Graham v. Equitable Life Assurance Society of United States

Albert, J. The plaintiff, Graham, held three policies of insurance in the defendant company. One of them, during the time involved herein, was lapsed. He still held a $10,000 policy issued on February 17, 1925, and a $5,000 policy issued on February 19, 1923. Both policies provided for payment, under certain conditions, for total and permanent disability. The larger policy provided for payment of $100 per month, and the other policy provided for payment of $50 per month. The action herein, based on these policies, attempts to allege a cause of action under the total and permanent disability clause, which was identical in the two contracts except as to the amount. The allegation is, in each count of the petition, that during the period from the 17th of September, 1931, to on or. about the 27th of July, 1932, the plaintiff was disabled due to illness and was prevented thereby from engaging in any occupation or performing any work for compensation of financial value. The clauses of the policies' involved are as follows: “If the Insured becomes wholly and permanently disabled before age 60, the Society will waive subsequent premiums and pay to the Insured a Disability-Annuity of One Hundred Dollars a month, subject to the following* terms and conditions: “(1.) Disability benefits before age 60 will be effective upon receipt of due proof, before default in the payment of *750 premium, that the Insured became totally and permanently disabled by bodily injury or disease after this policy became effective and before its anniversary upon which the Insured’s age at nearest birthday is 60 years, in which event the Society will grant the following benefits: “(a) (Waiver of payment of all premiums during the continuance of the disability.); “(b) (Pay to insured a monthly disability-annuity as above stated during the continuance of the total and permanent disability). “Disability shall be deemed to be total when it is of such an extent that the Insured is prevented thereby from, engaging in any occupation or performing any work for compensation of financial value, and such total disability shall be presumed to be permanent when it is present and has existed continuously for not less than three months; and, further (certain matters not here involved), will of themselves be considered as total and permanent disability within the meaning of this provision. “The right is reserved for two years after the receipt of proof of disability (not more than once a year) to require proof of the continuance of such total disability. If the Insured shall fail to furnish satisfactory proof thereof, or if it appears at any time that the Insured has become able to engage in any occupation or perform any work for compensation of financial value, no further premiums will be waived and no further Disability-Annuity payments will be made hereunder on account of such disability.” A jury was waived and the case was tried to the court, which allowed the plaintiff judgment for disability compensation on both policies from the 19th of December, 1931, to the 26th of July, 1932. From this judgment the defendant appeals. It is apparent from what has already been said that the plaintiff, by his own pleading and by his testimony, claims under the disability clause from the 17th of September, 1931, to the 27th of July, 1932, when he became engaged in gainful and financial employment.' We turn, therefore, to the terms of these contracts with the plaintiff to determine whether or not he was entitled to this compensation during the time for which he claims it. What was the contract between these parties f Briefly stated, the defendant company says to the plaintiff: “If you *751 become totally and permanently disabled, by disease, after this policy becomes effective, we will grant yon certain waivers of premiums during the continuance of such total and permanent disability, and pay you certain monthly amounts. ” . It will be noted that tire disability for which the company agreed to pay was not only a total disability, but that such disability must also be permanent; and it is by reason of the latter provision that the dispute arises in this case. As heretofore said, the plaintiff himself testifies that he went into a gainful employment on the 27th of July, 1932. It is apparent that under the terms of the contract both parties must have understood that unless the disability was permanent the insured was not entitled to any benefits under the terms of the policy. In other words, if the disability was “temporary” it is not covered by the policy. True it is that the policy provides that in the event the disability is total, and lasts for more than three months, it is presumed to be permanent. The contention of the defendant is that the provision as to the presumption of permanency does not give rise to a cause of action in this ease because the plaintiff himself testifies that the disability was not permanent. This action was not commenced until after the plaintiff had engaged in financial employment. We are, therefore, required to determine whether or not, under a policy of this kind, recovery can be had for total and permanent disability, when the plaintiff’s own evidence shows to a certainty that at the time the action was commenced the disability complained of was not permanent. We have formerly expressed ourselves on the interpretation of policies of this' character and have held that where the evidence in the case shows at the time of the trial that the disability complained of was not permanent, but only temporary, recovery could not be had. This is the substance of our holding in the case of Hawkins v. John Hancock Mutual Life Ins. Co., 205 Iowa 760, 218 N. W. 313, where numerous cases are gathered together sustaining this doctrine. It is true that the Minnesota Supreme Court has held to the contrary in the case of Maze v. Equitable Life Ins. Co. of Iowa, 188 Minn. 139, 246 N. W. 737. The Iowa Supreme Court, in the decision just cited, refers back to a New York decision, Ginell v. Prudential Ins. Co. of America, 205 App. Div. 494, 200 N. Y. S. 261, Id., 237 N. Y. *752 554, 143 N. E. 740, in which a former decision of the Supreme Court of that state is reviewed, and the holding of the Appellate Court was that no recovery could be had. While the Iowa Supreme Court followed the New York court in the Ginell case, the Minnesota Supreme Court refused to follow that rule. A case in line with the Ginell case is Mitchell v. Equitable Life Assurance Society of United States, 205 N. C. 725, 172 S. E. 497, 499. In the North Carolina case the defendant was the defendant in this case, under the same kind of a policy as is involved here. The court said, in part: “There is a natural feeling that, after an insurance company has received its premiums, it ought not to be allowed to escape liability or to avoid responsibility, and the just rule is that policies will be construed strictly against the insurers and in favor of the assured. * * * ‘ The policy having been prepared by the insurers, it should be construed most strongly against them.’ * * * But it is not the province of the courts to construe contracts broader than the parties have elected to make them, or to award benefits where none was intended. ’ ’ It was also held in that case that the presumption arising from total disability for three months is not conclusive. In the case of Lawrence v. Equitable Life Ins. Co. of Iowa, 128 Neb. 72, 257 N. W. 530, 533, the Nebraska Supreme Court had before it a similar case, which involved the construction of a policy where the plaintiff and defendant were both residents of Iowa; the policy was issued and delivered in this state; premiums were payable to the defendant in this state; and any benefits accruing to the plaintiff were payable in Iowa. The Nebraska court was there called upon to apply the Iowa law to the case it had before it. It bottomed its decision on the case of Hawkins v. John Hancock Mutual Life Ins. Co., 205 Iowa 760, 218 N. W. 313. It reviewed all the decisions of this state affecting this proposition, and held that there could be no recovery. In that case, as in this, much stress was laid on the case of Kurth v. Continental Life Ins. Co., 211 Iowa 736, 234 N. W. 201. It is said by the Nebraska court in that opinion: “It appears clear that in the Kurth case the Iowa court was not receding from its holding in the Hawkins case.” We are disposed to agree with the holding of the Nebraska *753 case that the Kurth case in no way recedes from our holding in the Hawkins case. In the Kurth case the accident occurred on the 8th of March, 1928, and the action was commenced on the 9th of March, 1929. The real contention was as to whether or not the fact situation measured up to the requirements of the policy on the phase of total and permanent disability. No reference was made in brief or argument to the Hawkins case, as the controlling question on which the Hawkins case turned was not raised or discussed in the submission of the Kurth case. The dissenting opinion herein is based wholly upon the case of Kurth v. Continental Life Ins. Co., 211 Iowa 736, 234 N. W. 201. That case has no bearing whatever on the question we have under consideration. In that case the action was brought while the claimant was still laboring under his disability, and, of course, he would be entitled to the presumption provided for in the policy under such circumstances; whereas, in the instant case, in exact line with the Hawkins case, the claimant had fully recovered from his disability at the time the action was brought. The distinction between the two cases is so marked that it ought not to be misunderstood. We think that the clause in the contract providing for this presumption is wholly an evidentiary matter. It was not intended to create or enlarge liability, and was put in the policy only for the benefit of the claimant, to reduce the difficulties of proving the permanency of the disability, and does not have any force or effect in the instant case, where the evidence conclusively shows that prior to the time of the commencement of the action the disability was removed and ceased to be permanent. The Ginell case, supra, has been followed in the following cases: Lewis v. Metropolitan Life Ins. Co. (La. App.) 142 So. 262; Brod v. Detroit Life Ins. Co., 253 Mich. 545, 235 N. W. 248; Mitchell v. Equitable Life Assur. Soc. of United States, 205 N. C. 725, 172 S. E. 497, 499; Metropolitan Life Ins. Co. v. Blue, 222 Ala. 665, 133 So. 707, 79 A. L. R. 852; Job v. Equitable Life Ins. Co., 133 Cal. App. (Supp.) 791, 22 P. (2d) 607. Our pronouncement in the Hawkins case has been cited with approval in each of the cases above designated. Outside authorities sustaining our holding that the plaintiff cannot recover in this case will also be found in Metropolitan *754 Life Ins. Co. v. Noe, 161 Tenn. 335, 31 S. W. (2d) 689, and Mackenzie v. Equitable Life Assur. Soc., 140 Misc. 655, 251 N. Y. S. 528. Other authorities throwing light on these questions are: Shipp v. Metropolitan Life Ins. Co., 146 Miss. 18, 111 So. 453; Home Benefit Ass’n v. Brown (Tex. Civ. App.) 16 S. W. (2d) 834; Leduc v. Metropolitan Life Ins. Co., 65 Quebec Official Law Reports, 320. Our conclusion, therefore, is that the Iowa court is committed to the doctrine laid down in the Hawkins and Ginell cases, and, under the fact situation in the case at bar, the plaintiff is not entitled to recover. — Reversed. Donegan, C. J., and Kintzinger, Parsons, and Stiger, JJ., concur. Richards, J., takes no part. Mitchell and Anderson, JJ., dissent.