Equitable Life Assur. Soc. v. Mercantile Com. B. & T. Co.

• Decision Date: 01 July 1944
• Docket Number: No. 12627.,12627.
• Parties: EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES v. MERCANTILE COMMERCE BANK & TRUST CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

143 F.2d 397 (1944)

EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES v. MERCANTILE COMMERCE BANK & TRUST CO. et al.

No. 12627.

Circuit Court of Appeals, Eighth Circuit.

June 12, 1944.

Rehearing Denied July 1, 1944.

COPYRIGHT MATERIAL OMITTED

Harry A. Frank, of St. Louis, Mo. (Theodore Rassieur and George M. Rassieur, both of St. Louis, Mo., on the brief), for appellant.

Wm. H. Armstrong, of St. Louis, Mo. (Thomas H. Cobbs, of St. Louis, Mo., on the brief), for appellees.

Before STONE, THOMAS, and JOHNSEN, Circuit Judges.

STONE, Circuit Judge.

This appeal is from judgment (on jury waived trial) in favor of the executors of Clarence R. Comfort for disability benefits under and return of premiums on two life insurance policies issued by appellant in 1921. The disability and premium waiver provisions are identical in the policies except for amounts (concerning which there is no issue).

In 1930, insured made claims for disability, which were approved by the company, and benefits were paid and premiums waived until receipt of a letter (dated March 15, 1932) by the company from insured wherein (after referring to these policies) he stated:

"I wish to advise you that I am back at my desk for short periods each day. I hope to regain my strength sufficiently to be able to continue at work and unless you hear from me to the contrary before the end of the month, you need not send the checks on the above claims."

After that letter, payments for disability were discontinued and insured paid premiums subsequently due until claims were again made in June, 1939, for disability, stated therein, to have commenced May 18, 1939. These claims were approved and disability payments made and subsequent premiums waived until death of insured in July, 1940. During this second period (on October 24, 1939) insured made claim both for disability payments and return of premiums covering the period (March, 1932, to April, 1939, for payments and 1932 to 1938 for return of premiums) intervening between the above two periods when such payments and premium waivers were allowed. Liability was denied by the company upon general grounds, followed by this action by his executors.

The trial court found total and permanent disability during the period in suit; that insured acted under a "mistaken conclusion of fact that he was not totally and permanently disabled, within the meaning of the policies," when he wrote the above letter of March 15, 1932, and when he made his second claim for disability; and that there was no unreasonable delay in apprising defendant of his present claim for disability. Conclusions of law were stated: That insured was totally and permanently disabled during this period; that the company waived proof of such disability; that insured did not waive his right to claim this disability; that there was no accord and satisfaction; that the payment of premiums during this period was not "voluntary"; and that there was no estoppel against the recovery.

Appellant seeks reversal on the grounds: (1) That insured was not totally and permanently disabled during the period for which recovery is sought; (2) that insured waived his claim for premiums and benefit payments; (3) that the claim is barred by the doctrines of estoppel and of laches; (4) that the claim is barred by accord and satisfaction; (5) that premiums paid are not recoverable because they were voluntary payments; (6) that notice and proof of claims are, under the terms of the policies, conditions precedent to the liability of appellant; and (7) that the denial of liability on grounds not relating to proofs of disability made after the period of disability had expired is not, as the trial court held, a waiver of failure of proofs for the preceding period.

Appellees oppose these grounds and further contend that, even if furnishing of due proof be held a condition precedent to liability and if it be held further that the company did not waive such defense by general denial of the claim, yet "the insured has substantially complied with the provisions of the policies relating to due proof, within the reason and the rule of Wayne v. New York L. Ins. Co., 8 Cir., 132 F.2d 28, and Hablutzel v. Home L. Ins. Co., 332 Mo. 920, 59 S.W.2d 639, affirming Mo.App., 52 S.W.2d 480."

1. Existence of total and permanent disability. The definition of such disability in the policies is, so far as here pertinent, as follows:

"Disability shall be deemed to be Total when it is of such an extent that the Insured is prevented thereby from engaging in any occupation or performing any work for compensation of financial value, and such Total Disability shall be presumed to be Permanent when it is present and has existed continuously for not less than three months."

Concededly, these were Missouri contracts. The finding of the trial court that the insured was totally and permanently disabled, during this period, is abundantly supported by evidence within the rule of decision laid down by Missouri courts. Stoner v. New York L. Ins. Co., 311 U.S. 464, 61 S.Ct. 336, 85 L.Ed. 284; Wiener v. Mutual Life Ins. Co. of New York, Mo. Sup., 179 S.W.2d 39; Heald v. Aetna Life Ins. Co., 340 Mo. 1143, 104 S.W.2d 379, 382; Comfort v. Travelers Ins. Co., Mo. App., 131 S.W.2d 734, 740; Stoner v. New York Life Ins. Co., 232 Mo.App. 1048, 114 S.W.2d 167; Id., Mo.App., 90 S.W.2d 784. Lengthy recital of the evidence would serve no useful purpose here. The fact situation will hereinafter appear sufficiently.

2. Waiver by insured. It is contended that the insured waived his claim for disability for this period because of a voluntary termination of his claim during the first period and because of his failure to assert this claim until after his claim (made in June, 1939) for the second period had been allowed. The Missouri courts have many times stated the generally accepted definition of waiver to be an intentional relinquishment of a known right. State ex rel. Met. Life Ins. Co. v. Shain, 334 Mo. 385, 66 S.W.2d 871, 874; Williams v. Chicago, Santa Fe, etc., Railway Co., 153 Mo. 487, 54 S.W. 689. The pertinent fact situation is that since 1917 insured had suffered from a condition known as "heart block," from which develops a permanent and serious heart ailment known as "Stokes-Adams heart disease." This ailment becomes progressively worse and results ultimately in death. In 1921, these policies were issued and an additional — "rated up" — premium charge made. Why this additional charge was made does not appear but because of his then heart condition and because he had had some difficulty in procuring insurance, it is entirely possible that this rating up was because of this physical condition. In 1930, this heart condition became worse and he was placed, for a considerable time, in a hospital and later returned to his home where he remained away from business until early in 1932. Early in 1932, he returned to his business against the advice of his doctors. It was about this time that he wrote the company to cease disability payments. This business consisted of a sizeable printing, stationery and mail order business which he had built up and largely owned. His business activities, on his return, were much lessened and restricted both as to character and time. This limited activity was continued — with heart attacks recurring and progressive retrogression in health — until July, 1939. At that time, he collapsed and remained continuously in hospital until his death in July, 1940. In June, 1939, he made the second claim for disability, which was allowed.

Besides these two policies, insured had a similar kind of policy with the Travelers Insurance Company. About the time (1930) he made his first claim on these two policies, he made a like claim under the Travelers policy. Liability was denied. Suit was brought in the State court. Just when this suit was tried does not appear but from the opinion on appeal (Comfort v. Travelers Ins. Co., Mo.App., 131 S.W.2d 734), it appears that evidence as to his condition at least as late as January, 1937, was introduced and considered. On that appeal, the court passed upon the sufficiency of the evidence to sustain recovery and held that it tended to show that "subsequent to 1932" insured was totally and permanently disabled (page 741 of 131 S.W. 2d). This opinion was filed September 12, 1939, and rehearing denied October 10, 1939. On October 24, 1939, the claims here involved were made in a letter to the company. From this letter and subsequent correspondence — particularly a letter from insured of March 9, 1940 — it is clear that insured was first apprised by the Comfort opinion that he was, during the period March 15, 1932, to May 18, 1939, totally and permanently disabled within the meaning of these two policies as such disability was defined in that opinion; and that he had been mistaken in thinking and acting otherwise. Since "whether or not plaintiff was totally disabled within the meaning of the policy provision is a mixed question of law and fact" (Comfort v. Travelers Ins. Co., Mo.App., 131 S.W.2d 734, 741), acting under a mistaken belief as to that matter would prevent such action being an intentional relinquishment of a known right, as required by the Missouri decisions to constitute a waiver (Taylor v. Aetna Life Ins. Co., 236 Mo.App. 435, 154 S.W. 421, 423; Picotte v. Mills, 200 Mo.App. 127, 203 S.W. 825, 826).

3. Estoppel and laches. It is further urged that the insured's claim was barred by the docrines of laches and of estoppel. The doctrines are not applicable to the facts of this case. Since there was no requirement in the policy that proof must be furnished within a specified time and since this is an action at law, the insured was at liberty to assert his claim at any time within the period fixed by the statute of limitations (Corcoran v. Metropolitan Life Ins. Co., Mo.App., 93 S.W.2d 1027; Wayne v. New York Life Ins. Co., 8 Cir., 132 F.2d 28) and no fact...