Levitt v. New York L. Ins. Co.

While I am disposed to the view that the majority opinion herein reaches the correct result, I cannot agree with some of the language contained therein.

I think that the case is properly reversed because the question, whether or not it was reasonably possible, to give notice of disability within one year after default in payment of premiums, is a matter to be decided from the evidence rather than arbitrarily and as a matter of law from the pleadings involved herein.

For example, the majority opinion holds that the default occurred on March 9, 1935. The petition alleges that the plaintiff guardian was appointed such February 18, 1936, which was 20 days before the expiration of the year within which notice should have been given. The petition alleges that it was impossible for the guardian to give notice before March 11th. This allegation is impliedly admitted by Division V of the answer but it might be controverted by the other divisions of the answer and by the proof. The evidence might show that it was reasonably possible for the guardian to give notice by March 9, 1936, and accordingly that the notice that was given came too late and is not to be excused.

My principal objection to the language of the opinion is that which deals with the father, Dr. Kline. Apparently the possibility of Dr. Kline giving notice is excluded from the picture because, as it is stated, "The party who ordinarily makes proof of claim is the one suffering the loss and who is entitled to recover under the policy." The opinion further states, "Neither the father nor any other person (than the guardian) had any legal right to proceed against appellee to recover the payments now claimed under the policy." As I see it, the opinion of the majority makes the question of the effect of failure to give notice depend upon the acts of those that had the right to recover disability benefits. The opinion overlooks two factors: first, that the policy must be kept in force for there to be any claim for disability benefits, and second, that plaintiff not only contends that he is entitled to disability payments but also contends that he is entitled to have the policy continued in force indefinitely without the payment of any further premiums.

Paragraph 10 of the petition states, "That under the provisions of said policy the defendant is indebted to the said Bernard Kline for disability benefits of Twenty-Five Dollars ($25) per month from and after the 1st day of June, 1934, to the date of this petition, together with interest thereon, and that under said policy the defendant is required to waive all premiums due under said policy from and after the 1st day of June, 1934, and is required to continue said policy in full force and effect because of said waiver of premium provision therein."

Insofar as the continuance of the policy is concerned, Dr. Kline, as the beneficiary, is clearly within the definition of one who would suffer a loss if the policy is permitted to lapse and one who would be entitled to recover under the policy eventually if the waiver of premiums is made operative to continue the policy in force. The fact that Dr. Kline would suffer such a loss and is the party ultimately entitled to recover on the contract is obvious. The fact that he should be considered in determining whether or not it was reasonably possible to give notice of the disability so as to continue the policy in effect for his benefit has been recognized by our former decisions. Carpenter v. Centennial Mut. Life Assn., 68 Iowa 453, 456, 27 N.W. 456, 56 Am.Rep. 855; Whitlow v. Sovereign Camp W.O.W., 199 Iowa 579, 584,202 N.W. 249; Fairgrave v. Illinois Bankers Life Assn., 211 Iowa 329,334, 233 N.W. 714; McCoy v. New York Life Ins. Co., 219 Iowa 514,521, 258 N.W. 320. The majority opinion would disregard the statements in these decisions on the theory that the father, as beneficiary, was not interested in the disability benefits. The factor that is overlooked is that the father is interested in the continuance of the policy for his benefit and his interest in the giving of notice of the disability for the purpose of securing waiver of premiums for his protection cannot be disregarded if we consider the picture as a whole instead of looking only at a part of it.

The opinion asks the question, "Upon what theory can the rights of this insured be forfeited or prejudiced by the failure to act of some third party who is under no legal or contractual right or obligation to act for him?" The expression "legal or contractual right or obligation", as applied to the record herein, might be misleading. The abstract does not set out the application for the policy. The policy, of course, is executed by the company and not by the insured. The contract between the insured and the company is determined from the application and the policy. If there is anything in the nature of a bilateral contract involved herein, it cannot be determined without the application before us. Of course, the insured, being but 15 years of age when the policy was issued, the company could not make a bilateral contract with him. It is a matter of common knowledge that, when policies are issued for an insured who is a minor, the application is signed by a parent or guardian so that there is some one executing the application who is legally bound thereby. Under the record, this minor had no guardian when the policy was issued so it must be assumed that Dr. Kline, as father as well as beneficiary, may have signed the application. When the facts are fully developed, then we can determine what contractual right or obligation Dr. Kline had in reference to the payment of the premiums. Without the application before us, how can we say there is no such contractual right or obligation?

It seems to me that, when the evidence is fully developed, it may be such as to warrant serious consideration of the reason, if any, why Dr. Kline failed to give notice within the time stipulated in determining whether or not it was reasonably possible for notice of disability to be given by March 9, 1936.