Mutual Life Ins. v. Landry

HUTCHESON, Circuit Judge. Appellee, Landry, is the insured in a life insurance policy which under conditions named in clause 31 entitled him to “disability benefits in event of total and permanent disability before age sixty”. On March 26, 1943, while no premium was in default, but after he had attained the age of sixty years, plaintiff advised the company that he had been totally and permanently disabled since 1937, and applied to it for disability forms. His request rejected on the ground that he was not entitled to disability benefits because he had not, as required by the policy, made proof of disability before attaining the age of sixty years, he filed an informal claim and then brought this suit. Claiming in it that a provision2 in a rider, entitled" “Supplementary Benefits to Section Entitled ‘Benefits in Event of Total and Permanent Disability Before Age 60’ ”, had, where the premiums were not in default, done away with the condition that proof be furnished before attaining the age of sixty, he sought payment for the amounts accrued and to accrue and for statutory attorney’s fees. Tried to the judge without a jury, there were findings fully supported by the evidence, (1) that plaintiff became totally and permanently disabled in May, 1938, (2) that he became sixty years of age on August 4, 1942, (3) that he did not file proof of disability until some months later, in March, 1943. Concluding, however, that the rider providing supplementary benefits “If proof delayed and no premium in default” had done away with the condition of Section 3, requiring proof before attaining age sixty, the district judge gave judgment for plaintiff on the policy. Holding, how [701] ever, that the question was a close one and that the defense had been in good faith, he denied the recovery of statutory attorney’s fees. The defendant has appealed from that part of the judgment awarding plaintiff disability benefits, the plaintiff from that part of it denying him attorney’s fees. We think it clear that the judgment for plaintiff may not stand. While a few cases may be found holding that a provision, like that of December 3, that the insured must furnish the company proof of disability before attaining the age of sixty is not a condition of recovery,3 the overwhelming weight of authority is the other way.4 But more important for us, it is settled in Louisiana, from which this case comes, that su'ch a provision is a condition of, and compliance with it is essential to recovery.5 The district judge held, and plaintiff concedes, that, but for the supplementary provision, this would be so here. An examination of the relied on supplementary provision makes it clear, we think, that it does not have the effect claimed for it. Its language is clear and unambiguous6 and yields its meaning without resort to construction aids. Its purpose and effect are plain. These are to enable the assured, under the conditions it fixed, ((1) that no premium is in default, and (2) that the proof furnished is su'ch as to entitle the insured to the disability benefits provided for in Section 3), to have the disability benefits start from the beginning of the disability, instead of, as provided in Section 3, from the receipt of the proof. It, therefore, provides that upon compliance with the supplementary provision, the company will: (a) Begin the monthly income payments provided for in Section 3 as of the end of the first completed month of such disability if earlier than that of receipt of such proof instead of as of the date of such proof, and (b) return any premium paid after the beginning of such disability. Appellee’s argument that the purpose of the clause was to entirely do away with the condition that proof be furnished before attaining age sixty falls, upon reading in the supplementary clause, “If, while no premium is in default, the proof furnished (under Section 3) is such as to entitle the insured to the disability benefits provided for therein.” Ilis argument that the failure of the supplementary clause to, in terms, require proof of liability before sixty, is a release of that requirement and that Section 3 benefits are available if only premiums are not in default, proves too much. Such a clause would not provide supplementary benefits to, it would do entirely away with, Section 3. Nor is there any more substance in appellee’s point that the second of the two supplementary clauses,7 “Benefits if premium in default not over six months”, repeats the Section 3 provision that proof must be made before the insured shall have attained the age of sixty years, and the first clause does not. Each having as its predominant purpose dating benefits back, each is addressed to, each deals with, a different situation. Clause one, dealing with a normal [702] section three situation, where premiums are not in default, and the proof is made as required in the section, confers only the supplementary benefit of dating the disability from its beginning instead of from its proof. Clause two, dealing with one where premiums are in default, and, therefore, not a normal section three situation, .adds to the benefit of dating the. disability back conferred in clause one, the additional benefit of waiver of a six months’’ default in premiums. Dealing as it did, not with a normal Section 3 condition, “premiums not in default”, it could not, without a contradiction in terms, have, as the first clause did, provided that the proof must be such as to entitle the insured to the benefits provided under Section 3. It had to provide in terms that proof of disability must be furnished before sixty. To argüe, as appellee does, that the insurer intended by the rider to waive proof before sixty, in a case where premiums were not in default, but to require it where they were six months in default, finds no support either in the language used or in the predominant purpose of the supplementary clauses, to begin the benefit payments from the date of disability instead of the date of proof. The judgment is reversed, and the cause is remanded for further and not inconsistent proceedings. Footnotes [1] “When Benefits Become Effective — If, before attaining the age of sixty years and while no premium on this policy, is in default, the insured shall furnish to the Company due proof that he is totally and permanently disabled, as defined above, the Company will grant the following benefits during the remaining lifetime of the insured so long as such disability continues.” [2] “Benefits If Proof Delayed and No Premium in Default. — If, while no premium is in default, the proof furnished the Company under the section providing for ‘Benefits in Event of Total and Permanent Disability before Age 60’ is such as to entitle the Insured to the Disability Benefits provided for therein, and if due proof is also furnished the Company that such disability has been continuous since its beginning, the Company will: “(a) Begin the monthly income payments provided for in such section as of the end of the first completed month for such disability if earlier than the date of receipt of such proof instead of as of the date of receipt of such proof, and, (b) Return any premium due after the beginning of such disability which has been paid during the continuance thereof.” [3] Smith v. Mutual Life Ins. Co., 188 Ark. 1111, 69 S.W.2d 874; Mutual Life Ins. Co. of New York v. Smith, 257 Ky. 709, 79 S.W.2d 28. [4] Epstein v. The Mutual Life Ins. Co. of N. Y., 143 Misc. 587, 257 N.Y.S. 772, affd. 236 App.Div. 843, 260 N.Y.S. 936 (1st Dept.); Birnbaum v. The Mutual Life Ins. Co. of N. Y., 170 Misc. 83, 9 N.Y.S.2d 928; Dovel v. Natl. Life Ins. Co., 229 Ala. 378, 157 So. 882; Jenkins v. The Mutual Life Ins. Co. of N. Y., 130 Pa.Super. 442, 198 A. 486; Lincoln Natl. Life Ins. Co. v. Ghio, 8 Cir., 111 F.2d 307; Goldman v. New York Life Ins. Co., 115 N.J.Eq. 535, 171 A. 541; Burchfield v. Aetna Life Ins. Co., 230 Ala. 49, 159 So. 235; Bennett v. N. Y. Life Ins. Co., 197 S.C. 498, 15 S.E.2d 743, C/f Boyett v. U. S., 5 Cir., 86 F.2d at page 67. [5] Clesi v. National Life & Accident Ins. Co., La.App., 193 So. 897, affd. 195 La. 736, 197 So. 413. [6] Birnbaum v. Mut. Life Ins. Co., 170 Misc. 83, 9 N.Y.S.2d 928; Wolfe v. Mutual Life Ins. Co., 3 Tenn.App. 199; Moscov v. Mutual Life Ins. Co. of N. Y., 387 Ill. 378, 56 N.E.2d 399. [7] “Benefits if Premium in Default Not Over Six Months. — If, not later than six months after the duo date of any premium in default and provided no previously due premium is also in default, due proof is received by the Company before the_ Insured shall have attained the age of sixty years that the Insured was totally and permanently disabled, as defined in the section entitled ‘Benefits in Event of Total and Permanent Disability before Ago 60’, at the date when such premium in default fell due, and has been continuously so disabled since said due date, the Policy will be reinstated without evidence of insurability and the waiver of premium and disability income benefits shall bo the same as if such default had not occurred.’'