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

• Decision Date: 26 October 1934
• Docket Number: 13928.
• Citation: 177 S.E. 40,174 S.C. 140
• Parties: KIRIAKIDES v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES.
• Court: South Carolina Supreme Court

177 S.E. 40

174 S.C. 140

KIRIAKIDES v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES.

No. 13928.

Supreme Court of South Carolina

October 26, 1934

Appeal from Thirteenth Judicial Circuit Court of Greenville County C.J. Ramage, Judge.

Action by Alexander Kiriakides against the Equitable Life Assurance Society of the United States. From a judgment for the plaintiff, defendant appeals.

Affirmed.

Haynsworth & Haynsworth, of Greenville, for appellant.

C. G Wyche, of Greenville, for respondent.

C. T GRAYDON, Acting Associate Justice.

Alexander Kiriakides, the plaintiff-respondent, brought action against the Equitable Life Assurance Society of the United States, a corporation, defendant-appellant, upon two policies of insurance insuring the life of the respondent with "disability" and additional "death benefits"; each policy being in the sum of $5,000, providing for double indemnity in case of death from accident and for the payment of the sum of $50 a month in case of total and permanent disability. As to the provisions relating to disability, the policies are identical in so far as the matters are to be considered by this court. The two cases were tried as one on circuit and will be considered together.

Each of the policies bore the register date of January 30, 1930, but the one was delivered to Kiriakides on March 7, 1930, and the other on May 15, 1930. The question as to when the policies actually went into effect is not involved in this case, as under any construction both policies were certainly in effect in May, 1930.

The cases were tried before Judge Ramage and a jury at Greenville at the October term, 1933, and resulted in a verdict for the plaintiff in each case for the sum of $300, being the installments alleged to have been due under the disability provisions from the 20th day of July, 1932, to the 20th day of December, 1932. The policy contains the following provision with reference to incontestability: "This policy, except as to the provisions relating to Disability and Double Indemnity, shall be (a) incontestable after it has been in force during the lifetime of the Insured for a period of one year from its date of issue, provided premiums have been duly paid, and (b) free from restrictions on travel, residence, occupation or military or naval service." (Italics added.)

The face of the policy shows that the defendant agrees to pay the sum of $5,000 to the wife of the insured, Marica Kiriakides, and then the society further agrees to increase the amount so payable to $10,000 upon receipt of due proof of death from accident in accordance with the double indemnity provision on the third page of the policy. The policy continues on the face thereof in this language: "And further, if the Insured before age 60 becomes totally and presumably permanently disabled as defined in the Total and Permanent Disability provision on the third page hereof, the Society will, subject to the conditions of such provision, waive subsequent premiums and pay to the Insured a disability income of fifty dollars a month."

The amount of the premium charged is $71.85, which includes the amount allocated by the company to the double indemnity and total and permanent disability provision.

The Court is not concerned with the double indemnity feature of the policy but only with the provision as to total and permanent disability.

The pertinent parts of the provision governing the total and permanent disability which is referred to on the face of the policy is found on the third page of the policy and reads as follows:

"Benefits in Event of Total and Permanent Disability.

Definition: For the purpose of this policy:

(A) Disability is total when it prevents the Insured from engaging in any occupation or performing any work for compensation of financial value, and

(B) Total Disability is presumably permanent only under the circumstances and from the date (herein called the Effective Date) as follows: (1) When due proof is received by the Society that it will presumably exist continuously during the remainder of the Insured's life-then from the date upon which such proof is received by the Society; or, (2) When it has existed continuously for three months-then from the date of the expiration of such three months; or, (3) When it involves the entire and irrecoverable loss of sight of both eyes, or the severance of both hands at or above the wrists, or of both feet at or above the ankles, or such severance of one entire hand and one entire foot-then from the date of such loss or severance.

(C) Disability resulting directly or indirectly from military or naval service in time of war is not a risk assumed by the Society.

Benefits: Upon receipt of due proof before the expiration of one year after default in the payment of premium, or if there be no such default not later than one year from the maturity of this policy, that the Insured, while this policy was in force, became totally and presumably permanently disabled as above defined due to bodily injury or disease: Disability Before 60: (1) Before the anniversary of the Register date of this policy upon which the Insured's age at nearest birthday is 60 years, the Society will

(a) Waive payment of all premiums falling due upon this policy after the Effective Date of such Disability and during its continuance.

(b) Pay to the Insured a monthly Disability Income as stated on the first page hereof from the Effective Date of such Disability; the first payment to be made upon receipt of such proof and subsequent payments to be made monthly thereafter during the continuance of such Disability * * *.

(Note:-Any premiums so waived and any Disability Income so paid shall not be deducted from any amount payable in any settlement of this policy.)

Recovery from Disability: The Society shall have the right at any time during the first two years after receipt of such proof, and thereafter once a year, to require proof of the continuance of such Total Disability. If the Insured fails to furnish satisfactory proof, or if it appears at any time that such Total Disability has been terminated, no further premiums will be waived and no further Disability Income payments will be made on account of such Disability."

In addition to the incontestable clause contained in the policy, attention has been called to the statute law of South Carolina with reference to incontestability of life insurance policies, section 7986 of the Code of 1932. This statute declares that after receiving the premium on any policy for the space of two years, the insurance company shall be deemed to waive the right to dispute the truth of the application, and section 7987 gives the right to the insurance company to institute proceedings to vacate policies within two years from the date of the issuance of said contracts. These sections are not pertinent to the inquiry here for the reason that the incontestable clause in the policy itself is for a shorter period than that provided in the law, and if it is determined that this clause does not cover the disability clause, there would be no reason to consider the statute.

There are three questions raised by the exceptions:

(1) That under the terms of the policies the same did not become incontestable in January, 1931, or May, 1931, or in January, 1932, or May, 1932, under sections 7986 and 7987 of the Code of 1932.

(2) That the circuit judge should have directed a verdict in favor of the defendant company on the ground that the policies in question were procured through the plaintiff's fraudulent misrepresentations as to his health, said misrepresentations being material to the risk, it being admitted that the defendant tendered back to the plaintiff the premiums which the defendant claimed covered the disability portion of the policy.

(3) That there was error in the order of the circuit judge setting the case for appeal requiring the defendant-appellant to print certain parts of the record.

These questions will be considered in the order above stated.

There is some diversity of opinion as to whether a policy contract is separable as to the life, disability, and double indemnity provisions among the courts of last resort in the United States, but under our construction the wording of the contract itself controls the question here under consideration. In the case of Ness v. Mutual Life Insurance Co. of N. Y., 70 F. (2d) 59, the almost identical question is thoroughly considered by Judge Parker Senior Justice of the Circuit Court of Appeals for the Fourth Circuit, and a well-reasoned opinion, to our minds, settles the point. The incontestable clause in the Ness Case is as follows: "Incontestability.-Except for non-payment of premiums and except for the restrictions and provisions applying to the Double Indemnity and Disability Benefits as provided in Sections 1 and 3 respectively, this Policy shall be incontestable after one year from its date of issue unless the...