Orr v. Mutual Life Ins. Co. of New York, 8408.

• Decision Date: 15 April 1932
• Docket Number: No. 8408.,8408.
• Parties: ORR v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: U.S. District Court — Western District of Missouri

57 F.2d 901 (1932)

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

No. 8408.

District Court, W. D. Missouri, W. D.

April 15, 1932.

W. S. Hogsett, of Kansas City, Mo., for plaintiff.

W. C. Michaels, of Kansas City, Mo., for defendant.

OTIS, District Judge.

Plaintiff and defendant entered into a contract of life insurance September 22, 1920. Among others are certain provisions of the contract dealing with the subject of "benefits in the event of total and permanent disability before (the) age (of) sixty." These provisions, so far as they need be here set out, are as follows:

"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 * * * 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 * * * the company, upon receipt and approval of such proof, will grant the following 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, * * * 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. * * *"

In his petition, the plaintiff alleges that on April 27, 1925, he became totally and permanently disabled from disease. He alleges that, being ignorant of the provisions of the contract providing for benefits for total and permanent disability and discovering those provisions for the first time in September, 1931, he then, or shortly thereafter, furnished the defendant such proofs of total and permanent disability as were required by the defendant. These proofs were received by the defendant and approved as satisfactory. Thereafter the defendant delivered to the plaintiff its check for $1,733.10, covering a refund of the annual premium of $433.10 paid by plaintiff on September 22, 1931, and $1,300 for income benefits at the rate of $100 per month from the period December 4, 1930, to December 4, 1931. It is alleged that the defendant has refused to pay income benefits for the period from April 27, 1925, to December 4, 1930. This action is brought to recover income benefits for this period, and to recover also premiums paid on the contract during this period, and for damages for vexatious delay and for attorney's fees.

The answer of the defendant admits that the plaintiff became totally and permanently disabled within the meaning of the contract on April 27, 1925, but denies that under the contract the plaintiff is entitled to any greater amount than he has been paid.

1. The principal question raised by the demurrer is whether, by the terms of the contract, the defendant is obligated to pay benefits on account of total and permanent disability for the full period during which such disability may have existed, including that part of it preceding the furnishing to the defendant by the insured of proof of disability. The contention of the plaintiff is that under the contract the insured, having furnished due proof, is then entitled to benefits for the whole period of disability. The contention of the defendant is that the insured is entitled to benefits from the date when proof of disability is furnished.

Deferring for the present consideration of cited cases, I examine the language of the contract. So examining it, I am constrained to say I do not find in it any possibility of reasonably interpreting it as the plaintiff contends it should be.

In my judgment there is no basis in the language used in the contract for the contention that it might be construed to be an agreement by the company to make retrospective payments for the period of disability before the furnishing of proof as well as prospective payments for the period of disability after the furnishing of proofs. Courts will not strain themselves to find ambiguities so that they may apply the rule that ambiguities must be resolved against the insurer. Out of the language of this contract, excessive straining cannot produce the tiniest particle of ambiguity.

Plaintiff points to a phrase and to a clause in paragraph 2 of that part of the contract which is set out above; to the phrase "during the continuance of such disability," and to the clause "but upon such approval, whatever income payments shall have become due will then be paid." Here, says plaintiff, are at least implied acknowledgments of liability for the whole period of disability. But neither the phrase nor the clause has any meaning unless it is read with its context. So read, they afford no support for the contention made.

The reasonable meaning of the phrase "during the continuance of such disability" is while the disability continues. The phrase is preceded by the verb, "will." It is an adverbial phrase. It has to do not with the beginning of liability, but with the termination of liability. If there could be any doubt about it that doubt immediately and in the same sentence is removed by an unequivocal and certainly an unambiguous provision as to when the first payment shall be due and as to what shall be the amount thereof. The company agrees to pay a first monthly payment of $100 (under this contract) upon the receipt of proofs, and subsequent monthly payments of $100 each, "on the first day of each calendar month thereafter." It is just impossible to reconcile this provision with plaintiff's theory of the contract.

The reasonable meaning of the words, "but upon such approval, whatever income payments shall have become due, will then be paid," is beyond any doubt. That...