Sherman v. Metropolitan Life Ins. Co.

• Decision Date: 26 May 1937
• Citation: 8 N.E.2d 892,297 Mass. 330
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: MARTH SHERMAN & another v. METROPOLITAN LIFE INSURANCE COMPANY.

297 Mass. 330

8 N.E.2d 892

MARTH SHERMAN & another v. METROPOLITAN LIFE INSURANCE COMPANY.

Supreme Judicial Court of Massachusetts.

May 26, 1937

January 8, 1937. -- . February 2, 1937.

Present: RUGG, C

J., PIERCE DONAHUE, LUMMUS & QUA, JJ. Present: RUGG, C.J., PIERCE FIELD, DONAHUE, & LUMMUS, JJ.

Insurance, Proof of loss, Disability insurance.

Proof of loss plainly required by the terms of a policy of disability insurance as a condition precedent to commencement of the insurer's liability, was not excused, so as to render the insurer liable without it, by the mental or physical incapacity of the insured to make it.

CONTRACT. Writ in the Superior Court dated May 24, 1934, and afterwards amended.

The action was tried before Morton, J., who ordered a verdict for the defendant and reported the action for determination by this court.

CONTRACT. Writ in the Superior Court dated December 27, 1934.

The action was heard without a jury by Pinanski, J., who found for the defendant. The plaintiff alleged exceptions.

Lee M. Friedman, (F. L. Kozol with him,) for the plaintiffs Sherman and another.

B. J. Killion, (J.

F. Connolly with him,) for Metropolitan Life Insurance Company.

M. H. Goldman, (G.

S. Harvey & S.

Fishman with him,) for the plaintiff Bruce.

F. H. Nash, (B.

Aldrich with him,) for the defendant New York Life Insurance Company.

LUMMUS, J. The first case is brought upon a policy of life insurance issued to Irving Sherman by the defendant Metropolitan Life Insurance Company. In a supplementary contract made part of the policy, the company promised "upon receipt by the company at its home office in the city of New York of due proof, on forms which will be furnished by the company, on request, that the insured has, while said policy and this supplementary contract are in full force and prior to the anniversary date of said policy nearest to the sixtieth birthday of the insured, become totally and permanently disabled, as the result of bodily injury or disease occurring and originating after the issuance of said policy, so as to be prevented thereby from engaging in any occupation and performing any work for compensation or profit, and that such disability has already continued uninterruptedly for a period of at least three months, it will, during the continuance of such disability," waive the payment of quarterly premiums and pay a certain sum monthly for the disability. It was provided that "such waiver shall begin as of the anniversary of said policy next succeeding the date of the commencement of such disability, and such payments shall begin as of the date of the commencement of such disability provided, however, that in no case shall such waiver begin as of any such anniversary occurring, nor shall such payments begin as of a date, more than six months prior to the date of receipt of the required proof." The policy provided that "the payment of a premium shall not maintain this policy in force beyond the due date when the next premium is payable, except as hereinafter provided. A grace period of thirty-one days, without interest charge, will be granted for the payment of every premium after the first, during which period the insurance shall continue in force." A lapsed policy "may be reinstated at any time" upon the production of evidence of insurability satisfactory to the company and the payment of all overdue premiums with interest. But the "supplementary contract" itself provided that "this supplementary contract shall automatically terminate and be of no further force or effect if any premium on said policy, or on this supplementary contract, shall remain unpaid at the end of the period of grace allowed under said policy for payment of premium thereunder."

The action is prosecuted by the beneficiaries named in the policy (G. L. [Ter. Ed.] c. 175, Sections 111, 125), who by a provision of the policy are entitled to receive the monthly payments for disability when the insured is mentally incapacitated, as Irving Sherman was during the period from July 1, 1924, to the date of the writ, May 24, 1934, and still is. We assume for the purposes of this decision that there was evidence that during that period he was totally disabled by insanity, not only from engaging in any occupation and performing any gainful work, but also from giving notice to the company and furnishing or causing to be furnished to it the "due proof" required by the policy. No premium was paid after April 2, 1924, when the policy was issued, and no notice of his incapacity was given to the company until December 16, 1932, soon after the policy was found among his effects. Proof of the claim, which was asked by the company without prejudice to its contention that it is not liable, was furnished on June 3, 1933, by the beneficiaries. The judge ordered a verdict for the defendant "on the grounds that the insured has failed to comply with the requirements of the policy as to the payment of premiums and the proof of disability," and reported the case.

In the second case, the plaintiff Bruce had a policy of life insurance issued by the defendant New York Life Insurance Company, by which it promised "upon receipt at the company's home office, before default in payment of [annual] premium, of due proof that the insured is totally and presumably permanently disabled and that such disability occurred after the insurance under this policy took effect and before its anniversary on which the insured's age at nearest birthday, is sixty years," to give him the "benefits" of paying him a certain sum monthly "during his lifetime and continued disability, beginning immediately on receipt of said proof," and of waiving the "payment of any premium falling due after approval of said proof and during such disability." In the event of default in payment of the annual premium after the insured has become so disabled, provision is made for the restoration of the policy and the right to such "benefits," provided such "due proof" is received by the company not later than six months after the default. Other policies held by Bruce contained either the same provisions or others no more favorable to him.

In his action to recover disability payments for the period from November 11, 1933, to July 9, 1934, the plaintiff Bruce introduced evidence tending to show that throughout that period he was totally disabled both physically and mentally, not only "from engaging in any occupation whatsoever for remuneration or profit" within the terms of the policy, but also from giving notice to the company and furnishing or causing to be furnished to it the "due proof" required by the policy; that such notice was given and due proof furnished on July 9, 1934; and that after that time disability payments were made. During the period for which recovery is sought, the plaintiff's wife paid the premiums on his behalf, and he seeks also to recover them in this action as payments made by mistake. The judge found for the defendant, and refused to rule that the plaintiff was excused from giving notice and furnishing "due proof" during such period as he was physically or mentally disabled from doing so. The plaintiff alleged exceptions.

The policy in the Sherman case created a liability on the part of the insurer to pay disability payments beginning at the commencement of the disability, but not more than six months before the receipt by the company of the "due proof." That was received, if received at all, not earlier than June 3, 1933. In respect to liability for the period from July 1, 1924, to December 3, 1932 (six months before June 3, 1933), the case depends upon much the same principles as the Bruce case. In the Bruce case the policy created a liability for disability payments which began immediately upon the receipt of "due proof," and the premiums which the company agreed to waive were those falling due after approval of the "due proof." In neither case was the furnishing of "due proof" a mere condition, precedent or subsequent, of a liability arising independently. The obligation itself was limited to a period measured and defined by the receipt of "due proof." In the Sherman case no obligation existed for any period more than six months...