McGuinness v. New York Life Insurance , 254 Wis. 475 ( 1949 )

This is an appeal from a judgment, entered October 4, 1948, awarding plaintiff damages and costs in the sum of $434.64. The action was commenced on February 21, 1945. The case originally came on for hearing on demurrer served by defendant to the sufficiency of plaintiff's complaint, and after the demurrer was overruled findings of fact and conclusions of law were filed, upon which the above judgment was entered. The court's memorandum opinion was set out in its order overruling the demurrer. No opinion was filed at the time the findings of fact and conclusions of law were filed or at the time judgment was entered.

Prior to August 26, 1942, the defendant, New York Life Insurance Company, made and delivered to the plaintiff (meaning W. P. McGuinness) its policy of life insurance in writing. Among other provisions in said policy, there is a clause designated "Disability Benefits" and in connection therewith the said policy contains in part the following provisions:

"Section 1 — Disability Benefits "1. Disability benefits shall be effective upon receipt at the company's home office, before default in the payment of premium, of due proof that the insured became totally and permanently disabled after he received this policy and before its anniversary on which the insured's age at nearest birthday is sixty years.

"Disability shall be deemed to be total whenever the insured becomes wholly disabled by bodily injury or disease so that he is prevented thereby from engaging in any occupation whatsoever for remuneration or profit, and under this contract disability shall be presumed to be permanent after the insured has been continuously so disabled for not less than three months and during all of that period prevented from engaging in any occupation for remuneration or profit. The permanent loss of the sight of both eyes, or the severance of both hands or of both feet, or of one entire hand and one entire foot, shall be considered total and permanent disability without prejudice to other causes of disability.

"2. Income Payments. — The company will pay the insured, or if such disability results from insanity will pay the beneficiary in lieu of the insured, a monthly income of one per cent of the face of the policy during the lifetime of the insured and the continuance of such disability. The first income payment shall become due on the first day of the calendar month following receipt of proof of total and permanent disability or proof of continuous total disability for three consecutive months, as above, and succeeding payments shall become due on the first day of each calendar month thereafter. Any income payments becoming due before the company approves the proof of disability shall become payable upon such approval, and subsequent payments will be made as they become due.

"3. Waiver of Premiums. — The company will waive payment of any premium falling due after approval of such proof of disability and during such disability. Any premium due prior to such approval is payable in accordance with the terms of the policy, but if due after receipt of said proof will, if paid, be refunded upon approval of such proof."

On August 26, 1942, while said policy was in full force and effect, with all premiums paid, and at the time when the disability benefits above were in full force and effect, W. P. McGuinness suffered a stroke, and as a result thereof became permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit. On January 19, 1944, due notice was given to the defendant of the fact that W. P. McGuinness was permanently and totally disabled, and the said W. P. McGuinness demanded the payment of $20 per month disability benefits during the continuance of his life and said disability.

The said W. P. McGuinness was fifty-seven years of age on July 15, 1943, and died on April 13, 1944. The plaintiff, Grace McGuinness, was thereafter appointed the administratrix of the estate of said deceased.

At the time the judgment was entered it was agreed that defendant had paid to W. P. McGuinness during his lifetime the sum of $60, being the income disability payments for the months of January, February, and March, 1944, the three months he lived after furnishing due proof of his disability. It is plaintiff's contention that disability income payments became due from defendant from the time the disability occurred on August 26, 1942, and it is defendant's contention that disability income payments became due from January 19, 1944, the date upon which notice was received by the defendant.

Section 1 of the policy in question is entitled "disability benefits" and clause 1 of the contract states:

"Disability benefits shall be effective upon receipt at the company's home office, . . . of due proof that the insured became totally and permanently disabled after he received this policy. . . ." (Italics ours.)

In the case of Equitable Life Assur. Soc. v. Adams (1937),56 Ga. App. 5, 192 S.E. 90, the court defined the wordeffective in a case similar to the present one, holding that the term "effective" as it relates to disability benefits does not differ in meaning from the same term when applied to the policy itself. It means that the right to the benefits does not go into effect until the prerequisites occur. It held that under an insurance policy providing for disability benefits to be "effective" on receipt of due proof that insured is totally and permanently disabled, the first payment to be payable on receipt of proof of disability and subsequent payments monthly thereafter, payments are not due for a period before proof was made though actual disability had existed for approximately five years.

In the present case the assured may have been permanently and totally disabled on and after August 26, 1942, but he did not file proof of such disability until January 19, 1944. The situation is the same as that existing in Equitable Life Assur.Soc. v. Adams, supra.

The pertinent part of clause 2 (income payments) is:

"The company will pay the insured, . . . a monthly income of one per cent of the face of the policy during the lifetime of the insured and the continuance of such disability. The first income payment shall become due on the first day of the calendar month following receipt of proof of total and permanent disability or proof of continuous total disability for three consecutive months."

Clause 3 (waiver of premiums) does not have any bearing in the instant case.

The right to disability benefits in the present policy does not go into effect until the prerequisites occur — the contract must remain in force, the insured must not be over sixty years of age, must be totally and permanently disabled, and due proof of such disability must be furnished the company. All these are necessary steps before the disability benefits become effective. The contract is wholly free from ambiguity.

See also Holtz v. New York Life Ins. Co. (1935), 37 Del. 1,179 A. 497; Jenkins v. New York Life Ins. Co. (1940),122 W. Va. 73, 7 S.E.2d 343; Rowan v. New York LifeIns. Co. (St. Louis Ct. App. 1939), 124 S.W.2d 577.

Schlintz v. Equitable Life Assur. Soc. (1937),226 Wis. 255, 276 N.W. 336, is distinguishable for it was devoted largely to construction of the clause relating to waiver of premiums and the question of impossibility of furnishing the required proof of disability by the insured because of his mental incapacity. There is a part of the Schlintz Case (p. 269) relating to the question of when disability benefits were payable, and it is the language in this part of the decision upon which plaintiff relies. However, mental incapacity to file due proof at the time the disability occurred was the cause for granting the relief prayed for, not only for waiver of premium to keep the policy in force, but as to disability income payments dating back to the date of the original disability.

In the present case there is no incapacity of any kind that prevented the insured from filing his proof of disability at an earlier date, such as mental incapacity as in the Schlintz Case or physical impossibility as in Comstock v. Fraternal AccidentAsso. (1903), 116 Wis. 382, 93 N.W. 22, andMutual Life Ins. Co. v. Johnson (1934), 293 U.S. 335,55 Sup. Ct. 154, 79 L. Ed. 398, (which affirmed Johnson v. Mut. Life Ins. Co. (4th Cir. 1934), 70 F.2d 41).

It follows, therefore, that the judgment rendered by the circuit court should be reversed.

By the Court. — Judgment reversed with directions to enter judgment dismissing plaintiff's complaint.