Reliance Life Ins. Co. of Pittsburgh v. Powell , 1941 Tex. App. LEXIS 584 ( 1941 )

WALTHALL, Justice.

Appellee having agreed to the statement of the nature and result of the suit as made by appellant, we adopt that statement, which is substantially as follows:

On November 16, 1939, appellee filed this suit to recover $2,950, alleged to be due under the terms of an insurance policy providing, in substance, that upon proof by insured that he had become totally and permanently disabled, premiums thereafter accruing would be waived and appellant would pay to assured a monthly benefit equal to one per cent of the face amount of the policy, i.e., $25 a month, payments to begin six months from the date of the receipt of such proof. Appellee alleged in his petition that he had been permanently and totally disabled since December 15, 1925, but no proof of such condition was filed with the appellant until April 4, 1939, after the receipt of which, appellant began payments six months from the date such proof was received. Appellee’s suit is for the collection of benefits for nine years and ten months prior to the time proof of disability was filed, but he did not claim any refund because of premium payment during such period. Appellant answered by general demurrer, special exception relating to the four years’ statute of limitation, a general denial, a plea of four years’ statute of limitation and a plea that the filing of proof of disability was a condition precedent to recovery. The demurrer and exception were overruled and judgment rendered for appellee for $2,950. Appellant perfected this appeal from such judgment.

The case was tried by introducing in evidence the policy and endorsements thereon and a stipulation of counsel about appellee’s physical condition. The effect of this evidence was to establish all the material facts so that if appellee’s construction of the policy was correct, he was entitled to recover the amount claimed.

The facts are that on the 16th day of April, 1919, appellant issued to appellee an ordinary life policy bearing endorsement, so far as material here, reading as follows:

“If the Insured * * * shall furnish proof satisfactory to the Company that he has become totally and presumably permanently disabled for life * * * and that such disability has then existed for not less than sixty days, the Company will grant the following benefits: ,

“(2) Installment Payments — Beginning six months after the receipt of such proof, the Company will pay to the Insured a monthly income of 1% of the face amount of the policy during the period of total and permanent disability prior to the maturity of the Policy.”

The policy matured upon death of the assured.

As admitted by appellant, appellee has been totally and presumably permanently disabled, as such terms are defined in the policy, since the 15th day of December, 1925. Ap-pellee filed proof of such condition on April 4, 1939, and thereupon appellant notified ap-pellee that beginning October 4, 1939, he would receive $25 a month and all premium payments would be waived. On October 4, 1939, appellant paid appellee $25 and continued to pay the same up to and including the date of trial. Also the premium due on April 16, 1939, was waived.

Appellant rested its defense upon the requirement in the policy that appellee must file proof of disability, which began December 5, 1925, but that such proof was filed April 4, 1939, which allegation of disability appellant claimed made appellee’s petition subject to its general demurrer, because the filing of proof of disability was a condition precedent to recovery.

It is the contention of the appellee that the policy obligates appellant to pay the monthly installments for the period of his total and permanent disability prior to the maturity of the policy, which occurred on the death of the insured; that appellee filed the required proof of his disability on April 4, 1939; that such proof of disability was pleaded, proved, and accepted by appellant; that the happening of the condition precedent to be determined is whether the condition precedent is one relating to the obligation for both past and future monthly disability payments or for future monthly payments ; that is, for payments maturing subsequent to the filing of the proof of disability, the second endorsement on the policy above quoted providing, “Beginning six months after receipt of such proof, the Company will pay to the insured a monthly income of 1% of the face amount of policy during the period of total disability prior to the maturity of the policy.”

Appellant construes the clause in the policy, “during the period of total and permanent disability,” as a limitation upon the time benefits are payable, and harmonizes with other provisions of the policy.

Appellant insists that appellee’s petition failed to allege the filing of the proof of disability, and such so failing, by the terms of the policy, being a condition precedent to appellee’s right of recovery, the petition was subject to its demurrer, and the court erred in overruling it.

Appellee’s petition alleged that “defendant.received the proof of total and permanent disability as sent in by plaintiff which was required by defendant under the terms of the policy,” and “defendant approved plaintiff’s claim for total and permanent disability” and “paid plaintiff disability benefits of $25 per month beginning October 4, 1939, and has continued to so pay said disability benefits since said date, but has refused to pay any such disability benefits pri- or to said date of October 4, 1939.”

We think the court was not in error in overruling appellant’s general demurrer to appellee’s petition in failing to allege that proof of disability was furnished to the company, the petition having alleged that ap-pellee received the proof of disability sent by him and accepted same as the proof required to be furnished.

While the words in the petition in alleging the fact are not the same as in the policy, the petition sufficiently states the fact of furnishing the proof of disability, which proof was received, accepted and acted upon by appellant. The policy required appellee to “furnish” (not file, as stated by appellant) the proof.

The disability sustained by appellee occurred in December, 1925, and the proof of the disability was furnished appellant on April 4, 1939, and the facts were so pleaded by appellee. The policy provided that “beginning six months after the receipt of such proof (of disability) the Company will pay a monthly income,” as stated in the policy. Appellant excepted to the petition on the ground that if any monthly sum was due appellee, it became due more than four years prior to the filing of the petition on November 16, 1939.

The court overruled the exception, and appellant submits error.

The policy matured on the death of the assured.

Appellee has been disabled since December, 1925. He furnished proof of his disability on April 4, 1939, and thereupon appellant notified appellee that, beginning1 October 4, 1939, he would receive the $25 a month and all premiums would be waived, and on October 4, 1939, appellant commenced the monthly payments, and continued to pay until the trial.

The question discussed seems to be: Does the cause of action begin at the time when the disability to the insured occurred, or at the time the proof of disability was furnished the company?

We have reviewed many opinions discussing policies similar to the one here, and as said by Chief Judge McClendon, of the Austin Court of Cjvil Appeals, in the case of State Life Insurance Company v. Barnes, 58 S.W.2d 189, the authorities in other jurisdictions are not in accord upon the question presented. In that case the policy provided that if the insured, after the payment of one premium, should become disabled the company, upon receipt of proof of disability, would make payment. The controversy of the policy revolves around a construction of the waiver provision in the policy of subsequent payment of premium. Briefly stated, the waiver provided that if the insured should become disabled (under the conditions stated), the company upon receipt of the proof of disability would waive payment of subsequent premiums.

The Austin court in that case held that the waiver took effect at the time of the disability, and did not depend upon the time when proof of the disability was furnished. In this case, as in the Barnes case, supra, there was a waiver of the payment of premiums subsequent to disability.

Without discussing the many cases referred to in the briefs, or trying to harmonize them, the cases of State Life Insurance Company of Indianapolis v. Parry, Tex.Civ.App., 88 S.W.2d 763, and State Life Insurance Company of Indianapolis v. Parks, Tex.Civ.App., 89 S.W.2d 289, both Texas cases, and, as we understand them, present similar questions to the case at bar, and reach the same conclusion. The policy in the Parry case provides:

“ * * * upon receipt at its Home Office of due proof of such disability of the insured as may be required by the Company, will grant the following benefits:

“First: Will waive payment of premium thereafter becoming due;

“Second: In addition will pay to the insured a monthly income equal to one per cent, of the original amount of insurance (exclusive of any accidental death benefit). The first monthly payment will be made upon satisfactory proof of disability as above provided, and the subsequent monthly payments will be made on the first day of each month thereafter during such disability.”

Appellee in that case made proof of disability about November 22, 1932. Appellant company paid appellee each month after proof of disability was furnished it by appellee the installments payable under the policy, but appellee demanded payment for all monthly installments back of the time he furnished proof of disability. Judge Brown, for the court, said: “We do not believe that such decisions are applicable to this case,” and quoted from Mr. Justice Sutherland in delivering the opinion of the Supreme Court of the United States in the case of Bergholm v. Peoria Life Insurance Co., 284 U.S. 489, 52 S.Ct. 230, 76 L.Ed. 416, as follows: “Here the obligation of the company does not rest upon the existence of the disability; but it is the receipt by the company óf proof of the disability which is definitely made a condition precedent to an assumption by it of payment of the premiums becoming due after the receipt of such proof.”

Judge Brown refers to other cases and distinguishes them in their facts or in the law involved from the case he is discussing.

The court refused a writ of error in that case, and while we do not think the case is altogether similar in its facts to the case at bar, it is like it in its contract provisions. Judge Brown reversed and rendered the case.

In the Parks case, to which we referred above, the opinion was rendered by Judge Martin, then of the Amarillo court. The policy provisions in that case are very much like those in the Parry case and in the case at bar, and we need not repeat them here, though the facts and appellee’s cause of action are different. In the Parks case the disability occurred in May, 1925, and ap-pellee furnished proof of disability in February, 1933. Suit was filed July 1, 1933. Recovery was sought and obtained in the trial court for forty-five months after disability.

What we wish to state in the Parks case is that the appellant claims that the furnishing of proof of disability marks the beginning of the period for which it is liable for disability benefits, while the appellee claims that the beginning of disability marks such period.

After discussing the case and referring to other authorities, Judge Martin held that the liability of appellant began with the furnishing of proof of disability, and reversed and rendered judgment for appellant.

We have concluded that the appellant was not liable for monthly payments back of the proof of disability. Appellant had made all the monthly payments as they became due subsequent to such proof.

The case is reversed and the judgment is here rendered that appellee take nothing by his suit.