Continental Assur. Co. v. Hendrix

• Decision Date: 11 January 1945
• Docket Number: 6 Div. 241.
• Citation: 20 So.2d 851,246 Ala. 451
• Parties: CONTINENTAL ASSUR. CO. v. HENDRIX.
• Court: Alabama Supreme Court

20 So.2d 851

246 Ala. 451

CONTINENTAL ASSUR. CO. v. HENDRIX.

6 Div. 241.

Supreme Court of Alabama

January 11, 1945

Rehearing Denied March 1, 1945.

London & Yancey and Chas. W. Greer, all of Birmingham, for appellant.

Graham Bibb & Wingo, of Birmingham, for appellee.

Replication 6 is as follows:

'And plaintiff, for further replication to defendant's pleas Nos. 2, 7, 9, 10, 12, 12 1/2, 15, 16, 18 and 19, and to each of said pleas, separately and severally, says that on to-wit, the 10th day of August, 1942, the defendant, having knowledge of the defense set up in said plea refused to pay said insurance and assigned as the sole ground for such refusal that they could not accept the decision of the Army Retiring Board (referring to the proceedings and findings of an army retiring board at Stark General Hospital, Charleston, S.C., on the 3rd day of June, 1942, in the case of Clive V. Hendrix, (0-298373) Medical Corp., by virtue of an order of the Secretary of War of the United States of America by direction of the President of the United States and pursuant to law and the regulations of the United States Army, the findings of which Army Retiring Board were that: 'Captain Clive V. Hendrix (0-298373) Medical Corp. is incapacitated for active service, and for limited service with the supply area and services; that the cause of said incapacitation is; psychoneurosis, anxiety state with depression, severe, cause undetermined; that the incapacity originated prior to entrance upon active duty and existed at time of entrance on active duty January 5, 1941; * * * that the incapacity is not an incident of the service and that it is permanent; that the defect is a major defect,' a copy of which proceedings and findings of said Army Retiring Board the plaintiff had furnished to defendant as part of plaintiff's proof of his disability and in support of his claim for benefits under said policy; that said statement of the sole ground of defendant's refusal to pay said insurance was made in a letter, dated August 10, 1942, written by the defendant to plaintiff's attorneys, Graham, Bibb and Wingo and in said letter defendant further stated in substance that it should be furnished with further evidence which 'would need to deal with the facts relating to the onset and development

of the disability.' Plaintiff further avers that not knowing that defendant had or pretended to have any other defense to the payment of said insurance he incurred considerable expense for attorneys and court costs and went to much trouble in his efforts to collect the amounts due under said policy. Wherefore, the plaintiff says that the defendant has waived the alleged defense set up in said plea and is estopped to avail itself thereof.

GRADNER Chief Justice.

Plaintiff, a practicing physician about forty years of age, seeks to recover of the defendant insurance company the sum of $200 per month over a given period of time for disability due to sickness, resulting in a total loss of all of his business time during that period, as provided in the insurance policy upon which this action is founded. The policy expressly provided that it did not cover disability resulting wholly or partially, directly or indirectly, from injury or sickness contracted while the insured was in the military or naval service in time of war. Aside from the general issue, there were numerous special pleas, and a number of replications thereto. The cause was submitted to the jury, resulting in a verdict and judgment for plaintiff, from which the defendant prosecutes this appeal.

Though the record is voluminous and has been read with care, we are persuaded that discussion here may well be brought within narrow limits. There were a number of special pleas relying upon misrepresentations on the part of plaintiff as to his earnings, as well as having other like insurance. To these special pleas plaintiff interposed a number of replications, among them Replication 6, which to our minds presents the most serious question on this appeal. A demurrer to this replication, based upon numerous grounds, was interposed and overruled. This presents the first question here for consideration, and for convenience Replication 6 will appear in the report of the case.

This replication is based upon the well-accepted theory that, where an insurer denies liability for a loss on one ground, at the time having knowledge of another ground of forfeiture, he cannot thereafter insist on such other ground if the insured has acted on its asserted position and incurred prejudice or expense by bringing suit or otherwise. 29 Am.Jur. p. 667; Liverpool & London & Globe Ins. Co. v. McCree, 213 Ala. 534, 105 So. 901; Travelers' Ins. Co. v. Plaster, 210 Ala. 607, 98 So. 909; Bankson v. Accident & Cas. Co., 244 Ala. 371, 13 So.2d 398; Georgia Home Ins. Co. v. Allen, 128 Ala. 451, 30 So. 537.

We are of the opinion the replication is insufficient, as stating the mere conclusion or opinion of the pleader without the averment of sufficient facts upon which to base such conclusion. Speaking of a special plea interposed in Nashville, C. & St. L. Ry. Co. v. Parker, 123 Ala. 683, 27 So. 323, 326, and declaring it insufficient, the Court observed: 'It gave no facts by which the court could determine the validity of the contract, or the correctness of the construction placed upon it by the pleader, or how or in what manner anything done or omitted to be done under 'the contract' could affect or vary the rights of the parties.'

And speaking of a replication to a plea in Thomas v. Irvine, 171 Ala. 332, 55 So. 109, 110, the Court held it insufficient for failure to set out the terms of the contract, at least in substance, the opinion stating: 'The averment of this replication in reference to the contract was but a statement of the pleader's conclusion.'

The case of Norwich Union Fire Ins. Society v. Prude, 156 Ala. 565, 46 So. 974, is to like effect. And we think the objection of the courts to a mere conclusion of the pleader as to the contents of a written instrument, rather than the statement of the facts as to its contents, is demonstrated as well-founded by the allegations appearing in this replication. Illustrative is the averment that in the letter in question (bearing date August 10, 1942) the defendant refused to pay on the ground that it could not accept the decision of the Army Retiring Board. Yet later in the replication, it appears that in the identical letter the defendant 'stated in substance that it should be furnished with further evidence which would need deal with facts relating to the onset and development of the disability.'

To our minds it is clear enough that a statement by the defendant company that it could not accept the finding of the Retiring Board, coupled with a suggestion that further evidence of facts should be produced relating to the onset and development of the disability alleged, could not properly be interpreted as a denial of liability. That question, by the very terms of the letter, was left open. Speaking of an implied waiver of a legal right, the author, in Sec. 821, Vol. 4, Couch's Cycl. of Ins. Law, used the expression: 'There must be a clear, unequivocal, and decisive act showing a purpose or intention to waive, or the acts or conduct relied upon must involve some element of estoppel.'

Our authorities do not appear to use this exact language. Yet, in effect, such is the holding of our decisions. Illustrative is the case of Liverpool & London & Globe Ins. Co. v. McCree, supra [213 Ala. 534, 105 So. 903], where is the expression 'definite denial of liability,' as disclosed by the following sentence: 'The pleas of waiver and estoppel can be predicated on this definite denial of the existence of the contract.'

Generally speaking, however, our authorities merely refer to a 'denial of liability.' Certainly, it was not intended by any of the authorities to so hamper correspondence between the insurer and the insured as to subject the insurer to a forfeiture of legal rights when seeking only more proof upon the question of the policy's coverage, and attempting to ascertain the true state of affairs.

Plaintiff had been in the U. S. Army, with the rank of captain, for more than a year when he first wrote the defendant, on February 3, 1942, merely giving notice that he was admitted to the Camp Davis Hospital on February 1, 1942. He gave no indication of the cause of his disability, its nature, or when it arose; and on February 24, 1942, he wrote the defendant that his regiment had been moved, and that he was a patient of the station hospital, Camp Davis, North Carolina, and declaring that under the terms of his policy, he was entitled to pay for hospitalization. Still there was no indication of the nature, or the extent, or the cause of the disability, nor did the letter intimate when the disability began. It was reasonable that the insurance company should first desire information, not only as to the nature of the illness, but also as to its origin. The matter of the 'onset and development' of the illness was one of great importance to the company under the express terms of the policy contract.

It was not until June 3, 1942, that plaintiff indicated in his correspondence that the disability began before his active military service began....