New York Life Ins. Co. v. Stoner

• Decision Date: 22 March 1940
• Docket Number: No. 11450.,11450.
• Citation: 109 F.2d 874
• Parties: NEW YORK LIFE INS. CO. v. STONER.
• Court: U.S. Court of Appeals — Eighth Circuit

109 F.2d 874 (1940)

NEW YORK LIFE INS. CO. v. STONER.

No. 11450.

Circuit Court of Appeals, Eighth Circuit.

February 19, 1940.

Rehearing Denied March 22, 1940.

William H. Becker, of Columbia, Mo. (Boyle G. Clark, J. E. Boggs, Paul M. Peterson, and Howard B. Lang, Jr., all of Columbia, Mo., H. Templeton Brown, of St. Joseph, Mo., and Louis H. Cooke, of New York City, on the brief), for appellant.

Benjamin Phillip, of St. Joseph, Mo. (B. L. Kaufmann, Francis Smith, and R. E. Culver, all of St. Joseph, Mo., on the brief), for appellee.

Before THOMAS and VAN VALKENBURGH, Circuit Judges, and DEWEY, District Judge.

DEWEY, District Judge.

In this action the appellant, New York Life Insurance Company, asked for a declaratory judgment on four similar combination life and disability insurance policies.

The policies were issued to Lewis K. Stoner, appellee, who claims to have been totally and permanently disabled since June 29, 1931, as a result of an injury sustained when an automobile struck the wagon in which he was riding.

Payments for total disability were made and premiums waived by the company to September 29, 1933. This action covers the right to benefits for the period between May 29, 1936, until January 7, 1938.

The total and permanent disability provisions of the four policies, except as to amounts, are identical. The provisions pertinent to this controversy are as follows: "Disability shall be considered total whenever the insured is so disabled by bodily injury or disease that he is wholly prevented from performing any work, from following any occupation, or from engaging in any business for remuneration or profit, * * * if the insured performs any work, or follows any occupation, or engages in any business for remuneration or profit, no further income payments shall be made nor premiums waived."

At the trial a jury was waived and the trial court filed a memorandum opinion. In that opinion is a comment as follows:

"* * * the defendant * * * was in court, however, (he walked in during the progress of the trial) and we observed him carefully. (It is knowledge made famous by the oft repeated tale that one can obtain a much clearer comprehension of the appearance and nature of an elephant by seeing one than by hearing the learned descriptions of even four eminent men of science). We observed the defendant carefully. He walked into the courtroom, using a cane, but with only a slight limp, and with no expressions of pain. He appeared to be a strong, vigorous, healthy man, whose manner, features and appearance suggested intelligence above that of the average farmer. * * *

"The whole truth of the matter is that as a result of his injury the defendant has a permanently stiffened ankle; that any extensive use of that ankle is now painful, so that it cannot be extensively used both because of the pain and because of the stiffness; that medical and surgical treatment possibly would remove entirely the pain element in the defendant's ankle condition. The only business in which the defendant has had training and experience is that of farming. He is not physically able, because of his injury and its consequences, to perform those farmer's tasks which require the more or less continuous and full use of both feet. That is the extent of his handicap."

With this statement it was startling on first impression to learn that the court had found the insured totally and permanently disabled.

Summarizing his opinion the court concluded the law governing to be as follows: "To have a declaratory judgment that it is not liable on account of total and presumably permanent disability under a policy of insurance such as are involved in this case an insurance company must prove by the preponderance or greater weight of the credible testimony that the insured can do any work; or that he can follow any occupation, that is, any of those occupations by which men earn livelihoods for themselves and their families, himself performing such of its duties as substantially constitute that occupation; or that he can engage in any business for remuneration or profit, that is, in any of those businesses by which men earn livelihoods for themselves and their families, himself performing such of its duties as substantially constitute that business." and made one ultimate Finding of Fact as follows: "From May 29, 1936, until January 7, 1938, the defendant was totally and presumably permanently disabled by reason of the injury received by him June 29, 1931", and entered a declaratory judgment that the plaintiff is liable to the defendant for total and permanent disability benefits for the period in question.

The appellant here contends that the court erred: (1) In concluding that the plaintiff bore the burden of proof to show that the defendant was not totally disabled within the meaning of the policies; (2) in the conclusion of law; and (3) in the finding of fact.

As plaintiff's evidence sought to establish that the insured was able to or did engage in a business for remuneration or profit during the period in question, we will limit our discussion to those phrases in the policies.

The only evidence submitted was that of the insured, corroborated by his brother and physicians.

Appellant, New York Life Insurance Company, assumed the burden of proof and is estopped to deny that it was not required to assume that burden.

We would not want to be understood however as holding that it was incumbent on the plaintiff to prove a double negative, as the plaintiff inferred from the court's conclusion of the law. To require a plaintiff to prove a double negative would often result in an unwarranted change of the plain provisions of an agreement.

"Whenever the establishment of an affirmative case requires proof of a material negative allegation, the party who makes such allegation has the burden of proving it, especially where the most appropriate mode of proof is by establishing the affirmative opposite of the allegation." 22 C. J.Evidence, Sec. 15, p. 70.

The most appropriate mode here required the plaintiff to prove, and prove only, the affirmative that the insured can or has during the period in question engaged in some business for profit.

The insured seriously and confidently contends that under the laws of Missouri the facts abundantly establish the total disability of the insured, or at least, substantial evidence to support the ultimate fact found by the trial court.

At the time of the insured's accident he was operating and farming 305 acres. This consisted of two farms, one of 200 acres, known as the Estate Farm, which he rented from his mother, and the balance owned by himself. They were operated as one grain and stock farm. The injury was from a fall resulting in two bones of his lower left leg being jerked out of the ankle joint. Sometime prior to September 29, 1933, he started to manage and operate the two farms in a manner hereinafter described and since that time his physical condition has been about the same, except that the ankle is slightly smaller than it was. The ankle is completely ankylosed and is painful to some extent at all times. He can walk a block or two with the aid of his cane and can drive his automobile without excess pain. When he overdoes the walking or exercising he often experiences pain so severe that he cannot sleep at night. The injury is permanent. His mind is not affected by the injury and has not been at any time.

Since his injury he has not been able to do the actual physical labor connected with the farming but hires it done. Prior to the injury he employed two men constantly on the farm but since the injury he has been able to operate it with one farm hand on account of the employment of a tractor and modern machinery. Since sometime prior to September 29, 1933, he has continued to operate the farm of 305 acres as a grain and stock farm. He buys livestock, cattle and hogs, from others, feeds the produce of the farm to them and sells the livestock. He goes to St. Joseph, Mo., and buys livestock and also buys livestock from his neighbors and in the purchase of livestock he deals with them personally. He drives his car to Omaha and St. Joseph, a distance of 90 to 100 miles, where he trades at the stockyards. He trades and sells livestock through the same commission men who handled his stock transactions before he was injured. He looks after the livestock on the farm, that is, personally sees it and keeps himself informed and acquainted with what is on the farm.

There is a highway between the two farms and the farms are mostly bordered by roads and he can drive his automobile anywhere that a binder or mowing machine can go, and he does this and drives into the fields and consults with his men about the crops and the method and manner of doing the work. He operates the Estate Farm under an agreement with his mother, pays the operating expenses, including taxes and insurance, and the living expenses of himself and his mother, and makes a profit which he divides with her.

The law becomes important as the court's finding of fact was based upon his conclusion as to the law.

In the interpretation of these insurance contracts, if the law applicable has been decided by the highest court of Missouri, the federal courts are required to follow its decision. Erie R. R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487.

That court has not construed the phrase used in insurance policies containing the provision that "disability shall be considered total whenever the insured is so disabled * * * that he is wholly prevented * * * from engaging in any business for remuneration or profit", or the phrase, "if the insured engages in any business for remuneration or profit, no further income payments shall be made nor premiums waived."

It has consistently held that where the language of an insurance policy is plain and unequivocal, there is no room for construction and the words must be...