Sanderson v. New York Life Ins. Co.

• Decision Date: 22 April 1946
• Docket Number: No. 20724.,No. 20721.,20721.,20724.
• Citation: 194 S.W.2d 221
• Parties: HAZEL L. SANDERSON, GUARDIAN AND CURATRIX OF THE PERSON AND ESTATE OF WILLIAM E. SANDERSON, A PERSON OF UNSOUND MIND v. NEW YORK LIFE INSURANCE COMPANY, A CORPORATION.
• Court: Missouri Court of Appeals

194 S.W.2d 221

HAZEL L. SANDERSON, GUARDIAN AND CURATRIX OF THE PERSON AND ESTATE OF WILLIAM E. SANDERSON, A PERSON OF UNSOUND MIND v. NEW YORK LIFE INSURANCE COMPANY, A CORPORATION.

No. 20721.

No. 20724.

Kansas City Court of Appeals. Missouri.

April 22, 1946.

Appeal from Jackson County Circuit Court. — Hon. Paul A. Buzard, Judge.

AFFIRMED.

Hugh B. Downey, Harry A. Morris, A.N. Abrams and John M.P. Miller for Hazel L. Sanderson, appellant.

(1) The defendant is liable for vexatious refusal to pay under a life, health and accident policy. Revised Statutes of the State of Missouri, 1939, Sec. 6040, Vol. 15, R.S. Mo. Ann., 778; Barber v. Hartford Life Ins. Co., 187 S.W. 874; 38 S. Ct. 54; 245 U.S. 146; 62 L. Ed. 208; Williamson v. Liverpool & London & Globe Ins. Co., 141 Fed. 54. (2) The judgment of the Circuit Court was erroneous because defendant never demanded due proof of continued disability which was a condition precedent to its lawful refusal to pay. Hughes v. Prudential Ins. Co. of America, 179 S.W. (2d) 630; Ray v. Equitable Life Insurance Society, 262 N.W. 833-34, 129 Nebr. 723; Appelman on Insurance Law and Prac., Sec. 1476, p. 70. (3) The Circuit Court's judgment erred because under the undisputed facts, the defendant misconstrued its own contract and its refusal to pay was purely vexatious. Thomas v. Metropolitan Life Ins. Co., 89 S.W. (2d) 590, 230 Mo. App. 206; Porter v. Equitable Life Assurance Co., 71 S.W. (2d) 766; Green v. American Life & Accident Ins. Co., 93 S.W. (2d) 1119. (4) The Circuit Court's judgment erred in its finding of fact that this is a case of first impression in the state of Missouri, and therefore excluding from its consideration the question of damages and attorney's fees for vexatious refusal to pay. Thomas v. Metropolitan Life Ins. Co., supra, 89 S.W. (2d) 590, 230 Mo. App. 206. (5) The policies require as a condition precedent to the cessation of disability payments defendant's demand for due proof of continuance of disability, which demand was never made. Hughes v. Prudential Insurance Company, 179 S.W. (2d) 630, 635; Ray v. Equitable Life Assurance Society, 262 N.W. 833, 834, 129 Neb. 703; 7 Couch, Cyclopedia of Insurance Law, 1945 Cumulative Supplement, Sec. 1540; Appleman on Insurance Law, Sec. 1446, p. 70; Feinberg v. New York Life Ins. Co. (Mo. App.), 127 S.W. (2d) 82; (6) An impossibility that would discharge duty to perform a promise, excuses a condition precedent if the existence or occurrence of the condition is no material part of the exchange for promisor's performance, and discharge of the promisor will operate as a forfeiture. Schoen v. American Natl. Life Ins. Co. (Mo.), 180 S.W. (2d) 57, 59, 352 Mo. 935; Harris v. Pacific Mutual Life Ins. Co. of Calif., 10 Cir., 137 F. (2d) 272, 273; Schoen v. American Natl. Ins. Co. (Mo. App.), 167 S.W. (2d) 423; Bennett v. New York Life Ins. Co. (Idaho S. Ct.), 121 Pac. (2d) 551, 142 A.L.R. 841, 852. (7) The plaintiff tendered due proof of continued disability and defendant refused to admit of such proof. Lambert v. John Hancock Mutual Life Ins. Co., 28 F. Supp. 142, affirmed 107 F. (2d) 1016, certiorari denied 309 U.S. 633, 84 L. Ed. 1011; 1 Wigmore on Evidence (2 Ed.), p. 772; Bogardus v. Trinity Church, 4 Sandf., Ch. 722; Com. v. Billings, 97 Mass. 405; Thayer v. Thayer, 101 Mass. 113; McDaniels v. Cutburth, 270 S.W. 353; Hablutzel v. Home Life Ins. Co. of New York, 59 S.W. (2d) 639, l.c. 641, 142 A.L.R. 855; Schoen v. American Natl. Life Ins. Co. (Mo. App.), 167 S.W. (2d) 423, 428; New York Life Ins. Co. v. Ross, 30 F. (2d) l.c. 82; Hughes v. Prudential Ins. Co., 179 S.W. (2d) 630, 635.

Richard S. Righter and Lathrop, Crane, Sawyer, Woodson & Righter for appellant.

(1) Where as here the insurer finds the proofs of continued disability unsatisfactory, the burden is on the plaintiff to prove that insured is still disabled. John v. Aetna Life Ins. Co. (Mo. App.), 100 S.W. (2d) 936; Eubank v. New York Life Ins. Co. (Pa.), 17 S.E. (2d) 591; Fricke v. Mutual Life Ins. Co. of New York (Kan.), 106 Pac. (2d) 677; Stoner v. New York Life Ins. Co. (Mo. App.), 90 S.W. (2d) 784; Stoner v. New York Life Ins. Co. (Mo. App.), 114 S.W. (2d) 167. (a) Where the insured has placed it out of his power or has refused to supply proofs of continued disability, the company is not obligated to pay further benefits. Erreca v. Western States Life Ins. Co. (Calif), 121 Pac. 689; Rocci v. Mass. Accident Co. (Mass.), 116 N.E. 477; United States Fid. & Guar. Co. v. McCarthy (Mo. App.), 33 F. (2d) 7. (b) The evidence offered here did not constitute due proof that the insured was still disabled. Mercantile-Commercial Bank & Trust Co. et al. v. Equitable Life Assurance Society (Mo.), ___ Fed. Supp. 1026; Travelers Ins. Co. v. Cadena (Mo. App.), 91 S.W. (2d) ___; Feinberg v. New York Life Ins. Co. (Mo. App.), 127 S.W. (2d) ___; Gladney v. Mutual Life Ins. Co. of New York (Mo. App.), 186 S.W. (2d) 538; Lamarr v. Metropolitan Life Ins. Co. (Tenn. App.), 143 S.W. (2d) 891; Kirby v. Prudential Life Ins. Co. (Mo. App.), 191 S.W. (2d) 379. (2) Plaintiff's first point in both briefs is that defendant never demanded due proof of the continuance of the insured's disability. This point is not well taken. Feinberg v. New York Life Ins. Co., 233 Mo. App. 707, 127 S.W. (2d) 82; Hughes v. Prudential Ins. Co. (Mo. App.), 179 S.W. (2d) 630; Waterous v. Columbian Nat'l Life Ins. Co. (Mo.), 186 S.W. (2d) 456. (3) The second point in plaintiff's "reply" brief is that the impossibility of furnishing proof of the insured's continued disability excuses such proof. This point is not well taken. Schoen v. American Nat'l. Ins. Co. (Mo.), 180 S.W. (2d) 57, 59; Lampert v. John Hancock Mut. Life Ins. Co., 28 Fed. Supp. 142. (4) Plaintiff's reply brief next urges that she has tendered due proof of continued disability. This argument is without merit. Harris v. Pacific Mut. Ins. Co. (Mo. App.), 137 F. (2d) 272; U.S. Fid. & Guar. v. McCarthy (Mo. App.), 33 F. (2d) 7, (5) The circuit court did not err in ruling that the defendant's refusal to pay was not vexatious. Howard v. Aetna Life Ins. Co., 350 Mo. 17, 164 S.W. (2d) 360; St. Clair v. Washington Fid. Nat. Ins. Co. (Mo. App.), 89 S.W. (2d) 85; Stahl v. American Nat. Assurance Co. (Mo. App.), 70 S.W. (2d) 78; Schaeffer v. North Assurance Co. (Mo. App.), 179 S.W. (2d) 923.

CAVE, J.

This is an action on two insurance policies for disability benefits and for penalties for vexatious refusal to pay. The petition contained three counts; the first two on the policies, and the third for penalties and attorneys' fees. The case was tried without a jury. No findings of fact or declarations of law were asked or made. The trial court rendered judgment for plaintiff on the first count for $248; on the second count for $1,242.32, and for the defendant on the third count. Defendant appealed from the judgment on the first and second counts, and plaintiff appealed from the judgment on the third count. By agreement, the appeals have been consolidated and will be disposed of in one opinion.

The facts are stipulated and may be summarized as follows: William E. Sanderson was the insured under two policies issued by defendant. The first, dated August 22nd, 1918, provided $1,000 life insurance, double indemnity for accidental death, and one-tenth of the face of the policy, $100, annually to the insured on the anniversary of the policy, upon receipt of due proof of total and permanent disability. The second policy, dated October 9th, 1931, provides $4,000 of life insurance, double indemnity for accidental death, and $40 per month upon receipt of due proof of total and permanent disability. Both policies provide for waiver of premiums during disability. The provisions of the policies directly involved are:

First Policy:

"3... . The Company may at any time and from time to time, but not oftener than once a year, demand due proof of such continued disability, and upon failure to furnish such proof, or if it appears that insured is no longer wholly disabled as aforesaid, no further premiums shall be waived nor income payments made." (Italics ours)

Second Policy:

"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. If such proof shall not be furnished, or if at any time the Insured shall become able to perform any work, follow any occupation, or engage in any business for remuneration or profit, no further income payments shall be made nor premiums waived...." (Italics ours)

Sanderson was adjudged insane by the Jackson County Probate Court September 4, 1934, and plaintiff and his wife and beneficiary in each policy, was appointed his guardian. He was confined to State Hospital No. 2 for the insane, at St. Joseph, Missouri, from that time until May 13, 1942. On that date he disappeared from the hospital and although plaintiff and State authorities have made a thorough search in an effort to find him, he has not been seen or heard from and his present whereabouts are unknown.

The Company waived the premiums and paid disability benefits to the guardian from 1934 until 1943. On July 16, 1943, the Company wrote Mrs. Sanderson concerning the two policies and advised her that under the terms of the disability benefit provisions, benefits were payable during the continuance of total disability, and that continuance of such benefits was subject to the continuance of such disability and that, under the policies, the Company had the right to "demand due proof of such continued disability and upon failure to furnish such proof, or if it appears that insured is no longer wholly disabled as aforesaid, no further premiums shall be waived nor income payments made. The Company now has under consideration the question of the continuance of the disability benefits. ...