Orr v. Mutual Life Ins. Co., 9523.

• Decision Date: 24 March 1933
• Docket Number: No. 9523.,9523.
• Citation: 64 F.2d 561
• Parties: ORR v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Eighth Circuit

64 F.2d 561 (1933)

ORR v. MUTUAL LIFE INS. CO. OF NEW YORK.

No. 9523.

Circuit Court of Appeals, Eighth Circuit.

March 24, 1933.

William S. Hogsett, of Kansas City, Mo. (Charles A. Orr, Chester L. Smith, Ralph E. Murray, and Alvin C. Trippe, all of Kansas City, Mo., on the brief), for appellant.

William C. Michaels, of Kansas City, Mo. (Frederick L. Allen, of New York City, and Meservey, Michaels, Blackmar, Newkirk & Eager, of Kansas City, Mo., on the brief), for appellee.

Before STONE, VAN VALKENBURGH, and BOOTH, Circuit Judges.

STONE, Circuit Judge.

In 1920 appellant took out a life insurance policy with appellee. This policy contained a provision whereby, if insured became totally and permanently disabled, monthly benefits would be paid him and further premiums on the policy waived. On April 27, 1925, insured became totally and permanently disabled. In ignorance of the disability clause in the policy, insured continued to pay premiums and made no claim until September, 1931. Notification and claim were made promptly thereafter. On December 2, 1931, the insurer issued insured a certificate waiving payment of the premium due and paid on September 22, 1931, and shortly thereafter refunded that premium. The same check included $1,300 in payment of monthly benefits from December 4, 1930. Premiums have been waived and benefits paid for the time subsequent to the notice and claim. The controversy is solely over refund of the premiums due and paid between April 27, 1925 (date of disability) and September 22, 1931 (the date of the refunded premium), and over-payment of the monthly disability from April 27, 1925 (date of disability) to December 4, 1930 (beginning date of payments by company). There is no dispute as to the facts which fully appear in the pleadings. The court sustained a motion by appellee for judgment on the pleadings. From that judgment is this appeal.

Two issues are argued here. The first is whether appellant is entitled to the disability payments and premium waiver from the date of the disability or only from the date when proof of disability is furnished appellee. The second is, if the above right dates from furnishing of proof, whether appellee has waived this requirement, and the delay in furnishing proof.

I.

The Policy.

The first of these issues is to be determined by the provisions of the policy. The pertinent part of the policy is as follows:

"Benefits in the Event of Total and Permanent Disability before Age 60.

"When such Benefits take Effect. — If the Insured, after payment of premiums for at least one full year, shall, before attaining the age of sixty years and provided all past due premiums have been duly paid and this Policy is in full force and effect, furnish due proof to the Company at its Home Office either (a) that he has become totally and permanently disabled by bodily injury or disease, so that he is, and will be, permanently, continuously and wholly prevented thereby from performing any work for compensation, gain or profit, and from following any gainful occupation, or (b) that he has suffered any of the following `Specified Disabilities' (which shall be considered total and permanent disabilities hereunder), namely, the entire and irrecoverable loss of the sight of both eyes or the severance of both entire hands or of both entire feet or of one entire hand and one entire foot, the Company, upon receipt and approval of such proof, will grant the following benefits:

"Benefits.

"1. Waiver of Premium. — The Company will, during the continuance of such disability, waive payment of each premium as it becomes due, commencing with the first premium due after approval of said due proof. Any premium due prior to such approval by the Company must be paid in accordance with the terms of the Policy, but if due after receipt of said due proof, will, if paid, be refunded upon approval of such proof.

"2. Income to Insured. — The Company will, during the continuance of such disability, pay to the Insured a monthly income at the rate of ten dollars for each one thousand dollars of the face amount of this Policy (but not including dividend additions), the first such monthly payment being due on receipt of said due proof and subsequent payments on the first day of each calendar month thereafter, if the Insured be then living and such disability still continue. No income payments, however, will be made prior to approval of such proof by the Company as satisfactory, but upon such approval, whatever income payments shall have become due will then be paid and subsequent payments will be made when due." (Italics inserted.)

There is no possible ambiguity in this language. It means just one thing and that is that waiver of premiums commences "with the first premium due after approval of said due proof" and that, as to payment of monthly benefits, the "first such monthly payment being due on receipt of said due proof." There are no other statements in the policy which, in the slightest degree, qualify or weaken or throw doubt upon this language. Since "contracts of insurance, like other contracts, must be construed according to the terms which the parties have used, to be taken and understood, in the absence of ambiguity, in their plain, ordinary, and popular sense" (Bergholm v. Peoria Life Ins. Co., 284 U. S. 489, 492, 52 S. Ct. 230, 231, 76 L. Ed. 416), this contention must be resolved against appellant.

Appellant relies strongly upon Minnesota Mut. Life Ins. Co. v. Marshall, 29 F.(2d) 977 (this court), as supporting his construction of this provision of this policy. The wording of the policy there involved is not the same as here and is far from being so clearly expressed. There, this court deemed an ambiguity to exist and properly resolved the construction in favor of the insured. There is no ambiguity in the present policy.

II.

The Waiver.

Appellee contends that waiver is no issue in this case because it must be and is not pleaded. We do not agree. Without discussing the necessity of pleading waiver, it is clear that such was pleaded. After setting forth certain acts of appellee, appellant pleads, in paragraph number "7" of the petition, that "by reason of all the facts aforesaid defendant has waived any and all right to object to lack of any other or earlier notice and/or proof of said disability, and is estopped now to assert any such objection or defense, or to assert a forfeiture of plaintiff's claim herein sued for, upon that or any other ground."

The facts relied upon to establish waiver or estoppel are as follows: On September 25, 1931, insured wrote requesting "form of application for total disability." Appellee replied that blanks would be sent "but we should first like to know when you became disabled"; suggesting that appellant read his policy which provided for disability, "the first payment being due after receipt of proofs of disability"; and requesting advice as to date of disability and attending physicians to date "because it is necessary to secure a statement from each one in addition to a statement signed by you as the insured." Appellant replied that the disability began "in the month of April, 1925"; detailed the circumstances in connection therewith from inception to date; named the attending physicians; and requested necessary blank for submitting claim "for all the benefits of total disability as provided for in my policy." Appellee replied, noting the disability "for several years"; inclosing blanks for insured and each attending physician "for the purpose of furnishing the Company information on this matter"; and suggesting prompt action to secure early "advice from the Home Office as to payment of disability benefits." Appellant and the attending physicians made out the statements on the blank forms and they were delivered to the local office (Kansas City, Mo.) of appellee and by it forwarded to the home office, in New York, on November 2, 1931, and received there on November 4, 1931. On November 2, 1931, appellee's "medical referee" (in Kansas City) directed its examining physician (near appellant's home) to examine appellant and report and also wrote appellant to get in touch for this examination "in regard to your claim for disability with this Company." This examination was made on November 3, 1931, and the report of the examiner received at the home office on November 6, 1931. Later in November, a "field inspector" was instructed to and did further investigate and his report was received at the home office on November 24, 1931. The proper officials at the home office considered the above proofs sufficient and instructed its local manager at Kansas City to refund the premium paid September 22, 1931, and to pay monthly benefits beginning with December 4, 1930. In compliance therewith, the manager, on December 4, 1931, sent insured a check which covered the above premium refund and monthly benefits covering the period since December 4, 1930. There was further correspondence to the effect that appellant declined the check and claimed payment from the date of disability; that appellee explained that, under the strict terms of the policy, payment was due only from receipt of claim, on November 4, 1931, but that under certain "rules" of the company the back payment of benefits for eleven months prior to that date and the refund of the premium within a year of that date had been made and that the check and future payments might be accepted without prejudice to the position of either party. The "rules" intended came about as follows: On August 27, 1930, a standing committee of the company adopted a resolution reciting changes made from time to time in the disability provisions of its policies and the desire to conform its "practice regarding the admission of disability claims on policies issued prior to July 1, 1930," so as "to conform to the provisions of the disability clauses in the July 1, 1930, policy forms" in certain respects. In pursuance...