New York Life Ins. Co. v. Majet

• Decision Date: 29 April 1935
• Docket Number: 31662
• Citation: 161 So. 156,173 Miss. 870
• Court: Mississippi Supreme Court
• Parties: NEW YORK LIFE INS. CO. v. MAJET

161 So. 156

173 Miss. 870

NEW YORK LIFE INS. CO. v. MAJET

No. 31662

Supreme Court of Mississippi

April 29, 1935

Division A

Suggestion Of Error Overruled November 18, 1935.

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

Action by Mrs. Mary T. Majet, administratrix of the estate of William N. Majet, deceased, against the New York Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Affirmed.

Watkins & Eager, of Jackson, for appellant.

An annuity payable to an adult male person is not apportionable and does not come within the exceptions to the common law rule that an annuity is not apportionable.

Kearney v. Cruikshank, 22 N.E. 580, 117 N.Y. 95; Henry v. Henderson, 81 Miss. 743, 63. L.R.A. 616; Chase v. Darby, 110 Mich. 314, 64 Am. St. Rep. 347, 68 N.W. 159; Nehls. v. Sauer, 119 Iowa 440, 93 N.W. 346; Vander Horst v. Kittredge, 241 N.Y.S. 205; Brownstein v. New York Life Ins. Co., 148 A. 273.

Where the disability provisions of an insurance contract provide periodic payments for total and permanent disability on the part of the insured, at specific times, the insured's right of action against the insurer does not arise until the insured has remained totally disabled for the length of time required under the contract.

Peek et al. v. New York Life Ins. Co., 219 N.W. 487; Langevin v. Prudential Ins. Co., 171 A. 392; Miles v. Casualty Co. of America, 203 N.Y. 453, 96 S.E. 744; Kiblinger v. American National Ins. Co., 131 So. 671; Atlas Life Ins. Co. of Tulsa, Okla., v. Wells. 63 S.W. 533; New York Life Ins. Co. v. English, 72 S.W. 58; Howard v. Benefit Assn. of Railway Employees, 39 S.W.2d 657; Woods v. Provident Life & Accident Ins. Co. of Chattanooga, 42 S.W.2d 499; Farlen v. Fidelity & Casualty Co., 192 N.Y.S. 513; Metropolitan Ins. Co. v. Lambert, 157 Miss. 759, 128 So. 750; Lennehay v. Mathews, 20 N.E. 453; In re Waage's Estate, 83 Pa. S.Ct. 51; McDonnell v. Mutual Life Ins. Co. of New York, 150 N.Y.S. 35.

H. Talbot Odom, of Greenwood, for appellee.

This case is governed solely by our statute requiring the apportionment of annuities, and the common law rule has no application.

While the policy contract before the court designates the yearly payments. "Life Income to Insured," it is unquestionably an annuity and must be treated as such.

In its technical meaning, an annuity is defined as, "a stated sum, payable annually," or as a yearly payment of a certain sum of money granted to another in fee, for life, or for years, and chargeable only on the person of the grantor.

The term is used in a broader sense as designating a fixed sum, granted or bequeathed, payable periodically, but not necessarily annually, subject to such specific limitations as to its duration as the grantor or donor may lawfully impose.

3 C. J. 200, 201; 2 R. C. L., pp. 2, 4.

The common law rule as to the apportionment of annuities has no application to the case at bar, but has been superseded by statute in this state which is now section 2179, Code of 1930.

2 R. C. L. 13; 3 C. J., Annuities, par. 38, p. 218; Brown v. Keech, 21 Ann. Cas. 313, 318; Mower v. Sanford, 76 Conn. 504, 57 A. 119, 100 Am. St. Rep. 1011.

Courts generally have apologized for applying the common law rule. In the case of Henry v. Henderson, 81 Miss. 743, 33 So. 960, 63 L.R.A. 616, our own court realized and pointed out the injustice of the common law rule denying an apportionment of annuities as to time.

The only statute in Mississippi on apportionment at that time was section 2543, Code of 1892. The legislature in adopting the Code of 1906 added the following amendment to the foregoing statute: "And a like apportionment shall be made in the case of annuities."

Since the amendment in 1906, section 2543 of the Code of 1892 has remained unchanged.

The term "annuities" in the amendment is all-embracing and includes all kinds and classes of annuities. There is no qualification, limitation, or restriction whatever.

Hamner v. Yazoo Delta Lbr. Co., 100 Miss. 349, 56 So. 466.

It is admitted that the provision requiring the apportionment of annuities was put in a rather unusual place and somewhat concealed. One would hardly think of examining the chapter on "landlord and tenant" in search of a statutory provision as to the apportionment of annuities. But the legislature often does strange and unusual things. However, the action of the Legislature in this instance is not without plausible explanation. The statute being amended was the only general statute on the subject of apportionment.

The statute has been several times before this court, and it has been uniformly held to apply to all insurance contracts.

Hartford Accident & Indemnity Co. v. Delta Pine Land Co., 150 So. 205.

But regardless of our statute requiring annuities to be apportioned as to time, the judgment of the lower court should be affirmed for the additional reason that the policy, if given a fair, reasonable and proper construction, imposes liability on the appellant.

Shivers v. Farmers Mutual Ins. Co., 99 Miss. 744, 55 So. 965; Columbian Woodman v. Birch, 115 Miss. 512, 76 So. 512; N. Y. Life Ins. Co. v. Blaylock, 144 Miss. 541, 110 So. 432; Home Ins. Co. v. Moore, 151 Miss. 189, 117 So. 524; Southern Ins. Co. v. Wall, 156 Miss. 865, 127 So. 298; Mutual Benefit Health & Ace. v. Blaylock, 163 Miss. 567, 143 So. 406; Brownstein case, 148 A. 273; Lackawanna Iron & Coal Co. case, 37 N.J.Eq. 26.

Argued orally by Tom Watkins and Pat Eager, for appellant, and by H. Talbot Odom, for appellee.

OPINION

Cook, J.

The facts in this case are not in dispute. On April 7, 1920, the New York Life Insurance Company, appellant, issued a life insurance policy to William N. Majet for seven thousand five hundred dollars, with a disability clause which provided that, in the event the insured became wholly disabled by bodily injury or disease, thereby permanently and continuously preventing him from engaging in any occupation whatsoever for remuneration or profit, he would be thereafter relieved, during such disability, of the payment of annual premiums on the policy, and would be paid, during disability, on each anniversary date after the anniversary of the policy next succeeding receipt of proof in such disability, an amount to equal one-tenth of the face amount of the policy, or seven hundred fifty dollars.

Several years prior to his death, the insured, William N. Majet, became totally and permanently disabled, and thereafter on each anniversary date of the policy, including the anniversary date next preceding the insured's death, the appellant waived the premiums on the policy, and paid to the insured one-tenth of the face thereof, or seven hundred fifty dollars, annually. The insured did not recover from the disability before his death, which occurred on March 23, 1934, six days before the anniversary date of the policy, which was March 29th, at which time an annual payment of seven hundred fifty dollars would have become due and payable. After the death of the insured, the appellant paid to the beneficiary the face of the policy, but refused to pay a proportionable part of the disability benefits, for the reason, as contended by it, that the benefits were, by the terms of the policy, payable only on specified anniversaries of the policy occurring during the lifetime and continued disability of the insured, and was not payable either in whole or in part if the insured was not living and disabled on any such anniversary. Thereafter Mary T. Majet, administratrix of the estate of William N. Majet, deceased, filed this suit, setting forth in the declaration the foregoing facts and averring that the disability benefits provided for in the policy were inserted therein for a valuable consideration of nineteen dollars and thirteen cents, payable annually in advance, and constituted a valid and binding contract to pay the deceased, during his lifetime and continued disability, an annuity of seven hundred fifty dollars, that the said annuity was apportionable under the law, and that there had accrued and was owing to the said William N. Majet, at the time of his death, for the period from March 29, 1933, to the date of his death on March 23, 1934, the sum of seven hundred forty-three dollars and sixty-seven cents, for which she sued and demanded judgment.

The provisions of the policy covering the disability of the insured are as follows:

"This Policy takes effect as of the 29th day of March, Nineteen Hundred and Twenty, which day is the anniversary of the policy. If the Insured becomes wholly and permanently disabled before age 60, the payment of premiums will be waived under the terms and conditions contained in section 1.

"Section 1--Total and Permanent Disability Benefits.

"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, and that such disability has then existed for not less than sixty days--the permanent loss of the sight of both eyes, or the severance of both hands or of both feet, or of one entire hand and one entire foot, to be considered a total and permanent disability without prejudice to other causes of disability--then

"1. Waiver of Premium. Commencing with the anniversary of the Policy next succeeding the receipt of such proof, the Company will on each anniversary waive payment of the premium for the ensuing insurance year, and, in any...