Whetstone v. New York Life Ins. Co.

• Decision Date: 16 December 1936
• Docket Number: 14400.
• Parties: WHETSTONE v. NEW YORK LIFE INS. CO.
• Court: South Carolina Supreme Court

188 S.E. 793

182 S.C. 150

WHETSTONE v. NEW YORK LIFE INS. CO.

No. 14400.

Supreme Court of South Carolina

December 16, 1936

Appeal from Common Pleas Circuit Court of Aiken County; C.J. Ramage Judge.

Action by Mrs. Ruby Whetstone against the New York Life Insurance Company. Verdict was rendered in favor of the plaintiff after defendant had moved the trial court for a directed verdict in its favor, and the motion was refused and the defendant saves exceptions; and from an order granting a new trial nisi, the plaintiff saves exceptions, and both parties appeal.

Exceptions of plaintiff to the granting of a new trial nisi sustained and exceptions of defendant-appellant overruled with judgment ordered to be entered in favor of plaintiff, in accordance with verdict of jury.

Williams & Busbee, of Aiken, for appellant.

Thomas Lumpkin & Cain, of Columbia, and Gyles & Garvin, of Aiken, for respondent.

FISHBURNE Justice.

On May 8, 1924, the defendant, in consideration of the payment of the first annual premium of $104.01, issued to Noah Whetstone its policy, insuring his life in the sum of $3,000. The policy, in addition to the usual provisions, contained what is commonly known as a total and permanent disability clause, carrying income payments and waiver of premiums, in this language:

"3. Benefits.-Upon receipt at the Company's Home Office, before default in the payment of 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 the insured's age at nearest birthday is sixty years, the following benefits will be granted:

(a) Income Payments.-The Company will pay to the insured a monthly income of $10.00 per $1000.00 of the face of the policy during his lifetime and continued disability, beginning immediately on receipt of said proof. Any income payment due before the Company approves the proof of disability shall be payable upon such approval. If disability results from insanity, income payments under this section shall be paid to the beneficiary in lieu of the insured.

(b) Waiver of Premiums.-The Company will waive payment of any premium falling due after approval of said proof and during such disability. Any premium due prior to such approval is payable in accordance with the terms of the policy, but if due after receipt of proof will, if paid, be refunded upon approval of proof."

The policy as originally issued was payable, in the event of death, to the estate of the insured; but in 1930, the insured having in the meantime married, the plaintiff, his wife, was substituted as beneficiary, by proper indorsement on the policy.

The complaint alleged that the insured, Noah Whetstone, had been since the 1st day of January, 1932, totally and presumably permanently disabled, by reason of insanity. The action was brought to recover income payments under the terms of the policy, aggregating $1,050, covering the period of disability from January 1, 1932, up to and including December 1, 1934. It is also alleged that all premiums falling due subsequent to the 1st day of January, 1932, were waived under its terms and provisions by reason of the total and permanent disability of the insured.

The plaintiff brings this action under that provision of the policy, already quoted, which provides that income payments will be paid to the beneficiary in lieu of the insured where disability results from insanity. The gist of the action, pertinent to the appeal here, is contained in this paragraph of the complaint:

"That owing to the nature of insured's disability namely, insanity, it was impossible for him to give the notice thereof required of him under the terms of the policy, and he was and is excused from failure so to do; that, upon information and belief, the defendant did have notice of the insured's disability about the month of December, 1932; that it was impossible for plaintiff, as beneficiary under said policy to give notice of insured's disability, and she is excused from failure so to do, until about the month of October, 1933, when insured was confined to the South Carolina State Hospital for the insane, whereupon she immediately offered the proof of insured's disability, dating from January 1, 1932 and requested defendant to provide her with its forms for submitting such proofs; that defendant refused to furnish its said forms and to permit plaintiff to furnish proof of insured's disability, at the same time denying liability under said policy, and claiming that said policy had lapsed and was no longer of any force and effect; that prior to October, 1933, aforesaid, it was impossible for plaintiff to give proof of said disability of the insured to defendant due to the fact that plaintiff was wholly ignorant of said policy, provisions and terms relating to furnishing of proof of disability, by reason of the insured's keeping said policy locked up in a trunk all the while until he was committed to said State institution for the insane."

It is further alleged that the insured fully complied with all of the terms and conditions of the policy of insurance except such as he was excused from performing by reason of his insanity, and that the plaintiff, as beneficiary, has fully complied on her part with all of its terms and conditions except such as she was excused from performing by reason of the facts and circumstances heretofore mentioned and alleged in the complaint.

The defendant, by way of defense, denied that the insured was totally and permanently disabled while the policy was in full force and effect; and further set up that the policy lapsed for nonpayment of the premium due May 8, 1932, and, further, that no receipt of due proof of such alleged total and permanent disability was received at the home office of the company before default in the payment of premium, nor was such proof received within six months after the default in the payment of the premium, and permitted by the policy, and that in any event, "Mrs. Ruby Whetstone, wife of the insured and beneficiary, and as the real party in interest under the terms of the policy is not excused from filing proofs in accordance with the terms and conditions of the policy, and therefore cannot recover."

The case was tried at the March, 1935, term of the court of common pleas for Aiken county, and a verdict was rendered in favor of the plaintiff for $1,050, with interest.

Upon the conclusion of the testimony, the defendant moved the court for a directed verdict in its favor upon several grounds, which will be hereafter discussed. The motion was refused, and the case now comes before this court upon exceptions assigning error because of the refusal to grant the directed verdict.

The contentions of the defendant are that the policy of insurance lapsed for the nonpayment of the premium maturing on May 8, 1932; that Noah Whetstone, the insured, was not mentally incapacitated before default in the payment of this premium; that no proof of disability or notice of disability was filed with the company as required by the policy as a condition precedent to recovery of benefits before "default in the payment of the premiums" on the policy, or within six months after the default had occurred; and, further, that the plaintiff, Mrs. Ruby Whetstone, as wife of the insured and beneficiary named in the policy, is the true claimant under its terms, and was not excused from filing claim in accordance with the strict requirement of the policy.

The premium falling due on May 8, 1932, was not paid. Its nonpayment is sought to be excused by proof of the insured's insanity prior to that date, which rendered him totally and permanently disabled, and which also rendered him incapable of filing proof of such disability as a basis for income payments, and as a basis for a waiver of the premiums by the company, including the premium falling due May 8, 1932. It is also contended on behalf of the plaintiff that no proof was filed with the defendant of the total disability of the insured by her, as beneficiary, prior to May 8, 1932, for the reason that she was not in possession of the insurance policy, did not know the name of the insurance company which issued it, and did not know that she was the beneficiary until some time in October, 1933, when the policy was discovered following the commitment of her husband, the insured, to the State Hospital for the insane; but that immediately thereafter she gave notice and offered proof.

A careful review of the record convinces us that the circuit judge was correct in submitting all questions to the jury.

The testimony shows that the insured and the plaintiff were married April 28, 1929, at which time the insured was a young man twenty-six years of age. He had been a successful farmer on a small...