Dean v. Northwestern Mut. Life Ins. Co.

• Decision Date: 11 August 1932
• Docket Number: 8435.
• Citation: 165 S.E. 235,175 Ga. 321
• Parties: DEAN v. NORTHWESTERN MUT. LIFE INS. CO.
• Court: Georgia Supreme Court

165 S.E. 235

175 Ga. 321

DEAN v. NORTHWESTERN MUT. LIFE INS. CO.

No. 8435.

Supreme Court of Georgia

August 11, 1932

Syllabus by Editorial Staff.

Under life policy waiving premiums during total and permanent disability, proof of disability held condition precedent to waiver.

Contract provided that, if insured should, prior to his sixtieth birthday anniversary, furnish satisfactory proof to the company that he has become totally and permanently disabled from any cause, and was physically or mentally incapacitated to such an extent that he was and presumably would be wholly and permanently unable to engage in any gainful occupation the company on receipt of such proof would waive the payment of the premiums thereafter falling due during the continuance of disability.

That insured's insanity and his representatives' ignorance of life policy providing for waiver of premiums on proof of disability prevented such proof did not avoid forfeiture (Civ. Code 1910, §§ 2475, 4266).

Certiorari to Court of Appeals.

Suit by A. S. Dean against Northwestern Mutual Life Insurance Company. Judgment for plaintiff was reversed by the Court of Appeals (43 Ga.App. 67, 157 S.E. 878), and plaintiff brings certiorari.

Affirmed.

RUSSELL C.J., and HILL, J., dissenting.

That insured's insanity and his representatives' ignorance of life policy providing for waiver of premiums on proof of disability prevented such proof did not avoid forfeiture. Civ.Code 1910, §§ 2475, 4266.

A policy of life insurance was issued on January 24, 1918, to Sidney S. Dean, 37 years of age, in consideration of specified premiums payable at intervals during the period of 20 years or until his death prior to the end of that time. The instrument contains a clause that the policy shall "cease and determine" upon default in payment of any premium except as otherwise provided. In another clause it is stated: "In consideration of the payment of an extra premium of seventy-eight cents (first payment hereby acknowledged) with each annual premium required under said policy, it is agreed that if, after payment of premium for one full year and during the continuance of this agreement the insured shall, prior to his 60th birthday anniversary, furnish satisfactory proof to the company that he has become totally and permanently disabled from any cause and is physically or mentally incapacitated to such an extent that he is and presumably will be wholly and permanently unable to engage in any gainful occupation or perform any work for money compensation, the company on receipt of such proof will by suitable endorsement of this agreement waive the payment of the premiums thereafter falling due under said policy and this agreement during the continuance of such disability, except as hereinafter stipulated and agreed: *** (2) Notwithstanding the acceptance of proof of disability, the insured, or his legal representatives, shall annually on the anniversary of the date of said policy, or within 31 days thereafter, file with the company a declaration of continued disability of the insured, and shall upon request, but not oftener than once a year, furnish proof thereof satisfactory to the company. If the insured, or his legal representatives, at any time after such waiver, shall, upon such request mailed by the company to his or their last known address, fail to furnish such proof of continued disability, or if it shall appear to the company that insured has so far recovered as to be able to perform work of any kind for compensation, gain, or profit, then and in either such event said waiver shall be deemed to have failed, and any premium or premiums then or thereafter falling due under said policy and this agreement shall be payable in accordance with the terms thereof, the same as if no waiver of premiums had been made. (3) Such premiums as fall due after the receipt by company of satisfactory proof of disability and prior to acceptance thereof shall be payable by insured, but the same shall be remitted by company. *** (6) The nonpayment of the extra premium as required by this agreement either on the due date or within the days of grace provided by said policy shall automatically terminate this agreement, but same may be reinstated, provided the said policy be then in full force, upon evidence satisfactory to the company of the insurability of insured and payment of all premium arrears with interest at the rate of five per cent per annum. ***"

All the premiums were regularly paid by the insured until January 29, 1926. In October or November, 1925, the insured was stricken was a disease of the brain which progressively grew worse, and caused him to die on April 16, 1927. At the time of his death he was completely insane. He had not paid the premiums accruing after January 29, 1926, nor had he given the company any notice contemplated by the foregoing excerpt from the contract. Continuously from a date prior to January 29, 1926, his mental disease had rendered him incapacitated as described in that provision of the contract, and unable to give notice of the facts to the company. Members of his family were unable to give such notice, because they did not know of the existence of the insurance policy until after the death of the insured. On exception to a judgment, in an action on the policy, overruling a general demurrer to the petition as amended, alleging facts substantially as above set forth, the Court of Appeals reversed the judgment of the trial court. In a petition for certiorari to this judgment of the Court of Appeals the plaintiff assigned error as follows:

"First. Petitioner assigns error upon the decision of the Court of Appeals *** as set forth in the opinion of the court, in which it is held: 'Under the stipulation in the contract of insurance sued on, to the effect that "if the insured shall *** furnish proof satisfactory to the company that he has become totally and permanently disabled from any cause, *** the company, on receipt of such proof, will by suitable endorsement of this agreement waive payment of the premiums falling due under said policy and this agreement during the continuance of such disability," such proof was a condition precedent to such waiver, and the fact that because of his insanity the insured could not make proof, and that no one else could make proof for him for the reasonthat no one knew that he had such policy of insurance, did not have the effect of keeping the policy of insurance in force until his death more than a year from the time of such total disability. Therefore the petition did not set out a good cause of action,' and that no right of action exists in favor of petitioner *** upon said policy; and for specific assignment of error avers that the Court of Appeals *** erred in holding that the plaintiff, your petitioner, failed to allege a good cause of action. *** Second. Petitioner assigns error upon the decision of the Court of Appeals, *** because its construction of the stipulation in question violates the cardinal rule

...