Metropolitan Life Insurance v. Harper , 189 Ark. 170 ( 1934 )

On June 1, 1923, the appellant, Metropolitan Life Insurance Company, issued and delivered to the International Paper Company of New York, in said State, its group policy No. 1864G, insuring and agreeing to insure the lives of certain employees of the said International Paper Company. The employees of the Southern Kraft Corporation were eligible for insurance under the group policy.

On December 1, 1928, appellant, Metropolitan Life Insurance Company, executed a certificate, No. 15,881, and delivered same to the International Paper Company to be by it delivered to the appellee, Curtis Harper, this certificate evidencing that the said Curtis Harper was then insured under the group policy above mentioned.

This policy provided, among other things, that, upon receipt at the home office in New York City, of due proof that the insured had become, while insured thereunder, and prior to his 60th birthday, totally and permanently disabled, as a result of injury or disease, so as to be prevented thereby from engaging in any occupation or performing any work for compensation or profit, it would pay the insured a stipulated sum per month for a certain number of months.

The appellee, Curtis Harper, continued in the employ of the Southern Kraft Corporation at Camden until April 7, 1933, on which date he received an injury as a result of being kicked by a mule, which caused his permanent and total disability.

Suit was brought by the appellee in the Ouachita Circuit Court on July 14, 1933. The appellee alleged the execution and delivery of the certificate to him, and the execution and delivery of the group policy to the International Paper Company, and that appellee was in the employ of the Southern Kraft Corporation at the time of his injury, and that the certificate was in full force and effect. He alleged that he was injured prior to his 60th birthday, by being kicked on his head and other parts of his body by a mule; that, as a result of said injuries, his skull was fractured, and there was a severe injury over his right eye, one over his left eye, injury to his left ear, and severe injury to his back and kidneys, and that he became totally and permanently disabled; that he duly notified the appellant of his injuries and disability, and requested blank forms upon which to make proof; and that the appellant refused to furnish such forms. It was further alleged that he was entitled, under the certificate, to recover 20 monthly payments of $71.45 each, aggregating $1,429, for which sum he prayed judgment. The group policy and the certificate were attached to the complaint as Exhibits A and B, and the total and permanent disability clause was copied in his complaint.

On October 3, 1933, the appellant answered, admitting that it is a corporation chartered under the laws of New York and authorized to do business in Arkansas; denied that the certificate contained the provisions alleged in the complaint; denied that appellee, from the date that the certificate was issued, was continuously in the employ of the International Paper Company until April 7, 1933; denied that on that date the insurance in force was $1,400, or any other sum; denied that appellee was in the employ of the International Paper Company; denied that appellee was required to drive and feed certain mules; denied that he was kicked on the head and other parts of the body by one of the mules; denied that he was permanently injured. It specifically denied the injuries mentioned in the appellee's complaint; denied that appellant was notified and requested to furnish blank forms on which to make such proof; denied that it refused to furnish forms; denied that it denied liability prior to the filing of the suit; denied that appellee is entitled to recover $71.45 for 20 months or any other sum; denied that it is liable to appellee in any sum. It further denies any repudiation of the contract, but expressly affirms the contract as expressed in the policy sued on.

Appellant then pleads certain paragraphs of the group policy as a defense, and denies that appellee received injuries while he was insured under said group policy. Appellant further states that the contract was made in New York, is not an Arkansas contract, and that appellee cannot recover 12 per cent. penalty or attorney's fees.

Appellee introduced the group policy and the certificate above mentioned, and he testified about his age and about working for the International Paper Company and his injuries.

Physicians were also introduced who testified as to the injuries. The appellant also introduced physicians who testified. Their testimony was in conflict, and it would serve no useful purpose to set it out.

The following stipulation was introduced: "It is stipulated and agreed by and between counsel for plaintiff and defendant that: The first and only notice, claim or proof that plaintiff had become totally and permanently disabled as defined in the policy was by letter of June 20, 1933, written by Lawrence E. Wilson, as attorney for plaintiff, and addressed to the Metropolitan Life Insurance Company, New York City. (Original of said letter hereto attached as part of this stipulation.) That defendant company replied to said letter under date of June 27, 1933, and on same date wrote the assured, International Paper Company, requesting information as to the status of plaintiff's claim. (Copies of said letters hereto attached as part of this stipulation.) That on July 6, 1933, the defendant again wrote the attorney for plaintiff sending him the forms GH 24-C on which to make claim as requested, and on the same date and on July 11, 19 and 21 it wrote other letters seeking information as to the status of plaintiff's insurance claim. (Copies of said letters hereto attached as part of this stipulation. That, without further notice or time, this suit was filed on July 14, 1933, and summons issued. That shortly thereafter notice of summons was received by the defendant. That prior to the filing of this action no denial of liability had been made by the defendant.

It is further stipulated and agreed that Master Insurance Policy No. 1864-G, pleaded in the complaint, was made, executed and delivered in the State of New York between the defendant and the International Paper Company, both New York corporations, and dated June 1, 1923. That the certificate, exhibited with the complaint, was executed and delivered to said International Paper Company in New York for the use and benefit of plaintiff and by said paper company delivered to plaintiff in Camden, Arkansas, on December 1, 1928. That at the time of such delivery to plaintiff he was a citizen and resident of Arkansas, and defendant was authorized to do business in said State."

Certain correspondence was introduced, which will be referred to hereafter. The case was tried before a jury, and a verdict for appellee was returned for $1,429. The case is here on appeal.

It is first contended by the appellant that the action was prematurely brought. It is contended that the action could not be brought until proof of disability was received by the home office in New York City. The policy provides that the first monthly installment will be paid upon due proof of total and permanent disability. There is nothing in the contract as to the character of proof required. The injury occurred on April 7, 1933, and on June 20 the attorney for appellee wrote a letter to the appellant, stating that appellee was insured under the group policy, giving the number, and stated to the appellant in this letter that he had made all effort to procure blanks upon which to file claim under the policy, but had failed to receive them; and said further: "This is to advise you that he expects to assert his rights under the total and permanent disability benefits provided for in the said policy. I will appreciate you writing me at your earliest convenience advising me the proper person to communicate with, in the event you have a State representative.

This letter was written on the 20th of June. Thereafter, on June 27, the appellant wrote the attorney that I had received his letter of the 20th, and that it was necessary that it know the present status of claimant's insurance, and that it was writing to the group policyholder for this information.

Although appellant was informed on June 20th that appellee had made an effort to get blanks to make proof, the appellant, seven days thereafter, wrote to him, not sending him blanks to make proof or requesting any proof, but stating to him that they were writing the group policyholder. They introduced a letter which the evidence shows that they did write to the group policyholder.

On July 6th, the evidence shows a letter was written, in which the statement was made that they were attaching two forms, SH 24 C, on which claim was to be made. Three months had elapsed since the accident to appellee, before this letter was written, and the company had been informed on June 20th that the appellee intended to assert his rights under the total and permanent disability benefits provided for in the policy. While the letter states that blanks to make proof of claim were attached, Mr. Wilson testifies that they were never received, and presented papers, and said that that was all that he had ever received from the company.

This evidence was admitted without objection. Of course it was competent for the appellee to prove that he never received the blanks, although it might be admitted that they were mailed. But in their first letter in response to Wilson's letter of the 20th, appellant not only did not furnish blanks, but it did not ask for any information or proof, but manifested an intention to get its information from the group policyholder. Appellant was then in the attitude of either treating Wilson's communication as proof, or of refusing to send him blanks to make the proof; but in either event he would have a right to bring his suit.

The policy provides that the first installment will be paid upon receipt of due proof of disability. Appellant either accepted Wilson's communication as proof, or declined to furnish him blanks at that time, and did not at that time ask for any additional proof or information. Appellee had a right to treat this as a breach of the contract. If he was entitled to recover at all, liability attached on the 7th of April, and the suit was not brought until July 14th. Immediately on the bringing of the suit, the appellant was again advised of appellee's claim and the facts he relied on.

When one party to a contract breaches it, the other party may immediately bring suit to recover damages for the breach. It is true that appellant, in its answer, expressly disavows any repudiation of the contract, but it is also true that it denies that appellee was continuously in the employ of the International Paper Company until April 7, 1933; it denies that on that date appellee had any insurance in force; and also denies that appellee was in the employ of the paper company on April 7th. It might very well say that it admitted issuing the group policy, and at the same time say that the appellee was never in the employ of the paper company, and never had any policy, and this would be a repudiation of the contract with appellee, notwithstanding it states in its answer that it does not repudiate the contract.

Insurance policies, as we have frequently said, are liberally construed in favor of the insured, and strongly against the insurer. National Life Acc. Ins. Co. v. Whitfield, 186 Ark. 198, 53 S.W.2d 10.

The next contention of appellant is that the verdict is not supported by the evidence, and is contrary to the law and the evidence. The evidence was in conflict as to the extent of appellee's injuries, and that question was settled by the jury under proper instructions, given both at the request of the appellee and the appellant.

There was sufficient evidence to submit the question of total and permanent disability to the jury. This court has frequently decided what constitutes total and permanent disability, and we do not deem it necessary to discuss this question here. Among the cases discussing this question are the following: Missouri State Life Ins. Co. v. Snow, 185 Ark. 335, 47 S.W.2d 600; Mo. State Life Ins. Co. v. Johnson, 186 Ark. 519, 54 S.W.2d 407; Guardian Life Ins. Co. v. Johnson, 186 Ark. 1019,57 S.W.2d 555; Aetna Life Ins. Co. v. Spencer,182 Ark. 496, 32 S.W.2d 310; Travelers Prot. Ass'n v. Stephens, 185 Ark. 660, 49 S.W.2d 364; Mutual Life Ins. Co. v. Marsh, 186 Ark. 61, 56 S.W.2d 433.

It is next contended that the verdict of the jury is excessive. The policy provided for the payment of 20 monthly installments of $71.45 each. At the time of the suit, there were four installments due. The other installments were due, one every thirty days.

"The breach of the contract, the appellant company's refusal to pay under its terms, and denial of any liability thereunder, gave the insured the right to sue for gross damages for such breach of contract, and the court has held that the measure of such damages is the present cash value of the past and future installments of the weekly indemnity, based on the life expectancy of the insured." Nat. Life Acc. Ins. Co. v. Whitfield, supra; Aetna Life Ins. Co. v. Phifer, 160 Ark. 98, 254 S.W. 335.

The recovery was for $1,429, the aggregate amount of the monthly installments. It should have been for the present value of the installments. As we have said, four installments were already due, and that left 16 installments that were to become due, one every 30 days. The four installments which were already due, together with the present cash value at the time of the trial of the 16 other installments, aggregate $1,382.92. The verdict should therefore have been for this amount, instead of $1,429, and it is modified so as to give judgment for $1,382.92.

It necessarily follows that the 12 per cent. damages should be 12 per cent. of $1,382.92, instead of 12 per cent. of $1,429, and the judgment will be modified accordingly.

In this case the policy or certificate was delivered to appellee in Arkansas, and it was not effective until delivered. The statute as to damages and attorney's fees is therefore applicable.

We do not deem it necessary to set out the instructions, but we have carefully examined the same, and have reached the conclusion that the jury was fairly instructed. All questions of fact were settled by the verdict of the jury, and the jury's finding of facts is conclusive here.

The judgment will be modified as above indicated, and, as so modified, affirmed.

SMITH, McHANEY and BUTLER, JJ., dissent.