Aetna Life Ins. Co. of Hartford, Conn. v. Durwood, 44280
| Decision Date | 14 March 1955 |
| Docket Number | No. 44280,No. 1,44280,1 |
| Citation | 278 S.W.2d 782 |
| Parties | AETNA LIFE INSURANCE COMPANY OF HARTFORD, CONNECTICUR, a Corporation, Plaintiff-Appellant, v. Edward D. DURWOOD, Defendant-Appellant |
| Court | Missouri Supreme Court |
William B. Cozad, Randolph P. Rogers, Jr., William M. Symon, Jr., Morrison Hecker, Buck, Cozad & Rogers, Kansas City, for plaintiff.
Wm. G. Boatright, Kansas City, for defendant-appellant, Edward D. Durwood.
Plaintiff, Aetna Life Insurance Company, filed this suit to obtain a declaratory judgment as to its rights and obligations under the permanent total disability provisions of five life insurance policies issued by plaintiff to and upon the life of defendant Edward D. Durwood. Defendant filed a croos-petition seeking to recover certain premiums he had paid and disability benefits which he alleged had accrued to him under the policies and penalties for plaintiff's vexatious refusal to pay. The trial court found all of the issues in favor of defendant, except the penalty and attorney fee for vexatious refusal to pay. The aggregate amount of the judgment for defendant upon all five counts of his cross-petition was $50,030.60. Each party has appealed.
Three of the policies, in the aggregate face amount of $25,000, were issued February 26, 1926, and provided for maturity at the end of 24 years. Each of the three policies contained this total permanent disability provision with respect to waiver of premiums and income disability benefits:
'If, before default in payment of premium and before the date of maturity of this policy, the insured becomes totally and permanently disabled by bodily injuries or disease and is thereby prevented from performing any work or conducting any business for compensation or profit, the following benefits will be available: A waiver of the payment of premiums falling due during such disability, and an income of ten dollars a month for each one thousand dollars of the original insurance payable to the life owner each month in advance during such disability and before the date of maturity of this policy.
These policies will be hereafter referred to as the 'three policies.'
Policy No. P624818, in the face amount of $20,000, was issued on May 11, 1928. It had no maturity date prior to the death of the insured. It had a disability provision similar to the one heretofore set out which was made applicable only in the event disability occurred before the insured reached age 60. If it occurred after age 60, only the waiver of premium provision was applicable. Since the claimed disability in the instant case occurred after Mr. Durwood became 60 years of age, only the waiver of premium benefit is in issue as to this policy. That provision is that the 'benefit shall accrue from the date evidence of such disability satisfactory to the company is received at its Home Office.' This differs from the provision in the 'three policies' in that it provides for satisfactory evidence rather than 'due proof' of disability and it will be further noted that it contains no provision for benefits prior to receipt of such satisfactory evidence at the home office.
Policy No. N856608, in the face amount of $121,300, was issued June 21, 1930. It provided for maturity at the end of 20 years. This policy contained a provision for waiver of premiums in the event of total permanent disability but had no disability income provision. Like the policy described in the preceding paragraph, it provided for 'evidence satisfactory to the company' in lieu of the phrase, 'due proof,' as used in the 'three policies.'
At the outset, we have decided that the slight differences in the phraseology of the two policies last described and of the 'three policies' is immaterial insofar as a determination of the issues in this case are concerned. Therefore, for the purposes of this decision, we will consider that the provisions relating to the accrual of disability benefits in the other two policies are, in legal effect, the same as provided in the 'three policies' above quoted.
Defendant became totally disabled on February 11, 1946, when he suffered a heart attack, and within three months thereafter it was determined that such disability was permanent. Within that period, Dr. A. Morris Ginsberg, defendant's physician, came to that conclusion and so advised defendant. After spending six weeks in bed, defendant has since been able to be up much of the time and can occasionally leave his home. However, he has not been able to carry on his business affairs. Upon being advised of his condition, defendant retired from any active participation in business and turned over the control thereof to his son. In view of the evidence in this record, we think the trial court was correct in making the following finding of fact on this issue: 'The court finds that defendant became totally and permanently disabled on February 11, 1946, by bodily injuries or disease, which prevented him from performing any work or conducting any business for compensation or profit, which total and permanent disability has continued uninterruptedly to the present time.'
Plaintiff has no notice of defendant's condition until November 20, 1950. In the meantime, plaintiff continued to send defendant regular notices of the amount of the premiums upon his policies as they became due and defendant voluntarily paid said premiums.
In February, 1950, the 'three policies' matured and plaintiff paid defendant $30,325, the amount which appeared to be due thereon, and defendant surrendered said policies to plaintiff for cancellation. Policy No. N856608 matured in June, 1950, and plaintiff paid defendant the full principal amount due, but defendant elected to return the money to plaintiff to be held at interest under a supplemental contract. This policy was also surrendered for cancellation. All of the policies had been in defendant's possession from date of issue until they matured.
Defendant testified that in November, 1950, an incident occurred which brought the Aetna policies to his mind and caused him to call the Kansas City office of the company and inquire whether the policies he had surrendered contained provisions for disability and waiver of premium benefits. Upon being advised that they did, he stated that he wanted to make a claim for such benefits. A short time later, he received a claim blank and on November 28, 1950, made a formal claim for disability benefits from February 11, 1946. Defendant testified that the reason he had not made a claim prior to this time was because he had completely forgotten about the disability benefit provisions. There was some medical evidence to the effect that his ability to remember might have been adversely affected by a diseased condition of his thyroid gland.
Plaintiff did not pay the claim and in December, 1951, filed this suit seeking an adjudication as to its liability. The proof was accepted by plaintiff for the waiver of premium benefit on Policy No. P624818 which had not matured. Defendant paid the premium that became due on May 11, 1951, after the claim had been filed. Plaintiff tendered a return of this premium but defendant refused to accept it, contending that he was entitled to a return of all premiums paid after February 11, 1946. Plaintiff in its petition renewed the offer to return this premium.
As we have previously indicated, defendant's answer and cross-petition, in five counts, sought recovery for amounts alleged to be due from plaintiff on account of benefits accrued and premiums paid on each of the policies. In the first three counts, he alleged that he was entitled to recover disability benefits of $10 per month for each one thousand dollars of insurance and all premiums paid on the 'three policies' from February 11, 1946, until February 1950, when those policies matured. In the fourth and fifth counts he prayed recovery for the amount of all premiums paid after February 11, 1946, on the other two policies. In each count, defendant also sought to recover interest from November 24, 1950, and ten per cent of the amount of the judgment as damages for vexatious refusal to pay the claim, plus a reasonable attorney fee. Evidence was presented to the effect that such a fee would be $7,500.
Plaintiff now contends that the trial court erred in rendering judgment for defendant for disability income and waiver of premium benefits upon the policies because such benefits accrued more than six months prior to the date that due proof of disability was received by plaintiff at its home office and hence were barred by the specific provisions of the policies requiring such proof as a condition precedent to the right to receive benefits. It is also argued that, under four of the policies, defendant's rights were released by virtue of the maturity, surrender and cancellation of those policies prior to receipt by plaintiff...
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