Schollman v. Prudential Insurance Company of America
| Decision Date | 26 March 1936 |
| Docket Number | 29449 |
| Parties | FRED J. SCHOLLMAN, APPELLEE, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: WILLIAM A REDICK, JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
1. Where an insurance policy provides that, if the insured becomes permanently disabled and incapacitated so as to be unable to engage in work or occupation of any kind for financial value and furnishes due proof thereof to the insurer, the company, while such disability exists, will waive the premiums which become due on the policy after the receipt of proof of such disability, and insured furnished such proof in June, 1933, after which and before suit brought, the insurer refused payment because the proof was not satisfactory, such denial of liability does not waive the required notice so as to give insured the right to recover premiums paid after incurring the disability and before furnishing proof of disability.
2. Denial of liability after proper proof of disability was given under an insurance policy, because the proof furnished did not satisfactorily show that insured was permanently disabled, waives any further proof, but does not increase the insurer's liability under the policy, as to waiver of premiums which were paid before proof of disability was made.
3. " The term ‘ due proof of such disability,' used in an insurance policy, does not require any particular form of proof which the insurer might arbitrarily demand, but such a statement of facts as, if established in court, would require payment of the claim." Wray v. Equitable Life Assurance Society, 129 Neb. 703, 262 N.W. 833.
4. In case of repugnancy between a principal clause of the disability provisions of a life insurance policy, obligating the insurer to pay monthly benefits upon the insured becoming totally and permanently disabled, and a subordinate clause which, standing by itself, would postpone the payments of such benefits until proof of disability was given, the first and principal clause is controlling, and insured is entitled to recover the benefits from the date the disability was incurred.
5. Contracts of insurance, like other contracts, are to be construed according to the sense and meaning of terms which the parties have used, and if they are clear and unambiguous their terms are to be taken and understood in their plain, ordinary and popular sense; but when such contract is so drawn as to be ambiguous, or to require interpretation, or to be fairly susceptible of two different constructions, so that reasonably intelligent men, on reading the contract, would honestly differ as to the meaning thereof, that construction will be adopted which is most favorable to the insured.
Appeal from District Court, Douglas County; Redick, Judge.
Action by Fred J. Schollman against the Prudential Insurance Company of America. From the judgment, both parties appeal.
Affirmed.
Montgomery, Hall & Young and Laurens Williams, for appellant.
Frost, Hammes & Nimtz, contra.
Heard before GOOD, EBERLY and DAY, JJ., and RAPER and PROUDFIT, District Judges.
This action was begun October 7, 1933, by plaintiff, Fred J. Schollman, to recover total disability benefits and return of two premium payments on a life insurance policy issued to him by the defendant, Prudential Insurance Company. The policy for $ 5,000 was issued May 16, 1923, and contained the following clauses:
This latter clause appears by indorsement.
The petition contains three causes of action. In the first cause plaintiff alleges that he was under 60 years of age, and while the policy was in full force he was stricken with sickness and disease and as a result thereof he was, and has been ever since, disabled to such an extent that he is unable to engage in any occupation or perform any work for any kind of compensation of financial value, and that the defendant received due notice of plaintiff's disability, and before filing of the petition denied liability, and thereby waived all further proofs of disability. He prays judgment on the first cause for $ 50 a month from March 25, 1932, and interest thereon.
The second cause of action alleges the issuing of the policy, and plaintiff's sickness and disability, and defendant's waiver of proof of disability, as stated in first cause, and that when plaintiff was sick and confined in a hospital, and after defendant had been notified of plaintiff's illness, the defendant refused to waive payment of the premium due May 16, 1932, and plaintiff paid same in the sum of $ 199.75, to prevent defendant from declaring the policy forfeited, and prays for judgment for said sum with interest.
The third cause of action is to same effect as the second cause for the premium due May 16, 1933, which plaintiff paid in the sum of $ 205.40.
The defendant answered the first cause of action, admitting the issuance of the policy and that it contained the provisions for total and permanent disabilities as set out hereinabove and that the policy is in full force and effect, admits that plaintiff "is now disabled within the terms of said policy," and alleges that due proof of said disability was not furnished it until late in June, 1933; admits that plaintiff is entitled to benefits at the rate of $ 50 a month, payable in June, 1933, and on the first day of each month thereafter, and denies all other allegations on second and third causes; admits that plaintiff paid the two annual premiums, and denies every other allegation of the petition.
Plaintiff for reply admits he was disabled as alleged in the answer, and entitled to $ 50 a month benefits, and denies allegations not admitted in the answer, and plaintiff again alleges that the defendant denied liability before suit was begun, and it cannot now, after litigation has begun, change its ground and defend on the ground that formal proof of disability was not furnished it until July 19, 1933.
Trial was had to a jury. At close of plaintiff's testimony the defendant offered to confess judgment for all disability from June 22, 1933, to date of trial, and asked the court to direct verdict in its favor, which request was overruled. At close of all the testimony defendant moved the court to direct verdict in its favor, which was denied.
The court then, on its own motion, gave a peremptory instruction to the jury to return a verdict for plaintiff on his first cause of action in the sum of $ 1,388, and for $ 224.21 on the second cause of action and $ 218.20 on the third cause of action, and judgment was rendered on the verdict.
At the hearing on the motion for new trial, the court refused a new trial on the first cause of action; set aside the judgment on the second and third causes, and dismissed those causes. Defendant appeals on first cause, and plaintiff appeals from dismissal of second and third causes.
The briefs of both parties set forth the evidence as to the disability of the plaintiff, which is not necessary to review here, it being sufficient to state that it is clearly shown that he was totally disabled from March 25, 1932, and defendant admits in its answer that plaintiff was so disabled from June 22, 1933, and defendant does not now claim that plaintiff was not so disabled.
Plaintiff was taken to a hospital on March 26, 1932. Mrs. Schollman testified she told Schnurman, a collector for the insurer, that plaintiff was very, very sick soon after plaintiff went to the hospital and he would ask her once or twice a week how plaintiff was. After plaintiff came from hospital (in July, 1932) she told Schnurman that she thought they were entitled to some insurance on that policy and asked him to go to the house and check it up. Afterwards she told Schnurman that the doctor said he would very likely never be able to go to work. Later she called the defendant's office and told them that the plaintiff was sick, and they said they knew it.
Mr Schollman, plaintiff, testified that he...
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