Mutual Life Ins. Co. of New York v. Barron

• Decision Date: 07 July 1944
• Docket Number: 14815.
• Citation: 30 S.E.2d 879,198 Ga. 1
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. BARRON et al.
• Court: Georgia Supreme Court

30 S.E.2d 879

198 Ga. 1

MUTUAL LIFE INS. CO. OF NEW YORK v. BARRON et al.

No. 14815.

Supreme Court of Georgia

July 7, 1944

In 1925, Mutual Life Insurance Company of New York issued to Dr Henry A. Barron, a practicing physician of Thomaston Georgia, a policy of life insurance in the sum of $5000. The policy also provided for a waiver of premiums and payment of total disability benefits upon an increasing scale not to exceed $100 per month, if the insured before reaching the age of sixty years should become totally and permanently disabled within the meaning of the policy and furnish proof of that fact to the company.

The policy contained the following stipulations as to disability (1) "Total Disability. Disability shall be considered total when there is any impairment of mind or body which continuously renders it impossible for the insured to follow a gainful occupation. (2) Permanent Disability. Total disability shall, during its continuance, presumed to be permanent, (a) if such disability is the result of conditions which render it reasonably certain that such disability will continue during the remaining lifetime of the insured; or (b) if such disability has existed continuously for ninety days. (3) Specified Disabilities. The entire and irrevocable loss of the sight of both eyes, or the use of both hands or both feet or one hand and one foot, will be considered total and permanent disability."

On or about January 1, 1927, Dr. Barron submitted proof of total and permanent disability satisfactory to the company. Accordingly, it waived premiums that became due after that date and made payments for total disability continuously thereafter up to and including the month of February, 1942, when it refused to make further monthly payments. In July, 1942, the insured filed suit to recover the amount alleged to be due at the rate of $100 per month from and after March 1, 1942. The company filed an answer denying liability and alleging that it had refused to pay the disability benefits after February 1, 1942, for the reason that after due investigation, it had learned that the insured was no longer totally and permanently disabled within the meaning of the policy. The plaintiff and the defendant both introduced evidence in support of their respective contentions. The jury found a verdict in favor of the plaintiff for the principal sum sued for, with interest, and for attorney's fees and damages. The defendant filed a motion for a new trial, which was overruled. This judgment was affirmed by the Court of Appeals, upon condition that the item of attorney's fees and damages be written off. Mutual Life Insurance Co. v. Barron, 70 Ga.App. 454, 28 S.E.2d 334. The Insurance Company presented to this court a petition for certiorari, which was granted.

The questions raised are sufficiently indicated in the following opinion.

Grover Middlebrooks, of Atlanta, Beck, Goodrich & Beck, of Griffin, and Louis W. Dawson, of New York City, for plaintiff in error.

W. M. Dallas, of Thomaston, for defendants in error.

BELL Chief Justice.

1. Before this policy was issued in 1925, the Court of Appeals had rendered two decisions dealing with similar policies, Whitton v. American National Life Insurance Co., 17 Ga.App. 525, 87 S.E. 827, decided in 1916, and Parten v. Jefferson Standard Life Insurance Co., 30 Ga.App. 245, 117 S.E. 772, decided in 1923. It is contended for the insurer that, under the rulings in these cases, a recovery in the instant case was unauthorized as a matter of law, and that since these were the only Georgia decisions which dealt with such contracts before the present policy was issued, it should be presumed that the parties here intended that their contract should be governed by these decisions.

We cannot sustain this contention, for several reasons. The policy did not contain the identical language that was involved in either the Whitton or the Parten case. While the meaning of the several clauses may be substantially the same, there is such a difference in verbiage and phraseology as to preclude any reasonable inference that the parties entered into the present contract relying upon either of those decisions as to how it should be construed. Moreover, in so far as the Parten case is concerned, the application expressly declared that any policy issued thereon should be governed by the laws of the State of North Carolina; and the Court of Appeals quoted and applied a decision by the Supreme Court of that State as a basis for its judgment. Lastly, it is declared in the constitution that decisions of the Supreme Court shall bind the Court of Appeals as precedents. Code, § 2-3009, Const. art. 6, § 2, par. 9. This would mean, of course, that the decisions in the Whitton and Parten cases would not be controlling as to the proper construction of contracts of this nature, as against subsequent decisions by the Supreme Court, and the parties are presumed to have known of this rule. The principle invoked has been recognized and applied by this court, but it has no application in the instant case. Compare Heist v. Dunlap & Co., 193 Ga. 462, 18 S.E.2d 837; Parham v. Robins, 197 Ga. 386, 29 S.E.2d 608.

We do not have before us a contract the language of which had been construed in a well-settled line of decisions by the Court of Appeals, with nothing to the contrary by the Supreme Court, and whether the claimed presumption could be indulged in such a situation is not determined.

2. The petitioner (the insurance company) assigned error on a ruling of the Court of Appeals as to what it would be required to show before it would be justified in discontinuing payments for total disability, where different occupations are involved; which ruling, in that court's opinion, was as follows: "In order for the insurance company to be justified in refusing to pay the total disability payments, by merely showing that the insured engaged in other occupations, it must appear: (1) that Dr. Barron never became physically able to [nor did he] resume his work as a doctor of medicine; (2) that he engaged in employments which were to him desirable, and as he might be fairly expected to follow in view of his station, circumstances, and mental and physical capabilities; and (3) that the employment produced a like remuneration or approximated the same livelihood. Under the circumstances of this case, it is necessary that the proof show all three of these essentials."

This ruling was erroneous, for the reason that it held in effect that the insured would be totally and permanently disabled within the meaning of the policy unless he became physically able to resume his work as a doctor of medicine, or to engage in such other employment as was desirable to him and as he might be fairly expected to follow, and which produced an income or remuneration comparable with that which he had formerly received as a doctor of medicine. Total and permanent disability were thus made to depend on whether the insured regained the equivalent of substantially all of his former earning capacity, whereas under the terms of the contract the company would cease to be liable if he regained any substantial part thereof. Nor would it be true that the insured would be entirely free to accept or reject any employment according to whether it might be desirable to him. His mere personal desire should not enter into the question.

The rule stated by the Court of Appeals, except as to desire, appears to have been deduced from the decision by this court in Prudential Insurance Co. v. South, 179 Ga. 653, 177 S.E. 499, 98 A.L.R. 781; and while that court, in its opinion, commended the decision, we are obliged to say that on re-examination it does not commend itself to us as being as clear as it should have been. We are satisfied, however, with the conclusion reached, and, while the decision was not concurred in by all the Justices, the general doctrine there laid down has been subsequently approved in at least one unanimous decision by this court. Metropolitan Life Insurance Co. v. Johnson, 194 Ga. 138, 20 S.E.2d 761. We will discuss the South case more fully later on in this opinion.

Counsel for the insurer protest strenuously against any construction that would place the instant contract in the class of occupational policies, and as to this point we are in substantial accord with the views of counsel. There is a material difference between a policy providing for payments for disability to carry on a particular occupation and one under which such payments are to be made in case the insured becomes unable from disability to carry on or to follow any gainful work or occupation. The distinction was pointed out in Buffo v. Metropolitan Life Insurance Co., 227 Ill.App. 366, 368, as follows: 'It appears that there are two general types of contracts of insurance of this nature one of which provides for indemnity if the insured is disabled or prevented from engaging in any occupation and performing any work for compensation or profit, which policy is commonly known and designated as a total disability policy. The other kind provides for indemnity if the insured is disabled from transacting duties pertaining to the particular occupation in which the insured is then engaged. These are ordinarily styled occupational [[disabilities]. It is generally recognized that there is a fundamental difference between these two classes of insurance and the risk that is assumed therein by the insurer. It therefore becomes necessary to revert to the provisions of the policy in question to determine which class the same comes under." See also Williams v. Preferred Mutual Accident Association, 91 Ga. 698, 17 S.E. 982; Vess v. United Benevolent Society of America, 120 Ga. 411, 47 S.E. 942; Ford v. United...