Court Opinion

ID: 6867902
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:57:02.318913+00
Date Added: 2024-06-11T16:05:21.341453
License: Public Domain

HANEY, Circuit Judge
(dissenting).
Insured, at the time of her default in payment of premiums on May 23, 1931, and prior thereto, was totally and permanently disabled by reason of insanity. From that time she was, and is now, wholly incapable of making proof of her disability. Proof of disability was not made until after default in payment of premiums.
The policy lapsed, and recovery cannot be had, unless (1) the liability of the appellee is fixed by the occurrence of the disability and not by the proof; or (2) insanity excuses performance of the condition requiring proof of disability.
1. Whether liability for disability benefits and waiver -of premiums is fixed by the occurrence of the disability, or is fixed by the receipt of proof of disability by the company, is dependent upon the exact language of the policy. The cases, cited by the majority as authority for the holding that the provisions before us make liability arise only upon receipt of proof, all consider provisions which differ from those before us, and are therefore not in point. I believe, however, that no liability arises under the provisions before us, until the insurer receives due proof of the insured’s total and permanent disability (1) “before default in the payment of premium,” and (2) “after he received” the policy, and (3) “before its anniversary on which the Insured’s age at nearest birthday is sixty years.”
2. In the federal courts when the question arises, as to whether or not insanity excuses the condition requiring proof of disability, the rule to be applied is the rule of the state where the policy was delivered. Mutual Life Ins. Co. v. Johnson, 293 U.S. 335, 55 S.Ct. 154, 79 L.Ed. 398.
As disclosed by the cases, there are two classes of provisions commonly found in policies. Those in the first class require the insured to submit proof of disability and those in the second class require proof of disability to be submitted, but do not specify who is to submit the proof.
In Kentucky,1 North Carolina, 2 South Carolina,3 Texas,4 and Virginia,5 it is held that insanity of the insured excuses the condition requiring submission of proof of disability by the insured. On the other hand, Alabama, 6 Georgia, 7 Illinois, 8 Kansas, 9 Tennessee,10 and Washington,11 have held that insanity does not excuse the performance of the condition, and in addition to the states named, the Circuit Court of Appeals for the Fifth Circuit12 and New *785Jersey13 have indicated their support in dicta.
With regard to provisions in the second class, where it is not specified who is to submit the proof of disability, in Arkansas, 14 Iowa,15 Kentucky,16 Nebraska,17 North Carolina,18 South Carolina,19 and Texas, 20 it is held that insanity of the insured excuses the performance of the condition. In addition, Connecticut21 supports this rule in dicta. On the other hand, the Circuit Court of Appeals for the Fifth Circuit, 22 Alabama,23 Georgia, 24 Mississippi, 25 Tennessee, 26 Washington, 27 and West Virginia,28 have held to the contrary, and are supported by dicta in New York. 29
In collecting these authorities, those involving health and accident policies have not been included, although the rule is apparently thought applicable by the Supreme Court in Mutual Life Ins. Co. v. Johnson, supra, 293 U.S. 335, 338, 55 S.Ct. 154, 79 L.Ed. 398. However, my examination discloses that in some of the states a different rule is invoked in life insurance policies than is invoked with regard to notice of disability in health and accident policies. Some of the cases regarding health and accident policies may be found in an annotation, 54 A.L.R. 600, 611.
The cases 30 excusing proof of loss as required by fire insurance policies because of insanity of the assured, were thought not applicable in Mutual Life Ins. Co. v. Johnson, supra.
The majority apparently make a distinction between the -two classes of provisions. I have been unable to find a single authority making such a distinction. The cases are cited and quoted from indiscriminately. However, even if such distinction is made, the authorities are evenly balanced as to the correct rule.
In Mutual Life Ins. Co. v. Johnson, supra, it appears that whatever rule is applied, it is a construction of the contract by the court. Since Oregon has not yet decided the point, I believe we must adopt the construction which is most favorable to the insured. Stipcich v. Metropolitan Life Insurance Co., 277 U.S. 311, 322, 48 S.Ct. 512, 72 L.Ed. 895. Such a construction requires us to hold for appellant herein, and I therefore dissent.

 Southern Life Ins. Co. v. Hazard, 148 Ky. 465, 146 S.W. 1107.

 Nelson v. Jefferson Standard Life Ins. Co., 199 N.C. 443, 154 S.E. 752; Rhyne v. Jefferson Standard Life Ins. Co., 196 N. C. 717, 147 S.E. 6; Id., 199 N.C. 419, 154 S.E. 749.

 Caldwell v. Volunteer State Life Ins. Co., 170 S.C. 294, 170 S.E. 349.

 Pan-American Life Ins. Co. v. Welch (Tex.Civ.App.) 74 S.W.(2d) 408; Mid-Continent Life Ins. Co. v. Hubbard (Tex. Civ.App.) 32 S.W.(2d) 701.

 Swann v. Atlantic Life Ins. Co., 156 Va. 852, 159 S.E. 192.

 Kimsey v. Jefferson Standard Life Ins. Co., 230 Ala. 550, 161 So. 796; McCutchen v. All States Life Ins. Co., 229 Ala. 616, 158 So. 729; New England Mut. Life Ins. Co; v. Reynolds, 217 Ala. 307, 116 So. 151, 59 A.L.R. 1075.

 Dean v. Northwestern Mut. Life Ins. Co., 175 Ga. 321, 165 S.E. 235; compare North American Accident Ins. Co. v. Watson, 6 Ga.App. 193, 64 S.E. 693.

 Hanson v. Northwestern Mut. Life Ins. Co., 229 Ill.App. 15.

 Smith v. Missouri State Life Ins. Co., 134 Kan. 426, 7 P.(2d) 65.

 Hall v. Acacia Mut. Life Ass’n, 164 Tenn. 93, 46 S.W.(2d) 56; compare Bank of Commerce & T. Co. v. Northwestern Nat. L. Ins. Co., 160 Tenn. 551, 26 S.W.(2d) 135, 68 A.L.R. 1380.

 Kearns v. Penn Mut. Life Ins. Co., 178 Wash. 235, 34 P.(2d) 888.

 Chambers v. Franklin Life Ins. Co. (C.C.A.5) 80 F.(2d) 339, 341.

 Goldman v. New York Life Ins. Co., 115 N.J.Eq. 535, 171 A. 541.

 Equitable Life Assur. Soc. v. Felton, 189 Ark. 318, 71 S.W.(2d) 1049; Missouri State Life Ins. Co. v. Case, 189 Ark. 223, 71 S.W.(2d) 199; Missouri State Life Ins. Co. v. Holt, 186 Ark. 672, 55 S.W.(2d) 788; Old Colony Life Ins. Co. v. Julian, 175 Ark. 359, 299 S.W. 366; Pfeiffer v. Missouri State Life Ins. Co., 174 Ark. 783, 297 S.W. 847, 54 A.L.R. 600.

 McCoy v. New York Life Ins. Co., 219 Iowa, 514, 258 N.W. 320.

 Northwestern Mut. Life Ins. Co. v. Carneal, 262 Ky. 665, 90 S.W.(2d) 1010; Fidelity Mut. Life Ins. Co. v. Gardner’s Adm’r, 233 Ky. 88, 25 S.W.(2d) 69; Metropolitan Life Ins. Co. v. Carroll, 209 Ky. 522, 273 S.W. 54.

 Marti v. Midwest Life Ins. Co., 108 Neb. 845, 189 N.W. 388, 29 A.L.R. 1507.

 Rand v. Home Ins. Co., 206 N.C. 760, 174 S.E. 749.

 Levan v. Metropolitan Life Ins. Co., 138 S.C. 253, 136 S.E. 304.

 State Life Ins. Co. v. Barnes (Tex. Civ.App.) 58 S.W.(2d) 189; Missouri State Life Ins. Co. v. Le Fevre (Tex. Civ.App.) 10 S.W.(2d) 267; State Life Ins. Co. v. Fann (Tex.Civ.App.) 269 S.W. 1111; Merchants’ Life Ins. Co. v. Clark (Tex.Civ.App.) 256 S.W. 969.

 Porto v. Metropolitan Life Ins. Co., 120 Conn. 190, 180 A. 289, 291.

 Egan v. New York Life Ins. Co. (C.C.A. 5) 67 F.(2d) 899.

 Burchfield v. Ætna Life Ins. Co., 230 Ala. 49, 159 So. 235.

 Smith v. Travelers’ Ins. Co., 177 Ga. 589, 171 S.E. 121; compare Life Ins. Co. of Virginia v. Williams, 48 Ga.App. 10, 172 S.E. 101.

 Berry v. Lamar Life Ins. Co., 165 Miss. 405, 142 So. 445, 145 So. 887; New York Life Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93,15 A.L.R. 314.

 Pacific Mut. Life Ins. Co. v. Hobbs, 168 Tenn. 690, 80 S.W.(2d) 662.

 Reynolds v. Travelers’ Ins. Co., 176 Wash. 36, 28 P.(2d) 310.

 DaCorte v. New York Life Ins. Co., 114 W.Va. 172, 171 S.E. 248; Iainnarelli v. Kansas City Life Ins. Co., 114 W.Va. 88, 171 S.E. 748.

 Mutchnick v. John Hancock Mut. Life Ins. Co., 157 Misc. 598, 284 N.Y.S. 565, 573.

 Insurance Companies v. Boykin (Germania F. Ins. Co. v. Boykin), 12 Wall.(79 U.S.) 433, 20 L.Ed. 442; Hartford Fire Ins. Co. v. Doll (C.C.A. 7) 23 F.(2d) 443, 56 A.LR. 1059; Valisano v. Continental Ins. Co., 254 Mich. 122, 235 N.W. 868; Houseman v. Home Ins. Co., 78 W.Va. 203, 88 S.E. 1048, L.R.A. 1917A, 299.