Pfeiffer v. Missouri State Life Ins. Co.

• Decision Date: 11 July 1927
• Docket Number: (No. 146.)
• Citation: 297 S.W. 847
• Parties: PFEIFFER et al. v. MISSOURI STATE LIFE INS. CO.
• Court: Arkansas Supreme Court

297 S.W. 847

PFEIFFER et al. v. MISSOURI STATE LIFE INS. CO.

(No. 146.)

Supreme Court of Arkansas.

July 11, 1927.

Rehearing Denied with Modification September 26, 1927.

Appeal from Lonoke Chancery Court; Jno. E. Martineau, Chancellor.

Action by the Missouri State Life Insurance Company against Will S. Pfeiffer, administrator of the estate of Samuel C. Pfeiffer, deceased, and others, to foreclose a mortgage, in which defendants by cross-complaint sued on a policy insuring the life of deceased. From a decree denying right of the beneficiaries to recover on the policy and a decree of foreclosure of the mortgage, defendants appeal. Reversed, with directions.

Missouri State Life Insurance Company brought this suit in the chancery court against Will S. Pfeiffer, administrator of the estate of Samuel C. Pfeiffer, deceased, and others, to foreclose a mortgage on approximately 1,072.07 acres of land in Lonoke county, Ark., to secure an indebtedness of $40,000 of said Samuel C. Pfeiffer to said life insurance company. The defendants filed an answer in which they admitted the execution of the mortgage but denied that the mortgagor owed the mortgagee the amount alleged in the complaint. By way of cross-complaint, the defendants allege that said insurance company issued to said Samuel C. Pfeiffer an insurance policy on his life for $25,000, and that said policy contained a disability clause in favor of the insured for $250 per month in case of total disability, and that said company refused to pay any of the amounts due under said policy and claim that the same has been forfeited for the nonpayment of premiums.

The application for said policy of insurance states the age of Samuel C. Pfeiffer to be 45 and his residence at Coy, Lonoke county, Ark. The policy provides for the payment of $25,000 immediately upon the receipt of due proof of the death of Samuel C. Pfeiffer, the insured. The policy was dated March 20, 1922. The policy also contained the following:

"Total and Permanent Disability Benefit.

"The company will pay to the insured a life income of ten dollars each month for each $1,000 of the face amount hereof if the said insured shall become totally and permanently disabled, as hereinafter defined, before attaining age sixty. The first payment of said income shall be made six months after receipt by the company of due proof of total and permanent disability, and subsequent payments shall be made monthly thereafter as long as the insured lives and suffers such disability, and shall be in addition to all other benefits provided by this policy.

"The company will also pay for the insured the premium required on this policy for every policy year following the date of approval by the company of proof that the insured has become totally and permanently disabled, and hereinafter defined, before attaining age sixty, and the premiums so waived will not be deducted in any settlement of the policy which will be continued in full force to maturity, with loan, cash and other guaranteed values increasing from year to year in like manner as if the premiums were being duly and regularly paid by the insured.

"Total and permanent disability may be due either to bodily injuries or to disease which must occur and originate while this policy is in full force after the first premium has been paid on it, but not before six months from the date hereof, and must be such as to prevent the insured then and at all times thereafter from engaging in any gainful occupation. * * *

"The annual premium for the total and permanent disability benefits is $76.50 and is included in the premium stated in the consideration clause."

Samuel C. Pfeiffer was 45 years old when the policy in question was issued to him and had been a successful farmer and business man. He became involved in debt in nearly the whole value of his property. He was a deputy sheriff of Lonoke county in 1923, and, on August 4, 1923, was shot in the hip while in the discharge of his duty. He was carried to a hospital in Little Rock and stayed there until September 26, 1923. He was then carried home but was not able to sit up. He had a drain from his side and had no strength at all. He remained confined to his bed as a result of this gunshot wound for several months. He finally recovered to such an extent that he was able to go to a small commissary store, about 50 or 100 yards from his dwelling house and help his young son, who was about 16 years of age, and his wife, to run the store. Occasionally, he sold some small articles of merchandise, but was not able to remain at the store for more than 2 or 3 hours at a time. Some days he could not go to the store at all. Frequently he made mistakes in giving change for $1 when he sold small articles of goods to customers. He believed that his mind had become affected and frequently spoke of it to friends and acquaintances. He was informed by his physicians that he had pellagra and was treated for that disease. In December, 1924, he became fearful lest he should harm his family and gave directions that his firearms be taken charge of by some one else. He died May 15, 1925, in a hospital at Little Rock, Ark. Pellagra was the cause of his death, and he died after being in the hospital for 11 days. He was physically in a dying condition and mentally as unbalanced as could be when he was carried to the hospital.

Dr. R. F. Darnall, a specialist in mental and nervous diseases for 29 years, and Dr. C. C. Kirk, at one time superintendent of the Arkansas State Hospital for the Insane and who has been engaged in hospital work practically ever since 1902, were witnesses for the appellants. According to their testimony as expert witnesses, the average case of Pellagra is a toxic condition and manifests itself by roughening and reddening the skin. Pellagra causes the mind to become affected and the victim to become insane. The time of the insanity and the length of time that the patient is affected before death ensues depends on the individual. After having been given a history of the insured, both of these expert witnesses testified unqualified that the insured became insane as a result of being afflicted with pellagra and that he was insane during the fall of 1924 and must have continued so until the time of his death.

Two physicians for the appellees testified that the insured had pellagra and was mentally disturbed. According to their testimony, however, he was not permanently insane from the early fall of 1924 until his death in May, 1925. According to their testimony, at times he would be capable of attending to his affairs. Numerous lay witnesses, including the widow and children of the insured, testified that he was never the same man after he was shot in August, 1923, and that he was permanently insane and incapable of attending to his business from early in the fall of 1924 until his death in May, 1925.

The appellees introduced about an equal number of witnesses who testified that, while the insured was mentally unbalanced on occasions during the fall of 1924 and the early part of 1925, he was at times capable of attending to his own affairs. The testimony on this point will be stated and discussed more at length under an appropriate heading in the opinion.

The chancellor found that the insured was not permanently insane from some time in the fall of 1924 until his death in May, 1925. Hence, he found that there had been a forfeiture of the policy for the nonpayment of the premiums and that no amount was due the beneficiaries in the policy under the terms thereof at the date of the death of the insured. A decree was entered of record in accordance with the findings of the chancellor, denying the right of the beneficiaries in the policy to recover any amount under it, and a decree of foreclosure was also entered of record in favor of the appellees, and the lands embraced in the mortgage were ordered sold for the payment of the mortgage indebtedness. The case is here on appeal.

Reed & Beard, of Lonoke, and Geo. E. Morris, of England, Ark., for appellants.

Rose, Hemingway, Cantrell & Loughborough, of Little Rock, for appellee.

HART, C. J. (after stating the facts as above).

At the outset it may be stated that the annotator, in a case note to 15 A. L. R. at page 318, states the general rule to be that insanity or incapacitating sickness of the insured will not excuse the failure to pay insurance premiums at the required time so as to prevent a forfeiture of the policy, where the policy expressly provides for such forfeiture in the event of nonpayment. The rule is supported by many decisions of courts of last resort, including the Supreme Court of the United States. Such holding is in application of the well-established doctrine that nonperformance of a contract which does not require or contemplate performance by the promiser personally is not excused by his sickness or other disability which renders him unable to perform it. Hence, it has been said that while a court of equity will relieve against forfeiture for a breach of a condition subsequent caused by unavoidable accident, that power has never been extended to a condition precedent so as to excuse a breach of contract arising from the disability of the party by sickness or insanity.

In the application of the rule, counsel for appellants concede that when a life insurance policy provides for a forfeiture of the insurance in case of a failure to pay premiums, the policy, in case of failure to pay, is forfeited, and sickness or insanity will not avoid the forfeiture. They contend, however, that the facts of the case at bar take it out of the rule and bring it within the rule equally well settled in this state that if an insurance company has in its hands sufficient funds due the insured to pay an assessment or premium when due, it is the insurer's duty to apply them to the payment of the premiums and prevent a forfeiture. The rule has been applied by this court in the...