Merchants' Life Ins. Co. v. Clark , 256 S.W. 969 ( 1923 )

It is urged that the judgment is wrong so far as it is in appellee's favor for $5,000 as a sum she was entitled to by the terms of the policy; and that, if it is right in that respect, it is wrong so far as it is in her favor for $600 as damages and $1,250 as attorney's fees she was entitled to by the terms of article 4746, Vernon's Statutes.

The contention as to the $5,000 is that the recovery thereof was unauthorized, mainly because, it is asserted, the right to claim any benefit under the policy was forfeited by the failure of the assured to pay the premium due June 21, 1921, within the time required by the policy, to wit, 31 days from said June 21, 1921. It conclusively appears in the record that the premium was not paid within the 31 days, or ever. Therefore the contention should be sustained if the forfeiture clause in the policy, set out in the statement above, was not inapplicable to the case, notwithstanding the failure of the assured to pay the premium.

The recovery of the $5,000 was predicated on the undertaking of appellant to pay the assured that amount in annual installments of $250 each if he "should [quoting] become totally and permanently disabled to such an extent as to render it impossible for him to engage in any gainful occupation whatever," and, if the assured should die before all the installments were paid, to pay appellee, in a lump sum, the total amount thereof then remaining unpaid.

It sufficiently appeared from the testimony, we think, and the jury found, that the insured was so disabled when the premium referred to became due, and continued in that condition until he died in August, 1921. 14 R.C.L. p. 1315 et seq.; 5 Joyce on Insurance, § 3032.

Appellee insists that the insured therefore was not bound to pay the premium referred to, and hence that the forfeiture clause in the policy did not apply to the case. The insistence is based on the provision in the policy with reference to such disability that "payment [quoting] of premiums will be waived by the company during any period in which the insured is entitled to this benefit."

Appellant, on the other hand, insists that the fact alone that the insured became disabled, if he did, as determined by the jury, did not entitle him to any benefit under the policy; that, to be entitled to payment of the annual installments, the assured must not only have become so disabled, but that he must, before the expiration of the 31 days specified, have furnished appellant proof of such disability, in writing have requested it to pay the installments, and have waived all other benefits under the policy. And, it appearing without dispute in the testimony that the insured never furnished such proof nor made such request and waiver, appellant insists that the insured never became entitled to payment of the installments, and hence that it was never in the attitude of having waived payment of the premium referred to.

We do not think appellant's contention should be sustained. It did not appear from the forfeiture clause, or any other part of the policy, that the proof, request, and waiver referred to must have been made before the expiration of the 31 days specified. On the contrary, the time within which the insured was to make such proof, etc., was not limited by anything in the policy. That being true, it could not be held, when the rules for construing such clauses in a contract are kept in mind, that the insured forfeited the right he had to the installments, if disabled as determined by the jury, because he did not make the proof, request, and waiver before the expiration of said 31 days. The insured being entitled, according to the finding of the jury, to demand payment of the installments on making the proof, request, and waiver, the most appellant could contend for with reference to proof, etc., was that it be made within a reasonable time after the disability arose. The judgment involves a finding that the insured died before the expiration of such a time, and the policy provided that if the insured, being entitled to the installments became of his disability, should die before all of same were made to him, the amount of the installments not paid should be paid to appellee "upon receipt of due proof of the death of the insured."

On the case stated, we think it should be held (1) that the provision in the policy that appellant was to waive the payment of premiums while the insured was disabled, within the meaning of the policy operated, the insured being so disabled, to relieve him of the necessity of paying the premium in question within the time specified in the policy; (2) that the insured, because so disabled, was entitled at the time he died to demand of appellant payment of the annual installments provided for in the policy, on making proof of such disability and request and waiver, as provided in the policy; (3) that the policy being, for the reasons stated, a valid obligation enforceable by the insured against appellant at the time he died, at his death became enforceable by appellee against appellant.

We have read Hipp v. Ins. Co., 128 Ga. 491, 57 S.E. 892, 12 L.R.A. (N. S.) 319; Wick v. Ins. Co., 104 Wash. 129, 175 P. 953; Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93, 15 A.L.R. 314: and Trainmen v. Dee,101 Tex. 597, 111 S.W. 396 — which seem to be the cases appellant relies upon, mainly, to support its contention to the contrary of the conclusion reached by us. As we understand the stipulations the courts construed in those cases, they were, severally, unlike the ones we have construed in this one, and the cases are therefore valueless as authority in this one.

The contention that the judgment for the $5,000 is erroneous and should be reversed, based on the action of the trial court in refusing a special charge requested by appellant which, had it been given, would have instructed the jury as to the meaning of the words "total and permanent disability" as used in the policy, is overruled. We think there was no substantial difference between the refused charge and the instruction the court gave the jury.

The contention that the judgment is wrong, so far as it is in appellee's favor for $600 as damages and $1,250 as attorney's fees she was entitled to recover, is predicated on the view that it did not appear that appellee was entitled to invoke the statute relied upon (article 4746, Vernon's Statutes) to support such recovery.

The statute provided that a life, health, or accident insurance company, which failed to pay a loss it was liable for within 30 days after demand was made for payment thereof should —

"be liable to pay the holder of such policy, in addition to the amount of the loss, 12 per cent. damages on the amount of such loss together with reasonable attorney's fees for the prosecution and collection of such loss."

Appellant insists that there was no testimony showing that demand was made on it for payment of the loss, as required by the statute, and therefore that a finding that it was liable for anything as damages or as attorney's fees was unauthorized. That demand was made we think was shown by the letter of appellee's attorneys dated November 18, 1921, advising appellant that appellee held the policy and that she —

"duly presents her claim for the payments provided for in said policy, by reason of the death of her said husband."

In the letter said attorneys requested appellant to forward —

"proper blanks so that claim can be presented under the provisions of said policy, wherein it is provided that the company waives the payment of premiums in case the insured becomes totally disabled."

It appeared that the letter reached appellant on or before November 23, 1921, for on that day, appellant's attorney answered it advising appellee's attorneys that appellant disclaimed liability on the ground that the "policy lapsed for nonpayment of premium on July 21, 1921."

The insistence that, if the letter of appellee's attorneys should be treated as a demand, it was not a sufficient one because not for a specific sum, is without merit, we think. The argument is that —

"in suit on combination policy, covering life, accidental death, and health, or disability, that, before penalty and attorney's fees are recoverable, there must be evidence of a demand for the payment of a specified sum, or that the demand must be sufficiently definite to enable insurer to know what is demanded, or under what clause demand is made."

There is no reason to doubt, we think, that appellant knew, when it read the letter of appellee's attorneys, that the demand was for the payment of the sum it had agreed to pay if the insured became disabled within the meaning of the policy.

Another contention, with reference to the recovery of the $1,250 as attorney's fees, is that it was unauthorized because it was not shown, it is asserted, what would have been a reasonable fee "for the prosecution and collection" of the loss. As the writer sees it, the only testimony on that issue was that of the witnesses Chancellor, Speer, and Robertson, with reference to a reasonable fee conditioned on success in the prosecution of a suit on the policy, and he thinks the fee contemplated by the statute was not a "contingent fee based upon the uncertainty of the result of the litigation" (Ins. Co. v. McAdams, 88 Ark. 550, 115 S.W. 175), but was a fee to be paid without reference to the result thereof (Casualty Co. v. Maloney, 119 Ark. 434, 178 S.W. 387, L.R.A. 1916A, 519). Therefore the writer thinks it was reversible error to overrule appellant's motion to strike out the testimony of the witnesses mentioned and then to refuse the special charge requested by appellant, which, had it been given, would have instructed the jury not to consider said testimony. Hammond v. Atlee, 15 Tex. Civ. App. 267, 39 S.W. 600; Bolton v. Gifford, 45 Tex. Civ. App. 140, 100 S. W, 210; Ry. Co. v. Price (Tex.Civ.App.) 192 S.W. 806; 23 C.J. 168. The writer is also of the opinion, with reference to the judgment so far as it was for attorney's fees, that the trial court erred when he failed to instruct the jury as to the burden of proof on the issue, and refused a special charge requested by appellant, which, had it been given, would have cured the error. The other members of the court think to the contrary, however, as appears from the opinion written by Associate Justice Hedges.

Over appellant's objection, both appellee and Dr. Clark were allowed to testify that they regarded the disability the insured suffered from as "permanent." If it was error to admit the testimony, the error was harmless, as it conclusively appeared from other testimony in the case that the disability was permanent. Other contentions presented in the brief are overruled for the same reason — that is, because the rulings of the trial court complained of, if erroneous, were harmless, for anything to the contrary appearing in the record.

The judgment is affirmed.