Marshall v. Equitable Life Assur. Soc.

• Decision Date: 10 January 1941
• Docket Number: No. 8401.,8401.
• Parties: MARSHALL v. EQUITABLE LIFE ASSUR. SOC.
• Court: U.S. Court of Appeals — Sixth Circuit

135 ALR 1225, 116 F.2d 901 (1941)

MARSHALL v. EQUITABLE LIFE ASSUR. SOC.

No. 8401.

Circuit Court of Appeals, Sixth Circuit.

January 10, 1941.

Milton M. Maddin, of Detroit, Mich. (David I. Hubar and Milton M. Maddin, both of Detroit, Mich., on the brief), for appellant.

Fred Glover, Jr., and William J. Shaw, both of Detroit, Mich. (Miller, Canfield, Paddock & Stone, of Detroit, Mich., on the brief), for appellee.

Before HICKS, HAMILTON, and MARTIN, Circuit Judges.

MARTIN, Circuit Judge.

The appellee insurance company on January 8, 1923, issued to appellant's intestate a policy of life insurance embracing a front page promise that "if the Insured becomes wholly and permanently disabled before age 60, the Society will waive subsequent premiums and pay to the Insured a Disability-Annuity of One Hundred Fifty Dollars a month subject to the terms and conditions on the third page hereof."

On the third page, the policy provided: "Disability benefits before age 60 shall be effective upon receipt of due proof, * * * that the Insured became totally and permanently disabled by bodily injury * * * before its anniversary upon which the Insured's age at nearest birthday is 60 years. * * *"

The contract of insurance stipulated that "total disability shall be presumed to be permanent when it is present and has existed continuously for not less than three months. * * *"

The policy held out to the assured lesser benefits, should he become totally and permanently disabled "after attaining age sixty"; and contained the further provision that "disability shall be deemed to be total when it is of such an extent that the Insured is prevented thereby from engaging in any occupation, etc."

On December 24, 1935, six days before the anniversary date of the policy nearest his sixtieth birthday, the insured was seriously injured in an automobile accident. From the date of his injury, he was unable to engage in any occupation. He died on August 9, 1938.

Holding that, within the meaning of the policy, the total and permanent disability of the assured commenced, not on the date of the accident, December 24, 1935, but on a date three months thereafter, March 24, 1936, the District Court limited recovery in this action to over-age sixty benefits. We think the trial judge erred.

The expression of a presumption that total disability is permanent after its continuous existence for three months does not exclude the right to show that the effective time of the commencement of assured's total and permanent disability was actually concomitant with the accident. Manifestly, the presumption clause was inserted in the policy not to the detriment of the assured, but as a means of lightening his burden of proof of disability.

The assertion that the disability benefits "shall be effective upon receipt of proof" that total and permanent disability befell assured before age sixty is not equivalent to a statement that the insurer shall not be liable for the first three months of such disability, or shall not have the basis of its liability for disability benefits fixed as of the date of actual total and permanent disability. It seems clear from the policy that the disability benefits to which assured would be entitled must be established by the event of total and permanent disability. The maturity of the time for paying assured for his first three months' disability is merely postponed until the furnishing of the required proof. In our judgment, this is the correct interpretation of the terms of the policy.

It would seem that the District Court over-stressed the importance of the one-judge opinion in Berg v. Equitable Life Assur. Soc., 149 Misc. 856, 269 N.Y.S. 375, 377, construing the same policy clause here involved. We cannot agree with the pronouncement of the New York Court that despite the fact that the policy contains no express provision that disability benefits shall begin at the end of three months, "an analysis of the entire scheme of the policies leads to a necessary implication of such provision." By our reasoning, the reverse is true.

It is settled law that if an insurance contract is so drawn as to be ambiguous, or to require interpretation or to be fairly susceptible of two different constructions, so that reasonably intelligent men would honestly differ as to the meaning of the contract, the construction most favorable to the insured should be adopted. Imperial Fire Ins. Co. v. Coos County, 151 U.S. 452, 462, 463, 14 S.Ct. 379, 38 L.Ed. 231; ...