Landry v. Mutual Life Ins. Co. of New York

• Decision Date: 10 March 1944
• Docket Number: Civil Action No. 889.
• Citation: 54 F. Supp. 356
• Parties: LANDRY v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: U.S. District Court — Western District of Louisiana

54 F. Supp. 356

LANDRY v. MUTUAL LIFE INS. CO. OF NEW YORK.

Civil Action No. 889.

District Court, W. D. Louisiana, Opelousas Division.

March 10, 1944.

Voorhies & Labbe, of Lafayette, La., for plaintiff.

Montgomery, Fenner & Brown, of New Orleans, La., for defendant.

PORTERIE, District Judge.

The plaintiff, Joseph Alcide Landry, is the holder of a life insurance policy with the defendant company, issued September 12, 1929, in the amount of $5000. On the very first page of this policy — the page in the boldest print and the page which has the skeleton of the contract and which ends with the signature of the President, of the Secretary and of the Registrar of the Company — there is found this language:

"AND

if the Insured is totally and presumably permanently disabled before age 60,

"WILL PAY

to the Insured Fifty Dollars monthly during such disability, increasing after five and ten years continuous disability, besides waiving premium payments, all upon the conditions set forth in Section 3."

Many of the conditions of the contract are on other pages, not solely on the first page, and are referred to in the skeleton contract of the first page by sectional notations. "Section 3" which is found on the second page of the contract is as follows:

"Section 3. Benefits in Event of Total and Permanent Disability Before Age 60.

"Total Disability. — Disability shall be considered total when there is any impairment of mind or body which continuously renders it impossible for the Insured to follow a gainful occupation.

"Permanent Disability. — Total disability shall, during its continuance, be presumed to be permanent;

"(a) If such disability is the result of conditions which render it reasonably certain that such disability will continue during the remaining lifetime of the Insured; or,

"(b) If such disability has existed continuously for ninety days.

"When Benefits Become Effective.—If, before attaining the age of sixty years and while no premium on this Policy is in default, the Insured shall furnish to the Company due proof that he is totally and permanently disabled, as defined above, the Company will grant the following benefits during the remaining lifetime of the Insured so long as such disability continues.

"Benefits. (a) Increasing Income. — The Company will pay a monthly income to the Insured of the amount stated on the first page hereof ($10 per $1,000 face amount of Policy), beginning upon receipt of due proof of such disability and increasing after sixty consecutive monthly payments have been made to one and one-half times such amount and after sixty further consecutive monthly payments have been made to twice such amount at which it shall remain while total and permanent disability continues.

"(b) Waiver of Premium. — The Company will also, after receipt of such due proof, waive payment of each premium as it thereafter becomes due during such disability."

When you fold the document in six, for filing or safekeeping, a rider on one of the back flaps comes to immediate notice, reading as follows:

"Supplementary Benefits to Section Entitled `Benefits in Event of Total and Permanent Disability Before Age 60'.

"Benefits if Proof Delayed and no Premium in Default. — If, while no premium is in default, the proof furnished the Company under the section providing for `Benefits in Event of Total and Permanent Disability before Age 60' is such as to entitle the Insured to the Disability Benefits provided for therein, and if due proof is also furnished the Company that such disability has been continuous since its beginning, the Company will:

"(a) Begin the monthly income payments provided for in such section as of the end of the first completed month of such disability if earlier than the date of receipt of such proof instead of as of the date of receipt of such proof, and,

"(b) Return any premium due after the beginning of such disability which has been paid during the continuance thereof.

"Benefits if Premium in Default not over Six Months. — If, not later than six months after the due date of any premium in default and provided no previously due premium is also in default, due proof is received by the Company before the Insured shall have attained the age of sixty years that the Insured was totally and permanently disabled, as defined in the section entitled `Benefits in Event of Total and Permanent Disability before Age 60', at the date when such premium in default fell due, and has been continuously so disabled since said due date, the Policy will be reinstated without evidence of insurability and the waiver of premium and disability income benefits shall be the same as if such default had not occurred.

"The Mutual Life Insurance Company of New York "William L. Simrell In script "Secretary."

Mr. Landry became sixty years of age on August 4, 1942. He complained of nothing to the Company and has kept on paying annual premiums as usual, but the premium on December 1, 1942, the first premium due by him after attaining the age of sixty, did not include the previously and annually paid sum of $27.20 for disability benefits. Landry alleges in his petition (and for the purpose of this motion it all must be considered proved) that he had forgotten about, or was in ignorance of, the disability benefits provision and simply paid the amount requested by the company. The sum paid by Landry for his $5000 life insurance policy, aside from the premium for disability benefits, was $246.15 per year. Then, it was on May 25, 1943, that he gave notice to the Company of total and permanent disability claimed to exist since May, 1938.

There were eight months and twenty days from the date of reaching the age of sixty to the date of his giving notice to the company. If the plaintiff was totally and permanently disabled in May, 1938, under the contract he should not have paid the $27.20 for disability benefits nor the main premium of the policy on December 1st of each of the years 1938, 1939, 1940 and 1941.

In this situation the defendant company has filed a motion to dismiss on the ground that there is no claim alleged by the plaintiff on which relief can be granted.

We are impressed with the physically prominent and forcibly declarative obligation of the company appearing on the first page. We admit that the last clause of the declaration on total and permanent disability is "or upon the conditions set forth in Section 3."

For the purpose of this opinion, we shall assume that the intention of the company under Section 3 was that the insured must file proof of claim of his disability "before attaining the age of sixty years, and while no premium of this policy is in default." It is in the language of the rider, which has the identical heading to Section 3, giving supplementary benefits, that we find in the contract a claim for which relief can be granted. The very essence of this rider is that the insured is permitted a delay in filing proof of his claim for total and permanent disability after he has attained the age of sixty years. The contract between the parties becomes embedded in the practical need for an insured, when totally and permanently disabled, to be forgiven the payment of any further annual premiums of any kind.

The rider is divided into two main sections, as follows: (1) "Benefits if Proof Delayed and no Premium in Default" and (2) "Benefits if Premium in Default not over Six Months." We must interpret this rider as a companion to Section 3; they are on the identical subject and in the same contract.

Section 3 provides that if "before attaining the age of sixty years" and "while no premium on this Policy is in default," the insured furnish the company due proof of disability, then the benefits are payable.

Let us examine now the very first paragraph of the rider. The only condition as to the time of filing any proof (and the proof is delayed, because specifically so stated) is that there be no premium in default. It is inescapable that this language clearly precludes that proof is required before the insured attains the age of sixty.

The second paragraph of the rider must now be considered contextually. The subject of the paragraph is "Benefits if Premium in Default not over Six Months." Differently from the paragraph just above, there is an allowance here that a premium may be in arrears, but the time limit is fixed at six months. There are three conditions in this second paragraph of the rider: (1) That the premium be in default not more than six months, (2) that the premiums previously due are not in default, and (3) that the proof must be received by the Company before the insured shall have attained the age of sixty years. This last condition, (3), is not one of the conditions of the first paragraph.

Therefore, we hold it to be clear and unambiguous that such requirement is not essential and is not a condition precedent to the application of the first paragraph — the one which applies to the facts of and, therefore, controls this case.

This conclusion, incidentally, accounts for the whole rider in the contract. It explains the heading to the rider: "Supplementary Benefits to Section Entitled `Benefits in Event of Total and Permanent Disability Before Age 60.'" Please note the word "supplementary." Obviously, the rider is supposed to contain less rigorous terms than Section 3 on page 2 of the policy contract, and is advanced as a trade-getter.

The division of the rider into two separate sections, one applicable to an insured whose premiums are not in default, and the other applicable to an insured whose last premium is not in default more than six months, must be construed together in conjunction with the conditions found in Section 3. The second paragraph of the rider which makes it a condition precedent that the insured must file proof before he has attained the age of sixty, explains and interprets the first paragraph which does not contain such requirement.

In the...