Bloss v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 02 January 1934
• Docket Number: 24747.
• Parties: BLOSS v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.
• Court: Washington Supreme Court

28 P.2d 303

176 Wash. 1

BLOSS v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.

No. 24747.

Supreme Court of Washington

January 2, 1934

Department 1.

Appeal from Superior Court, King County; Calvin S. Hall, Judge.

Two separate actions by Mary A. Bloss, as guardian of Roy S Bloss, a mental incompetent, against the Equitable Life Assurance Society of the United States, the actions being consolidated for trial. Judgment for plaintiff, and defendant appeals.

Reversed and remanded, with directions.

Kerr, McCord & Carey, of Seattle, for appellant.

Florence Mayne Hickey, of Seattle, for respondent.

MILLARD Justice.

Plaintiff as guardian of her husband, Roy S. Bloss, commenced two actions (which were consolidated for trial) to recover total permanent disability benefits from October 1, 1924, to date upon two life insurance policies issued September 18, 1923 by the defendant insurance company to Roy S. Bloss. The insurer denied liability on the ground that due proof of total and permanent disability was not made as required by the insurance contracts prior to lapsation of the insurance contracts for nonpayment of premiums due December 13, 1924. The cause was tried to the court which found that on or shortly prior to September 1, 1924, and while the insurance policies were in full force and effect, the insured became wholly and permanently disabled, and that the defendant was given due notice and proof of such disability of Mary A. Bloss, the beneficiary under the policies, on and prior to December 10, 1924, Before default in payment of any premium and after the disability had existed continuously for more than three months. Judgment was accordingly entered in favor of the plaintiff. The defendant has appealed.

While the two policies were issued September 18, 1923, both took effect as of the date of the application therefor, September 13, 1923, and are identical as to their terms. Each policy insured the life of Bloss in the sum of $2,500 payable to his wife upon receipt of due proof of death occurring while the policies were in force, with double indemnity in case of accidental death. The insurer further agreed to pay an annuity to the insured and to waive payment of all insurance premiums in the event the insured became totally and permanently disabled. The pertinent provisions of the insurance contracts read as follows: 'If the insured becomes wholly and permanently disabled Before age 60, the society will waive subsequent premiums and pay to the insured a disability annuity of twenty-five dollars a month subject to the terms and conditions contained on the third page hereof.'

The material recitals on the third page of the contract are as follows:

'Total and Permanent Disability. (1) Disability benefits Before age 60 shall be effective upon receipt of due proof, Before default in the payment of premiums, that the Insured became totally and permanently disabled by bodily injury or disease after this policy became effective and Before its anniversary upon which the Insured's age at nearest birthday is 60 years, in which event the Society will grant the following benefits:----

'(a) Waive payment of all premiums payable upon this policy falling due after the receipt of such proof and during the continuance of such total and permanent disability; and

'(b) Pay to the Insured a monthly disability annuity as stated on the face hereof; the first payment to be payable upon receipt of due proof of such disability and subsequent payments monthly thereafter during the continuance of such total and permanent disability. * * *

'Disability shall be deemed to be total when it is of such an extent that the Insured is prevented thereby from engaging in any occupation or performing any work for compensation of financial value, and such total disability shall be presumed to be permanent when it is present and has existed continuously for not less than three months. * * *'

The first annual premium was paid to the soliciting agent, R. E. Johns, at the time the insured applied for the insurance. A quarterly premium of $40.80 on each policy became due September 13, 1924, and was paid. Such payment continued the policy in force until December 13, 1924, when another quarterly premium matured, but was not paid. Just prior to the payment of the September 13, 1924, premium, Bloss lost his position and, according to Mr. Johns, the agent who wrote the policies, Bloss went to the office of the insurer and informed the company that he intended to drop at least one of the policies. He was persuaded, however, at that time by Mr. Johns to keep the policies in force a little longer. Premium notices were sent to the business address of the insured as he directed.

When Bloss applied for the insurance he stated that he had never had syphilis, when, in fact, he then had syphilis and probably had had that disease for a number of years prior to the date of his application for insurance. The affirmative defense of misrepresentation was not interposed by the appellant, which conceded that defense was not available by reason of the incontestable clause contained in the insurance contract.

In May, 1924, Bloss began to manifest mental incapacity by reason of the disease with which he was afflicted. He was unable to perform his work satisfactorily and on that account lost his position with Wm. D. Perkins & Co., September 1, 1924. Two weeks later, Bloss accompanied his wife and two other persons on an automobile trip from Seattle to Pullman and from that city to Seattle by way of Pendleton and Portland, Or. On that trip and after his return to Seattle, Bloss acted so irrationally as to alarm his wife. A neighbor advised Dr. Minnie Burdon, a family physician and family friend of the Blosses, of the actions of Bloss. Upon receipt of advice from that physician as to the condition of Bloss, and in response to the physician's suggestion that he visit his brother, Mr. Bloss's brother, Sidney Bloss of Chicago, came to Seattle. Prior to that arrival, the family physician induced Bloss to go to a King county sanitarium, which is an institution for the care of nervous and mental subjects. Bloss was detained in that institution and examined by certain physicians. An examination of Bloss on October 17, 1924, resulted in a tentative diagnosis of 'beginning general paresis.' That diagnosis confirmed the suspicion entertained some time previously by Dr. Burdon. The laboratory tests made October 20, 1924, on both the blood and spinal fluid, were positive for syphilis, four plus.

The relations between Mrs. Bloss and Sidney Bloss became strained when the latter learned on his arrival in Seattle that his brother had been placed in the sanitarium by Mrs. Bloss. On October 26, 1924, Sidney Bloss took his brother to Chicago. On November 5, 1924, Roy S. Bloss wrote the following note to R. E. Johns (the agent who sold the insurance to Bloss) at Seattle:

'Chicago, Ill. 11-5-24.

'Dear Johns: Hurrah for Coolige!

'I wish you would kindly change the beneficiary in my two policies 3252821 F 92961 325282(2)

--not sure of last figure--to my daughter and send endorsements to me at Warner Hotel, E. 33rd & Cottage Grove, Chicago, Ill., also the same on Nat. Life U-12-431.

'I have no life insurance payable to my daughter and thought it only right to protect her.

'Don't know how long I'll remain here.

'Yours,

R. S. Bloss.'

Under date of November 8, 1924, Mr. Johns wrote to Mrs. Bloss as follows, in transmitting to her the foregoing letter of Mr. Bloss:

'Dear Mrs. Bloss: Inclosed letter from Mr. Bloss which explains itself. I of course will do nothing re changing beneficiary & Mr. Bloss cannot while he is ill.

'I am getting papers together so that we can apply for the indemnity under both policies & will advise you from time to time as to progress.

'Sincerely,

R. E. Johns.'

A short time prior to receipt of the letter from Mr. Johns, Mrs. Bloss was notified by her husband's former employer, Wm. D. Perkins, that he had learned from Mr. Johns of the existence of the two policies which became the subject-matter of this controversy. That was the first information Mrs. Bloss had concerning the policies. Her husband had never told her that he had taken any policies in which she was named as beneficiary.

Learning of her husband's intention to change the beneficiary, Mrs. Bloss consulted an attorney. On December 10, 1924, she wrote to the appellant insurer as follows, on letterhead of Guie & Halverstadt, attorneys:

'Equitable Life Assurance Society of U.S., 303 Central Building, Seattle, Washington.

'Dear Sirs: My husband, Roy S. Bloss, has, I am informed, life and health policies #352821-352822 in your company. On or about October 17, 1924, he was examined by physicians who diagnosed the beginning of general paresis. We submit herewith copies of the findings of the diagnosticians, the originals of which are in my possession.

'I am sending you this notice for the purpose of conveying this knowledge to you that Mr. Bloss is incapacitated for authorizing or making change in his policy.

'Very truly yours,

'Mary A. Bloss,

'4005 West Holgate St., Seattle, Wash.'

The inclosures read as follows:

'Arthur P. Calhoun, M. D.

'Cobb Building, Seattle,

'Dec. 4, 1924

'E. H. Guie, Atty., Marion Bldg., Seattle, Wash.

'Dear Sir: At the request of Mrs. R. S. Bloss, through Dr. Burdon, I wish to report my findings in Mr. Bloss's case.

'I first saw him at the Meadows Sanatorium on Oct. 17 1924, at which time I made a tentative diagnosis of beginning general paresis. After consultation with Dr. Burdon it was decided to have laboratory tests done on both the blood and spinal fluid. This was done by Dr. Nickson of the Swedish Hospital on Oct. 20th. On the 22nd he reported that both

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