Equitable Life Assur. Soc. of U.S. v. Adams

• Decision Date: 04 June 1935
• Citation: 259 Ky. 726
• Parties: Equitable Life Assurance Society of United States v. Adams.
• Court: United States State Supreme Court — District of Kentucky

259 Ky. 726

Equitable Life Assurance Society of United States v. Adams.

Court of Appeals of Kentucky.

Decided June 4, 1935.

1. Evidence. — It is general knowledge that policies of insurance companies seldom contain identical terms or conditions, or employ same words, phrases, or clauses, so that every company's policy must be construed as it is written and applied to developed facts in particular case.

2. Insurance. — What parties to insurance contract have written down in it as essential ingredient of basis for claim under it may be regarded by courts as of essence of contract.

3. Insurance. — Parties may insert in insurance contract any provision they desire or agree upon, and court cannot make contract for parties under guise of interpretation.

Insurance. — Courts have duty to take words of insurance policy as they are found in it, and as persons with usual and ordinary understanding would construe them when used to express purpose for which they were employed, giving insured benefit of all doubt as to their meaning.

5. Insurance. — Where insured had not furnished insurer proof of disability within one year after its commencement as required under disability clause of group policy, insurer held entitled to directed verdict.

Appeal from Johnson Circuit Court.

WM. MARSHALL BULLITT, EUGENE B. COCHRAN and BRUCE & BULLITT for appellant.

J.L. HARRINGTON for appellee.

OPINION OF THE COURT BY JUDGE RICHARDSON.

Reversing.

The difficult and perplexing question presented for determination by this appeal is the proper construction of the disability clause of a policy of group insurance, and its application to the facts set forth in the beneficiary's pleading and testimony.

The disability clause contains this language:

"In the event that any employee while insured under the aforesaid policy and before attaining the age of sixty shall, within six months after the effective date of his insurance * * * become totally disabled by bodily injuries or disease, and in either of said events shall be so disabled as presumably to be continuously prevented for life from engaging in any occupation or performing any work for compensation of financial value, then upon receipt of due proof of such disability before the expiration of one year from the date of its commencement, the Society will * * * pay equal monthly disability-installments," determinable by the Table of Installments set forth in the policy.

It is conceded that the Equitable Life Assurance Society of the United States had issued and delivered to the Consolidation Coal Company a group policy, containing the above clause; Harry Adams was an employee of the Consolidation Coal Company, to whom a certificate had been issued by the Equitable showing his rights under the policy. Asserting his rights thereunder he filed this action in the Johnson circuit court to recover of the Equitable the disability benefits covered by the disability clause.

Considering without deciding, that while in the employ of the Consolidation Coal Company, he became totally disabled by disease, and that "he is so disabled as presumably to be continuously prevented for life from engaging in any occupation or performing any work for compensation of financial value," the question remains to be determined: Is he, on the allegations of his petition and his own testimony sustaining the same, entitled to the benefit of the disability clause?

In his petition he alleges "that he is under the age of sixty years, and that while said policy was in full force and effect, and all premiums thereon having been paid, at said time, on the 10th day of March, 1932, he became totally and permanently disabled, etc."

As a witness, he was asked and answered as follows:

"Q. What I am trying to get at is — when did your disability commence? A. In December.

"Q. 1931? A. Yes, sir."

His answer to another question is:

"I worked from that [about February 25] until March about the 12th 1932. The best I remember and I just simply had to quit again."

It is conceded that he did not thereafter, as an employee of the Consolidation Coal Company, and prior to the commencement of this action, work for the coal company.

He further testified, and his testimony in this respect is corroborated by that of Drs. Pickelsimer, Castle, and Wells, and the proof of his disability prepared by him and them, that the proof of his disability was prepared on March 23, 1933, and on that day mailed to the Equitable. That his proof of disability was not furnished to the Equitable until March 23, 1933, is not disputed. This statement of facts presents for determination the simple question, whether his failure to furnish proof of his disability before the expiration of one year from the date (December, 1932, according to his own testimony, or March 12, 1933, as alleged in his petition) of its commencement, precludes his recovery. It is his insistence that the furnishing of the proof of disability on March 23, 1933, was a compliance with this provision of the disability clause; that it was furnished within a reasonable time and within the statute of limitation of five years; therefore, he is entitled to recover.

To sustain this insistence, he cites to us: Equitable Life Ins. Soc. of the U.S. v. Merlock, 253 Ky. 189, 69 S.W. (2d) 12; Ohio National Life Ins. Co. v. Stagner, 231 Ky. 275, 21 S.W. (2d) 289; Travelers' Ins. Co. v. Turner, 239 Ky. 191, 39 S.W. (2d) 216; John Hancock Mut. Life Ins. Co. v. Cave, 240 Ky. 56, 40 S.W. (2d) 1004, 79 A.L.R. 848; Henderson v. Continental Cas. Co., 239 Ky. 93, 39 S.W. (2d) 209; Hagman v. Equitable Life Assurance Soc. of U.S., 214 Ky. 56, 282 S.W. 1112; Continental Cas. Co. v. Linn, 226 Ky. 328, 10 S.W. (2d) 1079; National Life & Accident Ins. Co. v. O'Brien's Ex'x, 155 Ky. 498, 159 S.W. 1134; Prudential Ins. Co. of America v. Kelsay, 257 Ky. 633, 78 S.W. (2d) 923; Federal Life Ins. Co. v. Holmes' Committee, 232 Ky. 834, 24 S.W. (2d) 906; Prudential Ins. Co. of America v. Dismore, 254 Ky. 725, 72 S.W. (2d) 433, 435; Independent Life Ins. Co. of America v. Downey, 255 Ky. 95, 72 S.W. (2d) 1008; Commonwealth Life Ins. Co. v. Ovesen, 257 Ky. 622, 78 S.W. (2d) 745; Prudential Ins. Co. of America v. Bond, 257 Ky. 45, 77 S.W. (2d) 373; Edge v. Ott, 151 Ky. 672, 152 S.W. 764; Knoxville Tinware & Mfg. Co. v. Howard, 219 Ky. 106, 292 S.W. 762; Bowlin v. Archer, 157 Ky. 540, 163 S.W. 477; AEtna Life Ins. Co. v. Wells, 254 Ky. 650, 72 S.W. (2d) 33.

An examination of those cases discloses that the questions here presented were not therein considered, except in the Wells, the Kelsay, and the Dismore Cases, and the principles therein reiterated, except in the Dismore Case, are not applicable.

"It is a matter of general knowledge that the policies of insurance companies seldom, if ever, contain the identical terms or conditions, or employ the same words, phrases, or clauses. Therefore, every company's policy must be construed as it is written and applied to the developed facts in the particular case." Mutual Life Ins. Co. of N.Y. v. Smith, 257 Ky. 709, 79 S.W. (2d) 28, 34. It is equally as true that after they are construed by the court, the company frequently alters changes, or eliminates the phraseology to escape the court's construction. Commonwealth Life Ins. Co. v. Leete, 224 Ky. 584, 6 S.W. (2d) 1057; Commonwealth Life Ins. Co. v. Gault's Adm'rs, 256 Ky. 625, 76 S.W. (2d) 618.

An examination of our opinions in the Wells, the Kelsay, and the Dismore Cases, supra, discloses that neither of the policies therein involved contained the requirement of furnishing due proof of disability "before the expiration of one year from the date of its commencement," as does the present one.

As was said in the Dismore Case:

"We have often held that, where the policy provides that either the giving of notice or the furnishing of proof of disability, or both, are a condition precedent to the insured's right to institute an action or to recover on the policy, such provision is controlling, unless waived by the insurer. Home Ins. Co. of N.Y. v. Roll, 187 Ky. 31, 218 S.W. 471; Standiford v. American Ins. Co., 208 Ky. 731, 271 S.W. 1042; Niagara Fire Ins. Co. v. Layne, 162 Ky. 665, 172 S.W. 1090; Fidelity Phoenix Ins. Co. v. Vincent, 224 Ky. 769, 7 S.W. [2d] 293; Home Ins. Co. of N.Y. v. Johnson, 226 Ky. 594, 11 S.W. [2d] 415; Svea F. & L. Ins. Co. v. Foxwell, 234 Ky. 95, 27 S.W. [2d] 675; Royal Ins. Co. v. Santamoro, 246 Ky. 787, 56 S.W. [2d] 359. The assured is not required, however, to comply with technical strictness with a provision relating to either the time of giving the notice or the making of proof of his disability before his right of action accrues or before he is entitled to recover. ...