Ætna Life Insurance v. Phifer

Humphreys, J. On May 27, 1922, appellee instituted suit against appellant to recover $2,000 damages for an alleged breach of the permanent total disability clause contained in an insurance policy .issued by appellant to appellee on November 17, 1919, which clause is as follows: “Six months after proof is received at the home office of the company, before the sum insured, or any installment thereof, becomes payable, that the insured has become wholly, continuously and permanently disabled, and will for life be unable to perform any work, or conduct any business for compensation or profit, or has met with the irrevocable loss of the entire sight of both eyes, or'the total and permanent loss, by removal or disease, of the use of both hands, or both feet, or of such loss of one hand and one foot, all from causes originating after the delivery of this policy, the company will, if all premiums previously due have' been ,paid, waive the payment of all premiums falling due thereafter during such disability, and, if such disability was sustained as above described, and before the insured attained the age of 60 years, the compan}^ will pay to the life beneficiary the sum of $10 for each thousand dollars of the sum herein described as the sum insured, and will pay the same sum on the same day of every month thereafter, during the lifetime and during the disability of the insured.” It was .alleged in the complaint “that .after the issuance and delivery of policy, and before the plaintiff attained the age of sixty years, and at a time when all premiums previously due had been paid, plaintiff sustained, by accident, on the 18th day of July, 1921, a broken leg, which did wholly, continuously and permanently disable and will disable Mm for life, preventing Mm from performing any work, or 'conducting any business for compensation or profit; that, within the time required by the policy, plaintiff furnished proof of said injury and disability, on the ninth day of January, 1922, and the defendant refused to pay plaintiff’s claim; that plaintiff is forty years of age, and has an expectancy in life of tMrty years; that, because of the failure of defendant to pay plaintiff the sum of $10 per month per each thousand dollars insured, and by reason of the breach of contract, plaintiff is entitled to recover of defendant the sum of two thousand dollars, based upon the life expectancy of plaintiff. ” Appellee filed a demurrer to the complaint upon the grounds, first, that the facts stated did not constitute a cause of action; and second, that the court had no jurisdiction to determine the cause. The demurrer was overruled, to which ruling appellant objected and saved an exception. Appellee then filed an answer denying all the material allegations of the complaint, and interposed the further defenses that the policy had lapsed by a failure to pay the premium on Nov. 17, 1921, and that the suit was prematurely brought. The cause was submitted to a jury upon the plead-, ings, testimony, and instructions of the court, which resulted in a verdict and judgment in favor of appellee for $1000, from which is this appeal. Appellant first contends for a reversal of the judgment because appellee failed to pay the premium due November 17, 1921, claiming it was necessary, under the permanent total disability clause, to pay the premiums maturing during the six months period from the time final proof of injury was made, in order to prevent the policy from lapsing. The injury occurred on July 18, 1921. The final proof of injury was made on January 9, 1922. A premium of $84.12 matured, according to the terms of the contract, on November 17, 1921. The correct interpretation of the permanent total disability clause contained in the policy and set out above is that the payment of all premiums falling* due after the injury was waived. The particular language in the clause providing for a waiver is: “The company will, if all premiums previously due have been paid, waive the payment of all premiums falling due thereafter during such disability.” In the connection used, “thereafter” refers to the beginning of the disability, which was the date of the injury, and not to the expiration of the six months’ period after final proof of the injury and dis-•abilitv. The purpose of the policy, evidenced by said clause, was to relieve the insured from burdens and to compensate him, in ease of permanent and total disability, during the period of disability, meaning from the beginning of such disability. Appellant next contends for a reversal of the judgment because nothing was due appellee under the terms of the permanent total disability clause when this suit was commenced, claiming that liability under the clause did not begin until six months after the final proof of the injury and disability was made. In other words, that liability did not begin when the injury and consequent disability occurred. The correct construction of the clause is that liability began with the disability. As stated above, and for the reasons given, the purpose of the policy was to compensate the insured during the period of permanent and total disability. Appellant’s next contention for a reversal of the judgment is that the undisputed evidence showed ap-pellee had not become wholly, continuously, and permanently disabled. We think there is substantial testimony in the record tending to show that 'appellee was totally and permanently disabled, according to Mr. Kerr’s definition of total disability when used in indemnity insurance policies. The definition given by him is as follows: “Total disability does not mean absolute physical disability on the part of the insured to transact any kind of business pertaining to his occupation. It is sufficient to prove that the 'injury -wholly 'disabled him from the doing of all the substantial and material acts necessary to be 'done in the prosecution of his business.” Kerr on Insurance, §§ 385 ¡and 386. This definition was approved in the case of Industrial Mutual Ind. Co. v. Hawkins, 94 Ark. 417 The record reflects that appellee was a farmer 40 years of age, iand not qualified to do any other kind of business; that both bones in his leg were broken about one-half an inch above the ankle, ,and protruded through the flesh something like two inches; that the bones were set by two physicians, but refused to knit; that 17 days thereafter they were set again by Dr. Prank Kirby of Harrison; that in December following an X-ray was made of the leg, which showed that neither one of the bones had united; that in February or March following the little bone united, and appellee gained some strength in the leg, but there was still a discharge from the wound and a tenderness in the bones when appellee threw his weight upon the broken limb; ¡that at the time of the trial decayed bone was sloughing off and being discharged from the wound; that Dr. Hodgins Kirby examined the leg in February and expressed the opinion that there was a chance to make a very good foot if two operations were made upon it; that the first operation would involve a removal of the callus around the break and the second a severance of the bones by sawing them in two and inserting a piece of bone to unite them. R. S. Krebbs, physician, examined appellee’s wound in Febuary, at the request of appellant, found an un-united break in both bones, and pronounced his disability total and permanent, but stated that, if the bones had since united, he was mistaken about it being permanent. Dr. Blackwood, physician and surgeon, in company with Drs. Kirby, Fowler, and Ruble, examined the wound and made .an X-ray picture of the leg the morning of the trial. The X-ray picture of the outside bone indicated a break and dislocation in four places, and also showed broken tissue. Their examination revealed a stiff joint and shortened leg. He pronounced the injury permanent, but gave it as his opinion that it would ultimately heal up and.leave a normal leg, except for stiffness and length. Dj\ L. Kirby, physician and surgeon, who had been practicing since 1871, testified that the large bone or tibia of the right leg was one inch short, and the little bone or fibula pushed down, but not quite as short; that the bones were sufficiently united to support the weight of appellee’s body; .that the discharge was coming from a space where the bone was dead; that the injury was permanent so far as the leg was concerned and would interfere with appellee’s occupation; that he did not know what was meant by a total disability, but, in his opinion, from all the facts, the foot was not wholly and permanently lost to appellee’s use; that it would be better than an artificial foot. The wounded leg was exhibited to the jury. We think the evidence was sufficient to warrant a submission of the question to the jury whether appellee was totally and permanently disabled. That question was submitted to the jury under correct instructions. The only objections made by appellant to the instructions were that they did not embrace certain questions precedent to the recovery, which were unnecessary, according to our construction of the permanent total disability clause in the policy. The instructions requested by appellant and refused by the court were properly refused, because based upon an incorrect interpretation of the permanent total disability clause, as heretofore indicated. . Appellant’s last contention for a reversal of the judgment is that, even if the policy had not lapsed on account of a failure to pay the November premium, and, even if the liability occurred on the date of the injury, appellee was entitled to recover only $20 a month, under the permanent total disability clause in the policy. The record reflects that appellant denied all liability under the permanent total disability clause aforesaid. When appellant received the proof of injury and disability, it wrote the following letter to .appellee: “Our medical board has considered this case very carefully, and is of the opinion that the insured has not necessarily become so disabled that he will never be able to perform any work or conduct any business for compensation or profit. In fact, there is a strong probability that he will receive such attention as will enable him to pursue some occupation. It would therefore appear that he does not come within the terms and conditions of the permanent total disability clause of this policy. “It also appears from our records that this insurance lapsed by reason of the nonpayment of the November 17, 1921, premium, and is being continued on the extension feature. By referring to the permanent disability clause, it will be noted that, in order for it to be effective, all premiums should have been paid.” This letter evinced an intention on the part of appellant not to be bound by the terms of the contract, and was equivalent to ia renunciation thereof. It stated in express words that the policy had lapsed. This denial of liability justified appellee, who was not in default, in treating the contract as breached and suing for gross damages, which he did. The measure of his damages was the amount appellant would have been required to pay him under the contract if if had not breached it, reduced to its present value. According to the mortuary tables introduced in evidence, appellee had an expectancy of 28.18 years. The payment provided for in the contract of the $2,000 policy was $20 a month. The present value thereof, according to appellee’s expectancy, was more than $1000. The judgment therefore was not excessive, and is affirmed. McCulloch, C. J., dissenting.