Mobley v. New York Life Ins. Co.

• Decision Date: 16 January 1935
• Docket Number: No. 7469.,7469.
• Citation: 74 F.2d 588
• Parties: MOBLEY v. NEW YORK LIFE INS. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

74 F.2d 588 (1935)

MOBLEY v. NEW YORK LIFE INS. CO.

No. 7469.

Circuit Court of Appeals, Fifth Circuit.

January 16, 1935.

Sydney C. Mize, of Gulfport, Miss., for appellant.

William H. Watkins, of Jackson, Miss., for appellee.

Before SIBLEY, HUTCHESON, and WALKER, Circuit Judges.

SIBLEY, Circuit Judge.

This appeal complains mainly of the instruction by the court of a verdict for the defendant in the trial of consolidated suits brought by Roy T. Mobley against the New York Life Insurance Company upon two similar policies of life insurance carrying benefits in case of total disability. By the terms of the policies, premiums necessary to maintain the insurance were due semiannually, but on proof of total disability before the age of sixty subsequent premiums were to be waived and monthly benefits paid so long as the disability lasted. Proof of continuance of the disability might be demanded not oftener than once a year, and on failure to furnish such proof no future disability payments would be made nor further premiums be waived; but in case of default in payment of premium after total disability, the policy might be restored and all benefits paid as if no default had occurred, provided that not more than six months after the default due proof were made of a continuous total disability since the default that would continue for life, or that had continued for three consecutive months. Mobley at the age of thirty-three, while his policies were in force, had an operation for appendicitis with results that totally disabled him, and he collected disability benefits for two years through January, 1933. The insurance company on March 1, 1933, wrote to him: "It appears that for some time past you have not been continuously totally disabled within the meaning of the disability benefit provision contained in the policies. In view of this condition we regret to inform you that no further disability payments will be made, and the premiums due on and after Feb. 7th, 1933, become payable in conformity with the terms of the contracts." Mobley in reply said he was taking immediate legal steps to secure the benefits under the policies. On March 9th the company wrote that the matter was receiving further attention, and the same day an attorney employed by Mobley wrote the company demanding payment of $28,980 as for a total breach of the insurance contracts and threatening suit. On March 17th the company wrote the attorney that its medical examiner in January had reported Mobley able to do light work of a remunerative nature, and that he could no longer be considered totally disabled within the definition of the policies, and that payment of benefits had been discontinued, to which decision it would adhere. On April 13th the company wrote Mobley that one of the policies had lapsed for nonpayment of premium, and urged him to apply for reinstatement to protect his interests. On June 5th it advised him: "Application for reinstatement after default in premium specified above not having been made, notice is hereby given that pursuant to the terms of the policy the value of the policy has been applied to purchase continued insurance" until June 20, 1937. On June 9th the company gave notice of the premium falling due July 9th on the other policy. On July 8th Mobley's attorney had written that Mobley did not agree to the action stated in the letter of June 5th, and would sue in a few days. In answer the company wrote that it was willing to give Mobley's claim for disability benefits further consideration, and asked for a statement from his physician as to his condition since January, and stated that one of its physicians would also call on Mobley to examine him. The examination was made July 24th, and chronic heart disease was found. The company claimed that this was its first knowledge of the heart trouble. It concluded he was totally disabled and tendered him on August 9th $910 accrued benefits, and a written waiver of premiums; but on July 24th suit on one policy had been filed and a few weeks later suit was filed on the other. The company pleaded the foregoing facts and correspondence and continued the tender with accrued costs. The suits claim a recovery of damages measured by the sum of the disability payments for the life expectancy of Mobley plus the amount that would be due at his death, all reduced to present value, upon the theory of an anticipatory breach of the contracts. The judge directed that the plea of tender be sustained.

Ordinarily, breach of a contract cannot occur until performance is due. In case the promisor prevents performance or disables himself to perform, a right of action at once accrues. In some classes of contracts, while executory on both sides, notably those for personal services and for the purchase or manufacture of goods, or for marriage, a total repudiation of the contract by one party before the time for performance may at the option of the other be treated as a present breach, excusing him from performance on his part and enabling him to sue the repudiator at once for all resulting damages; or he may decline to treat it as a breach and elect to keep the contract in force, tendering performance on his part at the time fixed by the contract and demanding performance of the repudiator. Hochster v. De la Tour, 2 El. & Bl. 678; Pierce v. Tennessee Coal, I. & R. Co., 173 U. S. 1, 19 S. Ct. 335, 43 L. Ed. 591; Roehm v. Horst, 178 U. S. 1, 20 S. Ct. 780, 44 L. Ed. 953. This doctrine of an anticipatory breach does not apply to commercial paper or in general to simple promises to pay money due on an executed consideration. It is said in Kelly v. Security Mutual Life Ins. Co., 186 N. Y. 16, 78 N. E. 584, 9 Ann. Cas. 661, approved in Killian v. Metropolitan Life Ins. Co., 251 N. Y. 44, 166 N. E. 798, 64 A. L. R. 956, to be confined to contracts to marry, for service, and for goods to be manufactured or...