Case Name: NEW YORK LIFE INS. CO. v. STONER
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1940-02-19
Citations: 109 F.2d 874
Docket Number: No. 11450
Parties: NEW YORK LIFE INS. CO. v. STONER.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 109
Pages: 874–884

Head Matter:
NEW YORK LIFE INS. CO. v. STONER.
No. 11450.
Circuit Court of Appeals, Eighth Circuit.
Feb. 19, 1940.
Rehearing Denied March 22, 1940.
THOMAS, Circuit Judge, dissenting.
William H. Becker, of Columbia, Mo. (Boyle G. Clark, J. E. Boggs, Paul M. Peterson,' and Howard B. Lang, Jr., all of Columbia, Mo., H. Templeton Brown, of St. Joseph, Mo., and Louis H. Cooke, of New York City, on the brief), for appellant.
Benjamin Phillip, of St. Joseph, Mo. (B. L. Kaufmann, Francis Smith, and R. E. Culver, all of St. Joseph, Mo., on the brief), for appellee.
Before THOMAS and VAN VALKEN-BURGH, Circuit Judges, and DEWEY, District Judge.

Opinion:
DEWEY, District Judge.
In this action the appellant, New York Life Insurance Company, asked for a declaratory judgment on four similar combination life and disability insurance policies.
The policies were issued to Lewis K. Stoner, appellee, who claims to have been totally and permanently disabled since June 29, 1931, as a result of an injury sustained when an automobile struck the wagon in which he was riding.
Payments for total disability were made and premiums waived by the company to September 29, 1933. This action covers the right to benefits for the period between May 29, 1936, until January 7, 1938.
The total and permanent disability provisions of the four policies, except as to amounts, are identical. The provisions pertinent • to this controversy are as follows: "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 any occupation, or from engaging in any business for remuneration or profit, if the insured performs any work, or follows any occupation, or engages in any business for remuneration or profit, no further income payments shall be made nor premiums waived."
At the trial a jury was waived and the trial court filed a memorandum opinion. In that opinion is a comment as follows: " the defendant was in court, however, (he walked in during the progress of the trial) and we observed him carefully. (It is knowledge made famous by the oft repeated tale that one can obtain a much clearer comprehension of the appearance and nature of an elephant by seeing one than by hearing the learned descriptions of even four eminent men of science). We observed the defendant carefully. He walked into the courtroom, using a cane, but with only a slight limp, and with no expressions of pain. He appeared to be a strong, vigorous, healthy man, whose manner, features and appearance suggested intelligence above that of the average farmer
"The whole truth of the matter is that as a result of his injury the defendant has a permanently stiffened ankle; that any extensive use of that ankle is now painful, so that it cannot be extensively used both because of the pain and because of the stiffness; that medical and surgical treatment possibly would remove entirely the pain element in the defendant's ankle condition. The only business in which the defendant has had training and experience is that of farming. He is not physically able, because of his injury and its consequences, to perform those farmer's tasks which require the more or less continuous and full use of both feet. That is the extent of his handicap."
With this statement it was startling on first impression to learn that the court had found the insured totally and permanently disabled.
Summarizing his opinion the court concluded the law governing to be as follows: "To have a declaratory judgment that it is not liable on account of total and presumably permanent disability under a policy of insurance such as are involved in this case an insurance company must prove by the preponderance or greater weight of the credible testimony that the insured can do any work; or that he can follow any occupation, that is, any of those occupations by which men earn livelihoods for themselves and their families, himself performing such of its duties as substantially constitute that occupation; or that he can engage in any business for remuneration or profit, that is, in any of 'those businesses by which men earn livelihoods for themselves and their families, himself performing such of its duties as substantially constitute that business." and made one ultimate Finding of Fact as follows: "From May 29, 1936, until January 7, 1938, the defendant was totally and presumably permanently disabled by reason'of the injury received by him June 29, 1931", and entered a declaratory judgment that the plaintiff is liable to the defendant for total and permanent disability benefits for the period in question.
The appellant here contends that the court erred: (1) In concluding that the plaintiff bore the burden of proof to show that the defendant was not totally disabled within the meaning of the policies; (2) in the conclusion of law; and (,3) in the finding of fact.
As plaintiff's evidence sought to establish that the insured was able to or did engage in a business for remuneration or profit during the period in question, we will limit our discussion to those phrases in the policies.
The only evidence submitted was that of the insured, corroborated by his brother and physicians.
Appellant, New York Life Insurance Company, assumed the burden of proof and is estopped to deny that it was not required to assume that burden.
We would not want to be understood however as holding that it was incumbent on the plaintiff to prove a double negative, as the plaintiff inferred from the court's conclusion of the law. To require a plaintiff to prove a double negative would often result in an unwarranted change of the plain provisions of an agreement.
"Whenever the establishment of an affirmative case requires proof of a material negative allegation, the party who makes such allegation has the burden of proving it, especially where the most appropriate mode of proof is by establishing the affirmative opposite of the allegation." 22 C. J.Evidence, Sec. I5, p. 70.
The most appropriate mode here required the plaintiff to prove, and prove only, the affirmative that the insured can or has during the period in question engaged in some business for profit.
The insured seriously and confidently contends that under the laws of Missouri the facts abundantly establish the total disability of the insured, or at least, substantial evidence to support the ultimate fact found by the trial court.
At the time of the insured's accident he was operating and farming 305 acres. This consisted of two farms, one of 200 acres, known as the Estate Farm, which he rented from his mother, and the balance owned by himself. They were operated as one grain and stock farm. The injury was from a fall resulting in two bones of his lower left leg being jerked out of the ankle joint. Sometime prior to September 29, 1933, he started to manage and operate the two farms in a manner hereinafter described and since that time his physical condition has been about the same, except that the ankle is slightly smaller than it was. The ankle is completely ankyloscd and is painful to some extent at all times. He can walk a block or two with the aid of his cane and can drive his automobile without excess pain. When he overdoes the walking or exercising he often experiences pain so severe that he cannot sleep at night. The injury is permanent. His mind is not affected by the injury and has not been at any time.
Since his injury he has not been able to do the actual physical labor connected with the farming but hires it done. Prior to the injury he employed two men constantly on the farm but since the injury he has been able to operate it with one farm hand on account of the employment of a tractor and modern machinery. Since sometime prior to September 29, 1933, he has continued to operate the farm of 305 acres as a grain and stock farm. He buys livestock, cattle and hogs, from others, feeds the produce of the farm to them and sells the livestock. He goes to St. Joseph, Mo., and buys livestock and also buys livestock from his neighbors and in the purchase of livestock he deals with them personally. He drives his car to Omaha and St. Joseph, a distance of 90 to 100 miles, where he trades at the stockyards. He trades and sells livestock through the same commission men who handled his stock transactions before he was injured. He looks after the livestock on the farm, that is, personally sees it and keeps himself informed and acquainted with what is on the farm.
There is a highway between the two farms and the farms are mostly bordered by roads and he can drive his automobile anywhere that a binder or mowing machine can go, and he does this and drives into the fields and consults with his men about the crops and the method and manner of doing the work. He operates the Estate Farm under an agreement with his mother, pays the operating expenses, including taxes and insurance, and the living expenses of himself and his mother, and makes a profit which he divides with her.
The law becomes important as the court's finding of fact was based upon his conclusion as to the law.
In the interpretation of these insurance contracts, if the law applicable has been decided by the highest court of Missouri, the federal courts are required to follow its decision. Erie R. R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487.
That court has not construed the phrase used in insurance policies containing the provision that "disability shall be considered total whenever the insured is so disabled that he is wholly prevented from engaging in any business for remuneration or profit", or the phrase, "if the insured engages in any business for remuneration or profit, no further income payments shall be made nor premiums waived."
It has consistently held that where the language of an insurance policy is plain and unequivocal, there is no room for construction and the words must be given their usual and natural meaning. State ex rel. Com. Casualty Co. v. Cox, 322 Mo. 38, 14 S.W.2d 600; Prange v. International Life Ins. Co., 329 Mo. 651, 46 S.W.2d 523, 80 A. L.R. 950; State ex rel. Mutual Benefit, Health & Accident Ass'n v. Trimble, 334 Mo. 920, 68 S.W.2d 685; State ex rel. Metropolitan Life Ins. Co. v. Hostetter, 338 Mo. 589, 92 S.W.2d 112; Heald v. Aetna Life Ins. Co., 340 Mo. 1143, 1148, 104 S.W. 2d 379; State ex rel. Prudential Ins. Co. v. Shain, Mo.Sup., 127 S.W.2d 675.
In Wendorff v. Missouri State Life Ins. Co., 318 Mo. 363, 370, 1 S.W.2d 99, 101, 57 A.L.R. 615, the court said: "In the construction of the policy, the rules to be followed are well settled. The policy is a contract. Plain and unambiguous language must be given its plain meaning. The con- • tract should be construed as a whole; but, in so far as open to different constructions, that most favorable to the insured must be adopted. However, the rule 'does not authorize a perversion of language, or the exercise of inventive powers for the purpose of creating an ambiguity where none exists.' "
In considering purely occupational and group insurance policies it has construed somewhat similar provisions insofar as they related to inability to perform any work or follow any occupation as being ambiguous and requiring judicial construction, and have held such construction requires that most favorable to the insured be adopted. So the phrase "any and every duty" was construed judicially to mean "any and every substantial -duty," and the phrase "permanently, continuously, and wholly prevented from performing any work for.compensation or profit", held ambiguous and open to judicial construction. State ex rel. Metropolitan Life Ins. Co. v. Allen, 337 Mo. 525, 85 S.W.2d 469, 470; Metropolitan Life Ins. Co. v. Hostetter, 338 Mo. 589, 92 S.W. 2d 122; Heald v. Aetna Life Ins. Co., 340 Mo. 1143, 1149, 104 S.W.2d 379, 383.
In the Heald case, supra, the Supreme Court of Missouri apparently adopts the rule in occupational and perhaps in group insurance cases, as follows: "The rule prevailing in most jurisdictions is that the 'total disability contemplated by an accident policy, or the disability clause of a life policy does not mean, as its literal interpretation would require, a state of absolute helplessness; rather, that the disability contemplated means inability to do all the substantial and material acts necessary to the prosecution of the insured's, or, in many instances, any, business or occupation, in a customary and usual manner.' Headnotes to Annotations in 98 A.L.R. 789. The leading cases cited therein from this state are James v. United States Casualty Co., 113 Mo.App. 622, 88 S.W. 125, 127; Foglesong v. Modern Brotherhood of America, 121 Mo.App. 548, 97 S.W. 240; Bellows v. Travelers' Ins. Co. (Mo.Sup.) 203 S.W. 978.' "
In this decision the court was discussing a purely occupational insurance policy. The words "in a customary and usual manner" mean the same as "to substantially perform." Giving to the decisions of the Supreme Court of Missouri their broadest interpretation, it might be said that in considering phrases in insurance policies similar to the one here in issue, they might construe the phrase most favorable to the insured and say that the interpretation should be, that the disability contemplated means, inability to substantially perform all the substantial and material acts necessary to the prosecution of the insured's, or any, business.
This construction is practically the same as that given by the Federal courts to the term "totally disabled" contained in war risk insurance policies. Lumbra v. United States, 290 U.S. 551, 54 S.Ct. 272, 78 L.Ed. 492; United States v. Green, 8 Cir., 69 F. 2d 921; United States v. Rice, 8 Cir., 72 F. 2d 676, 677; Thompson v. United States, 8 Cir., 65 F.2d 897; United States v. Weeks, 8 Cir., 62 F.2d 1030; United States v. Harth, 8 Cir., 61 F.2d 541, 546; United States v. Vineyard, 5 Cir., 71 F.2d 624; United States v. Nickle, 8 Cir., 70 F.2d 873, 879; United States v. Rye, 10 Cir., 70 F.2d 150, 151, 153; United States v. Sumner, 6 Cir., 69 F.2d 770.
The appellee contends that the construction should go further and the phrases interpreted as limited to the business or occupation in which insured .was engaged when the insurance policies were issued.
And that the phrases should be interpreted as meaning that the insured must perform the substantial and material acts of any business by his own physical efforts.
It may be that some of the appellate courts of Missouri have so construed similar insurance policies.
We are not bound to follow the decisions and reasoning of the intermediate appellate courts of Missouri. Erie R. R. v. Tompkins, supra; Graham v. White-Phillips Co., 296 U.S. 27, 31, 56 S.Ct. 21, 80 L.Ed. 20, 102 A.L.R. 24; Beals v. Hale, 4 How. 37, 45 U.S. 37, 54, 11 L.Ed. 865; Hudson v. Moonier, 8 Cir., 94 F.2d 132, 138; Hudson v. Maryland Casualty Co., 8 Cir., 22 F.2d 791.
The agreement is obviously not restricted to total disability as to a specific occupation, but includes inability to perform any work, any occupation, or engage in any business for profit, and there is nothing to indicate that the Supreme Court of Missouri has or would adopt such a construction which is contrary to the weight of authority. See Annotations in 98 A.L.R. 789; 79 A.L.R. 857.
An interpretation that to constitute engaging in any business for remuneration and profit means that he himself must physically be able to perform all of the duties of the business as substantially constitute that business would do violence t'o the plain terms of the policy agreement. Unwarranted results would follow from such a construction, for if a man were engaged in a mercantile business and could do all the substantial and material acts necessary and proper in carrying on of that business he .would under this interpretation be considered totally disabled if he were unable to do the work of every clerk and employee in that business.
The trial judge decided that the phrase, engaging in any business for remuneration or profit, was not limited to the specific business in which the insured was engaged when the policies were issued to him, but as he did use the expression "himself performing such of its duties as substantially constitute that business", it might indicate that it was necessary for insured to be physically able to perform all the acts of any business as distinguished from all the acts necessary to carry on any business.
The wording of the quoted law from the Heald case, supra, is "acts necessary to the prosecution of any, business," and not all acts of any business.
To interpret these phrases as meaning that it was necessary for insured to per-' form all the acts or duties of any business, would do violence to the repeated pronouncements of the Supreme Court of Missouri, that where the language is plain and unequivocal, there is no room for construction and the words must be given their usual and natural meaning.
It is true that in transacting some of the details of the business in which the insured has been engaged he is discommoded and slowed up by his injury, but this condition does not prevent him and he is able, and does, without any excess pain perform all the material and substantial duties to carry on. the business in which he is now engaged. He himself testifies that he is able to perform the duties of this business. He detailed the duties that he now performs in the operation of these farms and testified that he was able to and did perform all of them. There is nothing in the record to indicate that this was done by him in excess of his strength, or with excessive pain or injury to his health.
He is engaging in — that is, devoting attention and effort to, prosecuting or carrying on — a business for profit. Here we do not have to speculate upon whether he can do all such material duties of his business made necessary by engaging therein, for the evidence conclusively establishes that he does do them. Is he engaged in a business? Were he asked what his business was, the last thing he would think of to say would be that he is not engaged in any business.
We are constrained to find that the evidence conclusively establishes that the insured not only can but does substantially perform all the substantial and material acts necessary to the prosecution of the business in which the insured is engaged and that such business returns a profit. The judgment will be reversed with directions to the trial court to enter a declaratory judgment as requested by the appellant.
Reversed.