Merchants' Life Ins. Co. v. Clark

• Decision Date: 06 December 1923
• Docket Number: (No. 2802.)
• Citation: 256 S.W. 969
• Parties: MERCHANTS' LIFE INS. CO. v. CLARK.
• Court: Texas Court of Appeals

256 S.W. 969

MERCHANTS' LIFE INS. CO. v. CLARK.

(No. 2802.)

Court of Civil Appeals of Texas. Texarkana.

December 6, 1923.

Rehearing Denied December 13, 1923.

Appeal from District Court, Montague County; C. R. Pearman, Judge.

Action by Mrs. Gertrude Clark against Merchants' Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

The suit was by appellee, the beneficiary named in an insurance policy issued by appellant to James G. Clark, appellee's husband, June 21, 1920. By the terms of the policy, appellant was to pay appellee $5,000 "upon the receipt of due proof" of said Clark's death; or in lieu thereof, on conditions specified, was to pay appellee $10,000 —

"in the event of the death of the insured being caused directly and independently of all other causes by bodily injuries effected exclusively by external, violent, and accidental means (murder and suicide while sane or insane excepted), provided said death occurs within 60 days after such injuries are incurred;"

or "in lieu of the foregoing" was —

"to pay the insured hereunder in 20 annual installments of $250 each, upon receipt of written request of the insured with a legal waiver of all other benefits hereunder, and due proof of the following injuries or disability occurring before the insured reaches the age of 60 years, and during the period (20 years) premiums on this policy are to be paid, viz.: (a) The total loss of sight of one eye; or (b) the severance of one hand at or above the wrist; or (c) the severance of one foot at or above the ankle; or (d) if the insured should become totally and permanently disabled to such an extent as to render it impossible for him to engage in any gainful occupation whatever. The first installment of the above benefit will be paid immediately upon receipt of due and satisfactory proof of such total and permanent disability, or of any such injuries as above defined. Payment of premium will be waived by the company during any period in which the insured is entitled to this benefit. If the insured should die before all of said 20 installments have been paid, the total amount of the remaining installments will be paid in one lump sum of (to) the duly designated beneficiary, immediately upon receipt of due proof of death of the insured. * * * If the total and permanent disability referred to is from causes other than the entire and irrevocable loss of an eye, a hand or a foot, such disability must be such that there is neither then nor at any time thereafter any work, occupation, or profession that the insured can sufficiently do or follow to earn any wages, compensation or profit, and the insured must furnish from time to time evidence satisfactory to the company of continued total disability; and if the insured shall recover from such total disability sufficiently to enable him to engage in any gainful occupation he shall thereafter resume the payment of full premiums on the next succeeding due date of premium, and the installments already paid shall reduce to that extent the amount of insurance in force."

In her petition appellee alleged that the policy was in force May 15, 1921,

"at which time the said James G. Clark was afflicted with a mental derangement which deprived him of all reason and which wholly incapacitated him to engage in any gainful occupation whatever, and he, the said James G. Clark, did continue to remain in such condition until on or about August 27, 1921, at which time he departed this life."

She further alleged that Clark —

"became totally and permanently disabled to such an extent as to render it impossible for him to engage in any gainful occupation whatever, by reason of being afflicted as hereinbefore alleged, which said affliction befell him before he had reached the age of 60 years, and while the life insurance policy as aforesaid was in force and effect, it being at the time when the premiums due thereon had been paid, and it also being at the time during the premium-paying period as provided in said policy, and that by reason of his total and permanent disability the said policy became matured and payable on the dates as hereinbefore alleged."

And she further alleged —

"that by reason of the death of the said James G. Clark on August 27, 1921, he having died without recovering in anywise from such total and permanent disability, she, as beneficiary, then and there became entitled to payment under said policy, no part thereof ever having been paid."

In addition to the general denial in its answer, appellant set up a provision in the policy requiring premiums on the policy to be paid annually in advance, and a provision declaring that —

"except as otherwise provided herein, if any premium on this policy is not paid when due, this policy shall become ipso facto null and void, and all premiums paid thereon will be forfeited to the company, and the payment of a premium or installment thereof shall not maintain this policy in force beyond the date when the next premium or installment thereof is payable.'

And then, it alleged that the premium payable June 21, 1921, was never paid; that Clark died August 27, 1921; and that he never made a written request of it, as, by the terms of the policy, he might have done,

"to waive the payment of premiums on said policy with a legal waiver of all other benefits under said policy, and furnished evidence and due proof that he was or had become totally and permanently disabled under the terms of said policy,"

and therefore never became entitled to demand and receive payment of the annual installments of $250 each, provided for in the policy, as shown above.

A special issue as follows was submitted to the jury, and they answered same in the affirmative:

"Do you find from a preponderance of the evidence that James G. Clark, from June 21, 1921, to date of his death, was totally and permanently disabled to such an extent as to render it impossible for him to engage in any gainful occupation whatever?"

The appeal is from a judgment in appellee's favor for $5,000, as the amount due her by the terms of the policy, and for $600 as the damages, and $1,250 as reasonable attorney's fees, she was entitled to by force of the statute (article 4746, Vernon's Statutes).

Homer B. Latham, of Bowie, and Frank B. Hallagan and G. E. Brammer, both of Des Moines, Iowa, for appellant.

Donald & Donald and Benson & Benson, all of Bowie, and Alcorn & Jameson, of Montague, for appellee.

WILLSON, C. J. (after stating the facts as above).

It is urged that the judgment is wrong so far as it is in appellee's favor for $5,000 as a sum she was entitled to by the terms of the policy; and that, if it is right in that respect, it is wrong so far as it is in her favor for $600 as damages and $1,250 as attorney's fees she was entitled to by the terms of article 4746, Vernon's Statutes.

The contention as to the $5,000 is that the recovery thereof was unauthorized, mainly because, it is asserted, the right to claim any benefit under the policy was forfeited by the failure of the assured to pay the premium due June 21, 1921, within the time required by the policy, to wit, 31 days from said June 21, 1921. It conclusively appears in the record that the premium was not paid within the 31 days, or ever. Therefore the contention should be sustained if the forfeiture clause in the policy, set out in the statement above, was not inapplicable to the case, notwithstanding the failure of the assured to pay the premium.

The recovery of the $5,000 was predicated on the undertaking of appellant to pay the assured that amount in annual installments of $250 each if he "should [quoting] become totally and permanently disabled to such an extent as to render it impossible for him to engage in any gainful occupation whatever," and, if the assured should die before all the installments were paid, to pay appellee, in a lump sum, the total amount thereof then remaining unpaid.

It sufficiently appeared from the testimony, we think, and the jury found, that the insured was so disabled when the premium referred to became due, and continued in that condition until he died in August, 1921. 14 R. C. L. p. 1315 et seq.; 5 Joyce on Insurance, § 3032.

Appellee insists that the insured therefore was not bound to pay the premium referred to, and hence that the forfeiture clause in the policy did not apply to the case. The insistence is based on the provision in the policy with reference to such disability that "payment [quoting] of premiums will be waived by the company during any period in which the insured is entitled to this benefit."

Appellant, on the other hand, insists that the fact alone that the insured became disabled, if he did, as determined by the jury, did not entitle him to any benefit under the policy; that, to be entitled to payment of the annual installments, the assured must not only have become so disabled, but that he must, before the expiration of the 31 days specified, have furnished appellant proof of such disability, in writing have requested it to pay the installments, and have waived all other benefits under the policy. And, it appearing without dispute in the testimony that the insured never furnished such proof nor made such request and waiver, appellant insists that the insured never became entitled to payment of the installments, and hence that it was never in the attitude of having waived payment of the premium referred to.

We do not think appellant's contention should be sustained. It did not appear from the forfeiture clause, or any other part of the policy, that the proof, request, and waiver referred to must have been made before the expiration of the 31 days specified. On the contrary, the time within which the insured was to make such proof, etc., was not limited by anything in the policy. That being true, it could not be held, when the rules for construing such clauses in a contract are kept in mind, that the insured forfeited the...