The Franklin Life Ins. Co. v. Tharpe

178 So. 300, 130 Fla. 546, 1938 Fla. LEXIS 1312

• Court: Supreme Court of Florida
• Decided: January 7, 1938
• Status: Published

Opinions

Chapman, J.

This cause is here for the second time. It is reported in 118 Fla. 832, 160 Sou. Rep. 199. The parties will be referred to in this opinion as they appeared in the court below as plaintiff and defendant. On May 14, 1935, Virginia Y. Tharpe, widow, filed her amended bill of complaint in the Circuit Court of Dade County, Florida, in Chancery, and alleged, among other things, the issuance of a policy of insurance by the defendant on March 21, 1923, on the life of Lester T. Tharpe for the sum of $3,-000.00 and the plaintiff was the named beneficiary; that premium thereon for the first years was paid to the defendant. The policy contained the provision, viz.: “If the insured (Lester T. Tharpe) shall become totally and permanently disabled, by bodily injury or by disease * * * and shall furnish proof satisfactory to the Company of such disability, the Company agrees to waive further payment of premiums under said policy, such agreement to become operative only after endorsement of the same has been made on the policy by the Company.” That during the month of February, 1924, the insured took influenza or LaGrippe and it developed into pulmonary tuberculosis from which he died on March 26, 1926. The insured traveled from place to place in an effort to find a climate suitable to procure a recovery. It was further alleged that insured was totally and physically incapacitated from giving notice or filing proof of his disability with the Company. Plaintiff had no knowledge of the existence of the policy until November, 1930. It is asserted that the policy had not lapsed for the non-payment of premiums and was in full force on the day of his said death. The prayer of the amended bill is for an order establishing policy, relief against a forfeiture thereof, and an accounting thereon, with inclusion of attorney’s fees as provided by statute.

The amended bill was attacked by motion to dismiss because the policy and claims thereunder were barred by the statute of limitations, no equity, laches, and for failure to furnish proof of disability prior to (defendant’s) cancellation. Motions to strike parts of the bill and for better particulars and each motion was overruled and denied by the lower court.

The defendant admitted the issuance of the policy and as a defense against recovery contended, among other things, the failure to furnish proof of'total and permanent disability according to the terms of the policy, and the first information as to disability was on November 26, 1930; that insured was physically able to' inform or notify defendant by sufficient proof as to his physcial disability. That the cause of action did not accrue within five years before the ■ institution of the suit and laches existed which would, prevent a recovery, and that the second premium was not paid on the policy by the insured or any person in his behalf. Other allegations appear in the answer not material to recite.

The cause was by order of the court referred to Honorable Thomas J. Dowdell with instructions to take all the evidence offered by the parties and to report his findings on questions of law and fact to the court with proper dispatch.

The parties appeared and all the testimony was taken and his report contained a recommendation to the effect that the equities of the cause were with the plaintiff and that she should recover the sum of $3,000.00, with interest, the sum of $1,250.00 as attorney’s fees, and court costs in the approximate sum of $150.00. Exceptions to the report of the Special Master were promptly made and, on final hearing by the Chancellor, overruled and denied. A final decree for the plaintiff was entered and this appeal perfected, supersedeas order entered and bond given and approved, and the cause is here for review with two assignments of error'for reversal.

The first assignment is the denial by the lower court of the motion to dismiss the amended bill of complaint on the grounds of (a) no equity; (b) remedy at law; (c) conclusions of pleader; (d) action did not accrue within five years prior to suit; (e) laches; (f) condition precedent not alleged; (g) no proof of total disability as required by the policy. It is unnecessary to consider the order denying the motion to strike portions of the amended bill or motion for bill of particulars.

The contract of insurance involved here is one controlled by the laws of Florida. An insurance policy, like other contracts should be construed or interpreted so as to give effect to the intentions of the parties to be determined by the instrument as a whole. The purpose of a policy of insurance is intended or designed to secure the indemnity stated in the policy. When terms thereof are ambiguous, they should be fairly construed so as to effectuate their purpose, design and intent. This Court has held where there are conflicting clauses in an insurance policy, the one which affords the most protection to the insured will prevail.

The motion to dismiss the bill of complaint requires a construction or an interpretation by this Court of the clause in the policy of life insurance, viz.:

“If the insured * * * shall become totally and permanently disabled by bodily injury or disease * * * and shall furnish proof satisfactory to the Company of such disability, the Company agrees to waive further payment of premiums under said Policy, such agreement to become operative only after endorsement of the same has been made on said Policy by the Company.”

The above clause, under certain conditions, agrees to waive certain premium payments when the physical condition of the insured is such that he is totally and permanently disabled * * * by disease. The bill of complaint shows that the policy of insurance issued on March 21-, 1923, and the insured died March 26, 1926. It is alleged that in February, 1924, insured contracted Influenza or LaGrippe and shortly thereafter his disease was by a physician pronounced as pulmonary tuberculosis. The second annual premium on the policy of insurance matured March 21, 1924, with thirty days’ grace payment permitted. It was alleged that his total permanent incapacity, caused by the disease, viz., tuberculosis, prevented insured from filing proof of disability with the company. The beneficiary had no knowledge of the existence of the policy until November, 1930.

Total and permanent disability is defined in Vol. 5 (2nd Ed.) Joyce on the Law of Insurance, par. 3031, page 5217, viz.: “3031. ‘Total Disability,’ ‘Permanently Disabled,’ ‘Wholly Disabled,’ etc.; Accident and Benefit Insurances.— The clauses as to ‘total disability,’ etc., are, with certain exceptions, so various and complicated, especially so when considered in connection with other clauses in the same policy or contract, that it is difficult to determine whether the insurance companies have strenuously endeavored to thereby evade payment if the intricacies of language will so permit, or whether they are with the utmost good faith perhaps over-zealously, endeavoring to protect themselves and the funds with which they are entrusted. * * *

“Total disability does not mean absolute physical inability to transact any kind of business pertaining to one’s occupation, but it is sufficient if his injuries are such that common care and prudence require him to desist from transacting any such business in order to effect a cure. And it follows that the preservation of life and health is such an important consideration that it may become necessary that assured desist in the pursuit of his business transactions; and if'he is prevented from substantially performing every part thereof, there is a total disability. So under an Indiana case it is not necessary that assured be so wholly disabled as to be unable to perform any and every kind of business pertaining to his occupation, but it is sufficient if his disability is such that he cannot do any and all kinds of business pertaining to his occupation; and where the policy clauses are ambiguous the rule of liberal construction in favor of assured will apply.”

Par. 3032, text page 5222, supra:

“* * * (a) ‘Total and permanent disability’ to perform or direct any kind of labor or business means that the disability must not only be ‘total,’ but that it must also be ‘permanent,’ so far as the ability to perform or direct any kind of labor or business is concerned; and if assured becomes totally disabled both to ‘perform and direct’ any and all kinds of business he is, necessarily, totally disabled either to ‘perform and direct.’ * * *”

“(c) Total disability does not mean absolute inability to perform some acts or duties in the transaction of his business or in carrying on his occupation by assured. And although the stipulation is: ‘Wholly and continuously disabling said member from transacting any and every kind of business pertaining to the occupation’ covered by the policy terms, the contract should receive a reasonable construction so as to effectuate the purpose intended, and inability to perform some kinds of business pertaining to insured’s occupation, as in case of a merchant would not constitute total disability, assured might be able to transact certain branches of his business and still be unable to transact other branches, in which case he would not be totally disabled; the point being this, whether he was unable substantially or to some material extent to transact any kind of business pertaining to such occupation. * * *”

The allegations of the bill of complaint that the insured was not only disabled but was diseased when the premium fell due in March, 1924, and this illness about due date of premium was diagnosed as pulmonary tuberculosis and from this disease he died in March, 1926. The bill of complaint is sufficient as against this motion for dismissal.

It is urged as a ground of dismissal of the bill of complaint that the cause of action did not accrue within five years before suit. Plaintiff alleges she had no knowledge of the existence of the policy until November, 1930, and the 29th day of November, 1930, communicated with the claim department of the defendant. If the five year period began to run upon the death of the insured on March 26, 1926, and she corresponded in November, 1930, with the defendant about payment this under the circumstances may be sufficient to toll the statute. 14 Ruling Case Law, page 1333, par. 504, viz.:

“504. Excuses for Delay.—It seems to be the general rule that where, because of circumstances and conditions surrounding the transaction, the giving of notice within the time specified becomes impossible, it will be excused and held sufficient if given within a reasonable time after the removal of the obstacle. Accordingly most courts hold that where the circumstances of the accident covered by an accident policy are such that it is impossible to comply with the provision in the policy as to the giving of notice within a certain time, the failure to give such notice does not bar a recovery. On this principle where the beneficiary is ignorant of the death of the insured, or the existence of the' policy, delay in giving notice and making proofs is excused. * *,*”

Likewise 37 Corpus Juris, page 968, par. 347, viz. :

“Notice—a. In General. Where one not under disability has notice of an adverse claim or possession, of an •actionable wrong, of the rejection of a claim presented for allowance and payment, or of a fact which by reason of the relation of the parties at once subjects the one to liability to the other, the cause of action accrues when the notice is given and the statute runs from that time, but not until then. And if one is in possession of property for and in the right of another, the right of action arises and the statute of limitations begins to run from the time of notice of an adverse holding or antagonistic claim, and not until then. So, under particular statutory provisions creating liability upon notice of the peculiar conditions, the statute of limitations runs from the time of the giving of the prescribed notice. Where a contract expressly provides for notice before liability accrues, the statute will not run until such notice is given according to the requirement of the contract.”

See also: McElroy v. Hancock Mutual Life Ins. Co., 88 Md. 137, 41 Atl. Rep. 112; Federal Insurance Co. v. Holmes’ Committee, 232 Ky. 834, 24 S. W. (2nd) 906; Munz v. Standard Life & Accident Ins. Co., 26 Utah 69, 72 Pac. Rep. 182; Metropolitan Life Ins. Co. v. People’s Trust Co., 177 Ind. 578, 98 N. E. Rep. 513; Trippe v. Provident Fund Society, 140 N. Y. 23, 35 N. E. Rep. 316; Schanzeback v. American Life Ins. Co., 58 S. D. 528, 237 N. W. 737; Cady v. Fidelity & Casualty Co. of N. Y., 134 Wis. 322, 113 N. W. Rep. 967.

We find no error on the part of the court below in holding that the suit was properly brought within the five year period.

It is contended that it was the duty of the insured under the terms of the policy to pay the premium due on March 21, 1924, or to furnish to the defendant proof of his total and permanent disability by bodily' injury or disease. Plaintiff replies that at the time of the due date of the premium the circumstances and conditions then surrounding the insured were such that strict compliance with the terms of the policy was not only impossible but it was unreasonable because the insured was being treated for pulmonary tuberculosis and the knowledge of the fact of having the disease had affected his mind to such an extent that he took but little or no interest in any business affairs, but his sole efforts were directed to obtaining a recovery. He was despondent and melancholy. The authorities make provisions for such a situation. 33 Corpus Juris, page 15, par. 663:

“Excuse for Default in Giving. A default in serving notice or proofs of loss as required by the policy may be excused, where the circumstances are such as to render strict compliance with the requirement impossible or unreasonable, and insured has not failed to use due diligence. Thus, a default may be excused by the physical or mental incapacity of insured or the claimant under the policy, although there is authority to the contrary.

In the case of Minnesota Mutual Life Ins. Co. v. Marshall, 29 Fed. (2nd) 977, text page 979, it was said:

“A construction making the disability benefits to begin as of the time of proof might be all right where such benefits are sought while the insured is living, but a disability provision such as the one to be construed here, where the disability occurs near the due date of the premium and continues until death, is made worthless by holding the proof of disability and not the disability itself makes it operative. Such a construction is harsh and unreasonable and ought not to be adopted if the language used is susceptible of one more favorable to the insured. * * *”

In the case of Halblutzel v. Home Life Ins. Co. of New York, 59 S. W. (2nd) text page 641, 332 Mo. 920, the Court, in construing the provisions of a policy similar to the one under consideration here, said:

“* * * ‘Does this provision mean that the company will waive premiums becoming due after the insured has furnished proof or after he has become disabled? We construe it to mean that the company will waive premiums becoming due after the insured has become disabled, because this construction is more favorable to the insured, and more in consonance with the purpose of the provision, which is to give protection to the insured against disability. If it was the intention to waive only the premiums becoming due after the furnishing of proof, it would have been an easy matter for the company, who wrote the policy, to have said so in plain words.’ ”

See: Ryne v. Jefferson Standard Life Ins. Co., 196 N. C. 717, 147 S. E. Rep. 6; Aetna Life Ins. Co. v. Davis, 187 Ark. 398; 60 S. W. Rep. (2nd) 912; Southern Life Ins. Co. v. Hazard, 148 Ky. 465, 146 S. W. Rep. 1107; Storwick v. Reliance Life Ins. Co., 151 Wash. 153, 275 Pac. Rep. 550.

We hold that the bill of complaint is sufficient to withstand the attacks made in the motion to dismiss by the defendant.

We now pass to the question of the sufficiency of the evidence to sutain the decree sought to be reversed.

The plaintiff gave testimony, as well as her mother, the Doctor treating the deceased while in Miami, and some of his associates in business with the deceased, with citizens and residents of Macon and Bibb County, Georgia, and in the State of North Carolina and others in the State of Colorado where the deceased went shortly prior to his death. Due consideration has been given to the evidence offered on the part of the defendant and it has not been made to appear that the lower court erred in finding the equities of the cause with the plaintiff. We think the amount allowed by the lower court in way of attorney’s fees excessive. We think the sum of $750.00 a sufficient amount to be allowed plaintiff in way of attorney’s fees.

In the case of Farrington v. Harrison, 95 Fla., text page 770, 116 Sou. Rep. 763, this Court said:

“We also bear in mind the oft reiterated rule that while the findings of the chancellor on the facts where the evidence is heard by him, and the witnesses are before him, are entitled to more weight in the Appellate Court than where such findings are made in a cause where the testimony was not taken before the chancellor, yet in either case the chancellor’s findings should not be disturbed by an Appellate Court unless shown to be clearly erroneous. Sandlin v. Hunter Co., 70 Fla. 514, 70 South. Rep. 553; Travis v. Travis, 81 Fla. 309, 87 South. Rep. 762; Lucas v. Wade, 43 Fla. 419, 31 South. Rep. 23.

“On the other hand, where a decree is manifestly against the weight of the evidence or contrary to and unsupported by the legal effect of the evidence, then it becomes the duty of the Appellate Court to reverse such decree. Carr v. Leslie, 73 Fla. 233, 74 South. Rep. 207; Florida National Bank v. Sherouse, 80 Fla. 405, 86 South. Rep. 279; Gill v. Chappelle, 71 Fla. 479, 71 South. Rep. 836; Lightsey v. Washington Park Properties, 112 South. Rep. 555.”

The decree appealed from is affirmed, except as to attorney’s fees. If counsel for plaintiff files a remittitur in the sum of $500.00 upon going down of the mandate, the cause will stand affirmed, otherwise the decree appealed from is reversed.

Whitfield, P. J., and Brown, J., concur. Ellis, C. J., and Terrell and Buford, J. J., concur in the opinion and judgment.'