Hagberg, R. E.

English

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Volume 40 Issue 3 Article 14 April 1934 Insurance--Forfeiture of Policy--Insanity Not an Excuse for Failure to Notify Insurer as to Total Disability R. E. Hagberg West Virginia University College of Law Follow this and additional works at: https://researchrepository.wvu.edu/wvlr  Part of the Insurance Law Commons Recommended Citation R. E. Hagberg, Insurance--Forfeiture of Policy--Insanity Not an Excuse for Failure to Notify Insurer as to Total Disability, 40 W. Va. L. Rev. (1934). Available at: https://researchrepository.wvu.edu/wvlr/vol40/iss3/14 This Recent Case Comment is brought to you for free and open access by the WVU College of Law at The Research Repository @ WVU. It has been accepted for inclusion in West Virginia Law Review by an authorized editor of The Research Repository @ WVU. For more information, please contact ian.harmon@mail.wvu.edu. RECENT CASE COMMENTSrights,' but the mere opinion of the chancellor with no decreeadjudicating them is not enough." For an appeal it is not neces-sary that there be an actual enforcement of the relief sought," orthat the principles adjudicated be applied to the facts of the case. 'But there must be a decree putting these principles into effeet, forotherwise the appellant has suffered no prejudice.'Both of the statutes in question were taken from the Codeof Virginia, but they were not there construed together untilafter West Virginia had adopted the statute authorizing the trans-fer of causes from one forum to the other. In Virginia it hasbeen held that a decree dismissing a suit in equity, with leave totransfer the cause to the law court, is not final, but it is appeal-able as a decree adjudicating the principles of the cause?' Sincethe effect of such a decree is to deny to the plaintiff all of therelief sought in his bill, the case seems to be correct in the lightof both precedent and principle.-PAUL D. FARR.INSURANCE - FORFEITURE OF POLICY - INSANITY NOT ANEXCUSE FOR FAILURE TO NOTIFY INSURER AS TO TOTAL DISABILITY.- An insurance policy provided that, upon the insured's givingnotice of total disability before default in payment of premiums,further payment thereof would be ,excused during the disability.The insured was adjudged insane previous to the due date of apremium. While so incapacitated, the period of grace expired,that portion of subsection 1, which allows an appeal to any decree or order'adjudicating the principles of the cause' ").18 Reed v. Cline's Heirs, 9 Gratt. 136 (1852) (Bill to enforce a title bondfor sale of land, and after statute of limitations pleaded, court directed anissue to try whether the bond had been executed and lost. Held, that thisimpliediy adjudicates the plaintiff's right, as not barred by the statute oflimitations)."Armstrong v. Ross, 56 W. Va. 16, 48 S. E. 475 (1904).2Richmond v. Richmond, 62 W. Va. 206, 57 S. E. 736 (1907) (The de-cree ordered partition of certain lands, but the actual partition had not beenmade).2Wood et at. v. Harmison et aL, 41 W. Va. 376, 23 S. E. 560 (1895).'Garrett v. Garrett et als., 91 W. Va. 243, 112 S. E. 494 (1922) (Thedecree sustained a demurrer to an affirmative answer, but did not dismissthe answer or give any relief sought in the bill); Watson v. Wigginton, 28W. Va. 533, 552 (1886) (The trial court may correct the errors committed,or commit others, before enforcing the decree); Steenrod v. Railroad Co.,25 W. Va. 133 (1884).'Colvin et at. v. Butler, 150 Va, 672, 143 S. E. 333 (1928) ; Hodges & DeJarnette v. Thornton et al., 138 Va. 112, 120 S. E. 865 (1924).1Hagberg: Insurance--Forfeiture of Policy--Insanity Not an Excuse for FailuPublished by The Research Repository @ WVU, 1934WEST VIRGINIA LAW QUARTERLYno payment of premium having been made, nor notice of disabil-ity having been given to the company. The plaintiff, as com-mittee, seeks, in equity, to have the policy declared to be in fullforce. Held: The policy lapsed. lannerelli v. Kansas City LifeInsurance Company.'It is a well-settled rule that no excuse for failure to paypremiums can be offered to avert a forfeiture, save -(a) War in some jurisdictions.(b) Insolvency of the insurer.(c) Refusal of tendered premiums.(d) Any wrongful act of insurer preventing payment.(e) Want of notice, when it is the duty of the insurer to givenotice.(f) Waiver of prompt payment.'An act of God, sickness or insanity rendering the insured whollyincapable of attending to business affords no defense for failureto pay premiums when due, and will not avoid a lapse of thepolicy. The reason usually given is that the act required is notnecessarily personal to the insured, but may be performed byanother for him.'However, the payment of premiums may be waived by theintervention in the policy of a "disability clause", provided thecompany be given notice, in the form of proof of total disabilitybefore default in the payment of premiums. If notice is given,then payment of premiums will be waived. There is a divisionin the authorities as to the effect of failure to give notice. Oneline of authority holds that notice of the disability is a conditionprecedent, which must be performed prior to default in the pay-ment of premiums. Sickness or insanity of the insured, whichhas made it impossible for him to give the requisite notice, willx171 S. E. 748 (W. Va. 1933); Accord: Da Corte v. New York Life Ins.Co., 171 S. E. 248 (W. Va. 1933).2 VAxcE ON INSURANCE (2d ed. 1930) 291; but see W. VA. REv. CODE(1931) c. 33, art. 3, § 18 (Rights of insured after default in payment ofpremium).:Klein v. Life Ins. Co., 104 U. S. 88, 26 L. Ed. 662 (1881); Thompsonv. Knickerbocker Life Ins. Co., 104 U. S. 252, 26 L. Ed. 765 (1881); Car-penter v. Centennial Mut. Life Ass'n, 68 Iowa 453, 27 N. W. 456, 56 Am.St. Rep. 96 (1895); Roeci v. Mass. 'ccid. Co., 222 Mass. 336, 110 N. E.972 (1916); New York Life Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93,15 A. L. B. 314 and note p. 318 (1920).'See cases, supra n. 3 (In these cases, the courts have applied the well-established doctrine, that non-performance of a contract which does not re-quire or contemplate performance by the promisor personally, is not excusedby impossibility of performance).2est Virginia Law Review, Vol. 40, Iss. 3 [1934], Art. 14https://researchrepository.wvu.edu/wvlr/vol40/iss3/14RECENT CASE COMMENTSnot prevent the forfeiture.' The other line of authority escapesforfeiture of the policy by holding that, while notice may intheory be a condition precedent, yet its performance is excusedby the total disability; alternatively, such cases hold notice issimply a condition subsequent, the non-fulfillment of which willnot be permitted to extinguish "accrued rights".' Many of thedecisions cited in this group involve fire and accident insurancelitigation.' These can be distinguished from the principal case,in that, at the time of the disability, the interest has vested; andwhere the loss insured against has already been suffered, allfurther acts required of the insured are to be viewed as conditionssubsequent, thus to be excused by impossibility of performance.'In the able concurring opinion of the present case, it is arguedthat notice has merely the effect of waiver of payment ofpremiums: if proper notice has not been given, the policy auto-matically lapses, and in such event there are no provisions forits reinstatement.! From the angle of strict construction thismay be true, but the insurance contract being one of adhesion,"5 New York Life Ins. Co. v. Alexander, mspra n. 3; Wick v. Western UnionLife Ins. Co., 104 Wash. 129, 175 Pac. 953 (1918); Hanson v. Life Ins. Co.,229 Ill. App. 15 (1923); Courson v. Life Ins. Co., 295 Pa. 518, 145 Atl. 530(1929) (Suit for the recovery of premiums. The insurance company waspaying the benefits of the policy without protest); Yohalem v. Life Ins. Co.,136 Misc. 748, 240 N. Y. Supp. 666 (1930); Smith v. Life Ins. Co., 134 Kan.426, 7 P. (2d) 65 (1932); Dean v. Life Ins. Co., 175 Ga. 321, 165 S. E.235 (1932); Berry v. Life Ins. Co., 165 Miss. 405, 142 So. 44 (1932);Bergholm v. Peoria Life Ins. Co., 284 U. S. 489, 52 S. Ct. 230, 76 L. Ed.416 (1932); Egan v. Life Ins. Co., 60 F. (2d) 268 (D. C. N. D. Ga. 1932)(The condition is, "if insured furnish proof of the disability and not thedisability itself."); New England Mnt. Life Ins. Co. v. Reynolds, 217 Ala.307, 116 So. 151 (1928) (It was urged that waiver of premiums was but afurther method of paying the premiums and thus impossibility of perform.ance would not excuse payment).' Southern Life Ins. Co. v. Hazard, 148 Ky. 465, 146 S. W. 1107 (1912);Marti v. Midwest Life Ins. Co., 108 Neb. 845, 189 N. W. 388, 29 A. L. R.1507 (1922); Metropolitan Life Ins. Co. v. Carrol, 209 Ky. 522, 273 S. W.54 (1925); Pfeiffer v. Missouri State Life Ins. Co., 174 Ark. 783, 297 S.W. 847, 54 A. L. B. 600 (1927); Levan v. Met. Life Ins. Co., 138 S. C.253, 136 S. E. 304 (1927); Minnesota Inc. Co. v. Marshall, 29 F. (2d) 977(C. C. A. 8th, 1928); Missouri State Life Ins. Co. v. LeFevere, 10 S. W.(2d) 267 (Tex. Civ. App. 1928); Rhyne v. Jefferson Standard Life Ins. Co.,196 N. C. 717, 147 S. E. 6 (1929); Rhyne v. Jefferson Standard Ins. Co.,199 N. C. 419, 154 S. E. 149 (1930); Swan v. Atlantic Life Ins. Co., 156Va. 852, 159 S. E. 192, reported subsequently 168 S. E. 423 (1931).7 Rhyne v. Life Ins. Co., sapra n. 6; Levan v. Met. Life Ins. Co., supran. 6.'VAcE, rupra n. 2 at p. 1788. See New England Mut. Life Ins. Co. v.Reynolds, supra n. 5 (where the distinguishment is made). Obviously, itmight be argued similarly that, with the event of the disability, the interestunder the life policy has also vested, notice of such disability being re-quired merely for purposes of verification. The cases, however, attempt nosuch analogy.lIannerelli v. Kansas City Life Ins. Co., supra n. 1.3Hagberg: Insurance--Forfeiture of Policy--Insanity Not an Excuse for FailuPublished by The Research Repository @ WVU, 1934WEST VIRGINIA LAW QUARTERLY 279ought not to be governed by meticulous rules of contract law.'Supervening impossibility of performance should apply equallyto conditions precedent as well as to conditions subsequent.1"Where the failure to perform is the result of impossibility, itwould seem fair to excuse non-performance, inasmuch as the in-surer has been paid for its additional obligation and is slightly,if at all, prejudiced by the omission to notify.'' Judicial opin-ion, which thus forbids lapse of the policy, does so by attackingthe innate injustice of a contract, that by its technicalities mightwork forfeiture because of lack of notice. It is probable that thepossibility of fraud may have somewhat influenced the West Vir-ginia court in reaching its strict decision. ' Nevertheless, the in-sured's "total disability" in the .case at bar would seem to havebeen a matter of public record, since his confinement in the aslyumoccurred by court order. ' Hence, little justification for any fraudmotif is to be discerned here' Unless the case can be supportedupon the "theory of the bill",' from the angle of equity pleading,the result would appear to facilitate a forfeiture. Surely, modernequity should abhor such an outcome.8-R. E. HAGBERG."VANCE, supra n. 2, at pp. 201, 215."WOODRUFF, CASES ON INSURANCE (2d ed.) 5 ("What do they know ofthe law of the insurance contract, who only the law of contract know?").'-See Note (1927) 40 HARv. L. REV. 1016. Cf., as to the effect of initialimpossibility in the performance of a condition precedent, in Roman law,GAIUS, III., § 98, holding the stipulation of no effect if subject to such con-dition, (-the common law ace., Co. LiTT. 206a); INSTITUTES, IMI., 19, § 11;SAVIGNY, SYSTEM DES HEUTIGEN ROMISCHEN REcHTS, III., § 124, citingDIGEST, XLIV., 7, 31. As to the civil law, see FRENCH CIrm CODE, arts.1172-1173; GERMAN Civm CODE, § 158."Lez non cogit ad impossibilia, - (the law does not compel the impos-sible). BROOM's LEGAL MAXIms, (9th ed.) 171". Hatcher, J., writing inWatson v. Watson, 168 S. E. 373, 374 (W. Va. 1933).23 See Note (1927) 36 YALE L. J. 1021, 1022."See W. VA. REV. CODE (1931) c. 33, art. 3, § 32 (providing for penaltiesin certain cases of fraud in obtaining money from an insurance company)."Presumably, by virtue of the provisions of W. VA. REv. CODE (1931) C.27, art. 2.20Unquestionably, frauds currently perpetrated on insurance companiesshould require careful safeguards against abuse of the total disabilityprivilege. Hence, in a majority of instances, there might be adequatejustification for rigid enforcement of the notice provision. On the otherhand, the harsh penalty may seem unconscionable, as here, where there isample opportunity for verification.'7LANGDELL, SUMMARY OF EqUITY PLEADING (1883) 61.'The present case is unusual, in that the court of equity has deliberatelyrefused to relieve against supervening impossibility, even though complainantobviously had no remedy at law. Perhaps, the fact that the insured wasstill alive, albeit insane, may have actuated the court to a considerable ex-tent. In any event, the circumstance that the Virginia decision on prac-tically the same facts achieves an opposite result, should be significant. SeeSwan v. Atlantic Life Ins. Co., supra n. 6.4West Virginia Law Review, Vol. 40, Iss. 3 [1934], Art. 14https://researchrepository.wvu.edu/wvlr/vol40/iss3/14

Insurance--Forfeiture of Policy--Insanity Not an Excuse for Failure to Notify Insurer as to Total Disability

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Insurance--Forfeiture of Policy--Insanity Not an Excuse for Failure to Notify Insurer as to Total Disability

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