BUSINESS MEN'S ASSUR. CO. OF AMERICA v. Sainsbury

• Decision Date: 22 May 1940
• Docket Number: No. 1986.,1986.
• Parties: BUSINESS MEN'S ASSUR. CO. OF AMERICA v. SAINSBURY.
• Court: U.S. Court of Appeals — Tenth Circuit

110 F.2d 995 (1940)

BUSINESS MEN'S ASSUR. CO. OF AMERICA v. SAINSBURY.

No. 1986.

Circuit Court of Appeals, Tenth Circuit.

March 28, 1940.

Rehearing Denied May 22, 1940.

Robert L. Judd, of Salt Lake City, Utah (Emmett M. Bagley, Paul H. Ray, and Acel H. Nebeker, all of Salt Lake City, Utah, on the brief), for appellant.

H. A. Rich, of Salt Lake City, Utah (Carl A. Badger and Benjamin L. Rich, both of Salt Lake City, Utah, on the brief), for appellee.

Before BRATTON, and HUXMAN, Circuit Judges, and MURRAH, District Judge.

HUXMAN, Circuit Judge.

This is an action brought under Section 274d of the Judicial Code, 28 U.S.C.A. § 400, for a declaratory judgment to settle the rights and liabilities of the parties under a health and accident policy of insurance. There is no disagreement as to the facts, all of which were stipulated.

The Business Men's Assurance Company is a corporation existing and organized under the laws of the State of Missouri. On May 21, 1928, it issued a health and accident policy of insurance to Otto Sainsbury, insuring him against loss resulting from bodily injuries effected solely through accidental means, also against loss resulting from sickness. The policy as originally written contained provisions providing indemnity for loss resulting from temporary or permanent loss of time from sickness; total loss of time from confining sickness; total loss of time from non-confining sickness; total loss of time from confining or non-confining sickness; total loss of time from temporary or permanent disability. It also provided an election of method of settlement for total or partial disability. By subsequent agreement, and prior to any loss incurred, the policy was cancelled as to sick benefits and continued in force only as to benefits accruing from accident.

Plaintiff is a dentist, and is right-handed. On January 24, 1938, while the policy was in full force and effect, he suffered an injury which resulted in the amputation of all the fingers of his right hand between the distal and carpo-phallangeal joint. This injury totally and continuously disabled plaintiff from performing any and every kind of duty pertaining to his occupation, within five days from the date of the accident, and the total disability continued to the time of trial.

A disagreement arose between plaintiff and defendant as to the amount of indemnity to which plaintiff was entitled. The court entered judgment in which he provided: "That in the event it shall hereafter be determined that plaintiff's injuries are permanent in character, then said defendant Business Men's Assurance Company of America is obligated to pay to said plaintiff Otto Sainsbury the sum of Two Hundred ($200) Dollars per month commencing on January 28, 1938, and a similar amount of $200.00 on the 28th day of each and every month thereafter so long as said plaintiff lives and continues to suffer such total disability." From this judgment an appeal has been taken to this court. The parties will be referred to as they appeared in the court below.

Section 1 of Article II of the policy reads as follows: "If such injuries, independent of all other causes, shall totally and continuously disable the insured within five days from date of accident from performing any and every kind of duty pertaining to his occupation, the Company will pay him at the rate of $200.00 a month for the period beginning on the fourth day of such disability and continuing as long as he lives and suffers such continuous total disability."

Section 10 of Article XI reads as follows: "Upon request of the insured and subject to due proof of loss fifty per cent of the accrued indemnity for loss of time on account of disability will be paid at the expiration of each thirty days during the continuance of the period for which the Company is liable, and any balance remaining unpaid at the termination of such period will be paid immediately upon receipt of due proof."

Defendant contends that Section 1 of Article II provides the rate of payment per month for total disability, but that the amount to be paid each month is to be determined by Section 10 of Article XI. It construes Section 10 of Article XI to mean that it is obligated to pay plaintiff only $100 per month so long as total disability continues, and the balance at the termination of total disability. Defendant's position is that even if total disability is permanent in nature and will continue throughout the life of plaintiff, nevertheless it is obligated to pay him only $100 a month and the accumulated balance of $100 a month to his estate at his death.

Plaintiff, on the other hand, asserts that his right to recover is determined entirely by Section 1 of Article II, and that Section 10 of Article XI has no application to the loss which he has suffered.

If these two provisions are conflicting and obscure the meaning of the contract of insurance, then a liberal construction must be adopted in favor of insured and against the company. Richards v. Standard Acc. Ins. Co., 58 Utah 622, 200 P. 1017, 17 A.L.R. 1183; Gibson v. Equitable...