Fagerlie v. New York Life Ins. Co.

• Decision Date: 11 June 1929
• Citation: 129 Or. 485,278 P. 104
• Parties: FAGERLIE v. NEW YORK LIFE INS. CO.
• Court: Oregon Supreme Court

278 P. 104

129 Or. 485

FAGERLIE v. NEW YORK LIFE INS. CO.

Supreme Court of Oregon

June 11, 1929

Department 2.

Appeal from Circuit Court, Multnomah County; Louis P. Hewitt, Judge.

Action by John Fagerlie against the New York Life Insurance Company to recover certain disability benefits under the terms of two life insurance policies issued by the defendant company to plaintiff, by reason of disability resulting from a gunshot wound received by plaintiff on February 17, 1925. Verdict and judgment for plaintiff, and defendant appeals. Affirmed.

B. S. Huntington and Walter M. Huntington, both of Portland (Huntington, Wilson & Huntington, of Portland, on the brief), for appellant.

Nicholas Jaureguy, of Portland (J. G. Arnold, of Portland, on the brief), for respondent.

BEAN J.

The plaintiff alleges two causes of action. The first is based upon a life insurance policy, dated August 17, 1920, for $5,000 in case of death, which provides that, if the insured becomes wholly and permanently disabled, the company will pay, as disability benefits annually, one-tenth of the face of the policy, and also waive certain premium payments. This will be referred to as the first policy. Under the terms of this policy total and permanent disability is defined as disability by which insured "has become wholly disabled by bodily injury or disease, so that he is and will be presumable thereby permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit, and that such disability has then existed for not less than 60 days.

The second cause of action is founded upon a life insurance policy, dated May 16, 1923, for $3,000 in case of death which provides that, if the insured become wholly and permanently disabled, the company will pay each month 1 per cent. of the face of the policy, and also waive certain premium payments. Under the terms of this policy total and permanent disability is defined as follows: "Disability shall be deemed to be total whenever the insured becomes wholly disabled by bodily injury or disease so that he is prevented thereby from engaging in any occupation whatsoever for remuneration or profit, and under this contract disability shall be presumed to be permanent after the insured has been continuously so disabled for not less than three months and during all of that period prevented from engaging in any occupation for remuneration or profit."

On February 17, 1925, the plaintiff was shot, a bullet passing through his left lung. On June 30, 1925, defendant received from plaintiff a statement of claim for disability, signed by himself and accompanied by a statement signed by his physician, Dr. Fred J. Ziegler. Plaintiff's statement referred to the second policy by number, date, and amount and stated that he was totally disabled at the present time the cause of the disability was, "shot through lung and sides"; that the disability began February 17, 1925; and gave the name of his attending physician; and stated that his disability had prevented him from engaging in any occupation whatsoever for remuneration or profit since February 17, 1925.

The attending physician's statement stated practically the same facts as contained in plaintiff's statement, and as follows: "Is the insured wholly disabled at the present time? A. Yes." That he had been prevented by reason of disability from engaging in any occupation whatsoever for remuneration or profit since February 17, 1925. In answer to the question: "What is your opinion as to whether or not the insured by reason of his disability will be permanently continuously and wholly prevented thereby for life from pursuing any and all gainful occupations? A. Not permanently disabled. Lung chest wall was opened and drained and there will probably be a permanent weakness in that lung."

About June 26, 1925, the plaintiff was furnished with printed blanks by the defendant company at the local office of the treasurer of the defendant. On the same date that plaintiff obtained these printed blanks the local office of the defendant company wrote the following letter to its home office:

"File C.

"S. C. Beckley, Secretary, Committee on Disability Claims--Dear Sir: Re Policies Nos. 6808232 8458372--Johan E. Fagerlie. The above insured called at the office today and advised us that he has been totally disabled since February of this year, making inquiry regarding the disability provision in his policies. We gave him Forms Nos. 1 and 2 for completion.

"We understand that the insured was a government detective and that he was shot and severely wounded in a liquor raid last February, from the effects of which he is still suffering.

"Very truly yours,

"R. A. Durham, Cashier,

"By _________."

The printed forms which at that time were handed to plaintiff consisted of one form known as "Insured's Statement" and one form known as "Attending Physician's Statement." These forms were filled out by the plaintiff and his attending physician and returned to the local office of the company about June 30, 1925. Every question asked by the company on this form was answered by the plaintiff. The physician also answered every question asked by the company.

The agreement of the company contained in the first policy to pay one-tenth of the policy per annum during the endowment period if the insured becomes wholly and permanently disabled is by the terms of the policy "subject to all of the terms and conditions contained in section I hereof." Section I, so far as material, is as follows: "Whenever the Company receives due proof * * * that the insured, * * * has become wholly disabled by bodily injury or disease, so that he is and will be presumably, thereby permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit, and that such disability has then existed for not less than sixty days. * * *"

The agreement of the company contained in the second policy to pay the insured 1 per cent. of the face of the policy each month during the lifetime of the insured, and also to waive the payment of premiums if the insured becomes wholly and permanently disabled, "is subject to all the terms and conditions contained in section I hereof." These conditions of section I are as follows: "Disability benefits shall be effective upon receipt at the Company's Home Office, before default in the payment of premium of due proof that the Insured became totally and permanently disabled after he received this Policy and before its anniversary on which the Insured's age at nearest birthday is sixty years."

The statement of the insured and his physician were handed to the local office of the company, which then wrote to the home office as follows:

"File C.

June 30, 1925.

"S. C. Beckley, Secretary, Committee on Disability Claims--Dear Sir: Re Policies Nos. 6808232 8458372--Johan E. Fagerlie. In further reference to our letter of June 26th, we now attach hereto Forms Nos. 1 and 2 completed by the above insured and by his attending physician.

"We are obtaining an Inspection Report in this case, which will be forwarded to the proper department when received.

"Very truly yours,

"R. A. Durham, Cashier.

"By _________."

About six weeks later plaintiff received a letter from the local office, which, among other things, stated, with reference to the first policy, now involved, as follows:

"Our Home office advises that, from the evidence submitted and from information obtained by the company, it does not appear to the company that you are wholly and permanently disabled within the meaning of the provision in your policy No. 6808232 referring to disability benefits; it does not appear that you will be permanently, continuously and wholly prevented thereby, for life, from engaging in a gainful occupation. Claim for disability benefits under this policy is therefore disallowed. This policy does not provide, as does your policy No. 84583272, that total disability for not less than three consecutive months is presumed to be permanent.

"Very truly yours,

"R. A. Durham, Cashier,

"By Nielsen."

Defendant recognized the statements of plaintiff as proof of total disability covered by the second policy and on July 7, 1925, paid $90 covering the income payments provided for by the second policy for the months of May, June, and July, 1925. Thereafter defendant paid plaintiff $30 per month commencing with August, 1925, to and including April, 1927, and waived the annual premium of $99.33 on the second policy, which fell due May 1, 1926.

The defense to the first cause of action claimed by defendant, briefly stated, is that the defendant never received the proof required by the first policy as a condition precedent to the right of plaintiff to disability benefits under that policy and plaintiff has never been wholly and permanently disabled, as defined by the first policy. The defense of the company to the second cause of action, as claimed by it briefly stated, is that: "The defendant has fully paid and discharged all its liabilities on account of said second policy; since April, 1927, the plaintiff has not been wholly and permanently disabled as defined by the second policy and no liability has been incurred under said policy subsequent to said date."

The first assignment of error is that the court erred in refusing at the close of the testimony to direct the jury to return a verdict in favor of defendant upon the first cause of action and in refusing, at the time the case was submitted to the jury by the court, to instruct the jury, as requested by defendant, to return a verdict for the defendant upon said first alleged cause of action.

The plaintiff at different times submitted to medical examinations by the company for the...