Haynes v. Metropolitan Life Insurance

Digges, J., delivered the opinion of the Court. On December 7, 1963, Sergeant James Lee Haynes disappeared without a trace. He was on leave from active duty with the Army in Germany and had set out to hitchhike from his home in Baltimore to visit his parents in Maben, West Virginia. The Army and state police, upon notification that he was missing, conducted an extensive investigation but unearthed not one iota of evidence indicating an accident, foul play, or a voluntary absence without leave from the Army or his wife, Theda R. Haynes, the appellant.

Pursuant to Title 37 U.S.C., §§ 555-56 (Supp. V, 1965-69), the Secretary of the Army issued a Statement of Casualty, indicating the sergeant was presumed to be dead and setting the date of death as December 8, 1964, a year and a day from his disappearance. On December 17, 1964, the appellant presented the Army’s finding to the appellee, the Metropolitan Life Insurance Company, in an attempt to collect on a life insurance policy it had issued to her husband, but the claim was denied on the grounds that proof of death was both insufficient and premature. Following the company’s advice, Mrs. Haynes continued paying premiums and eventually obtained a decree and finding of presumed death from the Circuit ²⁵⁷ Court for Anne Arundel County in accordance with the Maryland Uniform Absent Persons’ Act, Code (1957, 1966 Repl. Vol.), Art. 16, §§ 200-12, on December 20, 1968.

Upon presentation of this decree to the company, all unearned premiums were refunded and all sums possibly due under the policy, except for interest, were paid in full for a total of $14,392.35. The present suit is for $3,725.83 interest the beneficiary claims has accrued on that sum from December 8, 1964 to March 31, 1969, the date of payment. On a motion for summary judgment the insurance company resisted this claim, asserting that no interest had accrued since it had paid in full when the proceeds of the policy were due, specifically, upon presentation of the decree and finding of death. The Circuit Court for Anne Arundel County (Childs, J.) concurred in this reasoning and Mrs. Haynes has appealed.

We shall affirm. The appellant’s principal argument is that summary judgment should not have been granted as a matter of law because there was a dispute over a critical fact of the case, the date from which interest should run. We frankly see little factual controversy here, but before addressing ourselves to that issue we shall discuss the contract and statutory provisions which bear on the general question of the insurance company’s liability for interest in a case such as this. The contract provision which governs the outcome of the appellant’s case is this brief and unobtrusive clause in the insurance policy: “The amount payable in the event of death of a person insured under this policy will be paid, upon receipt of due proof of such death.” (Emphasis added.) Clauses similar to this have been construed to mean that interest on the proceeds of a life insurance policy should not begin to run from the date of death or loss but from the date when proceeds are due and payable, normally the date of furnishing proof of death.

Crook v. N. Y. Life ²⁵⁸ Ins. Co., 112 Md. 268 , 75 A. 388 (1910) ; 3 Appleman, Insurance Law and Practice, § 1583 (rev. ed. 1967) ; 46 C.J.S. Insurance § 1391 (1946). In a case where death can only be presumed by seven years’ absence, it has been held that the insurance company is not liable for interest at least until the presumption, which is the only proof of death, has taken effect. New York Life Ins.

Co. v. Brame, 112 Miss. 828 , 73 So. 806, 811 (1917) and 112 Miss. 859 , 73 So. 812 (1917); 44 Am.Jur.2d, Insurance, § 1593 (1969). What constitutes “due proof” has been the subject of extensive judicial comment. In Richardson v. Life Ins. Co., 162 Md. 292, 297 , 159 A. 585 (1932), Chief Judge Bond, speaking for the Court, said: “ ‘It may be stated, however, as a general rule, in the absence of some policy or statutory requirement to the contrary, that sufficient proof of death is made by evidence in any form which is substantial and trustworthy enough to enable the insurer to form an intelligent estimate of his rights and liabilities under his contract.’ 5 Joyce, Insurance, Sec. 3277; 7 Couch, Insurance, sec. 1516; Griffin v. Northwestern Mut.

Co., 250 Mich. 185, 188 , 229 N. W. 509 .” The Municipal Court of Appeals for the District of Columbia has written: “According to the rule in the federal courts the ‘due proof’ called for in such policies is not, in the absence of express language, required to be in any particular form. The purpose of the requirement is merely to give the insurer a reasonáble opportunity to investigate and test the validity of the claim. The proof need not be such as to satisfy the company of the existence of the disability, but need only be such as would, if reasonably established in court, make out a prima facie case requiring payment of the ²⁵⁹ claim.” National Life Ins. Co. v. White, 38 A. 2d 663 (1944).

Also see John Hancock Mutual Life Insurance Co. v. Highley, 445 P. 2d 241 (Okla. 1968) and Levine v. New York Ins. Co., 155 Misc. 806 , 280 N.Y.S. 468, 472 , aff'd mem., 246 App. Div. 703 , 285 N.Y.S. 532 (1935). The statutes which bear on the legal effect of “receipt of due proof” in this case are Maryland Code, Art. 96 V2, § 43 (1957, 1964 Repl. Vol.) ; the Uniform Absent Persons’ Act, Code, (1957, 1966 Repl.

Vol.), Art. 16, §§ 200-12 and Title 37 U.S.C. §§ 555-56 . Sections 555-56 are the descendants of the now defunct World War II “Missing Persons Act,” which may still be found in Title 50, U.S.C. App. § 1005 (1964). The two sections of the present statute, which must be read in tandem, relate only to members of the military services and require the appropriate Secretary or his designee to make a finding of death, “when he considers that the information received [concerning the disappearance], or a lapse of time without information, establishes a reasonable presumption that a member in a missing status is dead . . .” (emphasis added) § 556 (b). The Secretary is not required to find that the absentee is dead, for he can “direct a continuance of his missing status.” § 555 (a) (1).

But if he does the date of death must be set at a year and a day after disappearance for the purpose of ending pay arid allowances, settling accounts and paying death gratuities. § 555 (b). “Missing status” is not limited to a situation in which the person is reported missing in action. § 551 (2) (A) and (B). The insurance company argues, citing In re Estate of Thornburg, 186 Ore. 570 , 208 P. 2d 349, 352 (1949), that the effect of the Secretary’s finding of presumed death should be limited to the administrative purposes for which it was designed, but we question the soundness of this contention or the breadth of the dicta in that case. The only element of the Secretary’s finding which is an arbitrary administrative act is the required setting of a convenient time to close the books on the absentee. We ²⁶⁰ need not comment, however, on the finding’s inherent value as evidence, for what respect it must be given in a non-federal proceeding has been regulated by state statutes.

This was the situation in the Thornburg case, where an Oregon statute accorded the finding “prima facie probative value in evidence.” Also see Stone's Estate, 58 Pa. D. & C. 154, 161-62 (1946). And it is thA situation in Maryland, where Art. 96(4, § 43, the second statute which concerns us in this case, provides: “A written finding of presumed death made by the Secretary of War, the Secretary of the Navy or other officer or employee of the United States authorized by the federal law to make such finding or a duly certified copy of such finding shall be received in any court, office or other place in this State as evidence of the death of the person therein disclosed to be dead and of the date, circumstances and place of his death or disappearance.” It should be noted that unlike the Oregon statute, Maryland’s does not modify the term evidence with attributes such as “prima facie” or “probative value.” The third statute affecting this insurance claim is Maryland’s Uniform Absent Persons’ Act. 1 The history of this Act and its many provisions have been fully described and elucidated in Note, 7 Md.L.Rev. 330, 335-39 (1943). Only a brief glance at the sections which govern this case are necessary here.

The Act’s most