Wallace v. Brotherhood of Locomotive Firemen and Enginemen
| Decision Date | 14 October 1941 |
| Docket Number | 45602. |
| Citation | 300 N.W. 322,230 Iowa 1127 |
| Parties | WALLACE v. BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN. |
| Court | Iowa Supreme Court |
Appeal from District Court, Wapello County; Heinrich C. Taylor Judge.
Action at Law for permanent disability benefits under the terms of a certificate held by plaintiff in defendant brotherhood. Defendant filed answer. At the close of plaintiff's evidence the court sustained defendant's motion to direct a verdict. Plaintiff appeals. Opinion states the facts.
Reversed and remanded.
Gilmore, Moon & Bannister, of Ottumwa, for appellant.
Roberts & Roberts, of Ottumwa, and Grimm, Elliott, Shuttleworth & Ingersoll, of Cedar Rapids, for appellee.
Ira Wallace commenced this action at law against the Brotherhood of Locomotive Firemen and Enginemen to recover for permanent disability benefits under the terms of a beneficiary certificate held by him. The defendant filed answer in which it denied that Wallace was totally and permanently disabled as defined in the contract, that he failed to exhaust the remedies provided in the contract to be pursued by him within the order in case an application for disability benefits is rejected, and that the exhaustion of these remedies is a condition precedent to the prosecution of an action at law.
Plaintiff's evidence tends to show that defendant is a fraternal insurance association with principal office and place of business at Cleveland, Ohio. On the 23rd day of August, 1927, for a valuable consideration paid by plaintiff, the defendant made, executed and delivered to him its Beneficiary Certificate D398033 witnessing that he is a member of defendant Brotherhood and entitled to all the rights, privileges, and benefits of a member. That included in the contract of said certificate, as a part thereof, is the Constitution of the defendant as of the date of issuance of the certificate or as thereafter altered and amended. That the Constitution in effect from and after January 1, 1932, to December 31, 1937, is the law of the Brotherhood constituting part of the contract sued upon during the period involved in this action. The Constitution, Exhibit P-8, in the trial court has been certified to the Supreme Court as a part of the record.
The Constitution provides that a member in good standing in the Disability Fund of the Beneficiary Department, who is adjudged by the General Secretary and Treasurer to be totally and permanently disabled, shall be entitled to receive fifty dollars for each calendar month from the date of application until his death or until he is adjudged no longer entitled to benefit.
Total and permanent disability is defined in the Constitution as " such a state of bodily incapacity as shall wholly and permanently prevent a member from engaging in any occupation, profession or business or from performing or directing any work for remuneration or profit."
On or about the 29th day of July, 1937, the plaintiff suffered a cerebral hemorrhage not of traumatic origin. He was confined in the hospital for a period of 19 days. He suffered paralysis of the right arm and a loss of part of his mental faculties, including memory, ability to concentrate and emotional stability.
On October 9, 1937, defendant received at its office in Cleveland, Ohio, plaintiff's application for disability benefit, on form provided by Grand Lodge of defendant and accompanied by report of physical examination.
On October 26, 1937, A. Phillips, General Secretary and Treasurer of defendant, advised plaintiff by letter " that approval of an allowance from the disability benefit fund could not be authorized at this time" .
On December 4, 1937, Mr. Phillips, upon inquiry at request of plaintiff, explained his action in a letter to Wm. N. Whitehouse, M. D., and stated " it was the opinion of this office that not enough time had elapsed in which to definitely determine the question of total and permanent disability."
The Constitution provides that in case application for benefits or allowances from insurance departments are rejected by General Secretary and Treasurer, the applicant has a right of appeal to the International President and that such appeal shall be made within ninety days from the date of decision. " Appeals not made within ninety days shall not be entertained, unless it is clearly shown that the cause of such delay was no fault of the member making the appeal."
At the close of plaintiff's evidence the defendant made a motion for a directed verdict, as the grounds of same will be discussed later they will not be set out at this time. The motion to direct was sustained, and the plaintiff has appealed.
It is first argued that the trial court erred in sustaining the first three counts of appellee's motion for a directed verdict, holding that Wallace had failed to establish that he was in such a state of bodily incapacity as to wholly and permanently prevent him from engaging in any occupation, profession or business or from performing or directing any work for remuneration or profit as is provided in Article 8, Section 23(a) of the Constitution.
In the case of Garden v. New England Mutual Life Insurance Co., 218 Iowa 1094, 254 N.W. 287, 292, this court said:
Permanent disability means a disability that is lasting rather than temporary. The word permanent means " for an indefinite and undeterminable period" . It does not embrace the idea of absolute perpetuity.
If a " permanent disability" must be one that is to exist for life, incurable, without possible hope of recovery during the insured's lifetime, then in most cases of total disability, the liability of the insurer may not be determined until the death of the insured. There are few afflictions which medical science will admit to be absolutely fixed, incurable.
There are, however, many afflictions which are presumably permanent, that is, they might not be cured or improved before death and they are continuing rather than temporary. Such afflictions may be said to be probably beyond hope of improvement. They are lasting for an indefinite or undeterminable period. The courts have said that these are " permanent" disabilities within the meaning of insurance agreements using that term. To hold otherwise would be to allow the insurer in practically every case to avoid liability until the insured had finally closed his case by death. Such construction would convert a disability policy into a life policy. This is not the purpose of disability insurance which is designed to sustain the disabled person during his years of incapacity to earn.
A disability agreement using the term " permanent" disability together with a provision to the effect that payments shall cease if recovery or improvement in the " permanent" disability occurs, or together with a provision for payment " during such disability", or together with a provision that payments shall continue " until disabled member's death or until he is adjudged no longer entitled to benefit" must be construed to cover such disability as is presumed permanent rather than absolutely permanent.
Article 8, Sec. 23 (d) of appellee's Constitution provides payment to disabled member " until the disabled member's death, or until he adjudged no longer entitled to benefits."
This court has said that such a provision as contained in the appellee's constitution, for the termination of payments before death means that it is placed there for the protection of the insurer and must be construed to qualify the meaning of the word " permanent" to fix liability, though the disability may be curable, so long as the company is protected in case the insured recovers.
In Kurth v. Continental Life Ins. Co., 211 Iowa 736, 739, 234 N.W. 201, 202, the court observed the provision of a disability policy to the effect that " If it appears that the insured has so far recovered as to be able to engage in any gainful occupation, the company's obligation [ceases.]"
The court said: " By the insertion of the foregoing clause in the contract, it is obvious that the disability by which the benefits may accrue and become obligations of the company is not absolutely expected to be absolutely permanent and absolutely continuous and to absolutely prevent the insured during his after lifetime from engaging in any gainful occupation, because this insertion was intended to govern when and if such presumably permanent disability might be removed by some means or other, and the company desired what benefits it might have by reason of such removal."
This record shows that Ira Wallace was employed as a railroad engineer. That in July 1937, he suffered from a cerebral hemorrhage, that he was at that time 56 years of age. That he was unconscious for several days. That his right arm and side of his body was affected. That his doctor testified that he was mentally incompetent. That at the time of the trial, which took place in 1940, three years after the " stroke" which he suffered, that Wallace was unable to perform labor of any kind. The appellee offered no evidence. In face of this record, it was a question for the jury to say whether or not appellant was totally and permanently disabled within the meaning of the policy.
It is next contended that the lower court erred in sustaining Ground 5 of the motion for direct verdict.
Ground 5 is as follows:
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