The case, which is here upon demurrer to a declaration, depends for its solution upon the nature of the breach of contract imputed to the defendant, the petitioner in this court, and upon the measure of the damages recoverable therefor.
From the declaration we learn the following: Respondent received from petitioner on February 7, 1927, a policy of insurance for $2,000 payable at his death. The consideration was a semiannual premium of $38 payable during his life, but for not more than twenty years. If, however, the insured became totally and permanently disabled before the age of sixty, the company, petitioner, was to pay him a monthly income at an agreed rate and was to waive the payment of any premium that would otherwise be due. Disability was to be considered total when the insured was so affected by bodily injury or disease as to be wholly prevented from performing any work, from following any occupation, or from engaging in any business for remuneration or profit. In particular, 'the total and irrecoverable loss of the sight of both eyes or of the use of both hands or of both feet or of one hand and one foot' was to constitute 'total disability for life.' Before making any income payment or waiving any premium, the company might demand due proof of the continuance of total disability, not oftener, however, than once a year after such disability had continued for two full years. Upon failure to furnish such proof, or if the insured performed any work, or followed any occupation, or engaged in any business for remuneration or profit, 'no further income payments' were to be made, 'nor premiums waived.' If, at the time of a default in the payment of a premium, the insured was disabled within the definition of the policy, the insurance was to be reinstated, provided, however, that within six months after the default proofs of such disability were received by the insurer. In any event, reinstatement would be permitted at any time within five years upon evidence of insurability satisfactory to the insurer and upon payment of overdue premiums with interest at 5 per cent. Finally, the insured, though in default, was to have the benefit of surrender values in the form either of cash or of temporary insurance or of participating paid-up insurance according to his choice.
On September 11, 1931, the insured, according to the declaration, lost 'the total and irrecoverable use' of one hand and one foot, and became totally and permanently disabled. Upon proof of his condition the company paid him the monthly benefits called for by the policy from October 11, 1931, to July 11, 1933, and during the same period waived the payment of semiannual premiums. It refused to make a monthly payment in August, 1933, and refused the same month to waive a semiannual premium, 'asserting to the plaintiff as its ground for such refusal that since it appeared to the defendant that for some time past the plaintiff had not been continuously totally disabled within the meaning of the disability benefit provision of the policy, the defendant would make no further monthly disability payments, and that the premiums due on and after August 7, 1933, would be payable in conformity with the terms of the contract.' Later, upon the expiration of a term of grace, 'the defendant, on or about September 19, 1933, declared the policy as lapsed upon its records.' Plaintiff has elected to treat the defendant's acts 'as a repudiation and denunciation of the entire contract,' relieving him on his part from any further obligation.