Wayne v. New York Life Ins. Co.

• Decision Date: 07 January 1943
• Docket Number: 12293.,No. 12292,12292
• Parties: WAYNE v. NEW YORK LIFE INS. CO. NEW YORK LIFE INS. CO. v. WAYNE.
• Court: U.S. Court of Appeals — Eighth Circuit

132 F.2d 28 (1942)

WAYNE v. NEW YORK LIFE INS. CO.

NEW YORK LIFE INS. CO. v. WAYNE.

Nos. 12292, 12293.

Circuit Court of Appeals, Eighth Circuit.

December 14, 1942.

Rehearing Denied January 7, 1943.

COPYRIGHT MATERIAL OMITTED

Daniel L. Brenner, of Kansas City, Mo. (Cornelius Roach, J. H. Greene, Jr., and Roach & Brenner, all of Kansas City, Mo., on the brief), for Jacob Wayne.

Richard S. Righter, of Kansas City, Mo. (R. Arch Smith and Rudolph Heitz, both of Kansas City, Mo., on the brief), for New York Life Ins. Co.

Before GARDNER, WOODROUGH, and RIDDICK, Circuit Judges.

GARDNER, Circuit Judge.

This was an action brought by Jacob Wayne against the New York Life Insurance Company on an insurance contract to recover certain disability benefits and premiums paid during his alleged total permanent disability. It will be convenient to refer to the parties as they appeared in the lower court. Plaintiff recovered judgment for the disability benefits claimed and defendant has appealed from that judgment. Plaintiff, after entry of judgment, made a motion to enter judgment in conformity with the jury's answers to certain special interrogatories, and from the order denying his motion he has appealed. We shall first give consideration to defendant's appeal.

On March 19, 1917, defendant issued to plaintiff the policy of insurance upon which this action was based. It contains provision for disability benefits payable annually, and for waiver of premium in the event of disability. Section 1 of the policy provides that: "Whenever the Company receives due proof, before default in the payment of premium, that the Insured has, subsequent to the delivery hereof, become wholly disabled by bodily injury or disease so that he is and will be presumably thereby permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit, and that such disability has then existed for not less than sixty days * * * the Company will on each anniversary waive payment of the premium for the ensuing year, and, in any settlement of the policy, the Company will not deduct the premiums so waived. * * * the Company will pay the Insured one-tenth of the face of the policy, and a like sum on each anniversary thereafter during disability until the face of the policy has been paid. After the face amount has been paid in instalments, the Company will continue to pay a sum equal to one-tenth of the face amount annually during the remainder of the lifetime and continued disability of the Insured." Other provisions are not here material.

Plaintiff alleged that he became wholly disabled on February 5, 1928, when he was 52 years old, and was thereby permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit; that he had furnished all proof required by defendant but defendant had failed to perform its contract. He sought to recover for thirteen years' disability benefits at $200 per annum and asked also for judgment for nine years' premiums paid, amounting in the aggregate to $806.04, plus ten per cent penalty for defendant's vexatious refusal to pay, besides $1,500 attorney fees.

Defendant's answer set up four defenses, all of which, save one, have now been abandoned. The fourth defense in effect challenged the sufficiency of the proof of disability and pleaded that plaintiff was estopped to claim that the oral notice alleged to have been given in December, 1929, was binding upon it. The grounds for the claim of such insufficiency are elaborated in the answer.

The court submitted five interrogatories to be answered by the jury, four of which were answered in such a way as to render the answer to the fifth unnecessary. The jury found the issues in favor of the plaintiff, assessed his damages for benefits and premiums paid at the sum of $2,200, and found under the instructions of the court that plaintiff was entitled to recover attorney fees in the amount of $1,125. Further reference will be made in the course of this opinion to the answers to the special interrogatories.

In February, 1928, as determined by the verdict of the jury, plaintiff became seriously ill and consulted and was attended by a number of physicians. He was advised by his physician that he must discontinue work and since that date he has not been able to perform any work. He was then 52 years of age, and from February, 1928, has been and is totally and permanently disabled. He paid all premiums on this policy up to and including March 19, 1938. He was also insured by another policy issued by defendant which contained no disability provisions. In December, 1929, plaintiff and his wife went to the office of the defendant company in Kansas City, Missouri, and there talked with one Mike McKinney, who was cashier for the defendant and whose duty it was to collect premiums, make loans on policies of insurance, and handle disability claims for the company. Plaintiff, in the presence of his wife, told Mr. McKinney that he was and had been totally disabled for more than two years and believed he had disability benefits due him on his policy of insurance and if so he wanted to make claim for such disability benefits. McKinney said he would check his records and see if he had any disability benefits on his policies. He left the room and in a few minutes returned, reporting that plaintiff had no such disability benefits. McKinney told plaintiff that his policies had some cash value on which he might borrow money, and subsequently plaintiff did borrow money on the policy not involved in this action.

In May, 1940, a relative of plaintiff visited him and asked if he did not have disability benefits in his policies with the defendant. Plaintiff then brought out the policies for examination and the disability provision was found in one of the policies. Plaintiff went immediately to the office of defendant and inquired of R. M. Wells, one of defendant's cashiers, as to why he had not been told that he had disability benefits under one of his policies when he had made inquiry about it several years ago, and was told by Mr. Wells that the company was under no obligation to tell him about his policies. Plaintiff then again requested that he be paid all benefits to which he was entitled under his policies and he was furnished blanks on which to submit formal proofs. Proofs in the form indicated by the blanks were filed June 28, 1940. These proofs indicated that plaintiff had been totally and permanently disabled from February 6, 1928. On July 8, 1940, defendant wrote to plaintiff, advising that the company had completed its investigation with respect to his claim for disability benefits but that from the information obtained it did not appear that he was totally and permanently disabled within the meaning of the disability provisions contained in the policy, prior to the date on which the insured attained age 60. The claim was accordingly disallowed. Plaintiff became 60 years of age in December, 1935. He commenced this action following the receipt by him of the letter denying liability.

Special interrogatory No. 4 was as follows: "Has plaintiff been totally disabled since February, 1928, and until July, 1940, from performing in the usual and customary way substantially all the material acts of any occupation in which otherwise he would have been able to engage? The jury answered: "Yes." It also answered in the affirmative an interrogatory which inquired whether plaintiff asked McKinney on December 18, 1929, if any of his policies issued by the defendant contained disability benefits and advised McKinney that he was and for approximately two years prior thereto had been totally disabled and desired to claim disability benefits if any of his policies provided therefor. The jury also answered in the affirmative an interrogatory as to whether McKinney, in the conversation referred to, on December 18, 1929, advised plaintiff that he did not have a policy of insurance with the defendant company which contained a provision for disability benefits.

At the close of all the testimony, defendant moved for a directed verdict, which motion was denied.

On this appeal defendant seeks reversal of the judgment entered against it on substantially the following grounds: (1) The plaintiff's conversation with McKinney did not constitute due proof of disability and plaintiff is estopped to claim and has waived the right to claim that the conversation with McKinney was due proof of disability; (2) the court erred in submitting to the jury the issue of vexatious refusal to pay; (3) the Missouri five year statute of limitations has run against all but one of the premiums plaintiff seeks to recover. Counsel for defendant in their brief assert that: "The principal question in this case is whether he also submitted `due proof' of his alleged disability within the meaning of the policy in the month of December, 1929."

In view of the verdict of the jury, we must resolve all conflicts in the evidence in favor of plaintiff and the evidence must be viewed in a light most favorable to his contentions. He is entitled to the benefit of such favorable inferences as the jury might reasonably have drawn from the evidence. Chicago, M., St. P. & P. R. R. Co. v. Linehan, 8 Cir., 66 F.2d 373; Gunning v. Cooley, 281 U.S. 90, 50 S.Ct. 231, 74 L.Ed. 720. Defendant urges that there was no substantial evidence of due proof of disability submitted prior to the formal proof filed with the company on June 28, 1940. The requirement of the policy is that the company be furnished "due proof" of the claim. The policy does not specify the manner in which this proof must be furnished, nor whether it shall be in the form of writing. Insured is entitled to a liberal construction of this phrase "due proof." Liverpool & London & Globe Ins. Co. v. Dillon, 4 Cir., 16 F.2d 774; Feinberg v. New York Life Ins. Co., 233 Mo.App. 707, 127 S.W.2d 82; Hablutzel v. Home Life...