Reliance Life Ins. Co, of Pittsburgh, Pa. v. Lynch , 144 Fla. 50 ( 1940 )

The record here discloses that the Reliance Life Insurance Company on May 5, 1930, issued a policy on the life of John P. Lynch for the sum of $2,000.00, and his wife, Alice N. Lynch, was made the beneficiary therein. The premiums on the policy were due and payable quarterly, and on the 8th day of July, 1931, when the policy was in force and effect, the insured became totally and permanently disabled for life by bodily injury or disease, and this disability continued until the date of his death January 2, 1932.

The parties, through counsel, by written stipulation dated November 21, 1938, filed in the lower court, agreed that the insured on July 8, 1931, when the policy was in effect, became totally and permanently disabled and that this disability continued until his death on January 2, 1932, and during this disability, on August 2, 1931, another premium became due and payable but was never paid to the insurance company. On November 18, 1931, the insurance company wrote the insured at Dowling Park, Florida, advising that the premium in the sum of $16.98 due on August 5, 1931, had not been paid and the policy had lapsed and was no longer in force. On January 15, 1932, Alice N. Lynch acknowledged receipt of the insurance company's letter dated November 18, 1931, and advised of the death of the insured and stated further that the insured, in October, 1931, was taken from his home to a hospital, but for some time prior to and after reaching the hospital and continuously until the time of his death, was unable to care for any business affairs. This letter was the first and only notice to the insurance company of the total and permanent disability and death of the insured. The insured, from and after July 2, 1931, was confined to his bed with a wasting and fatal disease, was delirious much of the time, was unable to look after business affairs, and was not physically able to advise the insurance company of his disability at any time after July 8, 1931, and before January 2, 1932. The beneficiary of the policy was ignorant of the provisions of the policy, the non-payment of premiums, and the necessity of notice to the insurance company prior to the death of the insured.

Suit was brought on the policy and the case was submitted on pleas of the defendant, viz.: (1) that the policy was not in force at the time of the death of the insured; (2) that the policy lapsed on September 6, 1931, prior to the death of the insured; (3) the insured failed to submit proof of disability during the lifetime of the insured or within three months after September 6, 1931; (4) that the waiver of the premium clause was never effective because of the failure of the insured to submit proof of disability. A replication was filed to pleas three and four to the effect that the insured's physical condition after July 8, 1931, made it impossible to submit proof within the meaning of the terms of the policy and the beneficiary was ignorant of the provisions of the policy and the failure of the insured to pay the premiums.

Considerable testimony was offered by the plaintiff, as shown by the record, but no evidence was offered by the defendant below. The lower court, at the conclusion of the taking of testimony, directed the jury to find a verdict for the plaintiff but submitted the question of counsel fees to be allowed the plaintiff, if any, to the jury. There was a verdict and judgment for the plaintiff below and an appeal has been perfected to this Court and the same is here for review.

The policy offered in evidence and considered in the lower court provided:

"TOTAL AND PERMANENT DISABILITY BENEFITS — If the Insured, after payment of the first premium on this policy and before a default in payment of any subsequent premium, or within three months after default, shall furnish proof satisfactory to the Company that while this policy is in force without default and prior to the anniversary of the policy nearest to the rated age of sixty years, he has become totally and permanently disabled for life by bodily injury or disease, the Company will grant the following benefits:

"(1) Waiver of Premium. — The Company will waive payment of the premiums, as they fall due, during the continuance of total and permanent disability, but from a date not more than three months prior to the receipt of such proof, * * *

"PROOF — Due proof of such disability must be submitted during the life time of the Insured and prior to or within three months after default in any premium payment."

Counsel for plaintiff in error poses three questions for decision by this Court, viz.: (1) That the language employed in the premium waiver clause, supra, is clear, free from ambiguity and the court should give the clause its common, ordinary meaning; (2) that the waiver of premium clause means that the insured was required to furnish proof of total permanent disability prior to or within three months after default in any premium payment as a condition precedent to recovery under the policy; (3) whether or not under the facts and circumstances of this case the failure to furnish notice of proof of permanent disability was excusable.

It appears to us that the real question presented for a decision is whether or not the insured was legally excusable for failure to furnish proof satisfactory to the company while the policy was in force that he had become totally and permanently disabled for life by bodily injury or disease and thereby effected a waiver of premium payments. The policy provides that due proof of such disability must be submitted during the life time of the insured and prior to or within three months after default in any premium payment.

The stipulation shows that John P. Lynch, on July 8, 1931, was stricken by a wasting and fatal malady and went to bed and there remained until October, 1931, when he was taken to a hospital, and the plaintiff was at the hospital with him from October until January 2, 1932, when he died. The insured was not able to attend to any business affairs for some time prior to the time he was taken to the hospital or at any time after reaching the hospital until the time of his death on January 2, 1932.

The insurance company, on November 19, 1931, by letter addressed to John P. Lynch, at Dowling Park, Florida, advised that the premium of $16.89 due August 5, 1931, under the policy not having been paid, the policy had lapsed and was not in force. On January 15, 1932, the plaintiff acknowledged receipt of the letter and advised the company of the death of her husband and that at the time the insurance company sent out the notices, the insured was in the hospital and not physically able to look after his business affairs, and that the insured did not submit due proof of disability while the policy was in effect or within the three months after default in the premium payment.

It seems to be settled law in Florida that a default in serving notice or proof of loss as required by a policy may be excused where the circumstances are such as to render strict compliance with the requirements impossible or unreasonable and the insured has not failed to use due diligence. Thus a default may be excused by the physical or mental incapacity of the insured or the claimant under the policy. It seems that the excuse offered for default in submitting proof of total and permanent disability under the terms of the policy was the physical condition of the insured as he was taken sick in July, 1931, immediately went to his bed, and was subsequently moved to a hospital, where he died. The record shows that the insured was unable to attend to his business and was delirious much of the time and was physically unable to advise the insurance company of his total and permanent disability from the time of his seizure with the illness until his death due to the ravages of the disease upon his body and mind. The beneficiary of the policy was ignorant of the terms of the policy and due dates of the premiums, and after the death of her husband so notified the insurance company.

We have given the case at bar careful consideration and conclude that it is ruled by Franklin Life Ins. Co. v. Tharpe,130 Fla. 546, 178 So. 300; Hallowes v. New York Life Ins. Co.,133 Fla. 872, 184 So. 7, 12, 14. We fail to find error in the record. The judgment appealed from is hereby affirmed.

WHITFIELD, J., concurs.

THOMAS, J., agrees to conclusion.

BROWN and BUFORD, J. J., dissent.

Chief Justice TERRELL not participating as authorized by Section 4687, Compiled General Laws of 1927, and Rule 21-A of the Rules of this Court.