New York Life Ins. Co. v. Reedy

• Decision Date: 25 April 1938
• Docket Number: 33173
• Court: Mississippi Supreme Court
• Parties: NEW YORK LIFE INS. CO. v. REEDY

180 So. 607

181 Miss. 774

NEW YORK LIFE INS. CO. v. REEDY

No. 33173

Supreme Court of Mississippi

April 25, 1938

Division A

Suggestion Of Error Overruled, May 9, 1938.

APPEAL from the circuit court of Monroe County, HON. THOS. H JOHNSTON, Judge.

Suits by Millard G. Reedy against the New York Life Insurance Company on two life insurance policies, each containing a disability clause, to recover alleged disability benefits and premiums paid on the policies. From a judgment for plaintiff the defendant appeals. Reversed, and judgment entered for defendant.

Reversed, and judgment here for appellant.

Watkins & Eager, of Jackson, and D. W. Houston, of Aberdeen, for appellant.

The burden of proof is upon the appellee to show that his alleged total and permanent disability arose subsequent to the delivery of said policies of insurance.

We respectfully submit that the appellant was entitled to a directed verdict at the conclusion of appellee's evidence and to a peremptory instruction at the conclusion of all of the evidence because the appellee wholly failed to meet the burden of proof which was upon him to show that his alleged total and permanent disability arose subsequent to the delivery of the policies of insurance sued on and each of them.

Equitable Life Assurance Society v. Henderson, 177 Miss. 815, 172 So. 321; Columbian Mutual Life Ins. Co. v. Jones, 174 Miss. 33, 163 So. 687; Scales v. Home Life Ins. Co., 89 F.2d 580; New Amsterdam Casualty Co. v. Perryman, 162 Miss. 864, 140 So. 342; Fidelity & Deposit Co. v. Merchants' & Marine Bank of Pascagoula, 151 So. 373, 154 So. 260.

The incontestable clauses of the policies sued on do not affect the issues involved in this cause.

John Hancock Mutual Life Ins. Co. v. Hicks, 183 N.E. 93; Apter v. Home Life Ins. Co. of N. Y., 194 N.E. 846; Sanders v. Jefferson Standard Life Ins. Co., 4 F.2d 55; Lavender v. Volunteer State Life Ins. Co., 157 So. 101; Messina v. New York Life Ins. Co., 161 So. 462.

The appellee was not entitled to recover premiums voluntarily paid appellant.

Aetna Life Ins. Co. v. Thomas, 166 Miss. 53, 144 So. 50; Featherstone v. Stonewall Life Ins. Co., 165 Miss. 164, 147 So. 305; Columbian Mutual Life Ins. Co. v. Gunn, 173 Miss. 897, 163 So. 454; 48 C. J. 752; Cooley on Taxation (4 Ed.), sec. l283.

Paine & Paine of Aberdeen, for appellee.

We respectfully submit to the court that this is a case properly submitted to the jury on the facts and since the facts were decided by the jury in favor of the appellee, then the case will not be disturbed on appeal unless manifestly wrong or against the overwhelming weight of the evidence.

Counsel for appellant are forced to admit that the incontestable clause would prevent the appellant from claiming fraud by Reedy in his application for insurance under the many and numerous decisions which have so well established this rule of law. And it occurs to us that it is carrying the incontestable clause doctrine mighty far to attempt to defeat the rights of a party after the incontestable period has elapsed by claiming that the efforts of the appellant company in the present case does not constitute a "contest" of appellee's policy rights.

United States of America, Petitioner, v. Patryas, 58 S.Ct. 551, 90 F.2d 715; Massachusetts Benefit Assn v. Robinson, 42 L.R.A. 261.

We do not controvert with appellant's counsel the law that premiums on insurance voluntarily made, where there is no coercion, compulsion or necessity for payments, cannot be recovered. But where such premiums are paid due to compulsion or coercion or through necessity to prevent the threatened lapse of policies, as in the case at bar, we insist that they are not voluntary payments and no decision in Mississippi has ever been rendered holding such payments voluntary payments.

Columbia Mutual Life Ins. Co. v. Gunn, 173 Miss. 897, 163 So. 454; 48 C. J. 752, sec. 306; Pacific Life Ins. Co. v. McCaskill, 170 So. 579.

The courts have established the doctrine that before an insurer will be permitted to rescind an insurance contract, it is required to return or tender the premiums within a reasonable time after it discovers the fact upon which it bases its rescission of the contract.

32 C. J. 1266, sec. 470.

The appellant here contends that the appellee was totally and permanently disabled prior to the issuance of the policies or at least at the time the policies were issued. Yet the appellant charged the appellee with the payment of a premium on both policies for the waiver of premiums and the payment of disability benefits and collected these premiums for seventeen long years and although appellant claims to have discovered this fact in the year 1936, the premiums collected during this period of time have not been paid to the appellee or tendered to the appellee under either one of these cases filed in the justice of the peace court.

OPINION

Smith, C. J.

The appellee filed two suits against the appellant in the court of a justice of the peace on two life insurance policies issued to him on February 5, 1920, each containing a disability clause, to recover alleged disability benefits and premiums paid on the policies by him. From a judgment there for the appellee the cases were carried by the appellant to the circuit court, where, by agreement, they were consolidated and tried as one, resulting in a verdict and judgment for the appellee.

At the close of the evidence the appellant requested, but was refused, a directed verdict in its favor. Both of the policies, in addition to insuring the life of the appellee, contain the following provisions: "And the Company agrees to pay to the Insured one-tenth of the face of this policy per annum, during the lifetime of the Insured, if the Insured becomes wholly and permanently disabled before age 60, subject to all the terms and conditions contained in Section 1 hereof. . . . Whenever the Company receives due proof, before default in the payment of premium, that the Insured, before the anniversary of the Policy on which the Insured's age at nearest birthday is 60 years and subsequent to the delivery hereof, has become wholly disabled by bodily injury or disease so that he is and will be presumably, thereby permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit," then further payment of premiums will be waived and "the Company will pay the Insured a sum equal to one-tenth of the face of the Policy and a like sum on each anniversary thereafter during the lifetime and continued disability of the Insured. . . . This policy is free of conditions as to residence, travel, occupation, or military or naval service, except as provided under Double Indemnity on first page hereof, and shall be incontestable after two years from its date of issue except for non-payment of premium."

In 1935 the appellee filed a claim with the appellant for the disability allowance, setting forth that he was then totally disabled, which claim the company approved, waived further payment of premiums on the policies, and began paying him the disability benefit provided therein. On June 10, 1936, the appellant wrote a letter to the appellee from which it appears, in substance, that it had just learned that the appellee's disability occurred prior to the issuance of the policies, and therefore the appellant was not liable under the disability provision thereof; demanded the repayment of $ 200 paid the appellee, and the payment of premiums that had been waived, in default of which the company would declare the policies lapsed for nonpayment of premiums....