Missouri State Life Insurance Co. v. Case

• Decision Date: 07 May 1934
• Docket Number: 4-3458
• Citation: 71 S.W.2d 199,189 Ark. 223
• Parties: MISSOURI STATE LIFE INSURANCE COMPANY v. CASE
• Court: Arkansas Supreme Court

71 S.W.2d 199

189 Ark. 223

MISSOURI STATE LIFE INSURANCE COMPANY v. CASE

4-3458

Supreme Court of Arkansas

May 7, 1934

Appeal from Independence Circuit Court; S. M. Bone, Judge; affirmed.

Judgment affirmed.

Allen May, J. R. Burcham, Dene H. Coleman, Charles Frierson, Jr. and Chas. D. Frierson, for appellants.

Ernest Neill and Shields M. Goodwin, for appellee.

OPINION

BUTLER, J.

On November 12, 1920, the Missouri State Life Insurance Company issued its policy in favor of Dr. William Byers Case, under the terms of which, in consideration of the payment in advance of the sum of $ 200.25 and the further payment of like sums on or before the 12th day of November of each year thereafter, his life was insured in an amount of $ 5,000. The policy provided for total and permanent disability benefits in the sum of $ 50 per month, in consideration of which the insured paid, on the dates aforesaid, an annual premium of $ 16.45. The annual premiums were paid each year up to and including the policy year ending November 12, 1929. Notice of the maturity of this premium was given Dr. Case, and at the expiration of the thirty-day grace period, a letter was addressed to and received by him, advising that the policy was forfeited and at an end for the nonpayment of the premium falling due on the last-mentioned date. He was also advised of his right to reinstatement of the policy upon the performance of certain conditions. Dr. Case did not answer these letters.

In February, 1932, Dr. Case was committed to the State Insane Asylum, and on August 25, 1932, the attorney for the appellee notified the insurance company that the insured had been totally and permanently disabled from permanent insanity; that he had been so disabled since sometime in the summer of 1929, and was at that time a patient in the State Hospital for Nervous Diseases in the city of Little Rock. Demand was made for the payment of disability benefits at the rate of $ 50 per month and a request that the company furnish forms on which proof could be made. On September 6, 1932, the company, answering the notice and claim, advised that the policy had lapsed for the nonpayment of premium and interest due November 12, 1929. Shortly after this Dr. Case died in the State Hospital. Notice of his death was immediately given the company with demand for the payment of the death claim. In due time this claim was also declined by the company for the same reason assigned in its answer to the demand for monthly benefits made during the lifetime of the insured.

On the 13th of March, 1933, Miss Robert Ella Case brought suit as administratrix of the estate of Dr. Case to recover disability benefits at the rate of $ 50 per month from May 1, 1929, to October 18, 1932, the date of Dr. Case's death, less the amount of a certain policy loan of $ 955 and interest due thereon, on the allegation that, while the policy was in full force and effect, the insured was, from May 1, 1929, until the date of his death, totally and permanently disabled by reason of permanent insanity, to the extent of preventing him from engaging in any gainful occupation. It was also alleged that, because of the permanent insanity, no notice of the disability was given the company.

The General American Life Insurance Company, having assumed the liabilities of the Missouri State Life Insurance Company, was made a party defendant. The latter company filed its separate answer, admitting that it would be bound if a judgment was rendered against the Missouri State Life Insurance Company, which company answered denying the material allegations of the complaint except that all premiums had been paid on the policy to November 12, 1929, which it admitted, and defended on the affirmative ground that the policy had lapsed for the nonpayment of the premium due November 12, 1929, and certain other affirmative defenses.

The case was tried and the jury found that Dr. Case was totally and permanently disabled from permanent insanity from July 1, 1929, to October 18, 1932, and returned a verdict in favor of the plaintiff in the sum of $ 872.04, the amount of the monthly benefits accruing between those dates, less the policy loan and interest. From that judgment is this appeal.

Here, as in the court below, the appellant insists there can be no recovery because of insufficient proof to show permanent and total disability at a time prior to the maturity of the premium due in 1929. It may be first stated that the insured, at the time of his death, was 61 years of age and had been for many years a popular and successful country practitioner, that being the only profession or vocation in which he had ever engaged except in 1920 when he abandoned it for a few months and attempted to write life insurance. He soon gave this up, however, and returned to his practice of medicine. He appeared to be fairly happy and successful, except for a short period in 1920, up and until 1927. From that time on it seems he began to slip. Early in his practice he was located in Cleburne County where he was popular and had a considerable practice. In the early spring of 1919 he returned to that county, and it is from that time until his commitment to the State Hospital with which the testimony has principally to deal relative to his mental condition.

The appellant calls attention to the testimony to the effect that during that period Dr. Case discussed with some of the witnesses current subjects with apparent intelligence; that he spoke of his insurance and said that he was fearful it would lapse because of his inability to meet the premiums; that he discussed with some of them his method of bookkeeping and his success in making collections for the practice he had done. Also that he made calls on patients and some witness who had called the doctor in his professional capacity testified that his services were satisfactory. This evidence, it is argued, was sufficient to show that Dr. Case was not incapacitated for any reason, or prevented from following his usual occupation, and therefore was not totally and permanently disabled to the extent that he could not pursue any gainful occupation as provided for in the policy.

In construing provisions in policies relating to total and permanent disability sufficient to prevent the insured from engaging in any gainful occupation, the rule has been often stated to the effect that we do not give to these provisions a strict and literal interpretation, on the theory that a fair intention of the parties to the contract of insurance is that the insured shall receive indemnity when he is disabled to the extent that he is unable to carry on any business which, without the disability, he would be able to do or capable of engaging in. Therefore, to come within the meaning of the contract of indemnity, it is not required that the insured shall be absolutely helpless, but he is totally disabled when the infirmity from which he suffers renders him unable to perform all the substantial and material acts of his business or the execution of those acts in the usual and customary way. Aetna Life Ins. Co. v. Spencer, 182 Ark. 496, 32 S.W.2d 310; Mutual Life Ins. Co. v. Marsh, 186 Ark. 861, 56 S.W.2d 433, and cases there cited.

When we consider the testimony to which reference has been made in connection with all of the testimony in the case, we think the evidence preponderates in favor of, and sustains, the finding of the jury. Several of Dr. Case's old friends, on his return to Cleburne County where he had formerly resided and practiced his profession, were scarcely able to recognize him because he was so changed. Formerly he had been a man careful of his personal appearance, amiable and loving the society of his fellows. Now he was unkempt, morose and retiring. He was unable to recall incidents of his young manhood which were likely to stand out in his memory. Those who called him in professionally, remembering his former skill, were greatly disappointed; he seemed to be uncertain what to do and neglectful of his patients. This was his condition as far back as April, 1929, and there is evidence to the effect that it continued throughout that year into 1930, when he became so helpless that his sister, Miss Case, took him to the home of his brother Ed Case, a farmer living near Heber Springs, where he was cared for, Miss Case paying her brother a reasonable amount for his care. Dr. Case remained there until he was committed to the State Hospital totally insane, where he remained in that condition until he died a few months after his admission. It was in testimony that he was suffering from a physical ailment which affected his brain, and in the opinion of the superintendent of the hospital this condition had lasted for several years. It is true that other expert witnesses testified that in their opinion Dr. Case was not insane in 1929, but, as we have stated, there is substantial evidence to sustain the finding of the jury.

The principal contention, however, is that urged in the second section of appellants' brief that the proof of disability constituted a condition precedent to liability, and the failure to give such proof before the lapse of the policy would prevent a recovery. To sustain this contention appellants rely chiefly on the case of Bergholm v. Peoria Life Ins. Co., 284 U.S. 489, 52 S.Ct. 230, 76 L.Ed. 416, conceded by them to be out of harmony with our decisions in the cases of Pfeiffer v. Mo. State Life Ins. Co., 174 Ark. 783, 297 S.W. 847; Old Colony Life Ins. Co. v. Julian, 175 Ark. 359, 299 S.W. 366; and Mo. State Life Ins. Co. v. Holt, 186 Ark. 672, 55 S.W.2d 788. But the argument is made that our later cases seem to modify the rule announced in the cases above cited and evidence a feeling of this court ...