Wachtel v. Equitable Life Assurance Society of United States ( 1935 )

The plaintiff is the beneficiary named in policies issued by the three defendant insurance companies, insuring the life of her husband. The policies contain clauses, differing only in immaterial detail, providing for double indemnity to be paid upon due proof that the death of the insured resulted from bodily injuries caused directly, exclusively and independently of all other causes by external, violent and purely accidental means. The assured died on August 10, 1930. The companies did not dispute liability for the stipulated indemnity to be paid upon proof of the death of the insured. They have refused to pay the additional sums payable upon due proof that the death was the result of accident, and this action was brought to obtain such double indemnity.

The beneficiary, before bringing suit, served upon each insurance company notice and proof of death of the assured. This proof is not in each case the same, but all state in some form that the assured died of acute coronary thrombosis. Only in the proof served upon the Travelers Insurance Company is there any allegation or suggestion that death was due to an "accident to left leg early part of July, 1930," but even in that proof the claimant stated without qualification that the cause of death was acute coronary thrombosis and the attending physician's statement, which constitutes part of the proof, gives the same cause, without even any contributory causes. Coronary thrombosis is, concededly, a disease. Thus, the proofs of death were not only insufficient to show death caused exclusively by accidental means, but showed affirmatively that death was due to disease.

The claimant began this action without serving any additional proofs. The complaint alleges that she has complied with and performed all the conditions and terms of said policy on her part to be performed. Proof of death by accident is a condition precedent to liability for double indemnity and under the pleadings the plaintiff was required to show performance of this condition. The trial court dismissed the complaint because the plaintiff failed to show such performance. The Appellate Division has reversed on the ground that proof which showed that the defendants waived performance was received without proper objection.

At the trial the plaintiff was permitted to introduce, over the objection of the defendants, evidence that death was due to an accidental injury sustained some months before. We assume that the evidence would be sufficient to raise a question of fact as to the cause of death. If that is so, it would also be sufficient to make out a primafacie case that the statement, in the proofs submitted to the companies, that death was the result of the disease of acute coronary thrombosis, was due to mistake. Admissions, in proofs of claims to insurance companies, like other admissions, are subject to explanation. They are not conclusive, and proof may be presented that they are erroneous. (Rudolph v. John HancockMut. Life Ins. Co., 251 N.Y. 208, 214.) The plaintiff maintains that proofs of death by disease, thus shown to be erroneous, may be regarded as sufficient proofs of death by accident, especially where the insurance companies demanded no additional proof.

Such contention carries its own refutation. The admission of the cause of death was binding until corrected or explained. (Rudolph v. John Hancock Mut. Life Ins. Co., supra; Hanna v.Connecticut Mut. Life Ins. Co., 150 N.Y. 526; Spencer v.C.M.L. Ins. Assn., 142 N.Y. 505, 509.) Explanation of an admission in proofs submitted to an insurance company may completely destroy the effect of the admission Then the admission no longer has force to sustain an affirmative defense of the company (Parmelee v. Hoffman Fire Ins. Co., 54 N.Y. 193;Cummins v. Agricultural Ins. Co., 67 N.Y. 260, 262), or to nullify affirmative proof by the plaintiff. (Pythias Knights'Supreme Lodge v. Beck, 181 U.S. 49.) An admission erroneously made may be disregarded when proof of the error has been properly admitted. None the less, a party, required by contract to submit proof of certain facts as a condition of liability, does not perform the condition by submitting through error proof that these facts do not exist.

We have said in other cases that the requirement of due proof is to be liberally construed in favor of the insured. (Glazer v. Home Ins. Co., 190 N.Y. 6.) It may be satisfied where "such reasonable evidence [is furnished] as the party can command at the time, to give assurance that the event has happened, upon which the liability of the insurers depends. * * * The purpose of the condition is that the insurer may be able intelligently to form some estimate of his rights and liabilities before he is obliged to pay." (O'Reilly v. Guardian Mut. Life Ins. Co., 60 N.Y. 169, 173.) We apply that test here. The proof submitted by the claimant showed, until explained, that the claimant was not entitled to double indemnity. No explanation of the admission that death was due to disease, and no proof that in fact death was due to accident, was ever furnished to these companies. They may have learned from other sources that death was due to accident, in spite of proof to the contrary submitted by the claimant. They may have decided, as a result of that independent investigation, that they would deny liability for double indemnity, even if formal proof that death was due to accident was thereafter presented. Nevertheless, it remains true that the claimant failed to comply with the stipulated condition to furnish the company with proof which would enable the insurer to frame an intelligent estimate of its rights and liabilities, and till such proof was given or waived, no liability for double indemnity could arise. The failure of an insurance company to object to the sufficiency of proof, when submitted, may, at times, preclude claim that the proofs did not comply with the terms of the policy. That is not the case where no proof has been submitted that "the event has happened, upon which the liability of the insurers depends" or where the proof submitted affirmatively shows that no liability exists.

The question remains whether the defendants waived the service of proof that death was due exclusively to accident. Waiver was not pleaded, and the letters from the defendant, which are relied upon to show waiver, were admitted over objection by the defendant. It is said that the objection was not sufficiently specific. It might well be argued that under the circumstances of this case, no other objection was called for. We need not decide that question now, for in our opinion the letters are insufficient to show waiver.

True, the letters reject any claim of liability for double indemnity, and ordinarily an unqualified rejection of liability by an insurance company before sufficient proofs of claim have been presented is a waiver of a condition that proofs must be presented. Here the letters of the defendants must be read in the light of what had occurred. The plaintiff, as we have said, had not only failed to submit proof of death by accident, but had submitted affirmative proof of death by disease. The purpose of the condition that proof must be submitted was to enable the defendants to determine whether they were liable. The claimant's proof was not explained or corrected. The defendants acted upon it, as they had the right to do. They denied liability for double indemnity because, so they said, the proofs submitted, and independent investigation alike, showed that no such liability exists. They did not close the door to further proof which might establish such liability. They were not called upon to say that, if the plaintiff contradicted the proof of death she had submitted, liability might exist.

The order of the Appellate Division should be reversed and the judgment of the Trial Term affirmed, with costs in the Appellate Division and in this court.