Brownstein v. New York Life Ins. Co.

• Decision Date: 07 January 1930
• Docket Number: 15. [a1]
• Citation: 148 A. 273,158 Md. 51
• Parties: BROWNSTEIN v. NEW YORK LIFE INS. CO.
• Court: Maryland Court of Appeals

148 A. 273

158 Md. 51

BROWNSTEIN v. NEW YORK LIFE INS. CO.

No. 15. ^[a1]

Court of Appeals of Maryland

January 7, 1930

Appeal from Superior Court of Baltimore City; Albert S. J. Owens Judge.

Action by Lillian F. Brownstein, administratrix of Isador C Brownstein, deceased, against the New York Life Insurance Company. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and SLOAN, JJ.

Wm. H Price, Jr., and Frederick W. Brune, both of Baltimore (Semmes, Bowen & Semmes, of Baltimore, on the brief), for appellant.

John B. Deming, of Baltimore (Keech, Deming & Carman, of Baltimore, on the brief), for appellee.

SLOAN J.

It appears from the declaration that on May 22, 1920, the New York Life Insurance Company, appellee, issued a life insurance policy to Isador C. Brownstein for $10,000, with a disability clause which provided that, in the event of the insured becoming wholly disabled by bodily injury or disease before arriving at the age of 60 years, he would be thereafter relieved, during such disability, of the payment of the annual premiums on the policy, and would be paid, during disability, on each anniversary date thereafter, an amount equal to one-tenth of the face amount of the policy, or $1,000. For this protection there was added to and included in the annual premium $9.90. On the same day the appellee issued to the same insured a similar policy for $5,000, with an additional charge of $4.95, and on June 19, 1920, another policy for $7,000, for which there was a charge for disability of $7.28.

At the time the policies were issued, the insured was 26 years of age, and within 2 years thereafter he became wholly and permanently disabled, and so continued to the day of his death on April 13, 1926. The suit is brought by Lillian F. B. Brownstein administratrix, appellant, for an apportionment of the disability benefits on the first and second policies from May 22, 1925, and on the third from June 19, 1925, to April 13, 1926. The appellee demurred to the declaration, and from the judgment thereon in its favor this appeal was taken.

The appellee contended that, if the insured died before the anniversary dates of the policies, the disability benefits did not accrue from the last preceding anniversary dates to the day of the death of the insured, and were not apportionable, and with this contention the court below agreed. The provisions of the policy covering the disability of the insured, and which this court is called on to construe, are:

"And the company agrees to pay to the insured one-tenth the face of this policy per annum during the lifetime of the insured, if the insured becomes wholly and permanently disabled before age 60, subject to all terms and conditions contained in section 1 hereof.

This policy takes effect as of the 22d of May, nineteen hundred and twenty, which day is the anniversary of the policy.

Section 1-- Total and Permanent Disability Benefits. Whenever the company receives due proof, before default in the payment of premiums, that the insured, before the anniversary of the policy on which the insured's age at nearest birthday is 60 years and subsequent to the delivery hereof has become wholly disabled by bodily injury or disease so that he is and will be presumably, thereby permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit, and that such disability has then existed for not less than sixty days, * * * then

1. Waiver of Premium.--[During disability.]

2. Life Income to Insured. One year after the anniversary of the policy next succeeding the receipt of such proof, the company will pay the insured a sum equal to one-tenth of the face of the policy and a like sum on each anniversary thereafter during the lifetime and continued disability of the insured. * * *

3. Recovery from Disability. The company may at any time and from time to time, but not oftener than once a year, demand due proof of such continued disability, and upon failure to furnish such proof, or if it appears that the insured is no longer wholly disabled as aforesaid, no further premiums shall be waived nor income payments made."

The appellant asks that the rule of construction adopted in many jurisdictions, to the effect that an insurance policy shall be most strongly construed against the insurer, be applied in this case. In this state there is no difference, however, between the construction of policies of insurance and any other contracts. In Frontier Mortgage Corporation v. Heft, 146 Md. 1, 12, 125 A. 772, 776, the opinion by Judge Digges says: "A policy of insurance and every clause and part thereof is the contract, and, like all contracts, should be construed so as to effectuate the real purpose and intention of the parties, giving to the language employed, when unambiguous, its ordinary and usually accepted meaning. * * * The rule, adopted in some jurisdictions, that insurance contracts are to be construed most strongly against the insurer has been distinctly repudiated by this court, and the sounder view that the intention of the parties as gathered from the whole instrument now prevails."

Both parties in this case urge the application of the construction given to annuities as the rule to be applied in this case, the appellee urging that the strict common-law rule that annuities are not apportionable applies. (Brown v. Koffman's Adm'rs, 112 Md. 398, 76 A. 846, 29 L. R. A. [ N. S.] 775, 136 Am. St. Rep. 395, 21 Ann. Cas. 308), and the appellant that the contract involved in this suit brings it within the principle of the exceptions to the rule exhaustively discussed in Brown v. Koffman's Adm'rs, 112 Md. 401, 409, 76 A. 846, 29 L. R. A. (N. S.) 775, 136 Am. St. Rep. 395, 21 Ann. Cas. 308. In 2 R. C. L. 12, it is said:

"On this uniform and unbending rule of the common law that annuities were not apportionable, two well-recognized exceptions were early ingrafted, namely, where the annuity was given by a parent to an infant child, or by a husband to a wife living separate and apart from him. * * * The question as to apportionment has also arisen where annuities have been given in lieu of dower, and, while a sharp conflict of authority exists on this point, some courts vigorously supporting the common-law rule that there can be no apportionment of an annuity in respect of time, except where it is payable by way of maintenance to an infant or feme covert (Tracy v. Strong, 2 Conn. 659; Mower v. Sanford, 76 Conn. 504 [57 A. 119], 63 L. R. A. 625 [100 Am. St. Rep. 1008]; Irving v. Rankine, 79 N.Y. 636; Chase v. Darby, 110 Mich. 314 [68 N.W. 159, 64 Am. St. Rep. 347]; note, 21 Ann. Cas. 315, it would seem that the weight of authority is in favor of numbering among the exceptions to the general rule an annuity created and accepted in lieu of dower ( Brown v. Keech, supra [112 Md. 398, 76 A. 846], 21 Ann. Cas. 308, 29 L. R. A. [ N. S.] 775 [136 Am. St. Rep. 395]; 63 L. R. A. 629, note; Blight v. Blight, 51 Pa. 420; Gheen v. Osborne [Osborn] 17 S. & R. (Pa.) 171; Rhode Island Hospital Trust Co. v. Harris, 20 R.I. 160 [37 A. 701]; In re Cushing, 58 Vt. 393 [5 A. 186]; Lynch v. Huston [Houston], 138 Mo.App. 167, 119 S.W. 994; Parker v. Seely [Seeley], 56 N. J. Eq. 110, 38 A. 280; Quinn v. Madigan, 65 N.H. 8, 17 A. 976. The extension of the doctrine of apportionment to include an annuity given to a widow in lieu of dower is based upon the ground that the annuity is necessary for the support of the widow until her death, or that that which is given in the place of dower should last as long as that for which it is given. Moreover, the inequity and arbitrariness of the general rule has been so generally conceded that modern legislation and judicial decisions have steadily tended to narrow the rule and enlarge the exceptions (Wilson's Appeal, 108 Pa. St. 346 [56 Am. Rep. 214]; Acts 1929, c. 495, § 305C, article 93 of Maryland Code applies to instruments executed after July 1, 1929); so that it may be safely stated that the trend of judicial opinion is now in favor of applying the principle of apportionment to any case where the annuity is made for the purpose of maintenance and support."

See 2 Perry on Trusts, 556; 3 C.J. 217, 218.

The reason assigned for allowing an apportionment of annuities given in lieu of dower is that there was a consideration passing from the annuitant to the doner or grantor, and that it was inconsistent that a widow should give up a right which continued from day to day for one which might be...