became 65 years of age the company would pay to a named beneficiary, if surviving the insured, and otherwise to his administrators, executors or assigns, the sum of $5000, and also provided for benefit payments in case of disability before reaching the age of sixty years, as follows: "If such benefit shall accrue on or before the policy anniversary nearest to age 60 of the insured, payment of premium falling due after the benefit shall accrue shall be waived or refunded, and an annuity shall be paid in monthly payments of one per cent. of the amount of insurance stated on the first page of the policy [that is, $5000], beginning on the date the benefit shall accrue and continuing without commutation so long as the insured shall survive and shall suffer such disability."
To the petition as amended the defendant demurred on the following grounds: 1. That the petition as amended set forth no cause of action against the defendant. 2. Defendant demurs specially to the averments in the amendment to the effect that the plaintiff furnished due proof of his disability to the home office of the company in Cincinnati in writing and the allegation that he went to the office of the defendant in Memphis, Tennessee, and reported to Tom Jones, agent of the defendant company, his disability and that the said Jones in turn notified the home office in writing of the plaintiff's disability, on the grounds (a) that the allegation is vague, indefinite, and contradictory and (b) is duplicitous and indefinite in that it is not alleged whether the plaintiff made due proof in writing to the home office or is relying upon the oral report of his disability to Tom Jones and his written report to the home office. 3. Demurs specially to the averments of the amendment to the effect that the plaintiff received a letter from the agent of the company in Memphis, Tennessee, in which all liability was denied, on the grounds: (a) that the same is a conclusion of the pleader; (b) that it is not alleged that the said Tom Jones had any authority to deny liability for the company, the allowance or disallowance under the policy sued on as to any and all disability being with the home office; (c) that the same is insufficient to show that proof was furnished as required by the policy and the law and that liability had been denied by the defendant.
The defendant also filed an answer, which, as amended, denied liability, setting up that it issued the policy as alleged, but that plaintiff failed to pay the premium extension due July 21, 1934, and under the terms of the policy and the contract as to disability the policy became null and void and any liability on the part of the company for disability under said policy ceased by reason of said failure to pay the premium when due, that the defendant had not received at its home office any proof of total disability as defined in the provisions of the policy and, therefore, the premiums on said policy were never waived by operation of the provisions of the policy on proof of disability, and that when said policy became void by reason of the plaintiff's failure to pay the premium due on July 21, 1934, and no proof of total disability had been filed before that date or within three months thereafter, as provided in the policy, all rights of plaintiff in said policy ceased because the filing of proof of total and permanent disability with the defendant at its home office was a condition precedent to the waiver by the defendant of the payment of premiums under the policy. The answer was amended by further setting up that the policy sued on lapsed for nonpayment of premiums due June 7, 1931, and that thereafter, on September 8, 1931, the plaintiff filed an application with the company for reinstatement of the policy, and in answer to question 14 therein, "Are you in sound health?" he made answer "Yes," and that in answer to question 15 therein, "Have you had any illness or injury or have you consulted any doctor or practitioner in the last ten years?" he made answer "No;" that said answers were false and fraudulent and made for the purpose of inducing the defendant to reinstate the policy, and were made by the plaintiff with full knowledge that he had suffered a stroke of paralysis on June 1, 1930, and that the defendant reinstated the policy by reason of and on the faith of the truth of the answers to the questions set forth in the application for reinstatement of the policy.
The court overruled the demurrers to the petition as amended and exceptions pendente lite, duly certified, were filed by the defendant. Thereafter the case proceeded to trial before the court and a jury, and after the introduction of evidence referred to in the opinion hereinafter the court directed a verdict for the plaintiff in the amount sued for. The defendant filed a motion for new trial on the general grounds, and by amendment added the following special grounds: (1) that the court erred in directing the said verdict and entering judgment thereon because under the evidence it was not demanded and was contrary to law; that under the pleadings there was no evidence authorizing the court to enter a verdict in favor of the plaintiff; that under the evidence a verdict was demanded in favor of the defendant; that the evidence clearly and without dispute showed that the plaintiff had not complied with the terms of the policy in furnishing due proof of total and permanent disability at the home office of the company while his policy was in full force and effect; (2) that the court erred in not, on motion of the defendant, directing a verdict for the defendant because (a) under the pleadings and the evidence a verdict in favor of the defendant was demanded, and (b) the evidence clearly and without dispute showed that the plaintiff had not complied with the terms of the policy in furnishing due proof of total and permanent disability at the home office of the company while his policy was in full force and effect. The court overruled the motion for new trial. The exceptions here are to the judgment overruling the defendant's demurrers on the grounds specified in the exceptions pendente lite and to the judgment overruling the motion for new trial.
1. The petition as amended set forth a cause of action. It alleged that the plaintiff became totally and permanently disabled on April 1, 1933, and that he could not pursue his former occupation of salesman and service manager or any other gainful occupation; that on or about October 1, 1933, he made proof of his disability and submitted the same to the home office of the defendant as provided by the policy, and that on October 7, 1933, the defendant denied in writing liability on the policy and claim. It was not necessary to set forth the details of the proof, such being evidential, but it was alleged that plaintiff reported his disability to the defendant's agent, Tom Jones, in Memphis, Tennessee, who in turn notified the home office thereof, and that thereafter, on October 7, 1933, plaintiff received from the defendant's agent at Memphis a letter in which all liability was denied; that he is still unable to perform his former occupations of salesman, sales manager, and service manager, and is entitled to certain named benefits under the policy. The court did not err in overruling the defendant's general demurrer.
(a) The special demurrers are not argued or insisted on, and must be treated as abandoned.
2. Assuming, but not deciding, that the evidence introduced on the hearing of the case showed that the plaintiff became totally and permanently disabled on June 1, 1930, as a result of a stroke of paralysis, and that such disability has continued from that time, it is apparent from the record that he has never complied with the provisions of the policy as to furnishing due proof and is not entitled to recover. Furthermore, as hereinafter shown, there was no such refusal to pay, on the part of the company, as would make the filing of proof unnecessary. In fact, the plaintiff did not plead, and does not now insist, on any waiver by the company, but based his right to recovery on the contention that he had fully complied with the conditions precedent as to furnishing proof. The policy provided: "On receipt by the company at its home office of due proof that the insured is totally disabled, as defined above, and will be continuously so disabled for life, the disability benefit shall accrue as of the beginning of such total disability, but not more than six months prior to such receipt of such proof. . ." (Italics ours.) It further provided: "Due proof of such disability must be submitted during the lifetime of the insured prior to or within three months after default in any premium payment." It was agreed by stipulation between the parties that the only correspondence to or from the home office of the defendant as to disability, exclusive of a letter from the home office to plaintiff's counsel under date of December 17, 1934, informing them that as the policy had lapsed a claim for benefits could not be considered, consisted of the letter written by Jones of the Memphis office, under date of September 27, 1933, to the home office, and the letter from the home office, under date of October 3, 1933 (not set out in the record), in reply to the letter of September 27, 1933, from the Memphis office. It was admitted by the plaintiff that he did not pay the premium due in July, 1934, and had not paid any since then.
Obviously, any proof of loss or claim sent in by plaintiff's attorneys, if any was sent, in connection with their letter of December 11, 1934, which was replied to under date of December 17, 1934, as above mentioned, was not "prior to or within three months after default in any premium payment." Therefore, the only timely information communicated to the home office as to any disability of the plaintiff during its existence, if any proof was made, could only have been by reason of the letter of September 27, 1933, from Jones of the Memphis office. But did it serve this purpose? The plaintiff testified that he went to the Memphis office about that time and reported to Tom Jones, agent of the company, his disability, and appointed him to act for him in advising the company, that Jones thereupon dictated a letter to the company, the contents of which he did not then know, and it is this action of the plaintiff and the letter of Jones that counsel for the plaintiff contend constitute a compliance with the provision of the policy as to proof of disability. The plaintiff did not personally send any proof to the home office. He relied on Jones, and it would be a sufficient compliance if due proof was transmitted by anybody on behalf of the plaintiff. But notice to Jones of the plaintiff's disability would not be equivalent to "receipt by the company at its home office of due proof" etc., as provided in the policy. If Jones failed to transmit to the home office proof or notice of total and permanent disability the result, as affecting the home office, was the same as if the plaintiff had not requested Jones to act for him. For this purpose Jones was the agent of the plaintiff and not of the company.
The letter written by Jones was put in evidence and read as follows: "We are advised by the above insured [R. O. Trundle] that for a considerable period, beginning about June 1st, 1930, he was incapacitated and totally unable to engage in any work of any nature. At this time he has recovered sufficiently to be employed. He has raised the question as to whether he would not be entitled to the disability benefits for the period during which he was incapacitated, provided, of course, that proper evidence is submitted and established for the correctness of his statement. We have advised him to secure from each of the attending physicians who consulted him during his period of infirmity full statements, and these will be forwarded to you as soon as received." This is the letter which the plaintiff, in his petition, called upon the defendant to produce and have in court upon the trial of the case, to be used as evidence on behalf of the plaintiff. Clearly it does not purport to notify the home office of any total and permanent disability of the plaintiff, but only serves the purpose of inquiring whether or not the company would allow him disability benefits for a period, after June 1, 1930, when he was temporarily incapacitated, "provided, of course, that proper evidence is submitted and established" etc.
It is not contended that any proof of disability had been submitted prior to September 27, 1933, and as Jones, acting for the plaintiff, represented to the home office that he had recovered sufficiently to be employed (the plaintiff testified that at that time he was working for Oliver Chill Plow Company and remained with them until June 30, 1934), evidently the home office took the position that the plaintiff was not entitled to any benefits because he had not, during his disability, made any proof thereof. This is inferable from the fact that Jones, after hearing from the home office, wrote the plaintiff as follows on October 7, 1933: "Although you have not provided us with the letters from the Litte Rock physicians who attended you during your illness, we wrote directly to our company and submitted your case. Their reply is that disability clause No. 6, the clause attached to your policy, provided that proof of disability is to be submitted while the insured is totally disabled. Indeed we regret that it is impossible for the company to take any action at this belated date on your case." Certainly that correspondence does not show that the home office had received any proof of total and permanent disability during the disability or that the company had declined to pay the plaintiff, under the policy, for any total and permanent disability, but only that they would not pay benefits for a disability reported as having temporarily existed prior to September 27, 1933, but of which no report was made during its existence.
Furthermore, it appears that the plaintiff never afterwards supplied the home office or Jones with statements from attending physicians as to even a temporary disability, which was all that Jones's letter, reasonably construed, related to. Even if it could be said that the evidence showed that since June 1, 1930, the plaintiff had suffered from a total and permanent disability, as defined by the policy, it must be held, as a matter of law, that the record fails to disclose that the plaintiff at any time complied with the condition precedent as to furnishing due proof to the home office of total and permanent disability during its existence and while the policy was in full force and effect. As shown above, the plaintiff admitted that he had not paid the July, 1934, extension premium, or any premium since, and that the policy had lapsed. The record shows that under date of October 14, 1934, he was notified in writing by the home office that because of his failure to pay the July, 1934, premium, the policy had become null and void on October 14, 1934. Under these circumstances the plaintiff was not entitled to recover, and the trial judge erred in not granting the motion for new trial.
Judgment reversed. Stephens, P. J., and Felton, J., concur.