Mobley v. New York Life Ins Co

• Citation: 55 S.Ct. 876,99 A.L.R. 1166,79 L.Ed. 1621,295 U.S. 632
• Decision Date: 27 May 1935
• Docket Number: No. 751,751
• Parties: MOBLEY v. NEW YORK LIFE INS. CO
• Court: United States Supreme Court

295 U.S. 632

55 S.Ct. 876

79 L.Ed. 1621

MOBLEY

v NEW YORK LIFE INS. CO.

No. 751.

Argued May 6, 1935.

Decided May 27, 1935.

Mr. Sidney C. Mize, of Gulfport, Miss., for petitioner.

Mr. Wm. H. Watkins, of Jackson, Miss., for respondent.

Mr. Justice BUTLER delivered the opinion of the Court.

In 1933 petitioner brought two actions against respondent in the circuit court of Harrison county, Miss. There being diversity of citizenship, defendant removed them to the federal court for the southern district of that state. The court consolidated the cases for trial, and, at the close of the evidence, directed verdicts and entered judgments for defendant. The Circuit Court of Appeals affirmed. 74 F.(2d) 588. And, upon petitioner's claim that the decision in this case conflicts with that of the Circuit Court of Appeals for the Sixth Circuit in Federal Life Ins. Co. v. Rascoe, 12 F.(2d) 693, and other cases, this court granted a writ of certiorari. 294 U.S. 705, 55 S.Ct. 640, 79 L.Ed. —-.

The first action, commenced July 25, is based on an alleged breach by anticipatory repudiation of an insurance policy for $5,000 issued August 7, 1928, by defendant on the life of plaintiff, payable to his wife as beneficiary and providing for monthly payments in case of disability. Plaintiff prays judgment for $33,980.¹ The other, commenced November 1, is based on a similar life policy for $2,000 dated April 9, 1925, and payable to his mother. The prayer is for $11,600.² His declarations may be construed to include demands for $70 per month during claimed expectation of life plus the face amounts of the policies, all reduced to present value. The insured seeks not payment of disability benefits as they mature according to the insurer's promises, nor the damages resulting from its failure regularly to pay installments when due. His claim, as indicated by the evidence offered, is at least for the present value of the monthly payments during his expectation of life and also for the present worth of the face value of the policy.

The question first to confront us is whether the evidence is sufficient to warrant a finding that the company repudiated the policies.

There is no controversy as to the facts. Except as above stated, the policies are alike. Each was issued in consideration of specified premiums payable semian nually in advance during the life of the insured. They provide: That whenever the insured is so disabled by bodily injury or disease that he is wholly prevented from performing any work, following any occupation, or engaging in any business for remuneration, and the company receives proof that this disability will continue for life, or that it has existed for the three months next preceding the proof, the company will pay monthly $10 per thousand of face value, and waive premiums; that, before making any income payment or waiving any premium, the company may demand proof of continuance of total disability (but not oftener than once a year after disability has continued for two full years), and that, upon failure to furnish such proof, no further payments will be made nor premiums waived.

December 13, 1930, the plaintiff suffered an acute attack of appendicitis for which he submitted to surgery. March 30, 1931, not having regained his health, he claimed monthly payments for permanent and total disability. On the proof he submitted and a physical examination made in its behalf, the company allowed the claim, waived premiums, and paid him $70 per month—$50 under one policy and $20 under the other—from January 13. The company caused his condition quite frequently to be observed. Several times between June 13, 1931, and March 1, 1933, it concluded that he was not continuously and totally disabled. On each of these occasions it notified him that no further income payments would be made and that premiums would no longer be waived. But in every instance, upon his insistence that he continued to be disabled and after further investigation and consideration, the company changed its ruling, paid past-due benefits, resumed monthly payments, and waived premiums.

March 1, 1933, the company wrote him stating it appeared that for some time he had not been continuously disabled within the meaning of the policies, that no fur- ther monthly payments would be made, and that the premiums due on and after February 7 became payable according to the terms of the contracts. Then, through his attorney, plaintiff demanded payment of the policies in full 'for the remainder of his natural expectancy, which is thirty-four years and six months from this date which under the terms of said policies will amount to $28,980,' and warned that unless the matter was adjusted within seven days plaintiff would bring suit. March 17, the company wrote the attorney explaining that information obtained as a result of its customary investigation indicated that insured had sufficiently recovered to do some remunerative work, and that, in view of the reports received, it could not consider him totally disabled; and declared that it would adhere to its decision.

April 13, it notified plaintiff that the $5,000 policy had lapsed and urged him to apply for its reinstatement. Later, it wrote that, application for reinstatement not having been made, the value of the policy had been applied to continue the insurance in force until June 20, 1937. On June 9 it notified him that premium on the $2,000 policy was about to mature. July 8, his attorney wrote the company that, as plaintiff was totally and permanently disabled and had demanded the value of the disability benefits, it was...