Opinion
No. 3364.
April 16, 1936. Rehearing Denied May 7, 1936.
Appeal from District Court, El Paso County; P. R. Price, Judge.
Suit by Frank M. Greene against the Metropolitan Life Insurance Company. From a judgment for plaintiff, defendant appeals.
Reversed and rendered.
This is a suit by Greene against the appellant upon an insurance policy to recover disability benefits. This is the second appeal. The former opinion is reported in 75 S.W.2d 703.
December 31, 1923, appellant issued to the Southern Pacific Company group policy No. 2000G, insuring the lives of all eligible employees of said company then working and new employees. In addition to life insurance, the policy provided for the payment of monthly benefits in case of total and permanent disability. Effective January 1, 1932, appellant issued its group policy, also numbered 2000G, in lieu of the former policy.
The premiums were paid monthly to the insurer by the Southern Pacific.
The policies provided the insurer would issue to the Southern Pacific Company, for delivery to each employee insured, an individual certificate showing the insurance protection to which such employee was entitled, etc. The policies were one-year term policies with renewal privilege granted the Southern Pacific Company upon notice and payment of premiums. They were issued and delivered to the Southern Pacific Company in New York.
Greene, in November, 1923, made written application to the Southern Pacific Company for the insurance to which he was entitled and certificate was issued. In October, 1924, Greene's employment ceased and his insurance was discontinued. In February, 1925, Greene was re-employed, and upon his application insurance certificate issued to him as before. This insurance was discontinued in October, 1930, when Greene ceased to be an employee.
On January 7, 1931, having been re-employed, Greene again applied for insurance and certificate issued to him as before. On June 25, 1932, this insurance was canceled because Greene then ceased to be an employee.
Upon the dates mentioned Greene resided and was employed in Arizona. His various applications for insurance were delivered to the Southern Pacific Company in Tucson, Ariz., and by said company transmitted to its insurance department in San Francisco, Cal., which department caused the San Francisco office of the insurer to issue the certificates mentioned. Such certificates were then transmitted through the Southern Pacific to Tucson and there delivered to Greene. The certificates were in the sum of $2,500 each, of which amount $500 was free insurance, and for the balance Greene paid $1.40 per month, which was deducted from his salary by his employer.
Attorney's fees and penalty, such as are authorized by article 4736, R.S. of this state (as amended by Acts 1931, c. 91, § 1 [Vernon's Ann.Civ.St. art. 4736]), are not recoverable under the laws of either New York, California, or Arizona.
The disability benefit terms of the first policy provide:
"8. Total and Permanent Disability Benefits. — Upon receipt at the Home Office in the City of New York, of due proof that any Employee, not working in Mexico, while insured hereunder, and prior to his sixtieth birthday, has become totally and permanently disabled, as the result of bodily injury or disease, so as to be prevented thereby from engaging in any occupation and performing any work for compensation or profit, the Company will, in lieu of the payment at death of the insurance on the life of the said Employee, as herein provided, pay equal monthly installments as hereinafter described to the said Employee, or to a person designated by him for the purpose, or if such disability is due to, or is accompanied by, mental incapacity, to the beneficiary of record of the said Employee. * * *
"The first monthly instalment will be paid upon receipt of due proof of total and permanent disability, in which event the insurance hereinbefore provided under this Policy, on the life of the said Employee, shall cease to be in force and no further premiums will be payable on account thereof."
The second policy provides:
"Total and Permanent Disability Benefit. — Upon receipt by the Company of due notice and proof — both in writing — that any Employee, not working in Mexico, while insured hereunder and prior to his sixtieth birthday has become totally and permanently disabled as a result of bodily injury or disease, so as to be prevented thereby from engaging in any business or occupation and performing any work for compensation or profit for the remainder of his life, provided:
"(A) the disability for which claim is made commenced after the Employee had been continuously insured hereunder for a period of one year, and
"(B) written notice of such disability was received by the Company not more than one year after premium payment on account of the Employee had been discontinued, the Company shall:
"1. discontinue all the insurance hereunder on the Employee, and
"2. three months after receipt of such proof of such disability commence to pay to the Employee, in lieu of the payment of the Life Insurance at his death, monthly instalments determined as to number and amount by the amount of such Life Insurance in force at the date of commencement of such disability, in accordance with the table below. * * *
"The requirement specified in proviso (A) above shall not apply to (1) any Employee in the employ of the Employer at the date of issue of this Policy, provided the Employee became insured hereunder within thirty-one days after he became eligible * * *"
Subsequent to June 25, 1932, Greene moved to El Paso, Tex., where he later filed this suit alleging he became totally and permanently disabled in March 1931, by flat feet of the third degree, and sought to recover the monthly benefit payments.
The prayer of the petition was that "he have judgment against the defendant, for all installments due to date of trial. $100.00 interest, being interest due from the due date of every installment until date of trial, $300.00 penalty and $833.33 attorney's fees, or for the sum of $2500.00 disability benefit, $100.00 interest from the due date of each and every installment until date of trial, $300.00 penalty and $833.33 attorney's fees, making a total of $3733.33, and that plaintiff recover interest on all sums that may be due him from the date they were due until paid," and for general relief.
The issues submitted inquired:
First. Whether plaintiff suffered total disability at any time between January 7, 1931, and June 25, 1932.
Second. Whether such total disability, if any, was permanent.
These two issues were answered, "Yes."
Third. What would be a reasonable fee for plaintiff's attorneys? This was answered, "$833.33."
Questions submitted at request of appellant inquired:
(A) Whether plaintiff, by taking and submitting to reasonable treatment, would become able at any time thereafter to work.
(B) Whether plaintiff was suffering from only a temporary disability.
(C) Whether plaintiff was suffering from only a partial disability.
These latter issues were answered, "No."
The judgment contains a finding by the court that the plaintiff made due proof of loss on February 15, 1933.
The case was tried May 17, 1935, and judgment rendered in plaintiff's favor for $3,721.30. This amount represented:
First. A monthly installment of $86.25, which the court held was due February 15, 1933, and like installments on the 15th of every month thereafter including May 15, 1935.
Second. $163.17 as interest on the installments from their due dates to date of trial.
Third. $309.80 as penalty.
Fourth. $833.33 as attorney's fees.
R. A. D. Morton and H. D. Stringer, both of El Paso, for appellant.
R. E. Cunningham and W. H. Fryer, both of El Paso, for appellee.
Those assignments are overruled which question the sufficiency of the evidence to support the findings made by the jury.
The testimony of Mr. Cunningham, one of the attorneys for plaintiff, supports the finding as to the attorney's fee.
The testimony of the plaintiff and the medical experts who testified in his behalf supports the other findings. To quote the testimony and discuss its probative force would serve no useful purpose.
Error is assigned to the refusal to submit requested issues which read:
"Question D: Do you find from a preponderance of the evidence that plaintiff furnished to defendant due proof that plaintiff had become totally and permanently disabled so as to be unable to engage in any occupation or perform any work for compensation or profit for the remainder of his life?
"If you have answered the foregoing issue in the affirmative, then, but not otherwise, answer the following issue:
"Question E: When do you find, from a preponderance of the evidence, that such due proof was furnished by plaintiff to defendant ?"
Another assignment complains of the court's finding that plaintiff made due proof on February 15, 1933, which was after plaintiff ceased to be insured under the group policy.
These assignments assume plaintiff's rights are governed by the group policy last issued and proof required to be made while plaintiff was insured thereunder.
If plaintiff became totally and permanently disabled between January 7, 1931, and January 1, 1932, his right is founded upon the first rather than the second group policy. Assuming he became disabled after January 1, 1932, and his right is founded upon the second policy, it was nevertheless not necessary for him to make the proof while he was still insured under the second policy. The phrase "while insured hereunder and prior to his sixtieth birthday," contained in the second policy, refers to the date of disability, and not, as appellant assumes, to the date the proof was required to be made.
The undisputed evidence shows plaintiff made proof in writing on the date found by the court. It is unnecessary to submit to the jury uncontested issues of fact for which reason questions D and E were properly refused. We do not understand appellant as contending the evidence is in conflict as to the fact that Greene furnished proof in writing on February 15, 1933. Appellant's contention is that it was necessary for Greene to make the proof while he was insured under the second policy; wherefore, proof made February 15, 1933, was not due proof.
As stated above, the phrase "while insured hereunder" does not refer to the time within which the plaintiff must have furnished proof. Wherefore the court did not err in holding that the proof made February 15, 1933, was due proof.
In one respect only is the date material upon which the proof was made. It becomes material in the disposition of the assignment which complains of the recovery of installments held to be payable the 15th days of February, March, and April, 1933, for which recovery was allowed with interest. If plaintiff's disability accrued prior to January 1, 1932, this matter presents no error for the benefits were payable under the first policy upon receipt of the proof. But if the disability accrued after January 1, 1932, the benefits were payable under the second policy three months after the proofs were received. We incline to the view the undisputed evidence shows the disability occurred prior to January 1, 1932, but to avoid possible error in this respect the judgment will be corrected so as to allow recovery for monthly installments beginning May 15, 1933. Such correction will be without prejudice to the right of plaintiff.
Another correction will be made limiting the interest recovery to $100, which is the amount prayed for. Appellant's propositions directed against this feature of the judgment are well taken.
Another proposition asserts appellant was entitled to a peremptory instruction because the plaintiff had not been insured for as long as one year and the policy (referring to the second policy) provides the disability benefits are not payable unless such disability commenced after "the employee had been continuously insured hereunder for a period of one year." The evidence shows Greene was an employee upon the date of issue of the second policy; insured under the first policy, which insurance became immediately effective under the second policy and continued until June 25, 1932. Appellee is protected from the operation of the provision relied upon by appellant by the last above-quoted provision of the second policy.
The argument referred to in the thirteenth and fourteenth propositions presents no error. Mr. Cunningham's argument was not improper. Mr. Fryer's argument was justified by previous argument of appellant's counsel. The qualification to the bill so shows.
The court defined "total disability" as: "such a disability as prevented him from engaging in any occupation and performing any work for compensation or profit."
The definition given of "permanent" reads: "is meant enduring continuously throughout the remainder of his natural life so as to prevent him from engaging in any occupation and performing any work for compensation or profit."
Those definitions are correct. The objections thereto are without merit.
Complaint is made of the form of issues 1 and 2 relating to total and permanent disability. It is complained they do not embody the issue of continuous disability. This complaint is based upon the word "continuously" appearing in the certificate issued. Greene's contractual rights are controlled by the policy rather than by the certificate. It was so insisted by appellant upon the former appeal, and this court so held. Furthermore, this matter presents no error in view of the definition of "permanent" as given by the court above quoted
Dr. Leslie, witness for plaintiff, testified:
"Q. How long will his feet be in that condition they are now in, in your opinion? A. The rest of his life.
"Q. In your opinion does that disable him in any way? A. It would.
"Mr. Morton: We object to that, your Honor, it is a conclusion and invades the jury's province.
"The Court: Overrule the objection.
"Mr. Morton: We except.
"Q. To what extent, Doctor?
"Mr. Morton: We object to that on the same ground, conclusion, he is not competent to give and invades the jury's province, not shown to be an expert in that line.
"The Court: Overrule the objection.
"Mr. Morton: We except.
"Q. To what extent, Doctor, does it disable him? A. I would say he would not be able to do any kind of work."
The witness was a medical expert, and we incline to the view the objection urged was not well taken. 19 Tex.Jur., Expert and Opinion Evidence, § 37, and last sentence of section 75.
The witness was familiar with the condition of the plaintiff's feet and testified fully to the facts upon which he based his opinion. The error, if any, in the admission of the quoted testimony was harmless. See cases cited in 1 Michie's Digest, 814.
Complaint is made of other rulings upon evidence none of which show any reversible error. Some of the rulings relate to evidence clearly admissible for limited purposes and was so limited.
The amended petition upon which the case was tried was filed March 1, 1935. Error is assigned to the recovery of the three installments payable subsequent to the filing of such petition. In view of the specific prayer for the recovery of all installments due to date of trial, it seems to this court the recovery of all installments due to date of trial should be regarded as proper. But in deference to rulings cited by appellant (Jones v. Dodd [Tex. Civ. App.] 192 S.W. 1134; Gardner v. Sittig [Tex. Civ. App.] 188 S.W. 731, 733; Id. [Tex.Com.App.] 222 S.W. 1090), and to avoid possible error in this connection, the judgment will be corrected to meet the objection urged; such correction to be without prejudice.
The only remaining question is that attacking the allowance of penalty and attorney's fee as provided by article 4736, R.S. of this state.
A contract of insurance is deemed to be made at the time and place where the final act is performed which evidences the acquiescence or final meeting of the minds of the parties upon the terms of the agreement. And the place where the contract is made is deemed to be the place of performance unless it is to be gathered from the agreement that a different place was fixed. Fidelity Mut. Life Ass'n v. Harris, 94 Tex. 25, 57 S.W. 635, 86 Am.St. Rep. 813.
Tested by this rule, the group policies, as between appellant and the Southern Pacific Company, must be regarded as New York contracts because it was in that state they were issued and delivered. Connecticut Gen. Life Ins. Co. v. Moore (Tex.Civ.App.) 75 S.W.2d 329.
But Greene acquired no rights under the policies until application for insurance thereunder was made by him and certificate issued and delivered. The policy, as to him, became effective when the certificate was delivered and governed by the laws of the state where such delivery was made. In accordance with this view it has been held, in suits upon group policies, the contracts were Texas contracts and recovery of penalty and attorney's fee under the Texas law upheld. Metropolitan Life Ins. Co. v. Worton (Tex.Civ.App.) 70 S.W.2d 216; Connecticut Gen. Life Ins. Co. v. Moore (Tex.Civ.App.) 75 S.W.2d 329; Connecticut Gen. Life Ins. Co. v. Dent (Tex.Civ.App.) 84 S.W.2d 250; Metropolitan Life Ins. Co. v. Delgado (Tex.Civ.App.) 77 S.W.2d 539; Metropolitan Life Ins. Co. v. Pribble (Tex.Civ.App.) 82 S.W.2d 414.
The record in this case shows Greene's certificate was issued in California and there delivered to the insurance department of the Southern Pacific for delivery to Greene. Delivery to Greene was made in Arizona, where he resided and where he continued to reside until after his insurance terminated. Under these circumstances the contract, as between Greene and appellant, cannot be regarded as a Texas contract. Connecticut Gen. Life Ins. Co. v. Moore (Tex.Civ.App.) 75 S.W.2d 329; Fidelity Mut. Life Ass'n v. Harris, 94 Tex. 25, 57 S.W. 635, 86 Am.St. Rep. 813; American Nat. Ins. Co. v. Smith (Tex.Civ.App.) 13 S.W.2d 720, and authorities there cited.
It is unnecessary to determine whether it is a California or Arizona contract. In neither case can the attorney's fee and penalty statute of Texas be constitutionally applied. Connecticut Gen. Life Ins. Co. v. Moore (Tex.Civ.App.) 75 S.W.2d 329; Ætna Life Ins. Co. v. Dunken, 266 U.S. 389, 45 S.Ct. 129, 69 L.Ed. 342; Hartford A. I. Co. v. Delta Pine Land Co., 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, 92 A.L.R. 928.
This view is not affected by the amendment in 1931 of the Texas law (Vernon's Ann.Civ.St. art. 4736) whereby it was provided that such attorney's fee shall be taxed as a part of the costs in the case. Such attorney's fees cannot be properly regarded as costs in the ordinary sense of the small fees allowed court officers. Pacific Mut. Life Ins. Co. v. Berryhill (Tex.Civ.App.) 69 S.W.2d 784 (writ refused); People of Sioux County v. National S. Co., 276 U.S. 238, 48 S.Ct. 239, 72 L.Ed. 547; Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 54 S.Ct. 133, 78 L.Ed. 267.
The cases last cited support the view that the true penal nature of the obligation sought to be imposed by the Texas law cannot be changed by the mere declaration of the statute that attorney's fees shall be taxed as costs.
Upon the former appeal this court held the attorney's fee and penalty were recoverable, but the record upon that appeal did not disclose fully the facts, as is done upon this appeal, showing that the contract cannot properly be regarded as a Texas contract.
The judgment is reversed and here rendered in favor of Greene for the monthly installment of $86.25, which was payable May 15, 1933, and the installments for the same sum payable on the 15th of every month thereafter to and including February 15, 1935, together with interest, not to exceed $100, as prayed by the plaintiff.
This judgment is without prejudice to the right of Greene to sue for and recover the monthly installments payable after February 15, 1935, which includes all installments here eliminated from the judgment of the lower court.
Reversed and rendered.