Moscov v. Mut. Life Ins. Co. of New York

• Citation: 387 Ill. 378,56 N.E.2d 399
• Decision Date: 18 September 1944
• Docket Number: No. 27824.,27824.
• Parties: MOSCOV v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: Supreme Court of Illinois

387 Ill. 378

56 N.E.2d 399

MOSCOV

v.MUTUAL LIFE INS. CO. OF NEW YORK.

No. 27824.

Supreme Court of Illinois.

May 16, 1944.

As Modified on Denial of Rehearing Sept. 18, 1944.

Appeal from First Division of Appellate Court for First District, on Appeal from Circuit Court, Cook County; Ray D. Henson, Judge.

Action by Theodore Moscov against the Mutual Life Insurance Company of New York to recover disability benefits and premiums paid subsequent to plaintiff's total and permanent disability. Prior to the trial plaintiff died and his children were substituted as parties plaintiff. Judgment for defendant was affirmed by the Appellate Court, 320 Ill.App. 281, 50 N.E.2d 970, and plaintiffs appeal.

Affirmed.

GUNN and SMITH, JJ., dissenting.

Reginald A. Barnett, of Chicago, for appellants.

Winston, Strawn & Shaw, of Chicago (Louis W. Dawson, of New York City, George B. Christensen and Edward J. Wendrow, both of Chicago, of counsel), for appellee.

WILSON, Justice.

Theodore Moscov, by Nathan Moscov, his next friend, brought an action in the circuit court of Cook county against the defendant, the Mutual Life Insurance Company of New York, to recover disability benefits and premiums paid subsequent to plaintiff's total and permanent disability. Defendant answered the complaint, disclaiming liability. Prior to the trial, plaintiff died and his children were substituted as parties plaintiff. At the close of plaintiffs' evidence, defendant's motion for a directed verdict was granted. Upon appeal, the Appellate Court for the First District affirmed the judgment rendered in favor of defendant and against plaintiffs. Moscov v. Mutual Life Ins. Co. of New York, 320 Ill.App. 281, 50 N.E.2d 970. We have granted plaintiffs' petition for leave to appeal, and the record is here for a further review.

From the pleadings and the evidence adduced it appears that on January 12, 1928, the defendant executed a policy for $2000, with a double indemnity clause, insuring the life of Theodore Moscov and in which his six children, the present plaintiffs, were named beneficiaries. So far as is relevant, section 3 of the policy, captioned ‘Benefits in Event of Total and Permanent Disability before Age 60,’ after defining total disability and permanent disability, declares:

‘When Benefits become Effective.-If, before attaining the age of sixty years and while no premium on this Policy is in default, the Insured shall furnish to the Company due proof that he is totally and permanently disabled, as defined above, the Company will grant the following benefits during the remaining life-time of the Insured so long as such disability continues.

‘Benefits. (a) Increasing Income.-The Company will pay a monthly income to the Insured of the amount stated on the first page hereof ($10 per $1,000 face amount of Policy,) beginning upon receipt of due proof of such disability and increasing after sixty consecutive monthly payments have been made to one and one-half times such amount and after sixty further consecutive monthly payments have been made to twice such amount at which it shall remain while total and permanent disability continues.

‘(b) Waiver of Premium.-The Company will also, after receipt of such due proof, waive payment of such premium as it thereafter becomes due during such disability.’

On the back of the policy is a rider, ‘Supplementary Benefits to Section Entitled ‘Benefits in Event of Total and Permanent Disability before Age 60,’' which, so far as pertinent, reads:

‘Benefits if Proof Delayed and no Premium in Default.-If while no premium is in default, the proof furnished the Company under the section providing for ‘Benefits in Event of Total and Permanent Disability before Age 60’ is such as to entitle the Insured to the Disability Benefits provided for therein, and if due proof is also furnished the Company that such disability has been continuous since its beginning, the Company will:

‘(a) Begin the monthly income payments provided for in such section as of the end of the first completed month of such disability if earlier than the date of receipt of such proof instead of as of the date of receipt of such proof, and,

‘(b) Return any premium due after the beginning of such disability which has been paid during the continuance thereof.’

A certificate of a physician, a resident of East Pittsburgh, Pennsylvania, dated March 18, 1938, states that the insured had been suffering from paralysis agitans and, to his knowledge, had been unable to follow his usual or any other work since August 11, 1933. From the trestimony of the Pennsylvania physician and of Dr. Samuel Levine, a son-in-law of the insured, it appears that paralysis agitans is commonly known as Parkinson's disease. In 1938, demand was made upon defendant to pay the disability benefits beginning August 11, 1933, and to return the premiums paid since the date last named. This defendant declined to do, asserting it was not liable under the policy for the reason that the insured became sixty years of age on May 15, 1934, and proof of total and permanent disability was not submitted prior to his attainment of age sixty. October 31, 1939, this action was instituted.

When the policy was issued Theodore Moscov was a resident of Canonsburg, Pennsylvania. The policy is a Pennsylvania contract and, the parties agree, is controlled by Pennsylvania law. Plaintiffs make the contention, among others, that submission of proof of disability before age sixty is not a condition precedent to the recovery of disability benefits and the waiver of premiums. We take judicial notice of the Pennsylvania law, under section section 1 of the Uniform Judicial Notice of Foreign Law Act. (Ill.Rev.Stat.1943, chap. 51, par. 48g.) In plain and unambiguous language, section 3 of the policy prescribes that ‘the Insured shall furnish to the Company due proof that he is totally and permanently disabled’ before attaining the age of sixty years and while no premiums are in default. Proof to the company before the insured becomes sixty years of age of total and permanent disability is a condition precedent to the insured's right to disability benefits provided in the policy. Jenkins v. Mutual Life Ins. Co., 130 Pa.Super. 442, 198 A. 486, 487. As the court observed in the case cited: ‘The clause is so clear and unambiguous that no resort to the decisions of other jurisdictions or policy contracts containing dissimilar provisions is necessary or of advantage.’

Reasons for requiring proof of disability before age sixty suggest themselves. As pointedly observed in Lyford v. New England Mut. Life Ins. Co., 122 Pa.Super. 16, 184 A. 469, 475: ‘The clause, making the furnishing of due proof of total and permanent disability a condition precedent to liability, is a proper, reasonable, and salutary one to prevent fraud and deception being practiced on the insurer. The necessity for some such provision is recognized in Courson v. New York Life Ins. Co., supra [295 Pa. 518, 145 A. 530],Lucas v. John Hancock Mututal Life Ins. Co., supra [116 Pa.Super. 298, 176 A. 514], and Perlman v. New York Life Ins. Co., 105 Pa.Super. 413, 161 A. 752. Without it the company might be called on to pay claims four years old as in the Lucas case, or even twenty-five years old, as suggested in Wick v. Western Union Life Ins. Co., 104 Wash. 129, 175 P. 953, at a time when it had become impossible to test the truth and justice of the claim.’ And, in Lucas v. John Hancock Mutual Life Ins. Co., 116 Pa.Super. 298, 176 A. 514, 515, the court said: ‘The very purpose of the due proof clause is the prompt notice may be given, in order that the company may have an opportunity to make a fair investigation of the claim. The unfairness of plaintiff's position is best established by the present claim, in asserting a disability that had existed for more than four years prior to his filing proofs of his disability.’

Urging that section 3 and the rider are inconsistent, plaintiffs invoke the familiar rule that ambiguous provisions or equivocal expressions whereby an insurer seeks to limit its liability will be construed most strongly against the insurer and liberally in favor of the insured. Lenkutis v. New York Life Ins. Co., 374 Ill. 136, 28 N.E.2d 86. This canon of construction, however, does not authorize a distortion of language or the exercise of inventive powers for the creation of an ambiguity where none exists. Crosse v. Supreme Lodge Knights and Ladies of Honor, 254 Ill. 80, 98 N.E. 261, 45 L.R.A.,N.S., 162. Again, contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous their terms are to be taken and understood in their plain, ordinary, and popular sense. United States Fidelity & Guaranty Co. v. Guenther, 281 U.S. 34, 50 S.Ct. 165, 74 L.Ed. 683, 72 A.L.R. 1064;Chicago, Nat. Life Ins. Co. v. Carbaugh, 337 Ill. 483, 169 N.E. 218;Kimbell Trust & Savings Bank v. Hartford Accident & Indemnity Co., 333 Ill. 318, 164 N.E 661;Crosse v. Supreme Lodge Knights and Ladies of Honor, 254 Ill. 80, 98 N.E. 261, 45 L.R.A.,N.S., 162. The parties to an insurance contract may incorporate in it such provisions, not in violation of law, as they choose; and it is the duty of the courts to construe and enforce the contract as made. Manifestly, courts have neither the right nor the power to make a new contract for the parties. Since the policy, without the rider, required submission of proof before age sixty as a condition precedent, the narrow question presented for decision is whether the rider has changed or eliminated the requirement prescribed by section 3.

Recourse to the policy discloses the purpose of the rider in its title, namely, supplementary benefits to those described in the third section. The language of the rider fixes the same time limit within which proof of permanent and total disability must be filed as prescribed in the body...