Decided November 15, 1933.
Insurance — Total and permanent disability under life policy — Meaning determined from contract, and not circumstances or conduct, when — Proof of temporary disability after termination, not compliance with total disability clause — Notice and proofs of disability not waived by insurer investigating claim.
1. Where the meaning of a contract of insurance against loss resulting from total and permanent disability can be fully and clearly ascertained from the words of the contract itself, the court may not resort to surrounding circumstances or the conduct of the parties for aid in its interpretation.
2. A policy contract which: (1) provides for waiver of premium payments and the payment of monthly benefits upon proof that the insured is totally and presumably permanently disabled; (2) defines total disability so as to include certain irreparable injuries such as the loss of both hands or both feet, and also to include bodily injuries or disease by which the insured is wholly prevented from doing any work, from following any occupation or from engaging in any business for remuneration or profit; (3) provides that the benefits promised shall accrue upon receipt at the company's home office, before default in payment of premium under said policy, of due proof that the insured is totally disabled as above defined, and will be continuously so disabled for life, or if the proof submitted is not conclusive as to the permanency of such disability, but establishes that the insured is, and for a period of not less than three consecutive months immediately preceding receipt of proof has been, totally disabled; (4) provides that upon the cessation of a presumably permanent disability the benefits therefor shall cease, is not complied with by proof of a temporary disability which is ended before such proof is made.
3. The policy requirements as to notice and proof of disability are not waived by the insurance company merely because claimant's proof, submitted after the time limit in the policies has expired, shows that the claimant's disability has already ended, and the insurance company thereafter makes air investigation of the claim. To effect a waiver there must be words or conduct showing an intention to abandon or relinquish a known right.
ERROR to the Court of Appeals of Cuyahoga county.
This was an action to compel the payment of benefits under the total disability clauses of certain insurance policies. Prior to 1927, Harry H. Rose was the holder of certain policies of insurance upon his own life, in favor of Florence Rose, issued by the New York Life Insurance Company. These policies contained clauses in which the company agreed to pay to the insured specified benefits upon proof of total and permanent disability.
In 1927 Rose took out an additional life insurance policy, to which a new and different form of disability contract was attached, and at the same time, for an additional premium, the company canceled the old forms of disability clause in the policies Rose already had, and substituted "riders' carrying the new form of disability contract.
The disability clauses in the old form were as follows:
"1. Disability Benefits shall be effective upon receipt at the Company's Home Office, before default in the payment of premium of due proof that the Insured became totally and permanently disabled after he received this Policy and before its anniversary on which the Insured's age at nearest birthday is sixty years.
"Disability shall be deemed to be total whenever the Insured becomes wholly disabled by bodily injury or disease so that he is prevented thereby from engaging in any occupation whatsoever for remuneration or profit, and under this contract disability shall be presumed to be permanent after the Insured has been continuously so disabled for not less than three months and during all of that period prevented from engaging in any occupation for remuneration or profit. The permanent loss of the sight of both eyes, or the severance of both hands or of both feet, or of one entire hand and one entire foot, shall be considered total and permanent disability without prejudice to other causes of disability.
"2. * * * The first income payment shall become due on the first day of the calendar month following receipt of proof of total and permanent disability or proof of continuous total disability for three consecutive months, as above, and succeeding payments shall become due on the first day of each calendar month thereafter."
"5. Recovery from Disability. The Company may from time to time demand due proof of the continuance of such total disability, but not oftener than once a year after such disability has continued for two full years, and upon failure to furnish such proof, or if it shall appear to the Company that the Insured is able to engage in any occupation for remuneration or profit, income payments shall cease and the payment of any premium thereafter falling due shall not be waived."
The part of the new form with which we are particularly concerned provided:" TOTAL AND PERMANENT DISABILITY * * * * * * * * * *
"New York Life Insurance Company agrees to pay to the Insured
"A monthly Income of Fifty Dollars and to waive payment of premiums under said Policy, as hereinafter provided, upon receipt of due proof that the Insured is totally and presumably permanently disabled before age 60, as hereinafter defined.
"Disability shall be considered total whenever the Insured is so disabled by bodily injury or disease that he is wholly prevented from performing any work, from following and occupation, or from engaging in any business for remuneration or profit, provided such disability occurred after the insurance under this Agreement took effect and before the anniversary of said Policy on which the Insured's age at nearest birthday is sixty.
"Upon receipt at the Company's Home Office, before default in payment of premium under said Policy, of due proof that the Insured is totally disabled as above defined, and will be continuously so totally disabled for life, or if the proof submitted is not conclusive as to the permanency of such disability, but establishes that the Insured is, and for a period of not less than three consecutive months immediately preceding receipt of proof has been, totally disabled as above defined, the following benefits will be granted:
"(a) Waiver of Premium. The Company will waive the payment of any premium under said Policy, including the premium for this Agreement, falling due during the period of continuous total disability, the premium waived to be the annual, semi-annual or quarterly premium according to the mode of payment in effect when disability occurred.
"(b) Income Payments. The Company will pay to the Insured the monthly incomes stated above for each completed month from the commencement of and during the period of continuous total disability. If disability results from insanity, payment will be made to the beneficiary in lieu of the Insured.
"The total and irrecoverable loss of the sight of both eyes or of the use of both hands or of both feet or of one hand and one foot shall constitute total disability for life."
On December 13, 1929, Rose filed his petition in the court of common pleas of Cuyahoga county, alleging that "he became totally disabled by disease upon and as of the 11th day of January, 1929, and that said total disability then commencing continued from that date to and including the 21st day or April, 1929," and that thereafter he gave to the company notice of such disability. The case was brought to issue by answer and reply, and in due course was tried to a jury. At the conclusion of all the testimony the court directed a verdict for the defendant and rendered judgment accordingly.
Upon proceedings in error in the Court of Appeals, the judgment of the court of common pleas was affirmed.
A motion to certify the record was granted by this court, and the case is here upon error to the Court of Appeals of Cuyahoga county.
Messrs. Friebolin Byers, for plaintiff in error.
Messrs. Garfield, Cross, MacGregor, Daoust Baldwin, for defendant in error.
As plaintiff in error was plaintiff below, and defendant in error was defendant below, the parties will be herein designated as plaintiff and defendant respectively.
Two grounds of error were chiefly urged by the plaintiff, and in our view of the case only these two ground need be considered. They are:
(1) That the defendant, by its conduct after the receipt of notice of plaintiff's disability, waived the requirement of the petition that the insured give notice and proof of such disability during its continuance.
(2) That the trial court misconstrued the language of the contract, and thereby wrongfully deprived plaintiff of his right to the disability benefits claimed in his petition.
We shall discuss these points in order.
(1) We are of the opinion that the facts adduced at the trial raised no inference of a waiver by the defendant of the policy requirement regarding notice and proof of disability. According to plaintiff's petition his disability terminated on. April 21, 1929. He did nothing to advise the defendant of his condition, or of his claim, until May 29, when he wrote the company of his desire to file proof. Blank forms were sent him on June 5, and these forms were filled out and returned to the company on July 12. Defendant acknowledged their receipt to July 16, and on August 1 sent a representative to investigate the claim. On September 28 the defendant advised the plaintiff that his claim was rejected. Plaintiff bases his contention that there was a waiver largely upon the fact that the proof of claim filed on July 12 contained the following question and answer:
"8. (a) Are you wholly disabled at the present time? — No."
He asserts that by proceeding with the investigation, with the plaintiff's cooperation, the defendant waived the requirement, of the policy.
"A waiver is a voluntary relinquishment of a known right." List Son Co. v. Chase, 80 Ohio St. 42, at page 49, 88 N.E. 120, 17 Ann. Cas., 61.
Richards on Insurance (4th Ed.), Section 106, cited by plaintiff in his brief, elaborates upon this definition as follows:
"Waiver is the voluntary relinquishment of a known right. It involves the idea of assent, and assent is an act of understanding. This presupposes that the person to be affected has knowledge of his rights, but does not wish to assert them. Intention to relinquish must appear, but acts and conduct inconsistent with intention to terminate the contract are sufficient * * *."
Interpreting the facts most favorably to the plaintiff, we are unable to see that they support any inference of waiver by the defendant. Assuming that the defendant, upon receipt of the proof of claim, had knowledge of the termination of the disability, there is nothing to show intention to abandon or relinquish its rights. It may have anticipated that plaintiff would sue. If so, it had a perfect right to make an investigation for its own protection. Plaintiff was led to give up nothing by the investigation or by delay. The time for filing his proof, fixed by the contract, had expired before he first gave notice of his disability. There is nothing in the evidence from which the jury could properly have found either waiver or estoppel.
(2) The other and more fundamental point upon which plaintiff insists is that the language of the new disability clause is subject to a construction which would allow him to recover. Referring to the clauses of the new contract, quoted supra, he says that, if proof of loss had been made during the period of disability, the company would have paid the benefits accruing from the beginning of that period to its end. Arguing from this promise, he contends that the true import of the contract is "health insurance" rather than insurance against total and permanent disability. In support of this contention, he claims that the language of the disability contract is ambiguous; that, unless it means what lie says it means, the additional premium which he paid for the new "riders" on the old policies was exacted for no adequate, additional benefit; and that, in selling the new contract, agents of the company passed out company literature which tended to corroborate his claim.
The following language of the policy he contends is ambiguous: "Or if the proof submitted is not conclusive as to the permanency of such disability, but establishes that the Insured is, and for a period of not less than three consecutive months immediately preceding reciept of proof has been, totally disabled, as above defined, the following benefits will be granted."
The requirement of proof which establishes that the insured "is" disabled would seem upon its face to necessitate the submission of such proof during the continuance of the disability, but the plaintiff contends that the suceeding words, "immediately preceding receipt of proof has been totally disabled," imply that proof may be filed within a reasonable time after the disability has ceased. Considering the contract as a whole, however, there is no ambiguity unless an assumption is first made that the agreement is one to pay for temporary disability. But we may not read a meaning into the clear language of the contract and then find ambiguity in the words which deny that meaning.
Indeed, plaintiff's case rests, wholly upon the theory that the policy provides payments for temporary disability, since a disability ended before proof of it is made must of necessity be temporary.
When, however, we turn to the lauguage of the disability contract, we find in large type at its beginning the words, "TOTAL AND PERMANENT DISABILITY." Thereafter the agreement provides for the payment of monthly income and the waiver of premiums upon proof that the insured is totally and presumably permanently disabled. The contract definition of total disability includes the loss of both hands, both feet, both eyes, or of one hand and one foot. But bodily injury or disease, incapacitating the insured for any work or occupation or business for remuneration or profit, is also within the definition.
Now, of course, total disability appears forthwith upon proof of the loss of both hands, but in many cases total incapacity for work or business could only be known to be permanent after the person concerned was dead. It was therefore necessary, as a matter of practice, that the policy establish some criterion upon which a presumption of permanent disability might be based, so as to enable the payment of benefits during the insured's life.
The contract accordingly provides for proof of permanent disability in two classes of cases: (a) That class in which the insured is and will be continuously disabled for life, for example, having both hands cut off; and (b) that class in which "the proof submitted is not conclusive as to the permanency of such disability," but in which there is a presumption of permanency, that is, in which the proof "establishes that the Insured is and for a period of not less than three consecutive months immediately preceding receipt of proof has been totally disabled."
If the presumptively permanent disability cease after payments begin, the contract provides for their discontinuance. If the cessation of disability be shown before the payments begin, plainly no payments need be made.
Thus analyzed, the language used becomes wholly clear and entirely free from ambiguity.
When the meaning of the contract can be fully and clearly ascertained from its own words, we are at liberty to go no further in search of aid in its interpretation. Comparison of the old with the new form of contract, quoted supra, shows clearly that for his additional premium the insured got the right to benefits in certain cases from the inception of disability, instead of from the end of a three-month period. But whether this additional benefit was adequate, in view of the increased premium charged, becomes immaterial to the construction of the contract where its language is entirely clear and unambiguous.
It does not definitely appear from the record that the sales literature put out through defendant's agents was ever shown to the plaintiff, but, if it was, it cannot avail to change the interpretation of a contract which in and of itself is clear and free from ambiguity.
The identical language used in this contract was under consideration Gottlieb v. New York Life Ins. Co., 136 Misc. 194, 240 N.Y. S., 568. In that case the court held that it was not a compliance with the contract to offer proof of disability one year after the disability had ceased. See, also, Bergholm v. Peoria Life Ins. Co., 284 U.S. 489, 52 S.Ct., 230, 76 L.Ed., 416.
In our opinion, therefore, there is no error in the. judgment of the Court of Appeals, and that judgment is accordingly affirmed.
STEPHENSON, JONES, MATTHIAS and ZIMMERMAN., JJ., concur.
WEYGANDT, C.J., not participating.