Opinion
No. 31367.
October 22, 1934.
1. INSURANCE.
Insurer which receives proof of loss from insured and denies liability on ground other than that proof is defective waives defects in proof.
2. INSURANCE.
Insured held not estopped to claim disability benefits under life policy by proof of loss which allegedly failed to show total and permanent disability, where insurer neither relied nor acted on proof, but made independent investigation and denied liability on another ground.
APPEAL from the Circuit Court of Tunica County.
King King, of Memphis, Tennessee, and Louis H. Cooke, of New York City, for appellant.
In the absence of proof to show that the certificate of proof of total and permanent disability was incorrect or was the result of a mistake, misapprehension or some error upon which estoppel could not be claimed, the defendant, insurer, was entitled to have its motion for a directed verdict sustained. The evidential value of the notice and the proofs of disability in insurance cases are either prima facie or conclusive.
2 Wigmore, sec. 1073, p. 570; Felix v. Ins. Co., 216 P. 95; 7 Cooley on Ins., p. 5866; Richelieu v. Ins. Co., 136 U.S. 408; Insurance Co. v. Lewis, 28 Fla. 209, 10 So. 297; Jones v. Ins. Co., 36 N.J.L. 29, 13 Am. Rep. 405; 14 R.C.L., pp. 1445, 1446; 5 Joyce on Insurance, sec. 3319; Ins. Co. v. Melick, 65 Fed. 178; 27 L.R.A. 629; 44 L.R.A. 846; 2 Arnold on Insurance, p. 1353; Mutual Ins. Co. v. Newton, 89 U.S. 22; Metropolitan Ins. Co. v. De Valt, 109 Va. 392, 17 Ann. Cases 34; General Accident Ins. Co. v. Humes, 185 P. 1085, 8 A.L.R. 318; Voekel v. Maccabees, 116 Wis. 206; Quatham v. Woodmen of America, 148 Mo. App. 33, 127 S.W. 651; Hicks v. Metropolitan Ins. Co., 190 S.W. 661; Mutual Life Assurance Society v. Harrington, 139 Miss. 847; Jensen v. Continental Life Ins. Co., 28 F.2d 545.
Numerous authorities could be cited as to the admissibility of statements in proof of disability or loss and they are all to the effect that the same are admissible and binding upon the insured until he shows that they were the result of error, mistake, misapprehension or fraud.
Metropolitan Ins. Co. v. Cleveland, 226 Ky. 221, 11 S.W.2d 434; Laury v. N.W. Insurance Co., 180 Minn. 205, 230 N.W. 648; National Fire Insurance Co. v. Provine, 138 Miss. 659; Mayhew v. Travellers Protective Assn., 52 S.W.2d 29; Giroux v. N.Y. Life Ins. Co., 85 N.H. 355; 159 A. 142; American Ins. Co. v. Anderson, 42 Ga. C. 624, 157 S.E. 112; Watkins v. Security Assn., 81 Colo. 66, 255 P. 452; 8 Couch, Cyc. of Insurance, secs. 2225 to 2227, inc.
It is respectfully insisted that the defendant had the right to rely upon the statements made by the plaintiff and furnished it pursuant to the terms of the policy until it is advised that the said proofs are not correct. The defendant was only called upon to defend the action set out in the pleadings. This court cannot say nor can any court say that if proper proofs are furnished showing a total and permanent disability, and investigation is made as the appellant has the right to make, that the action of the appellant will not be a payment of the claim for total and permanent disability if it finds the same to exist.
33 C.J., p. 18, sec. 666; Campbell v. Charter Oak F. M. Ins. Co., 10 Allen, 213; Case v. Mfg. F. M. Ins. Co., 82 Cal. 263, 21 P. 843; Hanover F. Ins. Co. v. Lewis, 28 Fla. 209, 10 So. 297; Travelers' Ins. Co. v. Nitterhouse, 11 Ind. A. 155, 38 N.E. 1110; U.S. Casualty Co. v. Peryman, 203 Ala. 212, 82 So. 462; Laurenzi v. Atlas Ins. Co., 131 Tenn. 644, 176 S.W. 1022.
C.A. Jaquess, of Tunica, for appellee.
Receiving and retaining notice or proofs of loss, without objecting to any defects therein, is a waiver of the objection.
Swann v. London, Liverpool Globe Ins. Co., 52 Miss. 704.
It has been pointed out that waiver of defects by an acceptance, as sufficient, of proofs offered, is based upon an estoppel of the company to dispute their sufficiency, and that, therefore, evidence of such a waiver should be admitted under the allegation of performance.
American Life Ins. Co. v. Mahone, 56 Miss. 180.
Under the principle that those defects upon which the company intends to rely must be pointed out, an objection to certain defects in the proofs will amount to a waiver of all of those not mentioned. And the same rule applies as to proof of death or disability.
7 Cooley's Briefs on Insurance 2d, pp. 6048-9; Aetna Life Ins. Co. v. Bethel, 131 S.W. 523, 140 Ky. 609; Sun Mutual Ins. Co. v. Mattingly, 77 Tex. 162, 13 S.W. 1016; Harriman v. Queen Ins. Co., 49 Wis. 71, 5 N.W. 12.
If an insurance company, after receiving an insufficient notice examines the claim and refuses to pay it exclusively on other reasons, this is a waiver of objections to the notice.
Rosenberg v. Maryland Casualty Co., 3 N.J. Misc. 1132, 130 A. 726; Shapiro v. Employers Liability Assn., 139 Misc. 454, 248 N Y Sup. 587; American Life Ins. Co. v. Mahone, 56 Miss. 180; National Life Ins. Co. v. Hedges, 233 Ky. 840, 27 S.W.2d 422.
A company cannot arbitrarily object to the sufficiency of proofs. If, however, they disclose a cause of death which excepts the company from liability, it does not derogate from their sufficiency as proofs of death. And while such a disclosure might suggest to the company the propriety of refusing payment, it could be no bar to the bringing of a suit.
Charter Oak Life Ins. Co. v. Rodel, 95 U.S. 232, 24 L. Ed. 433; Mutual Benefit Health Accident Association v. Mathis, 142 So. 494.
It is settled doctrine in this state, that in order for one to be totally disabled within the meaning of a health or accident insurance policy, it is not necessary that he be wholly incapacitated to perform any duty incident to his usual employment or business, but, if the insured is prevented by his injury or illness from doing the substantial acts required of him in his business, or if his physical condition is such that, in order to effect a cure or prolongation of life, common care and prudence require that he cease all work, he is totally disabled within the meaning of such policies.
Metropolitan Cas. Ins. Co. v. Cato, 113 Miss. 283, 74 So. 114; Equitable Life Ins. Co. v. Serio, 155 Miss. 515, 124 So. 485, 486; Metropolitan Life Ins. Co. v. Lambert, 157 Miss. 759, 128 So. 750.
Argued orally by Earl King, for appellant.
Appellees brought this action in the circuit court of Tunica county against appellant on a policy of insurance on the life of appellee Salmon for disability benefits under the policy, which policy had been issued theretofore and delivered by appellant to said Salmon. The bank's interest in the policy was by assignment from Salmon. The suit was brought to recover one hundred dollars a month because of the total and permanent disability of the insured.
The declaration alleged that on or about the 28th day of August, 1932, the insured made and filed with the home office of appellant full and complete proof of such total and permanent disability, which proof was in writing and contained all the facts with reference to such total and permanent disability. Appellant interposed three pleas — the general issue and two special pleas. The second special plea only is pertinent to the question involved. It is averred in that that neither of the appellees Salmon or the bank had at any time filed with the home office of appellant full and complete proof of disability in writing containing all the facts of such total and permanent disability.
The insurance policy contains these provisions:
"1. Total Disability. — Disability shall be deemed to be total whenever the Insured is wholly disabled by bodily injury or disease so that he is prevented thereby from engaging in any occupation whatsoever for remuneration or profit.
"2. Permanent Disability. — Disability shall be presumed to be permanent, — (a) Whenever the Insured will presumably be so totally disabled for life; or — (b) After the Insured has been so totally disabled for not less than three consecutive months immediately preceding receipt of proof thereof.
"3. Benefits. — Upon receipt at the Company's Home Office, before default in payment of premiums of due proof that the Insured is totally and presumpably permanently disabled and that such disability occurred after the insurance under this Policy took effect and before its anniversary on which the Insured's age at nearest birthday is sixty years, the following benefits will be granted:
"(a) Income Payments. — The Company will pay to the Insured a monthly income of $10 per $1,000 of the face of the policy during his lifetime and continued disability, beginning immediately on receipt of said proof. Any income payment due before the Company approves the proof of disability shall be payable upon such approval. If disability results from insanity, income payments under this section will be paid to the beneficiary in lieu of the Insured.
"(b) Waiver of Premiums. — The Company will waive payment of any premium falling due after approval of said proof and during such disability. Any premium due prior to such approval is payable in accordance with the terms of the policy, but if due after receipt of proof will, if paid, be refunded upon approval of proof. . . .
"6. Recovery from Disability. — The Company may from time to time demand due proof of the continuance of total disability, but not oftener than once a year after it has continued for two full years. Upon failure to furnish such proof, or if at any time it shall appear to the Company that the Insured is able to engage in any occupation for remuneration or profit, no further income payments shall be made nor premiums waived."
The proof of total and permanent disability furnished appellant by the insured consisted of a certificate of Dr. McElroy of Memphis, Tennessee, of date September 27, 1932, a letter from Dr. Leake of Maud in this state, under date of November 19, 1932, and a statement from the insured. This proof left it uncertain whether or not the disability was total and permanent. Dr. McElroy, in one paragraph of his certificate, stated that the insured was wholly disabled and prevented from engaging in any occupation whatever for remuneration or profit, and in another paragraph he stated that he thought he might be able to attend to business but would be partially disabled. Dr. Leake stated in his letter that the insured was paralyzed in his left side, with blood pressure from two hundred to two hundred twenty, his kidneys in fair condition, but that he was totally disabled so far as work was concerned; he said nothing about whether or not the disability was permanent. The insured's statement was not any more specific.
After receiving this proof, appellant made an independent investigation through its own agencies to ascertain whether or not the disability was complete and permanent. After doing so, it wrote the insured a letter denying liability, not upon the ground that proper proof had not been made, but upon the ground that the insured continued to work until after December 15, 1932, and therefore up to that time was not totally disabled, and thereafter the disability provisions of the policy were no longer in force. Under the policy, its disability benefits had expired before December 15, 1932; however, it is not pertinent to set out that provision of the policy. When this letter was written, appellant had not notified the insured that the proof was insufficient; as stated, its denial of liability was placed on another and a different ground.
The evidence in the case was sufficient to establish the insured's total and permanent disability within the provisions of the policy. At the conclusion of the evidence, the appellant requested a directed verdict in this language: "At this time, if your Honor please, I ask for a directed verdict for the defendant in this case, on the following grounds: There is no proof of the compliance with the terms of the policy. The proof shows, the undisputed proof shows that the plaintiff was not totally and presumably permanently disabled, at the time, and it appears from the proof submitted by the plaintiff, himself, that he was not totally and permanently disabled but he was only partially and permanently disabled; and for the further reason that no due proof of the disability as contemplated by the terms of the policy has been filed with the Home Office of the Company." The court denied this request. That action alone is assigned as error. It will be observed that the grounds upon which the directed verdict was asked were that the insured had failed to make proof of total and permanent disability as required by the policy, and that the proof submitted by the insured showed that he had not suffered permanent and total disability, and on the trial he was bound by such proof and would not be permitted to contradict it.
It is apparent at once that appellees failed to make the necessary proof of total and permanent disability. We will consider first whether or not such failure barred a recovery on the policy. Where an insurance company receives proof of loss from the insured and denies liability on another ground or grounds than that such proof is defective and does not meet the requirements of the policy, there is a waiver by the company of the defects in the proof. If the company denies liability on that ground, it must say so and give the insured an opportunity to amend his proof if he can. 7 Cooley's Briefs on Insurance (2 Ed.), pp. 6048, 6049; Swan v. Liverpool, London Globe Ins. Co., 52 Miss. 704; American Life Ins. Co. v. Mahone, 56 Miss. 180; Sun Mutual Ins. Co. v. Mattingly, 77 Tex. 162, 13 S.W. 1016; Rosenberg v. Maryland Casualty Co., 130 A. 726, 3 N.J. Misc 1132.
Was the insured bound by the proof made, which failed to show total and permanent disability, but probably the contrary? We think not. There is no element of estoppel on the insured. Appellant neither relied nor acted on the proof, but made an independent investigation, and, as shown, denied liability on another ground. Proof by the insured, as required by the policy, is not conclusive on him as to facts therein stated, unless the insurance company relied and acted on it to its injury. 33 C.J. 18, sec. 666.
Affirmed.