Appeal from the District Court of the United States for the Eastern District of Pennsylvania; William H. Kirkpatrick, Judge.
Before BIGGS, MARIS, and JONES, Circuit Judges.
The New York Life Insurance Company filed a complaint in the District Court for the Eastern District of Pennsylvania seeking to have four policies which it had issued to Jacob Levine reformed by changing the insured's date of birth from January 10, 1878, to January 10, 1875. The insured answered that the date of birth as stated in the policies was correct. The cause was tried to a judge without a jury. The court found that the insured's date of birth was correctly stated in the policies and dismissed the complaint. The insured also filed a counterclaim seeking recovery of disability benefits upon three of the four policies involved in the bill of complaint.*fn1 The court entered judgment for the company upon the counterclaim.
The court found that the insured was disabled April 1, 1937; that the disability commenced prior to the date when the insured became 60 years of age, which date was January 10, 1938; that the disability was total and permanent within the purport of the policies; that the premiums were fully paid; and that the insured filed proof of disability with the company on August 12, 1940. The court refused the insured recovery on policy No. 11,277,967 because it concluded that by the temrs of that policy the insured was bound to furnish proof of disability not later than November 9, 1938. The insured does not appeal from so much of the judgment as deals with this policy.
The reasoning which moved the court to enter judgment against the insured upon policies Nos. 8,375,155 and 11,150,820 is of a different nature. The court concluded, in the absence of any express provision dealing with the time for filing proof of disability, that such proof had to be filed within a reasonable time. It then found as a fact that a delay of three years and four months after the disability began and two years and seven months after the insured became 60 years of age, was unreasonable. The insured has appealed from the judgment insofar as it denied him recovery of income payments due under these two policies.
The question to be determined upon this appeal is whether the court erred in holding that proof of disability had to be filed within a reasonable time after the inception of the disability or after the insured became 60 years of age as a prerequisite to the recovery by the insured of disability benefits. We think that the holding was erroneous.
The insured purchased policies Nos. 8,375,155 and 11,150,820 in 1923 and 1930 respectively. Each year, in addition to the premiums for life insurance, he paid $23.84 for insurance protection in the event he became disabled. These premiums were paid by the insured up to the time of suit. Each policy contained provisions dealing solely with disability benefits. Policy No. 8,375,155 provides:
" * * * The Company agrees to pay to the insured One per cent of the face of this policy ($10 per $1,000) each month during the lifetime of the insured and also to waive the payment of premiums, if the insured becomes wholly and permanently disabled befoe age 60, subject to all the terms and conditions contained in Section 1 hereof.
"Second 1 - Disability Benefits
"1. Disability benefits shall be effective upon receipt at the Company's Home Office, before default in the payment of premium of due proof that the Insured became totally and permanently disabled after he received this Policy and before its anniversary on which the Insured's age at nearest birthday is 60 years.
"2. Income Payments. - The Company will pay the Insured, * * * a monthly income of one percent of the face of the Policy during the lifetime of the Insured and the continuance of such disability. The first income payment shall become due on the first day of the calendar month following receipt of proof of total and permanent disability or proof of continuous total disability for three consecutive months, as above, and succeeding payments shall become due on the first day of each calendar month thereafter. Any income payments becoming due before the Company approves the proof of disability shall become payable upon such approval and subsequent payments will be made as they become due."
Policy No. 11,150,820 provides:
" * * * upon receipt of due proof that the Insured is totally and presumably permanently disabled before age 60, as defined under 'Total and Permanent Disability', The Company Agrees To Pay To The Insured Twenty Dollars each month, ...