State Life Ins. Co. v. Barnes

• Decision Date: 04 January 1933
• Docket Number: No. 7782.,7782.
• Citation: 58 S.W.2d 189
• Parties: STATE LIFE INS. CO. v. BARNES.
• Court: Texas Court of Appeals

58 S.W.2d 189

STATE LIFE INS. CO. v. BARNES.

No. 7782.

Court of Civil Appeals of Texas. Austin.

January 4, 1933.

Rehearing Denied March 29, 1933.

Appeal from District Court, Williamson County; Harry A. Dolan, Judge.

Suit by Sara G. Barnes against the State Life Insurance Company. From a judgment in favor of the plaintiff, the defendant appeals.

Affirmed.

Sam Burnap and Wilcox & Graves, all of Georgetown, for appellant.

Stanton Allen, of Bartlett, and W. C. Wofford, of Taylor, for appellee.

McCLENDON, Chief Justice.

Appeal from a judgment (in trial to court without a jury) in favor of Sara G. Barnes (appellee here, plaintiff below) against State Life Insurance Company (appellant here, defendant below), upon two policies issued by appellant on May 31 and October 31, respectively, 1916, insuring the life of A. T. Barnes, husband of appellee, who died April 26, 1931.

Appellant defended upon the grounds: (1) That the policies had lapsed for nonpayment of premiums due May 31 and October 31, 1930, respectively; and (2) that appellee and her husband had accepted the full cash value and accumulated dividends on the policies in full satisfaction and cancellation thereof.

Appellee countered: (1) That Barnes was insane and totally disabled from performing any gainful labor prior to the due date of the premiums and continuously thereafter until Barnes' death, notice whereof was given appellant within a reasonable time after she discovered a provision in the policies waiving, under the stated contingency, payment of the premiums; and (2) that the sums paid in settlement were accepted in ignorance of the waiver provision.

The controversy on appeal revolves mainly around a proper construction of the waiver provision, whether notice to appellant of Barnes' disability prior to default in payment of the premiums was a condition precedent to effectiveness of the waiver; and whether appellee was precluded from recovery under the settlement payments. Other questions involved in the appeal relate to the admission of evidence. The waiver provisions of the policies read: "Total and Permanent Disability. If the insured, after paying at least one full annual premium and before default in the payment of any subsequent premium, and before attaining the age of sixty years, shall become wholly and permanently disabled by bodily injury or by disease, so that he is and will be permanently, continuously and wholly prevented thereby from performing any work for compensation or profit, or from following any gainful occupation, the Company, upon receipt at its Home Office, of due proof of such disability of the insured, will waive payment of the premiums thereafter becoming due, by a written endorsement thereon. Any premiums so waived shall not be a lien on this Policy, and the values in the table of options on the first page hereof shall increase in the same manner as if the premiums were paid by the insured. If the insured should so far recover as to be able to engage in any gainful occupation, the obligation on the part of the Company to waive payment of premiums shall cease, and the insured shall resume payment of premiums in accordance with this contract, beginning with the first premium becoming due after the date of such recovery. Proofs similar to those required in the first instance of such continuous disability must be furnished prior to the payment of each premium by the Company, if requested. Without prejudice to any other cause of disability the entire and irrecoverable loss of the sight of both eyes, or the severance of both hands above the wrists, or both feet above the ankles, or of the entire hand and one foot, occurring before age sixty, will be considered total and permanent disability within the meaning of this provision."

Upon this issue the trial court found: "I find that on May 31st 1929 and October 31st 1929, and for several months prior thereto and up to the date of the death of Albert T. Barnes in Williamson County, Texas, on April 26th, 1931, that the said Albert T. Barnes was mentally deranged and insane, and was during all of said time so suffering from such bodily disease to such an extent that he was wholly and permanently disabled so that he was wholly, permanently and continuously prevented thereby from performing any work for compensation or profit, or from following any gainful occupation."

The evidence amply supports this finding; and it is not challenged by appellant.

While the authorities in other jurisdictions are not in accord upon the question, those in this state, which we think are supported by the better reasoning, hold that the waiver took effect at the time of the disability, and did not depend upon the time when proof thereof was furnished. Minnesota Mut. Life Ins. Co. v. Marshall (C. C. A.) 29 F.(2d) 977; Mid-Continent Life Ins. Co. v. Hubbard (Tex. Civ. App.) 32 S.W.(2d) 701 (error ref.); Missouri State Life Ins. Co. v. Le Fevre (Tex. Civ. App.) 10 S.W.(2d) 267 (error dis.); State Life Ins. Co. v. Fann (Tex. Civ. App.) 269 S. W. 1111 (error ref.); Merchants' Life Ins. Co. v. Clark (Tex. Civ. App.) 256 S. W. 969 (error ref.); Bank of Commerce & Trust Co. v. Ins. Co., 160 Tenn. 551), 26 S.W.(2d) 135, 68 A. L. R. 1380; Southern Life Ins. Co. v. Hazard, 148 Ky. 465, 146 S. W. 1107.

In Bergholm v. Ins. Co., 284 U. S. 489, 52 S. Ct. 230, 76 L. Ed. 416, the Supreme Court of the United States granted a writ of certiorari to the Circuit Court of Appeals for the Fifth Circuit , "because of a supposed conflict with Minnesota M. L. I. Co. v. Marshall (C. C. A. [8th]) 29 F.(2d) 977." The provision in that case read:

"Upon receipt by the Company of satisfactory proof that the Insured is totally and permanently disabled as hereinafter defined the Company will

"1. Pay for the Insured all premiums becoming due hereon after the receipt of such proof and during the continuance of the total and permanent disability of the Insured."

The provision in the Marshall Case was substantially the same as that in the case at bar. In affirming the Fifth Circuit Court of Appeals in the Bergholm Case, the Supreme Court pointed out the controlling distinction in the wording of the policy provisions in the two cases as follows:

"The court [in Marshall Case] held that the waiver took effect at the time of the disability, and did not depend upon the time when proof thereof was furnished.

"We do not need to controvert this construction of the words quoted, or question the soundness of the view of the court that the existence of the disability before the premium became in arrears, standing alone, was enough to create the waiver. In that view, the obligation to furnish proof was no part of the condition precedent to the waiver; but such proof might be furnished within a reasonable time thereafter. Here the obligation of the company does not rest upon the existence of the disability; but it is the receipt by the company of proof of the disability which is definitely made a condition precedent to an assumption by it of payment of the premiums becoming due after the receipt of such proof. The provision to that effect is wholly free from the ambiguity which the court thought existed in the Marshall policy."

The holding in the Marshall and other cases above cited is in our opinion sound. Further comment we think unnecessary, except to add that, if appellant, the author of the language of the policy, had intended to make the notice and proof of liability a condition precedent to effectiveness of the waiver, apt unequivocal language to that effect was available and should have been employed. Absent which the rule...