Woodell v. Ætna Life Insurance

Sea well, J. "While giving due consideration to the able argument of counsel for tbe defendant to tbe contrary, we are of tbe opinion that *499 this ease is controlled by the principles laid down in Nelson v. Ins. Co., 199 N. C., 443, 154 S. E., 752; Rhyne v. Ins. Co., 196 N. C., 717, 147 S. E., 6; ibid., 199 N. C., 419, 154 S. E., 749; and Rand v. Ins. Co., 206 N. C., 760, 174 S. E., 749. In the Nelson case, supra, the clause relating to the furnishing of proof and payment of benefits read as follows: “If . . . the insured shall furnish to the company due proof of an irrevocable loss . . . the company, by endorsement in writing on this contract, will agree to pay . . . (b) commencing immediately from the acceptance by the company of the original proofs of disability ... a monthly income during the lifetime of the insured,” etc. The intervening omitted portions of the clause are not pertinent to the comparison we are here making. In the statement of fact in the Rand case, supra, we find that the company agreed that “if due proof shall be furnished the company,” etc., the company would “(1) waive the payment of annual premiums which may fall due under the said policy and under this contract during the continuance of such disability, commencing with the premium due on the anniversary of the policy next succeeding the date of receipt of such due proof. (2) To pay to the insured a monthly income of one per centum of the face amount of the policy during the continuance of such disability, the first income payment to become due on the first day of the calendar month following the date of receipt of such proof.” In the case at bar, it is stated that the payment of monthly income benefits shall begin “six months after proof is received.” No distinction we are able to make between the phraseology employed in the case at bar and that employed in the cited cases leads us to.the conclusion that any substantial rights of the parties might be made to rest on such distinction, or that a different rule of construction might apply other than that so repeatedly announced by this Court. In construing contracts of insurance the Court will be inclined to construe its separate parts with a view to its equitable enforcement and the protection of both parties to the contract. Care will be taken to give the various clauses of the policy an interpretation consistent with the main purpose of the contract, which is to guarantee to the Company the payment of its premiums, which are its life, and to secure it against fraud and imposition, and to give the insured that security and those returns for which he pays. A harsh and literal construction of procedural requirements, the effect of which would be to impose impossible conditions upon the insured or to deprive him of the substantial benefits to which he is entitled by reason of the premiums paid, will not be adopted where a different construction might reasonably be applied more consonant with the declared purposes of the contract. *500 In Rhyne v. Ins. Co., 196 N. C., 717, 719, Chief Justice Stacy for the Court, said: “But we are content to place our decision on tbe broad ground that, notwithstanding the literal meaning of the words used, unless clearly negatived, a stipulation in an insurance policy requiring notice, should be read with an exception reasonably saving the rights of the assured from forfeiture when, due to no fault of his own, he is totally incapacitated from acting in the matter. That which cannot fairly be said to have been in the minds of the parties, at the time of the making of the contract, should be held as excluded from its terms. Comstock v. Fraternal Accident Association, 116 Wis., 382, 93 N. W., 22. The primary purpose of all insurance is to insure, or to provide for indemnity, and it should be remembered that, if the letter killeth, the spirit giveth life. Allgood v. Ins. Co., 186 N. C., 415, 119 S. E., 561; Grabbs v. Ins. Co., 125 N. C., 389, 34 S. E., 503.” It is difficult to add anything to this statement which would more clearly set forth the legal principles involved in the case at bar, or better express the policy of this Court in the construction of insurance contracts. In the light of these decisions, we do not feel compelled to put a construction upon the phrases employed in the policy under consideration which would enable the Insurance Company to profit by the continued receipt of premiums and by the retention of the amounts which it should pay upon losses, by reason of the impossibility of performance on the part of the insured of some stipulation which has no reasonable connection with the merits of his claim. The clause in the policy under consideration providing that the monthly benefit shall begin six months after proof is received was probably phrased to give the Company a reasonable opportunity to investigate the merits of the claim, and to provide a period of trial during which the permanence of the disability might be tested by experience. At any rate, it cannot be accepted as within the minds of the contracting parties that the plaintiff should forfeit his right to monthly income when, through no fault of his own, it became an impossibility for him to give the notice. Rand v. Ins. Co., supra. In our opinion, the complaint states a cause of action, and the judgment overruling the demurrer is Affirmed.