Petitioners Brief — Landry v. Mutual Life Insurance

9

IN THE

Supreme Court of the Gnited States

October Term, 1945.

No.

JosepH Aucipe Lanpry, Petitioner,

v.

Mutvat Lire Insurance Company or New York.

BRIEF IN SUPPORT OF PETITION FOR WRIT OF

CERTIORARI.

Opinions Below.

The majority and dissenting opinions in the Cireuit Court

of Appeals (R. 91) are reported in 148 F. (2d) 699. The

opinions of the District Court (R. 12, 70) are reported in

54 F. Supp. 356 and 56 F. Supp. 156.

Jurisdiction.

As stated in the petition, the jurisdiction of this Court

is invoked under Section 240(a) of the Judicial Code as

amended by the Act of February 13, 1925. The judgment

of the Cireuit Court of Appeals denying the petition for re-

hearing was entered May 15, 1945 (R. 111).

Statement of the Case.

The petitioner, Joseph Alcide Landry, is the holder of a

life insurance policy (R. 57-65) with the Mutual Life In-

10

surance Company of New York, issued September 12, 1929,

in the amount of $5,000 and all premiums which have be-

come due on the policy have been paid. The policy con-

tains a provision for payment of benefits in the event of

total and permanent disability prior to attaining the age

of sixty years. The petitioner became sixty years of age

on August 4, 1942; prior thereto and particularly during

the month of May 1938, he became totally and permanently

disabled from performing his work as a farm operator,

which fact is not contested by the insurance company.

Due to his want of realization that his policy contained

such disability provisions, Landry did not notify the in-

surance company of his disability until March 1948, soon

after he realized that he was entitled to such benefits; thus,

the first notice of disability was given about seven months

after petitioner had attained the age of sixty years. The

insurance company did not have petitioner examined but

disclaimed liability on the ground that no right of action

existed because petitioner had failed to file proof of claim

before attaining the age of sixty years (R. 66-67). When

suit was instituted the insurance company filed a motion to

dismiss on the ground that the petitioner had no right of

action for the reason just stated; this exception was argued

and the District Court in a written opinion (R. 12; 54 F.

Supp. 356) overruled the motion to dismiss and held that

the language of the disability provision was clear and

unambiguous and that it was not a requirement of the

policy that proof of claim be filed before attaining the age

of sixty vears.

When the case was tried on the merits the insurance

company did not contest the total and permanent disability

of the petitioner and judgment was rendered for the amount

of disability benefits acerued since May 1938, but denying

the application of the statutory penalties (R. 77; see also,

56 F. Supp. 156).

.

| The pertinent provisions of the policy relative to dis-

ability benefits are reproduced below. From the front page

of the policy (R. 57) we quote:

11

‘and if the insured is totally and presumably perma-

nently disabled before age 60, will pay to the insured

$50.00 monthly during such disability, increasing after

five and ten years continuous disability, besides waiv-

ing premium payments, all upon the conditions set forth

in Section 3.”’

From page 2 of the policy (R. 59):

“Srerton 3. Benerits IN Event or Torar AND PeRMA-

yent Disapiuiry BEFORE Ace 60.

“Torar, Disanttrry.—Disability shall be considered

total when there is any impairment of mind or body

whieh continuously renders it impossible for the Tn-

sured to follow a gainful oceupation.

‘Permanent Disanwrry.—Total disability shall, dur-

ing its continuance, be presumed to be permanent ;

‘“(a) If such disability is the result of conditions

which render it reasonably certain that such disability

will continue during the remaining lifetime of the Tn-

sured; or

‘‘(h) If such disability has existed continuously for

ninety days.

“Wren Benertrs Become Errective.—If, before at-

taining the age of sixty years and while no premium

on this Policy is in default, the Insured shall furnish

to the Company due proof that he is totally and per-

manently disabled, as defined above, the Company will

grant the following benefits during the remaining life-

time of the Insured so long as such disability continues.

‘““Benerits. (a) Lvcreastne Income.—The Company

will pay a monthly income to the Insured of the amount

stated on the first page hereof ($10 per $1,000 face

amount of Policy), beginning upon receipt of due proof

of such disability and increasing after sixty consecu-

tive months payments have been made to one and one-

half times such amount and after sixty further consecu-

tive monthly payments have been made to twice such

12

amount at which it shall remain while total and per-

manent disability continues.

(b) Wartver or Premium.—The Company will also,

after receipt of such due proof, waive payment of each

premium as it thereafter becomes due during such

disability.’’

There is a rider or a supplementary clause which ap-

pears on the back of the policy (R. 65) which reads as

follows:

‘*SUPPLEMENTARY BENEFITS TO SEcTION ENTITLED

‘Benerits in Event or Toran aND PERMANENT Dts-

ABILITY Brerore AGE 60.’

‘*Benerits 1F Proor DELAYED AND NO PREMIUM IN

Derautt. If, while no premium is in default, the proof

furnished the Company under the section providing for

‘Benefits in Event of Total and Permanent Disability

Before Age 60’ is such as to entitle the Insured to the

Disability Benefits provided for therein, and if due

proof is also furnished the Company that such dis-

ability has been continuous since its beginning, the

Company will:

‘*(a) Begin the monthly income payments provided

for in such section as of the end of the first completed

month of such disability if earlier than the date of re-

ceipt of such proof instead of as of the date of receipt

of such proof, and,

‘‘(b) Return any premium due after the beginning

of such disability which has been paid during the con-

tinuance thereof.

‘‘Benerits 1F Premium 1n Derautt not Over Six

Monrus. If, not later than six months after the due

date of any premium in default and provided no previ-

ously due premium is also in default, DUE PROOF IS RE-

CEIVED BY THE COMPANY BEFORE THE INSURED SHALL HAVE

ATTAINED THE AGE or Srxty Years that the insured was

totally and permanently disabled, as defined in the

section entled ‘Benefits in Event of Total and Perma-

nent Disability Before Age 60,’ at the date when such

premium in default fell due, and has been continuously

_ so disabled since said due date, the Policy will be rein-

13

stated without evidence of insurability and the waiver

of premium and disability income benefits shall be the

same as if such default had not occurred.”’ (Capitali-

zation ours)

There is no other provision in the policy as to the time

when proof of claim must be filed and there is no for-

feiture clause for failure to file claim within any stated

time.

The insurance company appealed from the judgment to

the United States Circuit Court of Appeals for the Fifth

Circuit, without contesting the fact of disability; and in

so far as its appeal is concerned, which is the only issue

covered in the petition for a writ of certiorari, the question

to be decided is whether or not the language of the disa-

bility clause, including the rider, makes the filing of proof

of claim before the insured reached the age of 60 years a

condition precedent to recovery.

Petitioner appealed from the portion of the judgment of

the District Court denying the statutory penalties, but has

subsequently abandoned his cross-appeal (R. 99).

Specification of Errors.

(1) The Cireuit Court of Appeals erred in holding that

under the provisions of the policy proof of claim of dis-

ability must be filed prior to attaining the age of 60 years.

(2) The Cireuit Court of Appeals (R. 95) erred in hold-

ing that the weight of authority in the interpretation of the

disability clause involved is in favor of the construction

urged by the insurance company.

(3) The Circuit Court of Appeals erred in holding that

the Supreme Court of Louisiana had adopted the interpre-

tation urged by the insurance company.

(4) The Circuit Court of Appeals erred in failing to hold

that the disability clause involved, in so far as it affects

the petitioner’s rights in this proceeding, is ambiguous, for

the reason that the District Judge and one Circuit Judge

ei es 2

— e * aig a ge cee Ce ae he ig ee Rk ee ee ee re esi ea ee Ba oe ie

a ere er tthe 1

14

adopted the interpretation urged by the petitioner and the

two Cireuit Judges delivering the majority opinion held

that the interpretation urged by the insurance company

was correct.

ARGUMENT.

Petitioner contends that in the case of an insured whose

premiums are fully paid, the language of the rider (R. 65)

relieves him from complying with the requirement con-

tained in Section 3 of the poliey (R. 5Q) that the proof of

claim of disability must be filed before attaining the age

of 60 years. This was the position taken by Judge Porterie

of the District Court. In the alternative the petitioner con-

tends that the language of the entire disability clause, in-

cluding the rider, with reference to the requirement of fur-

nishing proof before attaining the age of 60, is so ambigu-

ous that it must be construed in the manner most favorable

to him. This was the position taken by Judge MeCord of

the Cireuit Court of Appeals.

In view of the fact that the argument and the law ap-

plicable to the specification of errors numbers 1, 2 and 3

are so connected that they cannot be set up separately in

the brief, these three specifications will be argued together.

Errors Nos. 1, 2 and 3. Language of Disability Clause is

Clear and Insured Did Not Have to File Proof Before

Attaining the Age of 60.

This particular disability provision of the Landry policy,

including the two sections of the rider, has not been con-

strued by any court in the United States, with regard to

the right of an insured to file proof of claim for disability

after he has attained the age of sixty years. So that while

analogies can be drawn with decisions of other courts inter-

preting similar language, the final interpretation of this

clause in the Landry policy is res novo.

There are two classes of disability provisions which differ

basically with reference to the incipiency of liability when

PERTINENT We VT NAN Pm CRIICA rg Pet Det CHENEY E Pe getay V0 OE Lag tae ME NECN, Hoe INE CHOCER TN, tend LED

—

15

an insured becomes totally and permanently disabled. The

leading case clearly defining these two classes of provisions

is Mutual Life Ins. Co. of New York v. Drummond, 111 F.

(2d) 282 (C. C. A., 8th). The disability clause of the policy

presented for interpretation was the same as that which

is contained in the Landry policy. We quote the following

from the opinion:

‘‘Generally speaking, there are two classes of dis-

ability clauses: One, those in which benefits are con-

ditioned upon the furnishing of proof and are to com-

mence from the time that proofs are furnished; and

two, those in which benefits are conditioned upon the

furnishing of proof, but which provide that the bene-

fits are to commence from the date that the disability

occurs. Under a clause of the first class, the furnishing

of proof is a condition precedent to liability, and the

right of the insured to the benefits provided does not

acerue until proofs are furnished. Under a clause of

the seeond elass the oeceurrence of the disability is

ordinarily held to be the event which creates the rights

of the insured to the benefits promised in the policy,

and the furnishing of proofs by the insured to the com-

pany is only a prerequisite to the actual receipt of such

benefits. ‘

‘“‘The policy in suit, in the absence of the rider, had

a disability clause of the first class hecause the benefits

provided for were to commence only with the furnish-

ing of proof. The addition of the rider, however,

brought the disability clause of the policy within the

second class, in which the right of the insured to the

disability benefits accrues as of the date of disability.’’

(111 I. (2d), at p. 285)

Since the Landry policy contained the identical disability

clanse we submit that when he beeame totally and per-

manently disabled in May 1988, the liability of the de-

fendant attached as of that time. The question, therefore,

for the Court to determine is whether or not Landry for-

feited his rights to benefits which had already aecerued in

16

his favor by failing, through ignorance, to file proof of

claim before he had attained the age of sixty years.

It is argued that the requirement of furnishing proof of

claim before attaining the age of sixty in this case goes to

“the very question of coverage’? under the policy. This

statement is erroneous; in this instance the insurance com-

pany overlooks the well accepted doctrine defined in Mu-

tual Life Ins. Co. of New York v. Drummond, supra. This

rule is recognized in the case of Lincoln Natl. Life Ins. Co,

v. Ghio, 111 F. (2d) 307 (C. C. A., 8th).

It is held in the Drummond ease that under policies of the

Mutual Life containing only Section 3 (disability clause),

without the rider, liability on the part of the company does

not begin until proof of claim of disability is furnished;

while under policies of that company containing Section 3

and the rider, which entitles the insured to retroactive

monthly payments from the date of disability, the liability

of the company begins on the date of disability, and only

the payments are postponed until proof is furnished. In

other words, the coverage of the Landry policy is that the

Mutual Life becomes liable at the time that the insured

becomes totally and permanently disabled before attaining

the age of sixty years. The policy’s coverage in this case

is that stated on the front page thereof as follows:

“Tf the insured is totally and presumably perma-

nently disabled before age 60 [the company] will pay

the insured $50.00 monthly, ete.’’ (R. 57)

Thus, this case does not present the issue of coverage

beeause the insurance company became obligated to Landry

for monthly benefits in May 1938. The insurance company

would not deny that if Landry had filed proof of claim in

July 1942, just before attaining 60, he would have received

his monthly payments which had accrued since May 1938.

This case brings up the issue of the forfeiture of a right

whieh acerued to Landry in May 1938. In July 1942, Lan-

dry had to his eredit, by virtue of the coverage of his policy,

eT ner ae. tre ae ie dcad Pies ee aan ede Gd es cs Anca RR he RN a le ld a Ry ck

17

approximately $2,500 in accrued benefits; the question

therefore is whether he lost this $2,500 and the right to sub-

sequent monthly payments by not filing proof before at-

taining the age of sixty years.

The law abhors forfeitures and one who claims forfeiture

as a defense must show that the language of the contract

upon which he relies is positive and unequivocal.

At the outset we direct the Court’s attention to the two

sections of the rider for the reason that the second section

aids materially in construing the requirements to be met

by Landry, whose premiums were not in default and who,

therefore, comes under the operation of the first section.

On the face of the policy (R. 57) there is an outright

obligation to pay certain monthly benefits to the policy-

holder if he becomes totally and permanently disabled be-

fore the age of sixty years.

Section 3 found on Page 2 of the policy (R. 59), quoted

above, defines total and permanent disability, and then there

appears the paragraph ‘‘ When Benefits Become Effective.”’

This particular clause, without reference to the rider, would

indicate that the filing of proof of claim prior to attaining

the age of sixty years is a condition precedent to recovery.

Then there is the rider printed on the back of the policy

(R. 65) (quoted above) by which Section 3 is amended and

supplemented. This rider gives supplementary benefits and

is purposely intended to cover cases where the insured has

delayed filing proof of claim; in fact, that is the very es-

sence of the rider. It grants additional benefits and pro-

vides the manner in which they may be obtained. In pro-

viding for such additional benefits where proof has been

delayed, this rider is divided into two sections as follows:

Benefits if Proof Delayed and no Premium in Default.

Benefits if Premium in Default Not Over Six Months,

For an insured to obtain disability benefits under Section

3 (without the rider) his proof of claim must have been

filed (1) before he attained the age of sixty years, and (2)

while no premium was in default.

A a hh ied het a a saa eet et ee

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Then we examine the rider (R. 65). Under the first see.

tion thereof we find that the only requirement as to the

time when proof of claim is to be filed is that no premium

shall be in default. Thus the provision which we had in

Section 3 that such proof had to be filed before attaining

the age of sixty vears is eliminated from the first section.

Under the second section, we find that there are three re.

quirements as to time when proof of claim must be filed by

an insured whose premiums are in default, namely: (1) The

premiums must not be in default more than six months, (2)

the premiums previously due must not be in default, and

(3) the proof must be received by the company before the

insured shall have attained the age of sixty vears.

Thus the breaking up of the rider into two separate see-

tions, ene applicable te an insured whose ‘* premiums are

not in default,’? and the other applicable to insured whose

‘*preminums are not in default more than six months’? is

significant and affords a guide in determining the rights of

the petitioner. The first section, stipulating additional

benefits for an msured who is in good standing, is more

lenient, and affords a wider range of protection; and the

second section dealing with one who is not in good standing

with relation to payment ot premiums, restricts his rights

by preseribing that he must file proof of claim prior to at-

taining the age of sixty years.

If such conditions were intended to apply to one whose

premiums are not in default the insurance company could

very easily have inserted the same in the first section of the

rider. It should be noted that the benefits which accrue to

the insured wnder Section 1 and Section 2 of the rider are

the same. The two sections differ only with respect to the

conditions under which the two classes of insured persons

may benefit under the terms of the rider. The only reason-

able conclusion to draw is that stated by the District Court

(R. 17) from which we quote:

‘*Therefore, we hold it to be clear and unambiguous

that such requirement is not essential and is not a con-

19

dition precedent to the application of the first para

graph—the one which applies to the facts of and, there-

fore, controls this case.’’

In support of our statement that allied clauses in a policy

contract assist in the interpretation of policy provisions,

see Boyett v. United States, 86 F. (2d) 66 (C. C. A., 5th).

Louisiana Civil Code, Art. 1955, reads as follows:

**All clauses of agreements are interpreted the one

by the other, giving to each the sense that results from

the entire act.”’

The language in the first clause of the rider to the effect

that the proof furnished must be such as to entitle the in-

sured to the disability benefits provided in Section 3, refers

solely to the quality or substance of the proof furnished, so

that the proof will conform to the requirements for proving

total and permanent disability as expressed in Section 3.

This clause, we submit, has nothing to do with the time

when the proof must be filed. To the contrary, the only

requirement of the first section as to the time of filing proof

is that there be no premium in default. z

The insurance company argues that since Section 3 made

ita condition precedent that proof of claim must be filed

before attaining the age of sixty years, it was unnecessary

to repeat this requirement in the rider. In answer to this,

we say that the insertion of this requirement in the second

portion of the rider indicates that it was necessary for the

company to insert it also in the first, if it was the company’s

intention that the proof of claim by one who was not in

default had to be filed before he attained the age of sixty

years,

The insurance company will undoubtedly use the same

argument in its brief to this Court as it used in the Cireuit

Court of Appeals; thus we deem it proper to quote the lan-

guage which follows, in order that such argument may be

rebutted at the present time. The argument was stated as

20

follows in the brief filed by counsel for the insuranee

company :

‘In the first paragraph these conditions embrace all

conditions otherwise required, namely, that proof fur.

nished the Company under the main section is such as

to entitle the insured to disability benefits. There is

no need here to specify what these conditions are. The

statement is all inclusive and embraces the conditions

stated in the main clause, including the one that proof

must be furnished before sixty.’’

‘*The second paragraph obviously deals with a situa.

tion in which the premium is in default. Consequently,

it was impossible to state the conditions in a generality,

but the only previously stated condition which it was

necessary to restate was that due proof be received by

the company before age sixty. It would have been

impossible to state the second paragraph in the same

general language as was employed in the first para-

graph. So stated, the clause would read as follows:

‘**Benefits if Premium ir Default not over Six

Months.—If, not later than six months after the due

date of any premium in default and provided no

previously due premium is also in default, the proof

furnished the Company under the section providing

for ‘Benefits in Event of Total and Permanent Dis-

ability before age 60”? is such as to entitle the Insured

to the Disability Benefits provided for therein, * * *’

‘*Manifestly such a provision would be a contradic-

tion in terms. Proof furnished after default could

never qualify as proof furnished the Company under

the section providing for benefits in event of total and

permanent disability before age 60, since a requirement

of the main section is that proof be furnished ‘while no

premium on this policy is in default.’ ”’

This clause which eliminates the specific statement of the

requirement of filing proof before attaining the age of sixty,

in the second portion of the rider, would not be a contra-

diction of prior provisions of the policy. The language in

the first portion of the rider stating that ‘the proof must

be such as to entitle the insured to the benefits provided

a

RELATE — —

————— ,

21

under Section 3 of the policy’’ refers to the quality, sub-

stance and sufficiency of the proof furnished. Similar lan-

guage is used in the second portion of the rider and also

refers to the quality, substance and sufficiency of the proof

furnished under Section 3. Thus, if we are correct in this

respect, the suggested draft of the second portion of the

rider, without specific reference to the age requirement, is

harmonious with the remaining portion of the disability

clause.

The following language contained in counsel’s suggested

form, to wit:

‘if not later than six months after the due date of any

payment in default’’

would specifically qualify the requirement of Section 3 of

the policy that proof of claim must be filed while no

premium is in default. This would not creat any ambiguous

situation as the language of the rider would control in that

respect ; then the language

‘the proof furnished the company under the section

providing for ‘Benefits in the Event of Total and Per-

manent Disability before age 60’ is such as to entitle

the insured to the disability benefits provided for there-

in’?

would have the same meaning as it has in the first section

of the rider,

In any event, language could have been found which

would have clearly avoided the situation which exists in

this case, and we urge our statement, which is truly a repeti-

tion at this time, that the inclusion of this specific require-

ment in the second portion of the rider, and the exclusion

of the requirement in the first portion leads logically to an

interpretation of the entire disability clause in accordance

with the views which we present.

As previously stated herein no court in the United States

has interpreted the whole of the disability clause contained

in the Landry policy, including Section 3 of the Poliey and

gee

22

the rider with its two sections. We wish, however, to dis-

cuss a few cases in which language of disability clauses

much less favorable to the insured, was held by various

courts not to require the filing of proof of disability prior

to attaining the age of sixty years, as a condition precedent

for recovery.

In the case of Smith v. Mutual Life Ins. Co.. 69 S. W. (2d)

874 (Sup. Ct. of Ark.), the policy contained the following

clause :

‘Tf the insured, after the payment of premiums for

at least one full year shall, before attaining the age of

sixty, and provided all past due payments have been

duly paid and the policy is in full foree, furnish due

proof to the company at its home office whether (a)

that he has become totally and permanently disabled,

ete e & #9)

In that case the insured, having been disabled prior to

attaining the age of sixty, did not file proof of claim until

later and the Mutual Life Insurance Company made the

defense that he had forfeited his rights under the terms of

the policy. We quote the following language from that

deeision :

‘‘Neither can we agree that our present holding is in

conflict with Bergholm v. Peoria Life Ins. Co., 284 U.S.

489, 52'S. Ct. 230, 231, 76 L. Ed. 416. The policy con-

strued in the Bergholm Case contains the following

language: ‘* * * * To entitle the Insured to the above

Total and permanent Disability Benefits this policy at

the time of making claim for such benefits must be in

full force and all premiums becoming due prior to the

time of making claim must have been duly paid: * * *

The Supreme Court of the United States was eminently

correct in holding that the language just quoted must

be performed by the insured as a condition precedent

to his right of recovery. This is the plain and un-

mistakable meaning of the language employed. How-

even, we have no such language in the policy of in-

surance here under consideration. We think the lan-

°

23

guage here employed is plain and definite to the effect

that, if the insured suffers total and permanent dis-

ability prior to his sixtieth birthday and at the time has

paid all premiums due, liability then and there attaches

and recovery is postponed until notice or proof of loss

is submitted. For instance, suppose the insured on the

day prior to his sixtieth birthday suffers an injury

which results in the loss of both legs and both arms.

In the natural course of events it would be impossible

to make proof of loss prior to the insured’s sixtieth

birthday. Such construction would nullify the plain

intentions of the parties. True this is an extreme

imaginary case, but it is not beyond the limits which

the parties had in mind at the time the contract was

effected.

“It is self-evident that the paramount consideration

the parties had in mind at the execution of this contract

was insurance against total and permanent disability.

Any construction which nullifies this paramount con-

sideration should be avoided, if possible. All courts

agree that it is a fundamental rule of construction that

insurance contracts when ambiguous should be con-

strued most strongly against the insurer. Mutual Life

Ins. Co. v. Hurni Packing Co., 263 U. 8. 167, 44 S. Ct.

90, 68 L. Ed. 235, 31 A. L. R. 102; Stipcich v. Ins. Co.,

277 U. S. 311, 48 S. Ct. 512, 72 L. Ed. 895.”

In the case of Mutual Life Ins. Co. v. Smith, 798. W. (2d)

28 (Ky.) the policy contained the following disability

clause :

‘“‘When Such Benefits Take Effect.—If the insured,

after payment of premiums for at least one full year,

provided all past due premius have been duly paid,

shall before attaining the age of sixty years at nearest

birthday and while this Policy is in full force furnish

due proof to the Company at its Home Office that he

has become totally and permanently disabled by bodily

injury or disease, so that he is, and will be, permanently,

continuously and wholly prevented thereby from per-

forming any work for compensation, gain, or profit, or

from following any gainful occupation, and that such

disability has then existed continuously for not less

24

than sixty days, the Company will grant the following

benefits. ’’

In that case insured became totally and permanently dis.

abled prior to attanining the age of sixty vears, and did

not file proof until two vears after the age of sixty years,

We quote the following from the opinion:

‘The argument that Smith’s delay of more than six

years after the commencement of his disability and

about two years after attaining the age of sixty, in

furnishing proof of disability, was unreasonable as a

matter of law, is neither authorized by any provision

of the policies, nor by a reasonable construction there.

of. They contain no requirement respecting the time

of furnishing proof of disability.

‘Neither of the words, ‘immediately,’ ‘forthwith,

‘forfeiture,’ nor the phrase ‘condition precedent? js

contained in them.

‘The only language connoting a ‘condition prece-

dent’ in this sentence, ‘Benefits in the Event of Total

and Permanent Disability Before Age Sixty,’ which is

only susceptible of the construction that the disability

must occur before age sixty. The next sentence, ‘When

such benefits (benefit in the event of such disability be-

fore age sixty) take effect,’ when read in connection

with the language following it, to the average mind,

naturally and inevitably, refers to the time of the com-

mencement of the payment of ‘the benefits’ and not the

time of the creation or commencement of the coverage

of the insured’s disability benefits, thereunder.’

* * * * * * *

‘*If giving notice or furnishing proof is made a con-

dition precedent to liability on the part of the insurer

or if forfeiture is provided for if they are not given,

then notice or proof must be given in accordance with

the terms of the policy contract. Staples v. Contin-

nental Ins. Co., 223 Ky. 842,5 S. W. (2d) 265; Federal

Iafe Ins. Co. v. Holmes’ Committee, 232 Ky. 834, 24

S. W. (2d) 906. In the case of Metropolitan Life Ins.

Co. v. People’s Trust Co., 177 Ind. 578, 98 N. E. 513, 41

25

L. R. A. (N. 8.) 285, the court held that a delay of two

years and two months in furnishing notice and proof

of loss was not unreasonable in the circumstances

established by the evidence. In the present case, it is

very clear that Smith, after the occurring of his total

and permanent disability, would not have continued to

pay the premiums and omitted to demand of the Mu-

tual Life the payment of the disability benefits except

ignorance of the provisions of the policy entitling him

thereto. The facts herein bring his rights within the

rule stated in Metropolitan Life Ins. Co. v. People’s

Trust Co., supra.”’

In the case of Viles v. Prudential Ins. Co., 96 F. (2d) 3

(C. C. A., 10th), under a clause similar to that contained

in the Landry poliey, and with a similar rider, the court

held that the insured was entitled to disability benefits even

though he had not filed proof before defaulting in his

premiums.

A contract of insurance is to be considered and construed

as a whole and all its parts so far as practicable are to be

harmonized and given force and effect, and, if provisions

in the policy proper and those in the rider or supplement

are in conflict or inconsistent with each other, those of the

latter must govern. Wagner Electric Corp. v. Ocean Acci-

dent & Guarantee Corp., 36 F. (2d) 186 (C. C. A., 8th).

We assume that counsel for the insurance company will

use as his main authorities in support of his interpretation

of the disability clause of the Landry policy, the case of

Birnbaum v. Mutual Life Ins. Co. of New York, 170 Mise.

83, 9 N. Y. S. 2d 928, and the case of Moscov v. Mutual Life

Ins. Co. of New York, 387 Ill. 378, 56 N. E. 2nd 399,

The Birnbaum case was decided by the City Court of

New York, County of Bronx, and there is no record of the

case having been appealed. It does not constitute a guide

to the construction of the disability clause of the Landry

policy for two reasons: (1) The rider which was on the back

of the Mutual Life policy in the Birnbaum case did not

26

contain the second section such as we find in the Landry

policy, and which contributes so much towards the proper

interpretation of the rights of the claimant under the first

section of the rider and (2) it is an ill-considered decision

without reasons supporting its conclusion.

In an attempt to vest prestige in the Birnbaum case,

counsel for the insurance company will probably call to the

Court’s attention the fact that the decision was cited in the

cases of Lincoln Natl. Ins. Co. v. Ghio, 111 F. (2nd) 307

(C. C. A., 8th), and Mutual Life Ins. Co. v. Drummond, 111

F. (2d) 282-286 (C. C. A., 8th). As pointed out by the Dis.

trict Judge in the present case (R. 21), the use of the Birn-

baum case in the Lincoln Natl. Ins. Co. v. Ghio case was ina

footnote for the purpose of comparison, and its use in the

case of Mutual Life Ins. Co. v. Drummond was not in con-

nection with the same question which is being considered in

the Landry ease.

The case of Moscov v. Mutual Life Ins. Co. of New York,

supra, was decided by the Supreme Court of the State of

Illinois, in line with the contention of the insurance com-

pany. The case is different from the Landry case in that,

like the Birnbaum policy contract, the Moscov policy con-

tract did not contain the second section of the rider such as

is found in the Landry poliey; the Supreme Court of Illi-

nois did not construe the same language which is now

presented in the Landry policy.

The cases of Brumit v. Mutual Life Ins. Co., 178 Tenn.

48, 156 S. W. 2d, 377, and Wolfe v. Mutual Life Ins. Co., 3

Tenn. Ap. 199, which will probably be cited by counsel for

the insurance company, are inapplicable as the conditions

in the contracts were not the same as in the instant ease.

Summing up our reasoning as to the interpretation of

the disability benefits of the Landry policy contract, we

submit:

(1) There is no time limit for filing proof, nor is

there a forfeiture.

27

(2) Section 3, page 2 of the policy (R. 59) required

that proof be furnished before insured attained age of

sixty.

(3) The rider on the backfold of the policy (R. 65)

giving supplementary benefits when proof is delayed,

is subdivided into two sections:

(a) When no premium in default.

(b) When premium in default not over six

months.

In the first portion of the rider, the one applicable to

Landry, who had paid all his premiums, the requirement

of filing of proof before attaining age sixty is eliminated.

In the second portion of the rider applicable to an insured

who is in default in premiums, the requirement of filing

proof before attaining age sixty, is inserted.

(4) The exclusion of this requirement in the first portion

of the rider and its inclusion in the second portion shows an

intention that the filing of proof before age sixty by an

insured in good standing is not a condition precedent to

his right of recovery.

(5) Consequently Landry did not lose his rights to re-

cover the benefits which had accrued to him since May 1938,

by failing, through ignorance of his rights, to file claim

until after he was over sixty years of age.

The Mutual Life Insurance Company wrote the policy ;

it saw fit to make the filing of proof before attaining the

age of sixty a condition precedent to recovery in the case

of policyholders who are in default, and not to make it a

condition precedent in the case of policyholders whose

premiums are all paid. Our interpretation gives full force

to the obligation on the face of the policy to insure against

disability occurring before age sixty.

ee eee ee eae Pee ee

rT

28

Specification of Error No.4. Language of Entire Disability

Clause as it Affects Landry is at Least Ambiguous,

Petitioner submits that even if the interpretation in the

majority opinion of the Cireuit Court of Appeals is reason.

able, nevertheless the court erred in failing to recognize

that the language involved is susceptible of two reasonable

interpretations and that accordingly it is ambiguous and

should be construed in favor of the insured. The fact that

Judge Porterie in two separate opinions (R. 12-33 and R.

70-77) handed down in the District Court and that Judge

McCord in a dissenting opinion (R. 95) in the Circuit Court

of Appeals decided that petitioner’s contention is correct,

furnishes proof of the fact that the language involved js

susceptible of two reasonable interpretations and conse.

quently is ambiguous. Another factor which shows the

ambiguity of the clause is that in the ease of Moscov y,

Mutual Life Ins. Co. of New York, 387 Ill. 378, 56 N. B. 2nd

399, where only Section 3 of the policy and the first portion

of the rider were presented for interpretation, two Judges

of the Supreme Court of Illinois dissented from the ma-

jority opinion, which held that the insured was required to

file proof before attaining the age of sixty.

‘The rule is settled that in case of ambiguity that con-

struction of the policy will be adopted which is most favor-

able to the insured. * * * Examination of the words relied

upon to show an exception to the Incontestability clause ‘of

the policy discloses ample doubt concerning their meaning.

The argunents of counsel have emphasized the uncertainty,

The District Court and the Cireuit Court of Appeals

reached different conelusions, and elsewhere there is di-

versity of opinion.’’? Stroehmann v. Mutual Life Ins. Co.,

300 U. S. 435, 439. See also Love v. Northwestern Mutual

Life Ins. Co., 119 FP. (2d) 251 (C. C. A, 5th); Bernier y.

Pacific Mutual Life Ins. Co. of Calif., 139 So. 631 (La. Sup.

Ct.); Ardoin v. Great Southern Life Ins. Co., 173 So. 114

(La. Sup. Ct.) ; and Muse v. Metropolitan Life Ins. Co., 192

29

So. 75 (La. Sup. Ct.), all to the effect that if language of an

insurance policy is ambiguous it is to be construed in favor

of the insured,

CONCLUSION.

In view of the foregoing it is respectfully submitted that

the petition for a writ of certiorari should be granted and

that this Court should review the decision of the United

States Circuit Court of Appeals for the Fifth Cireuit and

finally reverse it.

Respectfully submitted,

Homer Henpricks,

920 Southern Building,

Washington 5, D. C.

Counsel for Petitioner.

Of Counsel :

Donatp Lassk,

Lafayette, Louisiana.

July, 1945.