Indiana Life Endowment Co. v. Carnithan

• Decision Date: 15 October 1915
• Docket Number: No. 8467.,8467.
• Citation: 109 N.E. 851,62 Ind.App. 567
• Parties: INDIANA LIFE ENDOWMENT CO. v. CARNITHAN.
• Court: Indiana Appellate Court

62 Ind.App. 567

109 N.E. 851

INDIANA LIFE ENDOWMENT CO.

v.CARNITHAN.

No. 8467.^*

Appellate Court of Indiana, Division No. 1.

Oct. 15, 1915.

Appeal from Circuit Court, Vanderburg County; W. M. Blakey, Judge.

Action by Charles T. Carnithan against the Indiana Life Endowment Company. Judgment for plaintiff, motion for new trial overruled, and defendant appeals. Reversed, with instructions to sustain the motion for new trial.William D. Hardy, of Evansville, for appellant. William P. Miedreich and George K. Denton, both of Evansville, for appellee.

HOTTEL, J.

On January 19, 1912, appellee filed in the court below his complaint in two paragraphs against appellant and Thomas H. Kirkbride.

The first paragraph, after alleging that appellant was duly organized and incorporated as a mutual life and disability insurance company on the assessment plan under chapter 195 of the Acts of 1897 (sections 4739–4764, Burns 1908), engaged in the business of insuring the lives of its members and policy holders, and also in insuring them against disability, proceeds, in substance, as follows: That on May 19, 1910, appellant executed and delivered to appellee a policy of insurance whereby, in consideration of $1 and a monthly premium of $1, payable on the 1st day of each calendar month thereafter, it agreed to pay the beneficiary therein named, immediately upon receipt of proofs of the death of appellee, $100 for funeral and other emergency expenses, and thereafter to pay to said beneficiary $12 monthly on the last day of each calendar month during his life, beginning on the last day of the calendar month next succeeding in the death of appellee, not to exceed the total sum of $3,000; that by such policy appellant also agreed that, if appellee should by reason of pulmonary tuberculosis become totally and permanently disabled from performing, managing, and directing any kind of service or labor or other business upon which he might depend for a livelihood, it would, upon receipt of proofs thereof, pay the monthly benefits of $12 to appellee during the remainder of his life, not to exceed $3,000; that appellee performed all the conditions of the contract of insurance on his part to be performed prior to February 1, 1911, at which time appellant repudiated said contract and refused to accept any further payment of premium thereon, and notified appellee that it would not do so unless within three months from such date appellee would furnish it a certificate of his good health, and that in case of his failure to furnish such certificate within said period appellant would thereafter treat his contract of insurance as null and void; that appellee could not furnish such certificate, because he was then suffering from and afflicted with tuberculosis, which fact appellant well knew at the time it refused to accept said premium, and required of appellee that he furnish such certificate; that it was solely because of appellee's said condition of health that appellant repudiated its said contract of insurance and refused to accept further premiums thereunder; that appellee has been damaged by appellant's repudiation of such contract in the sum of $5,000, etc.

The second paragraph of the complaint differs from the first in that it seeks to recover upon the policy of insurance under the clause thereof hereinafter set out. This paragraph contains the same general averments contained in the first paragraph relative to appellant's organization and incorporation and the issuance of the policy of insurance, and then proceeds, in substance, as follows:

“That after the making of said contract and prior to the 30th day of January, 1911, the plaintiff contracted pulmonary tuberculosis, by reason of which he became and was on said 30th day of January, 1911, and has ever since continued to be, totally and permanently disabled from performing, managing, or directing any kind of service or labor or other business upon which he might or did depend for a livelihood; that the plaintiff had performed all the conditions of said policy and contract of insurance on his part to be performed, and that there is due him by reason of said disability under and by virtue of the terms of said policy the sum of $12 per month, from and including the month of February, 1911, to the present time, amounting to $132, together with interest on each of said payments at the rate of 6 per cent. per annum from the time the same became due and payable, and that said defendant has refused and still refuses to pay said sum or any part thereof, and had paid no part thereof, and on the 3d day of October, 1911, denied all liability therefor, solely on the ground that plaintiff did not have pulmonary tuberculosis and was not totally and permanently disabled.” (Our italics.)

On May 6, 1912, appellee filed a third paragraph of complaint which contained substantially all of the averments of the first paragraph, and, in addition thereto, alleged in detail the facts connected with appellee's failure to pay the premium due February 1, 1911, which averments are, in substance, as follows: Appellee was ready and willing to pay the premium on said policy due February 1, 1911, when it became due; that when he paid his last preceding premium he stated to Charles A. Hostetter, the secretary and general manager of defendant company, that he was in poor health and might not be able to get to the office when the next premium was due, and asked Mr. Hostetter to stop by his (appellee's) residence and collect said premium; that Mr. Hostetter then promised and agreed with appellee that he would stop at appellee's residence and collect said premium;that on February 1st, when such premium fell due, appellee was not able to go to the office of the company and pay; that he then had the money in his possession and was ready and willing to pay such premium, but did not take it to appellant's office because of his reliance upon said promise of Mr. Hostetter; that Mr. Hostetter did not call for said premium, as he had agreed to do, and a few days later, when appellee was able to get out, he went to appellant's home office at Evansville, Ind., and tendered to the said Hostetter the premium of $1, which Hostetter refused to accept, and demanded 10 cents more as a penalty; that appellee then produced such additional sum, and said Hostetter then stated to plaintiff that his policy had lapsed and his insurance became forfeited for failure to pay said premium on the day when it was due by the terms of the contract, and stated that no more premiums would be accepted thereon, unless, etc.

A copy of the policy is made an exhibit with each paragraph of complaint. The clause thereof on which the second paragraph of complaint is based provides as follows:

“If said insured shall by reason of *** pulmonary tuberculosis *** become totally and permanently disabled from performing, managing, or directing any kind of service or labor or other business upon which he might depend for a livelihood, this company will, upon receipt of satisfactory proof of such total and permanent disability, pay the monthly benefits herein stipulated to the said insured, such payments to begin on the last day of the calendar month next succeeding that in which said claim shall be allowed, and to continue during the life of the insured, the total so paid, however, not to exceed the maximum amount stated in this policy.”

Appellant filed an answer in general denial, and also an affirmative answer to the first and third paragraphs of complaint. The affirmative answer admits the execution and delivery of the policy of insurance sued on, and that such policy was conditioned as stated in such paragraph, but avers that after its alleged acts of repudiation appellee made application for total and permanent disability benefits and offered proof thereof and caused appellant to expend the sum of — dollars in investigating the fact as to whether or not appellee was disabled within the meaning of the policy, and until the filing of this suit, and thereafter, appellee demanded and insisted on such policy being in force and effect, and demanded the payment of disability benefits, on the ground that he was disabled, thereby electing not to treat said actions of appellant as a repudiation of such contract, and thereby estopping himself from so treating such acts.

[1] Issues were joined on such answer by reply in general denial. Appellant also filed a motion to require appellee to “elect to go to trial upon either the first and third paragraphs of his complaint, or upon the second paragraph, that is, to proceed upon the theory that the contract of insurance was in full force and effect for all purposes, or upon the theory that the said defendant had repudiated and broken said contract.” This motion was overruled, but no exception was reserved to such ruling, and, in any event, was rendered harmless by appellee's dismissal of the first and second paragraphs of his complaint before the case was finally submitted to the jury.

A verdict was returned in favor of appellee for $1,000. A motion for a new trial filed by appellant was overruled, and judgment rendered on the verdict.

Two errors are assigned and relied on for reversal. The first challenges the ruling on appellant's motion for new trial, and the second challenges the sufficiency of the third paragraph of complaint to state a cause of action.

[2] This action was commenced since the amendment of sections 344, 348, Burns 1908, by the act of 1911 (Acts 1911, p. 415), and hence no question is presented by the second error assigned. Stiles v. Hasler, 56 Ind. App. 88, 104 N. E. 878.

Appellant has expressly waived all the grounds of its motion for new trial, except 1, 2, 3, 7, 10, and 11. The first ground challenges the verdict of the jury as not being sustained by sufficient evidence, and will be first considered.

The policy of insurance was read in evidence, and contains the following provisions, among...