DeVore v. Mutual Life Ins. Co. of New York

• Decision Date: 23 January 1937
• Docket Number: 7599.
• Citation: 64 P.2d 1071,103 Mont. 599
• Parties: DeVORE v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: Montana Supreme Court

64 P.2d 1071

103 Mont. 599

DeVORE v. MUTUAL LIFE INS. CO. OF NEW YORK.

No. 7599.

Supreme Court of Montana

January 23, 1937

Appeal from District Court, Silver Bow County; T. E. Downey, Judge.

Action by Orin L. DeVore against the Mutual Life Insurance Company of New York. Judgment for the plaintiff, and the defendant appeals.

Affirmed.

Charles R. Leonard and W. D. Kyle, both of Butte, for appellant.

H. L Maury and A. G. Shone, both of Butte, for respondent.

ANGSTMAN Justice.

This action was brought to recover disability benefits under a life insurance policy covering disability losses. The complaint sought the sum of $50 per month from March 24 to September 9, 1934, and from February 9 to July 24, 1935, the date the action was commenced. It also sought recovery of the sum of $258.75, being the amount paid as premiums which plaintiff alleged the defendant had agreed to waive by provisions in the insurance contract.

The complaint was challenged by general and special demurrer. The demurrer was overruled and defendant answered.

The cause was tried to a jury. The court by instructions advised the jury that there could be no allowance of benefits accruing after June 20, 1935. The jury found for plaintiff in the sum of $752.09, with interest from July 24, 1935. Defendant's motion for new trial was denied and it appealed from the judgment entered on the verdict.

The important facts were undisputed. The point of difference between the parties hinges upon the meaning of the insurance policy. The policy provisions requiring disability payments were as follows:

"And if the Insured is totally and presumably permanently disabled before age 60, [the insurer] will pay disability benefits (a) Income and (b) waiver of premium, to the Insured Fifty Dollars monthly during such disability increasing after five and ten years continuous disability, besides waiving premium payments, all upon the conditions set forth in Section 3. ***

Section 3. Benefits in event of total and permanent disability before age 60.

Total disability.--Disability shall be considered total when there is any impairment of mind or body which continuously renders it impossible for the Insured to follow a gainful occupation.

Permanent disability.--Total disability shall, during its continuance, be presumed to be permanent;

(a) If such disability is the result of conditions which render it reasonably certain that such disability will continue during the remaining lifetime of the Insured; or,

(b) If such disability has existed continuously for ninety days. When benefits become effective.--If, before attaining the age of sixty years and while no premium on this policy is in default, the Insured shall furnish to the company due proof that he is totally and permanently disabled, as defined above, the company will grant the following benefits during the remaining lifetime of the Insured so long as such disability continues.

Benefits (a) Increasing Income.--The company will pay a monthly income to the Insured *** while total and permanent disability continues. ***

Special Disabilities.--The entire and irrevocable loss of the sight of both eyes, or of the use of both hands or both feet or one hand and one foot, will be considered total and permanent disability.

General Provisions.--The company may, before making any income payment or waiving any premium, require due proof of the continuance of total and permanent disability, but such proof shall not be required oftener than once a year after such disability has continued for two years. If such proof is not furnished on demand or if it shall appear to the company that the Insured is no longer totally and permanently disabled, no further income payments will be made or premiums waived. ***

If the Insured shall at any time so recover that the payment of Disability Benefits terminates and later shall furnish proof that he has again become totally and permanently disabled, Disability Benefits shall be the same in amount and subject to the same conditions as if no prior disability had existed."

The record shows that plaintiff, a veterinarian by profession, was injured on July 24, 1932, while the policy of insurance was in effect, by being shot in the neck, right thigh, and in the left hand while engaged in an encounter with bank robbers, he then being the sheriff of Gallatin county. The defendant paid him $50 per month as disability benefits from August 24, 1932, to March 24, 1934, and from September 9, 1934, to February 9, 1935. It was conceded that plaintiff paid to defendant the annual premium of $258.75 in August, 1934, by borrowing that amount on his policy of insurance.

At the time this action was commenced plaintiff was in the employ of the federal government in the capacity of junior veterinarian testing cows for the Bang's disease. He had a helper working with him. About all that plaintiff did in this employment was to draw blood from the jugular vein with a needle, and this he did with his "good" hand. He started to receive compensation under this employment on June 20, 1935. In May, 1933, plaintiff, his wife, and small boy drove from Bozeman to Iowa, his wife driving the car save that he may have driven a few miles. His daughter drove the car back to Bozeman. While in the east, he made a trip or two from Corning, Iowa, to Omaha, a distance of 84 miles, on which trips he may have driven a few miles.

In May, 1934, plaintiff became a candidate for county treasurer of Gallatin county and waged an unsuccessful campaign, traveling about the county in a car, his son-in-law doing the driving. In September, 1934, he went to Rochester and there underwent an operation on his shoulder. There was medical testimony showing that at the time of the trial plaintiff's left arm was practically useless; the muscles of the shoulder and arm were shrunken and atrophied and the arm partially paralyzed; but there was evidence that plaintiff at the time of the trial was physically able to handle clerical work or could act as a night watchman or pursue some similar gainful occupation, if such were available. There was ample evidence to support the conclusion that between the time of receiving his injuries and the 20th of June, 1935, plaintiff was unable to perform, and did not perform, any work of any kind, and that it was impossible for him to follow any gainful occupation.

Defendant contends that, since plaintiff was actually in the employ of the government in July, 1935, at the time this action was commenced, it is conclusively shown that he was not totally and permanently disabled within the meaning of the insurance contract. Plaintiff takes the opposite view and contends that the contract, under the circumstances here presented, should be construed as a straight disability contract. These opposing contentions make it necessary for us to interpret the contract of insurance. In doing so, we keep in mind that it is the established rule in this state that such contracts should be liberally construed in favor of the insured. McAuley v. Casualty Company of America, 39 Mont. 185, 102 P. 586; Libby Lumber Co. v. Pacific States Fire Ins. Co., 79 Mont. 166, 255 P. 340, 60 A.L.R. 1; Park Saddle Horse Co. v. Royal Indemnity Co., 81 Mont. 99, 261 P. 880; Fayle v. Camden Fire Ins. Ass'n, 85 Mont. 248, 278 P. 509; Cacic v. Slovenska, etc., Soc., 102 Mont. 438, 59 P.2d 910.

There is no serious contention that plaintiff was not totally disabled during the period for which recovery is sought here. In other words, it is lack of permanency, and not of totality, of disability that gave rise to this controversy. What, then, does the contract mean when it refers to a presumably permanent disability?

Section 3 of the policy in effect provides that "total disability shall, during its continuance, be presumed to be permanent" if it is reasonably certain that such disability will continue for life, or if it has existed continuously for ninety days. When proof is furnished of total and permanent disability as defined in the policy, the company is obligated to pay benefits "so long as such disability continues." This negatives the idea that the parties contracted for benefits only in case the disability be absolutely permanent. A fair interpretation of the contract leads inevitably to the conclusion that if the disability has existed continuously for ninety days it shall be presumed to be permanent and is compensable so long as it actually continues. Other provisions of the policy indicate an intention that the insurer is liable during the continuance of the total disability. Thus, under the general provisions of the policy, the company is given the right to demand proof of the continuance of the disability, but not oftener than once a year after the disability has existed for two years.

Those general provisions also declare that disability benefits may be terminated because of the recovery of the insured, and revived upon a proper showing of recurrence of disability. Taken by its four corners, the policy in question calls for disability benefits covering the period of time here involved, plaintiff during that time being totally disabled, even though at the time the action was instituted the plaintiff was employed in a gainful occupation. Courts have thus interpreted similar contracts. Gibson v. Equitable Life Assur. Soc., 84 Utah, 452, 36 P.2d 105; New York Life Ins. Co. v. Razzook (Okl.Sup.) 61 P.2d 686; Mitchell v. Equitable Life Assur. Soc., 205 N.C. 725, 172 S.E. 497; Dietlin v. Missouri State Life Ins. Co., 126 Cal.App. 15, 14 P.2d 331, 15 P.2d 188; Kurth v. Continental Life Ins. Co., 211 Iowa, 736, 234 N.W. 201; Maze v. Equitable Life Ins. Co. of Iowa, 188 Minn. 139, 246 N.W. 737.

Counsel for defendant strongly rely upon ...