McCoy v. New York Life Ins. Co.
| Decision Date | 15 January 1935 |
| Docket Number | 42619. |
| Citation | 258 N.W. 320,219 Iowa 514 |
| Parties | McCOY et al. v. NEW YORK LIFE INS. CO. |
| Court | Iowa Supreme Court |
Appeal from District Court, Dickinson County; James Deland, Judge.
The plaintiffs, the beneficiaries under a certain policy, issued by the defendant company, commenced an action against the New York Life Insurance Company, the defendant, upon said policy claiming both disability and death benefits. Jury was waived and case submitted to the court; the court returning a verdict in favor of the defendant insurance company. Plaintiffs appeal. Opinion states the facts.
Reversed and remanded.
Insured held liable on policy in effect when insured became disabled by insanity rendering it impossible for him to give required notice of disability.
J. W Morse, of Estherville, for appellants.
Milchrist, Schmidt, Marshall & Jepson, of Sioux City, for appellee.
On July 28, 1927, the New York Life Insurance Company issued a policy upon the life of Raymond E. McCoy. The first annual premium amounting to $39.22, was paid on July 28, 1927, and a like sum on July 28, 1928. No subsequent premiums were ever paid. On the 17th of February, 1929, while the policy was in full force, the premium having been paid, Raymond E. McCoy became insane, and was on or about the 27th of May, 1929, duly and regularly adjudged to be insane by the insane commissioners of Dickinson county, Iowa, and was confined in the Iowa State Hospital for the Insane at Cherokee, Iowa, from that date until June 7, 1933, at which time he died.
There is no dispute in regard to the facts in this case. The case was submitted upon a stipulation, and that stipulation states, among other things, that from February 17, 1929, until the death of the insured, on June 7, 1933, the said insured was totally and permanently disabled from performing any work or following any occupation or engaging in any business for profit; that during all of said period he was insane and was confined in the State Hospital for the Insane.
The policy which the New York Life Insurance Company had issued provided for the payment of disability benefits as follows:
On December 3, 1929, the insurance company, in accordance with provisions of its policy, declared a dividend to the said insured, Raymond E. McCoy, in the sum of $7.86, and on said date mailed by United States mail a check payable to the order of said insured for said sum. Thereafter, on or about April 5, 1930, the insurance company wrote a letter to the insured, calling his attention to the outstanding dividend check, asking that said check be cashed.
On or about June, 1930, E. E. Shelledy of Spirit Lake, Iowa, who was the agent of the New York Life Insurance Company who solicited the insurance from Raymond E. McCoy, was requested by the insurance company to call at the home of McCoy in regard to the dividend check which had been sent out months before and had not been cashed. In compliance with the request of his employers, the New York Life Insurance Company, Shelledy proceeded to the former home of the insured. When he arrived there, he inquired as to where Raymond E. McCoy was, and was informed that he was confined in the Insane Hospital at Cherokee, Iowa. He then asked the appellants in the case at bar, who were the beneficiaries of the policy, as to the dividend check which the company had sent to McCoy, and they informed him they knew of no such dividend check, and they then and there informed him that they had never heard or had any knowledge of the fact that an insurance policy had been issued by the New York Life Insurance Company. An investigation was then made of certain papers belonging to the said Raymond E. McCoy, and they found the unopened letter containing the dividend check from the New York Life Insurance Company, and also discovered the policy of insurance. The dividend check and the policy were turned over to the agent of the insurance company, who offered to prepare and furnish to appellants forms for making proof of permanent disability of the insured. And Shelledy immediately wrote to the insurance company, informing them of the facts in the case. Thereafter the insurance company wrote a letter that, due to the insured's condition, they would be unable to pay the dividend until there was a guardian appointed and a certified copy of the appointment forwarded to the home office. Shortly after the death of the insured, which occurred on June 7, 1933, Mr. Shelledy, the agent of the New York Life Insurance Company at Spirit Lake, Iowa, was notified of his death and was asked for the proper blanks to make proof of death. On June 21, 1933, the New York Life Insurance Company wrote to the McCoys, appellants in this case, denying liability and informing them that at the time of the death of Raymond E. McCoy the policy of insurance they had written had no value and he carried no insurance with their company.
The New York Life Insurance Company having denied liability, the appellants commenced an action to recover upon said policy. A jury was waived, and the case was tried to the court. The lower court held in favor of the insurance company and judgment was entered against the appellants for the costs. Being dissatisfied, they have appealed to this court.
It is the contention of the appellants that, for the reason that total disability of the insured arose while the policy was in force, and was of a character totally incapacitating the insured from giving notice or of furnishing proofs of such total disability, he was excused from complying strictly with the terms of the policy, and it therefore did not lapse.
The following facts should be kept in mind: First. The policy was issued by the New York Life Insurance Company and at the time that the insured became totally and permanently disabled the policy was in full force and effect; the premium having been paid for that year by the insured. Second. It was absolutely impossible for the insured to give the notice which the company now claims should have been given, due to his mental condition, and it was impossible for any one else to give the notice because the undisputed record shows that the beneficiaries had no knowledge that the insured had taken out the policy; in fact, no one knew anything about the issuing of the policy with the exception of the insurance company and the unfortunate insured. Third. The insured was totally and permanently disabled from February 17, 1929, to the date of his death. Fourth. The policy provided for the waiver of premium and the payment of $10 per month during total and permanent disability.
The controversy in the case at bar is one...
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