New York Life Ins. Co. v. Gresham

• Decision Date: 07 May 1934
• Docket Number: 31135
• Citation: 154 So. 547,170 Miss. 211
• Court: Mississippi Supreme Court
• Parties: NEW YORK LIFE INS. CO. v. GRESHAM

154 So. 547

170 Miss. 211

NEW YORK LIFE INS. CO. v. GRESHAM

No. 31135

Supreme Court of Mississippi

May 7, 1934

Division A

1 INSURANCE.

Where life policy provided that insurance applied for should not become effective unless applicant had not consulted or been treated by physician since her medical examination, policy never became effective if applicant had so consulted or had been so treated.

2 INSURANCE.

Provision in life policy that insurance applied for on September 27 delivered on October 16, to become effective as of July 24, 1928, should not become effective unless applicant had not consulted or been treated by physician since her medical examination, held not eliminated by amendment of application changing anniversary of policy to September 24 for 1929 and subsequent years.

3. INSURANCE.

Where life policy provided that insurance should not take effect unless applicant had not consulted or been treated by physician since her medical examination, and that policy should be incontestable after two years except as to provisions relating to disability benefits, insurer could contest liability for disability benefits on ground that insured had consulted or been treated by physician since her medical examination.

4. APPEAL AND ERROR.

Where insured's demurrer to special plea was erroneously sustained, question whether insurer had waived defense relied on must be determined by trial court and not by Supreme Court (Supreme Court Rules, Rule 11).

HON. S. F. DAVIS, Judge.

APPEAL from circuit court of Sunflower county HON. S. F. DAVIS, Judge.

Suit by Mrs. Mamie G. Gresham against the New York Life Insurance Company. From a judgment for plaintiff, the defendant appeals. Reversed and remanded.

Reversed and remanded.

Watkins & Eager, of Jackson, for appellant.

The application which was a part of the consideration for the writing of the policy and which was attached to and made a part of the policy, contained a provision that the insurance applied for should not take effect until the policy was delivered to and received by the appellee and the first premium paid in full during her lifetime, and then only if the appellee had not consulted or been treated by any physician since her medical examination. The application and medical examination were both executed and delivered on August 27, 1928. This is undisputed. It is also undisputed that on October 2, 1928, the appellee underwent a surgical operation at Campbell's Clinic in Memphis and according to her own statement and her own testimony, her disability arose and commenced on that date.

Fidelity Mutual Life Insurance Co. v. Elmore, 71 So. 305, 111 Miss. 137; Mutual Life Insurance Co. v. Shoemake, 126 Miss. 497, 89 So. 154; National Life & Accident Ins. Co. v. Hugger, 158 Miss. 686, 131 So. 75; 1 Couch on Insurance, sec. 130 A, pages 249-250; New York Life Ins. Co. v. Smith, 91 So. 456, 129 Miss. 544; Stipcich v. Metropolitan Life Ins. Co., 8 F.2d 285; Fitzgerald v. Metropolitan Life Ins. Co., 90 Vt. 291, 98 A. 498; Prahm v. Prudential Ins. Co., 98 N. J. L. 355, 120 A. 918; Gordon v. Prudential Ins. Co., 231 Pa. 404, 80 A. 882; Security Life Ins. Co. v. Booms, 31. Cal.App. 120, 159 P. 1000; House v. Bankers Reserve Life Ins. Co., 43 S.D. 440, 180 N.W. 69; Dubuc v. New York Life Ins. Co, 4 D. L. R. 364.

Moody & Johnson, of Indianola, for appellee.

Conceding for the sake of the argument, but not admitting, that the agreement in the original application referred to in the plea was in full force and effect at the time of the delivery of the policy, yet the record discloses that before the payment of any disability benefits the appellant was fully apprised of the facts that the appellee had been treated by a physician, and had had an operation on her feet after the original application was made and before the policy was delivered.

When premiums are collected and retained by a life insurance company, with a knowledge of the facts, the life insurance company thereby waives the condition precedent in an application that the policy shall not become effective unless delivered to the insured in good health and then only if the insured has not been treated or examined by a physician since the date of the application.

American Bankers Ins. Co. v. Thomas, 154 P. 44; Central Life Ins. Co. v. Roberts, 176 S.W. 1139; New York Life Ins. Co. v. Dumler, 282 F. 969.

The plaintiff made a different offer to the defendant, and her offer was accepted and the premium paid in accordance with the new offer.

32 C. J. 1104, sec. 191.

The construction placed upon a contract of insurance by the parties as evidenced by acts, conduct, or declarations indicating a mutual intent and understanding will be adopted by the courts where the language of the contract is ambiguous, or there is a reasonable doubt as to its meaning.

32 C. J. 1150, sec. 260; 6 R. C. L. 852, sec. 241; Fullerton v. United States Casualty Co., 6 A. L. R. 367; Mutual Reserve Fund Life Association v. Sylvia A. Austin, Executrix, 73 C. C. A. 498, 142 F. 398, 6 L. R. A. (N. S.) 1064.

A provision in an insurance policy making it incontestable after the lapse of a specified time does not cease to operate when the insured dies within the time specified, but continues thereafter for the benefit of the beneficiary; and therefore, if contest is not instituted within the time specified, it is too late.

Metropolitan Life Ins. Co. v. Peeler, 6 A. L. R. 441; Pacific Mutual Life Ins. Co. v. Strange, 135 So. 477.

OPINION

Cook, J.

Appellee filed this suit in the circuit court of Sunflower county against the appellant, New York Life Insurance Company, seeking to recover the benefits provided for total and permanent disability in a life insurance policy issued by the appellant to her. The declaration alleged the execution and delivery of the policy, and that the appellee became totally and permanently disabled so as to entitle her to permanent disability benefits thereunder from and after March 1, 1931; that the appellant, upon proof, paid the disability benefits provided by the policy from March, 1931, to March 1, 1932, but thereafter refused to make further payments. By this suit she sought to recover the monthly benefits from March 1, 1932, to the date of the filing of the suit.

To this declaration the appellant interposed a plea of the general issue, and upon these pleadings the trial proceeded. The appellee offered evidence to establish that she was totally and permanently disabled within the meaning of the provisions of the policy. On cross-examination of the appellee, the appellant undertook to show that between September 27, 1928, the date of her application for the policy, and October 16, 1928, the date of the delivery thereof and the payment of the first premium, she had consulted physicians and had undergone a surgical operation for physical defects, which afterwards contributed materially to her disability. The court below excluded this evidence, and also all testimony in reference to the contents of the written proof of disability furnished by the appellee to the appellant, wherein the fact that she had secured medical and surgical treatment before the delivery of the policy was set forth. Thereupon, by permission of the court, the appellant filed a special plea averring that between the date of the written application for the policy and the delivery thereof the appellee had consulted physicians and had undergone a surgical operation, and that, consequently, under the express provisions of the application, which was a part of the policy, the disability provisions of the policy were never in force or effect, and were null and void from their inception. The provision of the application set forth in this special plea as the basis of the charge that the disability provisions of the policy never became effective reads as follows:

"It is mutually agreed as follows: 1. That the insurance hereby applied for shall not take effect unless and until the policy is delivered to and received by the applicant and the first premium thereon paid in full during his lifetime, and then only if the applicant has not consulted or been treated by any physician since his medical examination; provided, however, that if the applicant, at the time of making this application, pays the agent in cash the full amount of the first premium for the insurance applied for in Questions 2 and 3 and so declared in this application and receives from the agent receipt therefor on the receipt form which is attached hereto, and if the Company, after medical examination and investigation, shall be satisfied that the applicant was at the time of making this application, insurable and entitled under the Company's rules and standards to the insurance, on the plan and for the amount applied for in Questions 2 and 3, at the Company's published premium rate corresponding to the applicant's age, then said insurance shall take effect and be in force under and subject to the provisions of the policy applied for from and after the time this application is made, whether the policy be delivered to and received by the applicant or not."

The appellee demurred to this special plea on the ground that the policy sued on was dated so as to take effect as of July 24, 1928, and that the plea presented no defense to the cause of action. The court sustained this demurrer, and at the conclusion of the testimony offered to show the nature and permanency of the disability of the appellee, which was undisputed, instructed the jury to return a verdict in her favor for the full amount sued for.

The appellant seeks a reversal on the ground that the court erred in sustaining this demurrer to the special plea and in sustaining objections to the evidence offered to...