Schlintz v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 07 December 1937
• Citation: 226 Wis. 255,276 N.W. 336
• Parties: SCHLINTZ v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.
• Court: Wisconsin Supreme Court

226 Wis. 255

276 N.W. 336

SCHLINTZ

v.EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.

Supreme Court of Wisconsin.

Dec. 7, 1937.

Appeal from a judgment of the Circuit Court for Outagamie County; Edgar V. Werner, Judge.

Affirmed.

Action by Harvey A. Schlintz, as guardian of Charles R. Crowell, an incompetent, against the Equitable Life Assurance Society of the United States to recover certain income payments alleged to be owing for disability under an insurance policy issued by the defendant to Charles R. Crowell. The defendant answered denying liability, and upon a trial to the court, it filed findings and conclusions upon which judgment was entered for recovery by the plaintiff. Defendant appealed.Fawsett, Shea & Hoyt, of Milwaukee (C. F. Mikkelson, of Milwaukee, of counsel), for appellant.

Benton, Bosser, Becker & Parnell, of Appleton (David L. Fulton, of Appleton, of counsel), for respondent.

FRITZ, Justice.

The life and disability insurance policy on which this action is based was issued by the defendant to Charles R. Crowell in June, 1920, and he paid all premiums thereon until the semiannual premium payable on December 9, 1934. On February 28, 1935, Crowell was adjudged an incompetent by the county court of Outagamie county, and on May 28, 1935, the plaintiff, Harvey A. Schlintz, was appointed and qualified as his guardian. Thereupon this action was commenced to recover the annual income provided in the policy to be paid in monthly installments in the event that Crowell should, before attaining the age of sixty years, become physically or mentally incapacitated to such an extent that he would be wholly and presumably permanently unable to engage in any occupation or perform any work for compensation of financial value. The plaintiff alleged in his complaint that about February 1, 1934, Crowell, then fifty-four years of age, became mentally incapacitated to such an extent that he was unable to engage in any occupation or perform any work for compensation of financial value; that his total disability has continued to exist and is permanent; that all agreements and conditions of said policy to be fulfilled and performed on his part have been duly fulfilled and performed; that the defendant waived the proof of disability required under the terms of the policy; and that none of the annual income for permanent and total disability has been paid.

So far as its defenses are involved on this appeal, the defendant denied in its answer that Crowell became mentally incapacitated about February 1, 1934, so that he was unable to engage in any occupation or perform any work for compensation of financial value, or that he was suffering from a mental disability, or that it was of a permanent character; and that it waived proof of disability required under the terms of said insurance policy. Further answering, the defendant alleged that the policy lapsed on or about December 9, 1934, by reason of the nonpayment of the insurance premium which became due on that date; that in accordance with the options available under the policy Crowell elected to and did surrender the policy about January 7, 1935, for its cash surrender value after deducting therefrom the loans theretofore made thereon; that its check to Crowell for that balance was accepted and cashed by Crowell, who thereby terminated all of his rights under said policy, which was then canceled and ceased to exist as a contract of insurance; that under the policy total and permanent disability benefits are payable only if such disability occurred while it was in full force and effect and all premiums thereon were fully paid, and if due proof of such disability and that it had existed for sixty days previous was furnished while the policy was in full force and effect and all premiums thereon were fully paid; and that although the policy further provides that the premiums payable would be waived after receipt of such proof and the disability benefits would become payable six months after the receipt thereof, no proof of alleged disability was furnished before or after the surrender and termination of the insurance, and there was a total failure to perform any of the conditions required to entitle the assured to any of the disability benefits provided for in the policy.

On the trial it appeared without dispute that premiums were paid up to December 9, 1934, when another semiannual premium became payable with thirty days of grace. Then Crowell wrote a letter to the defendant in which he expressed doubt as to his ability to carry the policy, and requested information as to the cash surrender value of the policy if he found it necessary to drop it at the expiration of the period of grace, and also similar information if he kept the policy in force until the next premium became due on June 9, 1935. Defendant promptly replied that loans on the policy aggregated $2,380, which left a balance of $133.40 as its cash surrender value. On January 8, 1935, Crowell wrote to the defendant that he would be unable to carry the policy after January 9, 1935, and requested that the cash surrender value be remitted to him. Under date of January 16, 1935, Crowell wrote and inquired whether his previous letter had been received, and stated that if it had not, the defendant should accept this letter as a notification to cancel the policy. On January 21, 1935, the defendant replied that Crowell should send the original policy, or, if it was lost, should submit proof of such loss verified by him and the beneficiary on an enclosed form. Crowell and his wife signed that form on January 30, 1935, at the office of defendant's agent at Appleton, and Crowell forwarded it to defendant's Chicago office with a letter explaining his inability to locate the policy. On February 12, 1935, Crowell received the defendant's check at Appleton for the balanceof the surrender value, and cashed it at a hotel in Oshkosh where he stayed for five days, during which time he became intoxicated and spent all of the proceeds. There was proof that on December 10, 1934, Crowell had told a friend, John Schlintz, that the premiums on the policy were paid, and attached considerable importance to the fact that it would take care of his wife after his death; that in December, 1934, or January, 1935, Crowell had told his wife that he had negotiated another loan on the policy to take care of the premium; and also that his brother had sent him a check for $338 on December 21, 1934, to pay the premiums on the policy in question and on another policy, but that Crowell had indorsed that check to his wife to deposit it in the bank without telling her what it was for. On February 25, 1935, two examining physicians, appointed by the county court of Outagamie county, reported that Crowell's mental condition was impaired, and in immediate need of proper treatment; and he became a voluntary patient at the Northern State Hospital for the Insane, where the medical staff's diagnosis was “Manic Depressive Psychosis-Depressed Type (mild).”

On the trial herein the court found that about May 1, 1934, Crowell because of his very poor physical and mental condition became unable to work and was forced to leave his employment; that on October 1, 1934, and at all times thereafter, he was wholly and presumably permanently incapacitated to engage in his customary occupation, or to perform or engage in any work or labor, and by reason of that disability he was on October 1, 1934, and at all times thereafter, wholly and presumably permanently disabled and unable to engage in any occupation or perform any work for compensation of financial value; that for more than sixty days prior to December 9, 1934, and continuously thereafter, he was of weak, unsound, and diseased mind to such an extent that he was incapable of understanding or comprehending the nature and consequences of his acts, or of an ordinary business transaction, and that because of his mental condition he was wholly incompetent and unable to comprehend the nature and extent of his own disability or to give notice and proof thereof to the defendant, or of comprehending or understanding the nature and effect of the letters written by him to the defendant in 1934 and January, 1935, or of the acceptance by him of the defendant's check for $133.40 on February 12, 1935. Upon those findings the court concluded that the alleged surrender and cancellation of the policy as claimed by the defendant was and is void and of no legal effect; that it was never legally canceled, rescinded, or surrendered; and that it at no time lapsed because of nonpayment of any premiums or assessment, but was still in full force and effect.

[1][2] Appellant's first contention is that the trial court's finding as to Crowell's mental incompetency is not sustained by the evidence. In support of that contention the appellant claims that Crowell's letters clearly establish that he fully comprehended his act of surrendering the policy and the effect of it; that that act of surrendering is not evidence of incompetency; that the plaintiff's witnesses by their acts and conduct during the period in question believed Crowell to be competent; and that his failure to make claim under the policy was not due to incompetency. A review of the record discloses that although there is considerable conflict in the evidence and the inferences which can reasonably be drawn therefrom, in respect to the facts found by the court, as stated above, there is sufficient credible evidence in support of the findings because of which they cannot be held to be contrary to the clear preponderance of the evidence. In view of that conclusion on our part, no useful purpose will be served by an extended discussion of the evidence. It is true that in the absence of other evidence to the contrary, the literary style and apparently businesslike character of Crowell's letters in relation to surrendering the policy would warrant finding that he...