Compton v. Amicable Life Ins. Co. of Waco, Tex

• Decision Date: 27 May 1935
• Docket Number: 32831
• Citation: 182 La. 991,162 So. 751
• Court: Louisiana Supreme Court
• Parties: COMPTON v. AMICABLE LIFE INS. CO. OF WACO, TEX

162 So. 751

182 La. 991

COMPTON v. AMICABLE LIFE INS. CO. OF WACO, TEX

No. 32831

Supreme Court of Louisiana

May 27, 1935

Rehearing Denied July 1, 1935

Appeal from Ninth District Court, Parish of Rapides; R. C Culpepper, Judge.

Suit by Roussel T. Compton against the Amicable Life Insurance Company of Waco, Tex. From a judgment dismissing the suit on a plea of prescription and an exception of no cause of action, plaintiff appeals.

Judgment annulled, plea and exception overruled, and case remanded.

Harold W. Hill and John R. Hunter, both of Alexandria, for appellant.

Hawthorn Stafford & Pitts, of Alexandria, for appellee.

OPINION

O'NIELL, Chief Justice.

This suit was dismissed on a plea of prescription and an exception of no cause of action. The district judge decided that both pleas were well founded. The plaintiff has appealed.

The suit is for a disability benefit, under a life insurance policy for $ 2,000, with a so-called "supplemental agreement" for the payment of $ 10 per month per thousand dollars of life insurance, in case of total and permanent disability of the insured by bodily injury or disease. The plaintiff claims the penalty of double indemnity, that is, an additional $ 20 per month, and $ 750 attorney's fee, under Act No. 310 of 1910.

The policy was issued on the 14th of February, 1931. The quarterly premium was $ 14.94, payable on the 14th of February, May, August, and November, each year; which included a quarterly premium of $ 1.36 for the disability benefit, to terminate, however, when the insured would be 60 years of age. He was only twenty-six when the policy was issued.

He avers that, on the 28th of March, 1931, while he was performing his duties as an employee of an oil company, gaging the contents of a gasoline tank, about 35 feet above the ground, he was overcome by the fumes and fell to the ground, the distance of 35 feet, falling on his back and head, and fracturing that part of the vertebral column called the sacrum, and several vertebrae, and sustaining other bodily injuries, rendering him totally and permanently disabled, so that he has become continuously prevented from engaging in any occupation whatsoever for remuneration or profit during the remainder of his life. He avers that there was no default in the payment of the premium on the insurance policy at the time of the accident; the next premium then being the quarterly premium of $ 14.94 to come due on the 14th of May, 1931. He avers that, immediately after the accident, and while he was confined in a hospital, he was advised by an agent of the company, whom he names, that, because of his total and permanent disability, he would not have to pay the premium that would come due on the 14th of May, or any further premiums; the agent having reference to the stipulation in the policy that the company would continue the policy in force without requiring the payment of premiums during the continuance of such disability as the defendant was then afflicted with. He avers that the agent assured him that he, the agent, took notice of the disability, for the company, and would report the matter to the company without delay; hence plaintiff avers, according to his belief, that the agent did notify the company of the accident and of plaintiff's total and permanent disability, and that, if the company did not receive the notice at its home office from the agent, the company received notice through the agent. He avers that because of the assurances given to him by the agent of the company, he did not remit the quarterly premium of $ 14.94 which, but for the happening of the accident before that date, would have been due on the 14th of May, 1931. He avers that the company never gave him the "proper notice of the maturity of the premium," as required by Act No. 68 of 1906; hence he avers that the policy has not been forfeited, or legally declared forfeited, by the company.He avers that, on the 1st day of August, 1931, having failed to receive any disability benefit from the company, he furnished ample and sufficient proof of his total and permanent disability, and demanded payment of the amount due him under the policy; but that the company refused to pay, claiming that the policy was forfeited by default in the payment of the premium due on the 14th of May, 1931. He avers that the company therefore refused to furnish the forms for making proof of his disability; and he avers that the physicians' certificates which he furnished to the company should be deemed sufficient proof of his total and permanent disability.

The suit was filed on the 11th of December, 1933, more than two years after the date, the 14th of May, 1931, on which the quarterly premium of $ 14.94, which was not paid, was due, if the policy was not by its terms continued in force without requiring the payment of premiums after the accident happened.

The so-called "Supplemental Agreement for Total and Permanent Disability," attached to and forming part of the policy, provides:

"Amicable Life Insurance Company agrees, that whenever the Company receives due proof before default in the payment of any premium due upon this Policy that the Insured, prior to the anniversary of the Policy on which the Insured's age at nearest birthday is sixty years, has become totally and permanently disabled by bodily injury or disease so that he is and will be presumably thereby permanently and continuously totally disabled for life, and by reason thereof permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit, and such disability has, upon the date of submitting proof, existed for not less than ninety days, to grant the following benefits, subject to all the provisions of this Supplemental Agreement:

"First. -- Continue the Policy without requiring the payment of premiums, if any, thereafter falling due during the continuance of such disability and in any settlement of the Policy the Company will not deduct the premiums so waived. The loan and surrender value and all other benefits under this Policy shall continue the same as if the waived premiums had been paid as they became due.

"Second. -- Pay to the insured a sum equal to $ 10.00 for each thousand dollars of the face amount of this Policy upon the date of the approval of said proof, and a like amount upon the same date of each month thereafter during the life of the Insured while the Insured is totally and permanently disabled according to the provisions of this Supplemental Agreement. If there be any indebtedness on this Policy, the interest thereon may be deducted from the monthly payments. Such income payments shall not reduce the sum payable in any settlement of this Policy."

The further provisions in the "Supplemental Agreement" are not pertinent to this case. They have reference to the right of the medical adviser of the company to examine the insured, and the right of the company to require, from time to time, but not oftener than once a year, due proof of continued disability; and there is a stipulation that any one of certain specified afflictions shall be deemed a total and permanent disability.

A careful reading of the language which we have quoted leaves no doubt that, in order for a policy like this one to be continued in force without the payment of premiums after the insured has become totally and permanently disabled, the company should receive due proof of the total and permanent disability of the insured before a default has occurred in the payment of a premium due on the policy. Although, obviously, the total and permanent disability of the insured is the cause or reason for exempting him from the payment of premiums in order to continue the policy in force, the exemption does not take place immediately in consequence of the occurrence or beginning of the total and permanent disability. The exemption from the payment of premiums arises only when the company receives due proof of the total and permanent disability, after it has existed 90 days or longer, and before a default has occurred in the payment of a premium on the policy.

If the allegations in the plaintiff's petition are true, and we must assume that they are true for the purpose of determining whether he has set forth a cause of action, the agent of the company must have misinterpreted the language in the so-called supplemental agreement, attached to and forming part of the policy, exempting the insured from the payment of premiums after being totally and permanently disabled; and the agent's misunderstanding of the language, perhaps in good faith, must have caused the insured to misunderstand it, or to rely upon the agent's plausible interpretation, that the insured was exempted from the payment of premiums by becoming totally and permanently disabled, within the meaning of the policy. The insurance company invokes here one of the "General Provisions" of the policy, viz.:

"No one on...