Graham v. Equitable L. Assur. Soc. , 221 Iowa 748 ( 1936 )

I find myself unable to agree with the majority, and therefore respectfully dissent.

The majority bottom their opinion upon the decisions of Hawkins v. John Hancock Mutual Life Ins. Co., reported in 205 Iowa 760,218 N.W. 313; Ginell v. Prudential Ins. Co., 237 N.Y. 554,143 N.E. 740; Garden v. New England Mutual Life Ins. Co., 218 Iowa 1094,254 N.W. 287.

So it becomes necessary to examine what the policy in each of these cases provides:

In the Garden case the clause reads as follows:

"Upon receipt of due proof that the Insured has become * * * incapacitated so as to be wholly and permanently unable to engage in any occupation or profession or to perform * * * and that such disability * * * has existed for a period of ninety days, the Company will pay to the Insured * * *."

No presumption arises from ninety days continuance, which is merely a condition precedent to the allowance of benefits if the disability is in fact permanent.

In the Hawkins case the policy provides:

"If * * * the insured shall become wholly and permanently disabled * * * so that thereby he will be wholly, continuously, and permanently prevented, * * * and has been so disabled for not less than sixty days * * * the company will grant * * *."

Again we find that the sixty-day period raises no presumption, but is merely a further condition.

In the Ginell case the provision is not set out in the opinion, but there is no reference to any presumption whatever.

In the case at bar the disability clause reads as follows:

"Disability shall be deemed total when it is of such an extent that the insured is prevented thereby from engaging in any occupation — for compensation of financial value, and such Total Disability shall be presumed to be Permanent when it is present and has existed continuously for not less than three months."

The distinction is plain. All the cases above referred to require that the disability be permanent and afford no benefit of presumption in determining whether it is. The policy in the case at bar defines "total disability" and then provides that such total disability shall be presumed permanent after ninety days continuance, thus itself defining what is meant by the use of the term "permanent," namely, a total disability which exists when the proof is filed and which has existed continuously for ninety days.

But, the majority argue that because the action was commenced after the disability was removed and ceased to be permanent, the insured is not entitled to recover. I cannot agree with this because in the case at bar it appears without serious dispute that Graham was totally disabled when he filed the formal proofs of loss. True, he did not commence his action until after his recovery, but the obligation to pay arose when he filed his proofs of loss showing that he was totally disabled for a period of not less than three months. No liability arose until the claim was made and the proofs submitted or waived, but the moment he complied with the terms of the policy by filing the necessary proofs of loss, which was done in this case, he was entitled to the benefits of the policy, even though his action was not commenced until after he had recovered. To me it seems unthinkable that the clause which provides for a presumption by continuance of disability for a prescribed period was not intended to fix the liability of the insurer from the date that the proof of loss was filed to the date of termination of disability. To say that one who has filed a proof of loss while still totally disabled cannot recover, while one who commences his suit during the period of disability can recover, is splitting hairs and indulging in overrefinement of reasoning to arrive at a clearly unintended result, because the disability in both cases was identical, and he is excluded from recovering simply because he did not bring suit, although he did comply with the terms of the policy and file proof of loss, while totally disabled.

It is interesting to note that in the Hawkins v. John Hancock Mutual Life Ins. Co. case relied upon so strongly by the majority, the disability had terminated before the proofs were filed, which is an entirely different situation than we have in the case at bar, where the proofs were filed before the disability terminated.

To me it seems that this case is controlled by the case of Kurth v. Continental Life Ins. Co., reported in 211 Iowa 736, at page 738, 234 N.W. 201, 202, where it is said:

"It is seen that, upon the happening of the contingency insured against, — that is, the suffering of total and permanent disability, as defined, — the company, upon satisfactory proof thereof, agrees to waive the future premiums which may thereafter become due on the policy and during the continuance of such disability, and to provide for such payments by indorsing the agreement on the contract itself; and further, six months after the date of such indorsement, upon proof of the continuation of such disability, to pay one-tenth of the face of the policy, or, in this instance, $500, to the insured, and annually thereafter to pay a like sum during the life and continued disability of the insured. There appears to be no ambiguity in these provisions, and they should cause no particular difficulty in construing them, except as respects the starting point. As said before, the contingency insured against is that the insured has been wholly disabled for a period of not less than 60 days, and that such disability so suffered is presumably permanent, and that he will be wholly and continuously prevented thereby from pursuing any gainful occupation. This may be clarified by analysis in this manner: If the insured has been wholly disabled (a) for a period of not less than 60 days; and (b) such disability as has existed for not less than 60 days is presumably permanent, and (c) the insured will be wholly and continuously prevented by the disability that has existed for a period of not less than 60 days and which disability is presumably permanent, from pursuing any gainful occupation. It would thus appear that these three separate factors were combined, and that upon the combination only are the benefits to accrue.

"If the construction sought to be placed on the policy by the defendant insurance company should prevail, the waiver of premiums would then mean nothing; secondly, the installment payment provisions would mean nothing, as they, if any there be due, are to be paid to the insured himself. The fact is that the use of the word `presumably' in connection with `permanent' is sufficient to destroy the idea that it was intended that the absolute certainty of the permanency and the absolute certainty of the continuance of the disability should prevail. The word `presumably' is a comparative adverb, as used in this instance, and by its very nature precluded the idea of an absolute, lasting, or fixed condition. Its meaning is: fit to be assumed as true in advance of conclusive evidence; credibly deduced; fair to suppose; by reasonable supposition or inference; what appears to be entitled to belief without direct evidence. Webster's New International Dictionary. By the employment of this word `presumably,' it is clear that there might be some question, at present or in the future, concerning the permanency and continuancy of the described disability. It next follows that the phrase `and that he will be wholly and continuously prevented thereby' must be construed as not implying absolute certainty, but as a reasonable and fair presumption that `he will be wholly and continuously prevented thereby from pursuing any gainful occupation.' The words, `permanently' and `continuously,' standing alone, would imply that the disability was a lasting and absolutely fixed condition; but when these words are taken in connection with the language used in other provisions of the contract, the only fair construction to be placed on such words is, not that the disability which has existed during sixty days must exist forever, but that such disability has existed for a period of not less than sixty days and by a fair presumption will continue for a future period. Penn Mut. Life Ins. Co. v. Milton,160 Ga. 168, 127 S.E. 140, 40 A.L.R. 1382. To sustain this point, we quote another clause of the contract as follows:

"`After accepting proofs of disability under this policy the company shall have the right at any time thereafter, but not more frequently than once a year, to require proof of the continuance of such disability; and if the insured shall fail to furnish such proof, or if it appears that the insured has so far recovered asto be able to engage in any gainful occupation, the company's obligation to pay the premiums and installments shall cease.'

"By the insertion of the foregoing clause in the contract, it is obvious that the disability by which the benefits may accrue and become obligations of the company is not absolutely expected to be absolutely permanent and absolutely continuous and to absolutely prevent the insured during his after lifetime from engaging in any gainful occupation; because this insertion was intended to govern when and if such presumably permanent disability might be removed by some means or other, and the company desired what benefits it might have by reason of such removal. It must, therefore, be held, as a matter of law, that the insured, under this contract, was required to furnish proofs only of the fact that he had been wholly disabled by bodily injury or disease for a period of not less than 60 days, and that such disability is presumably permanent, and that he will be presumably wholly and continuously prevented thereby from pursuing any gainful occupation."

The provisions in the policy in the case at bar are almost identical with the provisions in the policy in the Kurth case. In the majority opinion the only attempt to show that the Kurth case — which was filed later than the Hawkins opinion — did not overrule the Hawkins opinion is the quotation from the Nebraska case, Lawrence v. Equitable Life Ins. Co. of Iowa, reported in128 Neb. 72, 257 N.W. 530, at page 533, in which the Nebraska Supreme Court had before it a similar case, and in which it said:

"It appears clear that in the Kurth case the Iowa court was not receding from its holding in the Hawkins case."

But I find that the Minnesota Supreme Court has had this same question before it, and that distinguished court in the case of Maze v. Equitable Life Ins. Co. of Iowa, 188 Minn. 139, 246 N.W. 737, on page 740, in which case the disability had terminated or ceased to be total before the action was commenced, which is the exact point involved in the case at bar, does not agree with the Nebraska court and holds:

"It seems to us that the Kurth case is strong authority in support of the contention of the plaintiff."

To me it seems that this case is controlled by the Kurth case, and until that opinion is overruled it should be followed.

Accordingly, I would affirm the decision of the lower court.

ANDERSON, J., joins in this dissent.