Northwestern Mut. Life Ins. Co. v. Carneal

• Decision Date: 20 December 1935
• Citation: 90 S.W.2d 1010,262 Ky. 665
• Parties: NORTHWESTERN MUT. LIFE INS. CO. v. CARNEAL.
• Court: Kentucky Court of Appeals

90 S.W.2d 1010

262 Ky. 665

NORTHWESTERN MUT. LIFE INS. CO. v. CARNEAL.

Court of Appeals of Kentucky

December 20, 1935

As Modified on Denial of Rehearing March 3, 1936.

Appeal from Circuit Court, Todd County.

Action by Ada V. Carneal against the Northwestern Mutual Life Insurance Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

Bruce &amp Bullitt, William Marshall Bullitt, and Robert Lee Blackwell all of Louisville, and White & Clark, of Hopkinsville, for appellant.

W. E Rogers, Jr., and H. W. Linton, both of Hopkinsville, for appellee.

STANLEY Commissioner.

On August 5, 1922, the appellant, the Northwestern Mutual Life Insurance Company, issued to Leslie C. Carneal a life insurance policy for $1,000. The quarterly premium was $10.97. For an additional quarterly premium of 22 cents, there was attached, as a supplemental contract, a rider providing: "If, during the continuance of this agreement, the company shall be furnished with satisfactory proof that prior to his sixtieth birthday anniversary, the insured has become disabled in body or mind to such an extent as to make it continuously impossible for him to engage in any gainful occupation, and that such impairment is presumably permanent, the company, on receipt of such proof, will, by suitable endorsement of this agreement, waive the payment of the premiums falling due under the policy. ***"

The premium due May 5, 1932, was not paid. Four days after expiration of the grace period, the wife of the insured sent a check to the general agent of the company for $11.19 for the premiums. The company wrote Carneal acknowledging its receipt, but stated that it would be necessary that he sign a health statement which was enclosed before the premiums would be reported as paid. On July 7, it again wrote Carneal, calling his attention to the situation, and, having received no response, the check was returned on July 18. Carneal had borrowed the limit on his policy, and there was available only $1.58 for extended insurance upon the failure to pay the May 5 premiums. This carried the contracts to June 9, 1932. In August, the policy, with the rider, was returned to Carneal as canceled. He died November 26, 1932. On December 20, 1932, almost seven months after the apparent termination of the contract, the company was furnished with proof and notice that on May 5, when the premiums were due, the insured was totally and permanently disabled, and therefore was entitled to the benefit of the waiver of payment, with the resulting continuance in effect of the life insurance. The company declined to accept this, and refused payment. Thereupon, suit was brought to recover. The case was submitted to the court upon the law and the facts, and it adjudged the recovery. The appeal follows.

It was pleaded in defense that the furnishing of proof of disability before the premiums became due or before the policy lapsed was a condition precedent to the waiver of payment, and accordingly that proof was offered too late. We have recently considered this point and held that such is the proper interpretation of similar clauses. New York Life Ins. Co. v. Gunn, 253 Ky. 596, 69 S.W.2d 1018; Western & Southern Life Ins. Co. v. Robertson, 255 Ky. 13, 72 S.W.2d 718; Pacific Mutual Life Ins. Co. v. Paynter, 255 Ky. 669, 75 S.W.2d 335; Mutual Life Ins. Co. v. Smith, 257 Ky. 709, 79 S.W.2d 28.

But those cases are not applicable because the conditions of the contract and the facts are different.

The petition alleged that when the premiums fell due the insured was disabled in mind and body to such an extent that he was totally and permanently disabled, as defined in the policy covering disability and waiver of premium, and remained so until his death; that by reason of such mental incapacity he was unable to understand his rights or his obligations with reference to the contract, and was at all times prior to his death unable to furnish proof of his disability. There was substantial evidence tending to establish the fact that, beginning in the latter part of 1931, and particularly on May 5, 1932, until his death, the insured was "disabled in body or mind to such an extent as to make it continuously impossible for him to engage in any gainful occupation," which was the condition of waiver of premiums. The trial court did not disclose in the record the grounds upon which he decided the case. We therefore accept his decision upon the assumption that he found every fact which the evidence conduced to prove and which went to support the judgment in favor of the plaintiff. Coleman's Ex'r v. Meade, 76 Ky. (13 Bush) 358; Preferred Risk Fire Ins. Co. v. Neet, 262 Ky. 257, 90 S.W.2d 39. It is often declared that the decision of a judge on the law and facts is regarded as would be the verdict of a properly instructed jury. It does not seem necessary, therefore, to state the evidence.

The question is whether the fact of mental incapacity to such an extent that the insured was unable to give notice to the insurer in advance of default in payment, and thus procure the waiver called for by the policy, excuses him. The Supreme Court recently considered the identical question in Mutual Life Ins. Co. v. Johnson, Adm'r, 293 U.S. 335, 55 S.Ct. 154, 79 L.Ed. 398. The conflict among the state courts is shown. Without indicating its own preference, the court decided the case in favor of the insured under the Virginia contract.

In Southern Life Ins. Co. v. Hazard, 148 Ky. 465, 146 S.W. 1107, and Metropolitan Life Ins. Co. v. Carroll, 209 Ky. 522, 273 S.W. 54, the policies contained stipulations for waiver of premium effectually the same as that in the case at bar. Upon the presumption that, having become totally disabled, the insured was not in condition to attend to his business with that promptness which is required of persons in normal condition, it was declared in each case that the condition called for the application of the doctrine that time was not of the essence of the requirement as to furnishing proof of disability. Recovery was adjudged, notwithstanding the proof was furnished in the first case after death and in the second during life but shortly before death, yet in each case following the apparent lapse of the policy for failure to pay the premium.

The case of Fidelity Mutual Life Ins. Co. v. Gardner's Adm'r, 233 Ky. 88,...