Reed v. New York Life Insurance Company

• Decision Date: 26 June 1936
• Docket Number: 29643
• Citation: 268 N.W. 290,131 Neb. 330
• Parties: CHARLES S. REED, APPELLEE, v. NEW YORK LIFE INSURANCE COMPANY, APPELLANT
• Court: Nebraska Supreme Court

268 N.W. 290

131 Neb. 330

CHARLES S. REED, APPELLEE, v. NEW YORK LIFE INSURANCE COMPANY, APPELLANT

No. 29643

Supreme Court of Nebraska

June 26, 1936

APPEAL from the district court for Douglas county: CHARLES LESLIE JUDGE. Reversed and dismissed.

Judgment reversed, and action dismissed.

Syllabus by the Court.

Insured though totally disabled for more than three consecutive months, held not entitled to recover, where disability was neither total nor permanent when he claimed benefits under a policy raising presumption of permanence after three months' disability.

Appeal from District Court, Douglas County; Leslie, Judge.

Action by Charles S. Reed against the New York Life Insurance Company. From a judgment for plaintiff, defendant appeals.

Reversed and dismissed.

Brown, Fitch & West, for appellant.

Reed, Ramacciotti & Robinson and R. L. Hrushka, contra.

Heard before GOSS, C. J., ROSE, EBERLY, DAY, PAINE and CARTER, JJ.

OPINION

EBERLY, J.

This is an action to compel the payment of certain "total and permanent disability" benefits under two insurance policies issued by defendant, under which plaintiff was insured. From a judgment for plaintiff, the defendant appeals.

The two insurance policies in suit each insure the plaintiff to the extent of $ 2,000, with double indemnity in case of accidental death. The policies are in full force and effect. Each policy on its face provides, in addition to the ordinary provisions contained in a life insurance policy: "And upon receipt of due proof that the insured is totally and presumably permanently disabled before age sixty, as defined under 'Total and Permanent Disability,' the company agrees to pay to the insured $ 20 each month, and to waive payment of premiums, as provided therein."

Plaintiff, it appears, was born on June 4, 1896.

On the second page of each policy, under the head of "Total and Permanent Disability," appear the following provisions:

"Disability shall be considered total whenever the insured is so disabled by bodily injury or disease that he is wholly prevented from performing any work, from following any occupation, or from engaging in any business for remuneration or profit, provided such disability occurred after the insurance under this policy took effect and before the anniversary of the policy on which the insured's age at nearest birthday is sixty.

"Upon receipt at the company's home office, before default in payment of premium, of due proof that the insured is totally disabled as above defined, and will be continuously so disabled for life, or if the proof submitted is not conclusive as to the permanency of such disability, but establishes that the insured is, and for a period of not less than three consecutive months immediately preceding receipt of proof has been, totally disabled as above defined, the following benefits will be granted:

"(a) Waiver of Premium. The company will waive the payment of any premium falling due during the period of continuous total disability, the premium waived to be the annual, semiannual or quarterly premium according to the mode of payment in effect when disability occurred.

"(b) Income Payments. The company will pay to the insured the monthly income stated on the first page hereof ($ 10 per $ 1,000 of the face of this policy) for each completed month from the commencement of and during the period of continuous total disability. If disability results from insanity, payment will be made to the beneficiary in lieu of the insured.

"In event of default in payment of premium after the insured has become totally disabled as above defined, the policy will be restored and the benefits shall be the same as if said default had not occurred, provided due proof that the insured is and has been continuously from date of default so totally disabled and that such disability will continue for life or has continued for a period of not less than three consecutive months, is received by the company not later than six months after said default.

"The total and irrecoverable loss of the sight of both eyes or of the use of both hands or of both feet or of one hand and one foot shall constitute total disability for life.

"Before making any income payment or waiving any premium, the company may demand due proof of the continuance of total disability, but such proof will not be required oftener than once a year after such disability has continued for two full years. Upon failure to furnish such proof, or if the insured performs any work, or follows any occupation, or engages in any business for remuneration or profit, no further income payments shall be made nor premiums waived."

The evidence discloses, without dispute, that the plaintiff was taken ill on March 4, 1933, and thereafter remained under the constant and continued care of his physician until July 9, 1933. He was first able to work part time on June 20, 1933. With reference to his actual condition, his physician testifies:

"Q. During the period from the first date that you have given, and until the time that you say he returned to work, do you personally know whether or not he was, during said period, totally disabled? A. I would say for carrying on any particular work he would be totally disabled during that period of time, he was still confined to his home and practically bedridden the latter part of May, and came in a few times the first two or three weeks in June, but it was at my advice he did not return to his regular employment until he regained his strength and normal activities."

Plaintiff's first demand for payment of total and permanent disability benefits was orally made in July, 1933. He testifies:

"Early in July, after Dr. Best had told me he thought I was going to be all right, * * * I called Mr. Forbes (cashier of defendant company in Omaha) and I told him I thought that my total disability had stopped, and I wanted him to send me the blanks upon which to make claim on my insurance."

These blanks were not sent to plaintiff, and on July 27, 1933, the request was repeated by him in writing. This letter was answered by the home office, under date of August 9, 1933, to the effect, viz.:

"Under the terms of your above numbered policies, disability benefits become effective upon receipt at the company's home office of due proof that the insured is totally and permanently disabled, as provided.

"Inasmuch as it is evident from your conversation with Mr. Forbes that you were no longer totally disabled, you will appreciate that the company cannot consider that you are totally and permanently disabled within the meaning of the policies and consequently cannot favorably consider claim."

Thus, the decisive question in this case is whether or not the plaintiff is entitled to recover as "totally and permanently" disabled, under the definition of the policies issued to him. No notice in writing was ever served on the insurer by the insured, as stipulated in the policies, nor was any attempt made to comply with this provision as to notice until plaintiff had ceased to be totally disabled. The language of the policy relating to the subject of total and permanent disability, which we have quoted, is clear. We find no ambiguities therein. Under such circumstances, "Contracts of life insurance, like other contracts, must be construed according to the terms that 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, 76 L.Ed. 416, 52 S.Ct. 230.

The indemnity provisions here under consideration are, in express terms, limited to "total and permanent disability." They are not policies insuring against "temporary total disability." True, to enable the assured to secure full measure of protection intended to be afforded, these insurance contracts provide that, in effect where for more than three...