Court Opinion

ID: 8303282
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:19:08.347244+00
Date Added: 2024-06-11T16:44:26.283693
License: Public Domain

On Petition to Rehear.
The appellant has filed a dignified and courteous petition to rehear in this cause which must be granted.
In our original opinion we affirmed the lower court because no proofs of disability had been furnished within a reasonable time. It is now brought to our attention that the bill filed in this cause averred the following fact:
“Proof of complainant’s disability was furnished defendant and under the terms of said certificate of policy * *
As said in the original opinion a plea in bar was filed by the Insurance Company to the bill. The filing of this affirmative plea of the statute of limitations admitted the facts alleged in the bill, to wit, that “proof of complainant’s disability was furnished defendant”. Gibson’s Suits in Chancery, Sec. 321, page 281, and See. 342¡, page 303, wherein it is said:
“An affirmative plea does not deny any matter contained in the bill; indeed, for all purposes of the plea, it admits all of the matters of fact charged in *353the bill. An affirmative plea, therefore, in effect, admits the bill, bnt seeks to displace its equity, by bringing forward .a single additional matter of fact.”
Thus it is seen from what is last above said that the Insurance Company admitted that they did have proofs of disability. The policy contains no period within which such proofs shall be made and therefore under the aver-ments of the bill it must be presumed that they were made in due time.
The policy among other things provides that when the Company has received due proofs of such disability it will pay “in a fixed number of installments chosen by the employer from a table in the paragraph entitled 'Modes of Settlement’, the first installment to be paid immediately upon the receipt of due proofs of such disability. ” Under the “Modes of Settlement” provision of the policy it is provided that the installments on each $1,000 dollars of insurance shall be paid in varying amounts depending upon which method is taken, that is from one to twenty years. Of- course it is not known herein what method would have been elected by the employer because as far as we know the employer was never asked to fix any method. In view of this apparent ambiguity and the fact that these payments might run as much as twenty years with installments of from' $85 to $5.78 per month, we think that the matter should be returned to the lower court where answer and proof might be taken on these questions.
It is a cardinal principle of insurance law in this State, requiring no citation of authority, that a policy or a contract of insurance is to be considered liberally in favor of the insured, and strictly as against the company. Stated more fully, the rule is, that where by reason of *354ambiguity in the language employed in a contract of insurance, there is doubt or uncertainty as to its meaning, and it is fairly susceptible of two interpretations, one favorable to the insured and the other favorable to the company, the former will be adopted. In support of this statement see many authorities cited in Michie’s Tennessee Digest, Insurance, Sec. 44.
Herein the Insurance Company argues that this contract is not severable and that upon the disability (November, 1944) the cause of action accrued; that therefore the six year statute, Code 8600, is applicable because the beginning of the suit was beyond the six year period. The insurance contract does not say the whole shall be payable when disability occurs. The provision of the contract with deference to permanent and total disability benefits (quoted in our original opinion) provides that these payments shall be made in installments, method of which shall be chosen by the employer. There is no time limit in the policy that says when or how the employer shall select when or what these installments shall be. It would thus seem that the contract is ambiguous. Under such a situation the statute of limitations only applies to such installments, whatever they are, that would have been due more than six years prior to the institution of the suit herein.
Group insurance is now quite generally written and ordinarily it takes the form of insurance whereby the employees ’ lives are insured by the employer in consideration of a flat premium based upon an average age and generally paid by the employer, or partially by both the employer and the employee, as long as the employee remains in the employment and the premiums are paid. Such contracts are generally construed as creating a con*355tract of insurance between the employer and the employee bnt for the benefit of the insured employees. Carpenter v. Chicago & E. I. R. Co., 21 Ind. App. 88, 51 N. E. 493; Gallagher v. Simmons Hardware Co., 214 Mo. App. 111, 258 S. W. 16.
Such contracts are entire, bnt as said in Atkinson v. Railroad Employees Mut. Relief Society, 160 Tenn. 158, 167, 22 S. W. (2d) 631, 634: “While the benefit certificate issued to complainant constitutes an entire contract, the obligation thereby cast upon the society is severable, with a right of action accruing” to the holder for each benefit installment payable and in default.” The above statement by this Court is in conformity with the actions on such contracts generally over the country. See 1 C. J. S., Actions, Sec. 103, page 1318, and 50 C. J. S., Judgments, Sec. 671, where it is said:
“Where money is payable in installments, a distinct cause of action arises on the falling due of each installment, and they may be recovered in successive actions, no judgment in the series of actions operating as a bar to the recovery of any installment not due at its rendition. ’ ’
In Everhart v. State Life Insurance Co., 154 P. (2d) 347, the Circuit Court of Appeals for the Sixth Circuit, speaking through Martin, Circuit Judge, held that installments on an endowment policy wherein suit was not brought until some seventeen years after the insurance company quit paying were, under the Ohio limitation statute, not barred and that suits might be brought on those not barred on each separate installment. That is, that the suit would only bar those installments which fell due more than fifteen years before the commencement of the action.
*356Thus it would seem that under the pleadings in this case those installments due within the limitation period of our statute of six years, Code Section 8600, are not barred and those becoming due as of the date of disability November, 1944, up until the statute started to run would be barred. It results that the judgment of the Chancellor must be reversed and the cause remanded for answer or such other action as is deemed advisable, in conformity with this opinion. The costs of appeal are taxed against the insurance company. The costs below will await the outcome there.