Reynolds v. Travelers' Ins. Co.

• Citation: 176 Wash. 36,28 P.2d 310
• Decision Date: 03 January 1934
• Docket Number: 24561.
• Court: Washington Supreme Court
• Parties: REYNOLDS v. TRAVELERS' INS. CO.

28 P.2d 310

176 Wash. 36

REYNOLDS v. TRAVELERS' INS. CO.

No. 24561.

Supreme Court of Washington

January 3, 1934

Department 1.

Appeal from Superior Court, King County; J. T. Ronald, Judge.

Action by Oscar F. Reynolds, as administrator of the estate of Garrett E. Nearing, deceased, and as administrator of the estate of Mary E. Nearing, deceased, against the Travelers' Insurance Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

Preston Thorgrimson & Turner, of Seattle, for appellant.

Lester E. Pope and E. C. Whitley, both of Seattle, for respondent.

STEINERT Justice.

This action was brought to recover the full amount of a life insurance policy made payable at the death of the insured named therein, and also to recover the aggregate amount of monthly income for permanent total disability of the insured during his lifetime. The action was tried Before the court without a jury. The court made findings of fact and conclusions of law, and thereupon entered judgment for plaintiff. The defendant has appealed.

The facts are these: On February 5, 1925, appellant issued its policy on the life of Garrett E. Nearing, in the sum of $4,000, with Mary E. Nearing, his wife, named therein as beneficiary. Mr. Nearing and his family were at that time residents of Dallas, Tex. The insurance was made effective from February 2, 1925. In addition to the death benefit, the policy contained a provision for the payment to the insured of a monthly income of $40 during permanent total disability. Respecting this latter feature the policy provided: ' Upon due proof that since the payment of the initial premium upon this contract, Before a default in the payment of any subsequent premium, and Before the anniversary of this contract nearest to the sixtieth anniversary of the date of birth, the Insured has become wholly disabled by bodily injuries or disease and will be continuously and wholly prevented thereby for life from engaging in any occupation or employment for wage or profit, the Company will waive the payment of any premiums which may fall due on this contract during such disability and will pay from the commencement of such disability and during its continuance the disability income stated on the first page of this contract. The premiums so waived and the disability income so paid will not be deducted in any settlement hereunder.' (Italics ours.) The grammatical arrangement of the italicized portion of this provision has occasioned the dispute between the parties to this action.

The policy recited upon its face that it was issued in consideration of the signed application therefor by the insured, and of the payment of a premium of $13 on the second day of each month for twenty years, or until the death of the insured. As a special privilege, a grace of thirty-one days for the payment of premiums was allowed, during which time the contract was to remain in full force and effect.

It is conceded that the premium payments due February 2, March 2 and April 2, 1925, respectively, were paid, but that no subsequent payments were ever made or tendered; it is also conceded that the policy lapsed on June 5, 1925, for nonpayment of premiums, unless such payments were waived, either by the fact of disability or by some act of the company. Beyond this point the evidence is, or rather the conclusions to be drawn therefrom are, in dispute. There was evidence to support the following material facts found by the trial court: Shortly after receiving the policy on or about February 5, 1925, the insured began to develop symptoms of insanity which were so progressive that by the first of April, 1925, or in any event Before the expiration of the grace period for the April premium, he had become totally and hopelessly incapacitated by reason of syphilitic paresis. Later in the same year, the insured was brought to Seattle by his wife, and there remained in her care continuously until August, 1927, when he was committed to the asylum for the insane at Steilacoom, Wash., where he died September 9, 1927.

In the spring of 1927, the wife for the first time learned of the existence of the policy. This information was communicated to her by certain agents of the company, in Seattle, who came to the home of the Nearings to inquire why the premiums on the policy had not been kept up. Search was at once instituted by the wife, and the policy was found by her while the agents were still at the house. On being told that the insured had been insane for about two years, the agents suggested that proof of disability should be made. Subsequently, Mrs. Nearing visited the company's office in Seattle where blanks for making proof were furnished to her. Although the company's agents knew that the premiums on the policy had not been paid, and also knew that Mrs. Nearing was cognizant of that fact, they, nevertheless, raised no question, at the time, as to the failure or timeliness of proof of disability. Within a short time thereafter formal proofs were actually supplied by Mrs. Nearing. It will be kept in mind that all the transactions subsequent to the discovery of the policy occurred in 1927, nearly two years after the policy would ordinarily have lapsed for nonpayment of premiums. Upon receipt of the formal proofs at its home office, the appellant made an independent investigation of the matter and as a result thereof disallowed the claim, on the ground that the insured could not be considered as having become totally disabled prior to the lapsing of the policy. The letter from the company disallowing the claim reads as follows:

'Seattle, Wash., August 17, 1927.

'Mr. Garrett R. Nearing, 6040 7th Avenue, N. E., Seattle, Washington.

'Re: Life Policy 18-NW-2777--P.T.D. Claim.

'Dear Sir: We have just received a letter from the Home Office stating that after a careful investigation of this case at Dallas, Texas, they did not feel that you could be considered totally disabled prior to the lapsing of your policy on April 2nd, 1925.

'It is, therefore, necessary that your claim be disallowed inasmuch as it is not in order for payment.

'Very truly yours,

'Claim Division, by D. T. Shinn.'

Within less than a month after the date of this letter, the insured died.

As the title of this action indicates, Mrs. Nearing, the beneficiary named in the policy, is now dead, and the action is at present being waged by the respondent in his representative capacity of administrator of the two estates.

In addition to the foregoing facts, which we think are supported by the evidence, the trial court found that the policy of insurance matured on or about April 1, 1925, by reason of the permanent total disability of the insured, and was in full force and effect at all times up to and including the date of Mr. Nearing's death. The trial court further found that due and ample proof of such disability occurring prior to default in the payment of premiums had been furnished. These latter findings, so termed, were in reality conclusions, and furnish the basis of the dispute between the parties herein.

There are three questions in the case. The first question is whether the contract of insurance required, under the law of this state, that proof of permanent total disability be submitted prior to the lapsing of the policy for nonpayment of premiums, or merely required that the proof submitted show that the disability occurred while the policy was still in force. Under the first alternative, the proof should have been made not later than the date of the expiration of the grace period allowed for the payment of premiums. Under the latter alternative, proof of permanent total disability, although occurring many years Before , could be supplied at the time of death of the insured. Under the latter alternative, also, such permanent total disability would of itself have the effect of keeping the policy alive for years, without notice to the company, and without payment of further premiums.

The decisions, generally, upon this question, are in conflict. We need not resolve their comparative weight, because the question has been definitely settled in this state. In Wick v. Western Union Life Ins. Co., 104 Wash. 129, 175 P. 953, the total disability clause was practically the same as that here involved. So far as is material here, that clause reads as follows: 'Total Disability.--If the insured, Before attaining the age of sixty years, shall furnish due proof that he has, Before default in the payment of any premium become wholly disabled by bodily injury or disease and will be permanently, continuously and wholly prevented thereby from pursuing any and all gainful occupations, the company will pay for said insured all premiums which shall become due and payable during the continuance of such disability.'

It will be observed that the grammatical arrangement and punctuation of the language dealing with the time for furnishing proof were, in effect, the same in that case as those employed in the case at bar. The same contention was made there as is made here. The court held that, under the terms of the disability clause just quoted, proof was required to be furnished 'Before default in * * * any premium.' In reasoning to its conclusion, the court pointed out that the word 'has,' in the clause then under consideration was significant in that it had reference to an event as of the present time, rather than as of the past. The same reasoning is, of course, applicable to the present situation. The court then noticed other provisions in the policy, expressive of the intent to place a limitation as to time upon the vitality of the contract. Similar provisions, though not identical in form or extent, are contained in the policy Before us. For instance, on the first page of the contract...