Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; J. Leroy Adair, Judge.
Before SPARKS, MAJOR, and TREANOR, Circuit Judges.
This is an appeal from a judgment of the District Court dismissing the suit at plaintiff's cost. The suit was brought on claims under two war risk insurance policies, the plaintiff seeking to recover as beneficiary under the policies for death benefits and as administrator for total permanent disability benefits.*fn1
The complaint alleged that insured, the deceased, became totally and permanently disabled on June 18, 1919, during the life of the policy; that the insured thereby became entitled to receive monthly payments in installments of $57.50 each; and that insured died April 22, 1927. The plaintiff further states in his complaint that under the policy the defendant agreed to pay to the beneficiary on the death of the insured like installments until there should be paid a total of 240 monthly installments, less whatever number of installments, if any, which had been paid to the insured.
The defense of statute of limitations was raised by motion to dismiss and the motion was sustained.
The following statutory provisions were the basis of the District Court's granting a motion to dismiss:*fn2 "No suit on yearly renewable term insurance shall be allowed under this section unless the same shall have been brought within six years after the right accrued for which the claim is made or within one year after July 3, 1930, whichever is the later date * * *: Provided, That for the purposes of this section it shall be deemed that the right accrued on the happening of the contingency on which the claim is founded * * *."
It is the defendant's contention that the "happening of the contingency" upon which the claims in the instant case are founded was the "alleged occurrence of permanent total disability of the insured;" and that the occurrence of the permanent total disability of the insured in 1919 started the statute of limitations running against the plaintiff's claims, both as personal representative of the insured and as beneficiary under the policies.
If the defendant's contention is correct the District Court properly sustained the motion to dismiss, since under the government's theory the statutory period had expired long before suit was brought.
It is clear that the period of limitation begins to run when "the right accrued." The "right" is the right which is asserted in the suit; and by further statutory declaration this right accrues upon "the happening of the contingency on which the claim was founded." But the right which has accrued is a right "for which the claim is made." And by force of the foregoing language, the right which is asserted by the allegations of the complaint in this case is a right to receive payment of insurance benefits for which claims are made, that is, total and permanent disability benefits and death benefits.
At the outset we should note that the contract of insurance covers two rights for each of which a claim may be made, a right which may accrue to the insured for disability benefits; and a right which may accrue to the beneficiary for death benefits. Our question then is, What was the contingency upon which the respective claims for benefits under the insurance policy was founded, since each right in suit accrued upon the happening of that contingency?
For the purposes of a suit to enforce a right, for which a claim is made, the contingency upon which the claim is founded must bear such a relation to the claim that, in the case of the non-happening of the contingency, tghe claim is unenforcible. By the terms of thec ontract of insurance contained in the policy a claim for death benefits could not be enforced without the happening of the death of the insured. But if no question of lapse of policy by reason of non-payment of premiums is involved in a suit,it is not necessary for a beneficiary to prove that there has been total and permanent disability. When, as in the instant case, the insured had discontinued payment of premiums several years before his death, it would be an essential fact of plaintiff's case that total and permanent disability occurred at a time prior to the discontinuance of the payment of the premiums. Otherwise the beneficiary would fail to show the existence of a valid contractual obligation at the time of the death of the insured. But it is clear that the claim for death benefits is founded on the "happening of the contingency" of total and permanent disability only in the same sense that it is founded on the "happening of the contingency" of the payment of insurance premiums during the life of the insured.
The term "contingency" is not defined by the statute. Consequently, if the contract of insurance does not disclose the "contingency" the statutory limitation cannot be applied, since courts are not at liberty to devise a "contingency" upon which to found a claim. But there should be no difficulty in determining the "contingency" upon which a claim for insurance benefits is founded in view of the definite designation of the two possible contingencies in the language of the contract of insurance.
Under the terms of the insurance policy the government agrees to pay a principal amount, converted into monthly installments, "to the beneficiary or beneficiaries hereinafter designated, commencing upon the death of the insured, while the insurance is in force." It is apparent from the provisions of the contract of insurance that a beneficiary has no enforcible legal claim for the payment of benefit installments until the death of the insured, and it is difficult to perceive how the happening of the contingency of "total and permanent disability" can be the foundation of a claim for money payments when such claim is not legally ...