Opinion
14215
February 3, 1936.
Before RAMAGE, J., Barnwell, April, 1935. Affirmed.
Actions by Alonzo E. Corley against the Atlantic Life Insurance Company. Plaintiff Corley died, and the actions were revived in the name of his wife, to whom he had assigned his interests and who was appointed executrix of deceased's will. From judgments for defendant, plaintiff appeals.
The order of Judge Ramage follows:
These three actions came on to be heard at the spring, 1935, term of the Court of Common Pleas for Barnwell County, and by consent of counsel were ordered to be heard and tried together. The respective actions involve the right of the plaintiff to recover the benefits provided for under the total and permanent disability benefit provisions contained in the three policies of insurance issued by the defendant company on the life of Alonzo E. Corley.
From the record it appears that these actions were instituted by Alonzo E. Corley on or about October 12, 1934. The action first above entitled involves Policy No. 73156, in the face amount of $5,000.00, and the other actions involve Policies No. 40298 and No. 40299, in the face amount of $2,000.00 each. The said Alonzo E. Corley died testate on November 2, 1934, and previous to his death he assigned all rights and claims under the policy involved in the first action to his wife, Mrs. Jessie P. Corley, and she was substituted plaintiff therein as such assignee. Mrs. Jessie P. Corley is the duly appointed and acting executrix of the last will and testament of the said Alonzo E. Corley, and she has been substituted plaintiff as such executrix in the two remaining actions.
After the plaintiff had rested her case, the defendant moved for a nonsuit on the grounds hereinafter referred to, and I overruled the same with leave to the defendant to renew such grounds on motion for a directed verdict. Upon completion of all of the testimony the defendant made a motion for a direction of verdict, and argument was had in support thereof. The plaintiff likewise made a motion for direction of verdict in her favor, and I then proposed that the further hearing and determination of such motions be deferred and that the case be submitted to the jury upon the agreement that either party may renew such motions for direction of verdict before me at my chambers at Saluda, S.C., and I retained the right to grant or refuse such motions at that time. This agreement was consented to by counsel representing both parties in open Court and approved by the Court. The jurisdiction of the Court to hear and determine such motions for direction of verdict was thereby expressly reserved by me the same as if such motions had been finally determined during the course of the trial. Thereafter, the issues were submitted to the jury, but, they being unable to agree, a mistrial was ordered.
The matter now comes before me pursuant to the agreement aforesaid on the motion of the defendant for a direction of verdict and order for judgment. The testimony in these cases is undisputed, with the exception of that relating to whether or not the insured was totally disabled as defined in the three policies, the clauses in respect to which are substantially the same. The defendant bases its right to a direction of verdict on the following grounds:
(1) Because under the undisputed testimony the insured, Alonzo E. Corley, did not, before the non-payment of any premium due under the several policies, furnish proof satisfactory to the company that solely from causes originating after delivery of the policies, and entirely beyond the control of the insured, he had become totally and permanently disabled as therein defined, and that the company did not receive notice of such alleged disability until many months after the policies had become lapsed and of no effect and the giving and furnishing of such notice and proofs while said policies were of full force by the payment of premiums was made a condition precedent to liability for the waiver of premiums or payment of indemnities.
(2) Because the policy involved in the first action became lapsed for non-payment of the extension agreement and loan interest becoming due on June 10, 1932, and was not thereafter reinstated; that the two remaining policies lapsed for non-payment of the premium and loan interest becoming due on April 5, 1933, and were not thereafter reinstated; and that all insurance benefits created under the three policies ceased and determined many months before the date the company received notice of the alleged claim for disability, which notice was first received on September 24, 1934.
Because the insured was not during any of the times the said policies were of full force, totally and permanently disabled as defined in said contracts, and even if so the cause of such disability was not entirely beyond the control of the insured.
The undisputed testimony establishes that the several policies became lapsed for non-payment of premium on the dates set forth in defendant's motion and were not thereafter reinstated. Upon lapse taking place, term insurance for a short period was automatically purchased under the three policies, but such term expired many months before notice of the alleged disability was given or the death of the insured. It is also undisputed that the first notice received by the company of the insured's alleged disability was that contained in the letter addressed by his attorney to the company bearing date September 26, 1934, and received September 27, 1934. Upon this request the company, without waiving, but reserving all of its rights and defenses, furnished blanks upon which the insured may submit proof of his claim, and such proofs were thereafter completed and returned to the company and the claim was declined on October 8, 1934.
The testimony of the insured, Alonzo E. Corley, was taken, de bene esse, a short while prior to his death, and he thereby admitted that the first notice given by him to the company of his claim was in the letter of his attorney dated September 26, 1934, and that he was not at any of the times while said policies were of full force prevented by a physical or mental incapacity from giving notice and furnishing proof of his alleged disability to the defendant company. In fact, he frankly conceded that his mind was not then, nor had not been in any way affected, and did not claim that his physical or mental condition was such as to have prevented him from giving the company such notice and proof. The plaintiff contends that the insured was excused from giving the notice and proofs required by the terms and conditions of the policies because he was unaware of the definition of the words "total and permanent disability." The insured testified that prior to being informed by his attorney in September, 1934, he thought that the words "totally and permanently disabled" meant a state of absolute helplessness and not an inability to do substantially all of the material acts necessary to the prosecution of his business or occupation in substantially his accustomed and usual manner. Unquestionably, the terms of the policies required the furnishing of satisfactory proofs of disability, while the policies are of full force by the payment of premiums, as a condition precedent to liability for the waiver of premiums or payment of indemnities. The evidence here is undisputed that the company first received notice of the claim many months after the policies had become lapsed and of no effect. The contention advanced by the plaintiff is novel and does not appear to have been raised before in this State. However, there is a wealth of authorities dealing with the general subject. Two of the oldest maxims in the law are ignorantia facti excusat, ignorantia juris non excusat, and ignorantia legis neminem excusat. There is no contention made that the insured was ignorant of the fact that his policies contained disability clauses, but merely that he was ignorant of the law governing the same. In the recent case of McKorrell v. Mutual Life Insurance Company, 174 S.C. 415, 178 S.E., 346, it was held that the insured was presumed to know that his policies contained disability benefits. Under the authorities establishing and giving application to the foregoing maxims, the insured therefore cannot be excused for his alleged failure to know the law so as to excuse him from giving the required notice. The declaration by an appellate Court as to what constitutes or is the law does not make the law but merely calls into application and gives expression to what has always been the law from its earliest days. Such law together with its inferences and constructions is presumed to have always existed and is not the declaration of a new theory. It follows, therefore, that the meaning and connotation of the language used in disability clauses was the same from the day it was first employed until the present time, and will remain unchanged unless circumscribed by statute or decision. The fact that the insured not have been aware of this law does not excuse his failure to comply therewith. If he had any doubt as to whether or not he was disabled within the meaning of the disability clause contained in his policies, he had but to give notice of his claim to the company and furnish evidence of his condition to it. If the company declined to honor the claim and concluded that he was not entitled to the protection thereby afforded and the insured thought himself aggrieved thereby, he could have instituted an appropriate proceeding for the recovery of these benefits. Thereupon the Court would have concluded whether, under the facts and obtaining law, liability rested upon the defendant to waive the payment of premiums and grant the monthly income payments. To hold otherwise would undermine the sanctity of obligations of every description and introduce untold confusion into the law of contract.
The law in this State is well settled that the insured was under the duty to comply with the conditions of his policies before he would be entitled to recover benefits. It was so held in the recent case of Ford v. New York Life Insurance Company, 176 S.C. 186, 180 S.E., 37, 42, decided March 5, 1935, as follows: "It is true that the plaintiff is required to file proof of disability with the company before he is entitled to the benefits of the disability provisions contained in his policy."
The validity of these requirements has been continuously affirmed since Craig v. United States Health Accident Insurance Company, 80 S.C. 151, 61 S.E., 423, 18 L.R.A. (N.S.), 106, 128 Am. St., 877, 15 Ann. Cas., 216. The cases of Parker v. Jefferson Standard Life Insurance Company, 158 S.C. 394, 155 S.E., 617, 618; and Black v. Jefferson Standard Life Insurance Company, 171 S.C. 123, 171 S.E., 617, 618, are directly in point.
In the Parker case the insured sought to recover annual installments alleged to have matured prior to the time he gave notice and furnish proofs of his disability. In rejecting his claim, the Court said:
"Yet the policy of insurance represents a solemn contract where the parties, legally capable of contracting, have voluntarily agreed upon their own terms and consented to their own conditions, and, in the absence of waiver or a prevention of performance by one party through the act of the other pursuant to a liberal construction in cases of doubt and ambiguity in favor of the insured, must be enforced in accordance with its plain meaning, and not violated or disregarded by the Courts. Perkins v. Philadelphia Life Insurance Company, 93 S.C. 88, 76 S.E., 29.
"It is, indeed, difficult to conceive how provisions in a contract purporting to evidence the mutual intention of the contracting parties could be freer from doubt or ambiguity than those under consideration. The clause in question simply provides in plain, unmistakable language that, `upon receipt of due proof' by the company of the disability of the insured, the primary and initial act upon which a purely executory clause becomes operative, the company will, at the option of the insured, agree in writing indorsed on the policy to do one of two things, namely, to pay for the insured the premiums which shall thereafter become payable during the period of disability or will grant an endowment for the face value of the policy, under which no premiums will be required, payable in ten equal annual installments, the first to be paid immediately upon receipt of due proof of the disability or incapacity. * * *
"The reasonableness and validity of such notice requirements are not only recognized and sustained by the Courts ( Craig v. United States Health Accident Insurance Company, 80 S.C. 151, 61 S.E., 423, 18 L.R.A. (N.S.), 106, 128 Am. St. Rep., 877, 15 Ann. Cas., 216), but furnish a proper administrative protection against imposition and fraud, which would be of little practical value if the notice and demand could be so long deferred as to prevent a timely and effective investigation of the claim. Such a construction as contended for would likewise render, in direct disregard of the express agreement of the parties as plain as the apt selection of words can make it, uncertain the maturity date of the first installment, would completely ignore the contractual plan and obligation of granting an endowment for the face value of the policy in a specific number of `equal annual installments,' and would require the insurer to pay in a lump sum what the parties have plainly agreed shall only be paid annually and in an amount each year not in excess of one-tenth of the face value of the policy."
This principle was reaffirmed in the Black case in the following language: "In the case of Parker v. Jefferson Standard Life Insurance Co., 158 S.C. 394, 155 S.E., 617, it has been definitely held that the disability payments cannot be rightly claimed prior to the filing of due proofs of disability. In the case of Garner v. Volunteer State Life Insurance Co. [ 171 S.C. 1], 171 S.E., 370, filed October 23, 1933, the rule in the Parker case was followed, with the exception that inability to file the necessary proofs might be excused under the rule expressed in Levan v. Metropolitan Life Insurance Co., 138 S.C. [253], 254, 136 S.E., 304. In the case now before us, there is no effort made to show that the insured's failure to file due proofs of his disability for some twenty months could be excused on the ground of physical or mental disability or any other cause. The rule in the Parker case is therefore applicable to this case, and the claim for monthly disability payments should begin from the filing of due proof of disability, to wit, February 4, 1931."
These cases are also easily distinguishable from the cases of Garner v. Volunteer State Life Insurance Company, 171 S.C. 1, 171 S.E., 370; and Levan v. Metropolitan Life Insurance Company, 138 S.C. 253, 254, 136 S.E., 304. In those cases it was held that an insured may be excused from giving notice where he was prevented from doing so by a mental or physical incapacity. Here it is agreed that the insured was neither mentally nor physically incapable of complying with the terms of his contracts. I therefore hold and rule that the defendant is entitled to a directed verdict on the first and second grounds of its motion.
There is a conflict of testimony as to whether or not the insured was totally and permanently disabled, as that term has been defined by our Courts, prior to the lapse of the policies. The plaintiff offered numerous witnesses to prove that since the year 1930 the insured was unable to do substantially all of the material acts necessary to the prosecution of his business, in substantially his customary and usual manner. On the other hand, the defendant developed through cross examination that during this time the insured had supervised the operation of his farm and mills, although he may not have performed any actual physical work in connection therewith. Testimony was also offered to show that the cause of the insured's disability was sclerosis of the liver, and that excessive use of alcohol over a long period of time is likely to produce this disease. It was further brought out that the insured had been a constant user of alcohol for a great number of years, and this testimony is pertinent in connection with the insured's defense that the disability sustained by him did not originate from causes entirely beyond his control. For the purposes of this decision it is unnecessary to rule whether or not the testimony offered was sufficient to carry the case to the jury on this point, and I therefore refrain from expressing an opinion thereabout.
The plaintiff also contends that the defendant waived the failure of the insured to give notice of his claim within the required time by furnishing blanks for the submission of proof long after the policies had become lapsed. As stated, it is admitted that the first notice of the claim was that contained in the letter addressed by Mr. Boulware, the insured's attorney, to the counsel to the company at Richmond, bearing date September 26, 1934. The testimony clearly establishes that the blanks were furnished to the insured as a courtesy and upon the distinct reservation that none of the company's rights were thereby waived. In the letter addressed by Mr. Scott, counsel to the company, to Mr. Boulware dated October 1, 1934, and in reply to the above letter, the following is found: "However that may be, I wish to be equally courteous to you, and for that reason am enclosing herewith customary blanks used to file proofs of a disability claim. You may be sure, as indicated, that in so doing, and in furnishing you with the attached blanks, the company is in no way waiving any of its rights or any of its legitimate defenses to any claim or claims filed by or on behalf of the above named. On the contrary, the company expressly reserves to itself any and all such rights and defenses, including especially but not exclusively, the fact that irrespective of whether Mr. Corley is now or has at any time been disabled as defined no intimation, notice, or proofs of any claim for disability benefits have ever been filed with the company while the contracts, or any of them, were in full force and effect."
Use of language could hardly make it clearer that the company, in furnishing the blanks, did not intend to relinquish or waive any of its rights or to excuse the failure of the insured to give the notice of his claim while the policies were of full force. Some evidence was offered tending to show that in 1930 when an agent of the defendant company delivered to Mr. Corley a policy of insurance in the face amount of $10,000.00, and not involved in this action, the plaintiff informed such agent that the insured was ailing and could not get around to attend to his business. There is no contention that this statement was made by Mrs. Corley in connection with the filing of a claim for disability or that a claim was presented at such time. Furthermore, there is no showing that this agent was requested to or actually did transmit such information to his home office. The fact that at the time the insured accepted the delivery of a large policy would tend to disprove the assertion that he was or claimed to be totally and permanently disabled.
The plaintiff also contends that the incontestable clause contained in the three policies precludes the company from contesting the right of the plaintiff to receive the total and permanent disability benefits; such period of contest having expired. The incontestable clause reads: "This contract shall be incontestable after it has been in force during the lifetime of the insured for a period of one year from the date hereof, except for non-payment of premium or. * * *" It is therefore clear that the company has the right to contest the policy, or any portion thereof, at any time for the non-payment of premium. As one of the principal defenses asserted by the defendant is the non-payment of premium, the incontestable clause is without application and does not preclude contest on behalf of the company. Furthermore, the right of the plaintiff to recover benefits under the disability clause is conditioned upon the insured furnishing due proof of his disability "before non-payment of any premium due under the `premium' clause on the first page of this contract." Accordingly, neither the plaintiff nor the insured can claim any rights or benefits under the disability clause unless proofs of such disability are furnished to the company before the non-payment of any premium due, and as such proofs were not so furnished, the company has an unquestioned right to contest any claim made under the policies, either for the death benefit or disability benefit. The effect of the non-payment of premiums before the furnishing of proofs is to extinguish and make ineffectual the disability benefit provisions contained in said policies.
In the recent case of Livingston v. Mutual Benefit Life Insurance Company, 173 S.C. 87, 174 S.E., 900, 901, it was held that "the `incontestable clause' relates to the validity of the contract of insurance. It does not affect the construction of the terms of the contract."
It therefore appears that the plaintiff has failed to make out a cause of action against the defendant, and that there is no obligation resting upon the defendant to waive the payment of the premiums becoming due under the said policies or to pay the monthly indemnities provided for therein.
It is, therefore, ordered that the verdict be, and the same hereby is, directed in favor of the defendant, and that judgment is so ordered in each of the cases.
Messrs. Thos. M. Boulware and Joseph L. Nettles, for appellant, cite: As to proof of disability: 175 S.C. 182; 178 S.E., 867; 158 S.C. 394; 155 S.E., 617; 171 S.C. 123; 171 S.E., 617; 171 S.E., 370; 138 S.C. 254; 136 S.E., 304; 171 S.C. 1; 171 S.E., 370; 80 S.C. 151; 61 S.E., 423; 146 S.C. 41; 143 S.E., 668; 175 S.C. 324; 179 S.E., 56; 14 R.C.L., 1333; 138 S.C. 253; 136 S.E., 304. Waiver: 165 S.C. 427; 164 S.E., 6; 128 S.C. 223.
Messrs. Thomas, Lumpkin Cain and Blatt Fales, for respondent, cite: Failure to give notice and proof of disability: 15 A.L.R., 318; 284 U.S. 489; 52 Sup. Ct., 230; 80 S.C. 151; 61 S.E., 423; 18 L.R.A. (N.S.), 106; 128 A.S.R., 877; 15 Ann. Cas., 216; 158 S.C. 394; 155 S.E., 617; 93 S.C. 88; 76 S.E., 29; 171 S.C. 123; 171 S.E., 617; 171 S.E., 370; 138 S.C. 254; 136 S.E., 304; 176 S.C. 337; 180 S.E., 210; 174 S.C. 415; 178 S.E., 346. Estoppel: 2 McC., 23; 149 S.C. 402; 147 S.E., 444; 165 S.C. 33; 162 S.E., 599; 106 S.C. 356; 91 S.E., 326; 174 S.C. 415; 129 S.C. 226; 123 S.E., 845; 9 S.C. 43; 54 S.C. 314; 32 S.E., 431; 124 S.C. 211; 117 S.E., 351. As to ignorance of law: 115 S.C. 10; 104 S.E., 325; 217 Ala., 307; 116 So., 151; 103 S.C. 494; 88 S.E., 36. Incontestable clause: 173 S.C. 87; 174 S.E., 900. Payment of premium: 284 U.S. 439; 52 Sup. Ct., 431; 151 U.S. 452; 14 Sup. Ct., 379; 38 L.Ed., 231; 104 U.S. 88; 26 L.Ed., 662; 93 U.S. 24; 23 L.Ed., 789; 31 Fed. (2) 862; 166 S.C. 181; 164 S.E., 609; 4 S.C. 1. Direction of verdict: 180 S.E., 55; 78 S.C. 552; 59 S.E., 641; 173 S.C. 1; 174 S.E., 581; 91 S.C. 17; 74 S.E., 37; 121 S.C. 324; 113 S.E., 637; 35 A.L.R., 637; 4 Rich., 365.
February 3, 1936. The opinion of the Court was delivered by
After a careful examination of the record in this case, the Court is satisfied with the well-considered and able order of his Honor, C.J. Ramage, Circuit Judge, which will be reported.
The judgment of the Court is, that all of the exceptions be dismissed, and that the judgment of the Circuit Court be, and the same hereby is, affirmed.
MR. CHIEF JUSTICE STABLER and MESSRS. JUSTICES CARTER, BONHAM and BAKER concur.