## Facts

- Mutual Life issued in Virginia a $4,500 life insurance policy to Benjamin F. Cooksey, including disability benefits and a waiver-of-premium provision conditioned on the insured furnishing “due proof” of total and permanent disability while no premium was in default.
- A quarterly premium due November 16, 1931 was subject to a 31-day grace period ending December 17, 1931; the premium was not paid.
- On December 17, 1931, Cooksey was bedridden with chronic nephritis and later died on January 20, 1932.
- The evidence (conceded by the insurer) showed that by December 14, 1931 Cooksey was totally and permanently disabled both physically and mentally, rendering him unable to give notice or furnish proof of disability before the premium default.
- The insurer treated the policy as lapsed for nonpayment and denied liability, arguing proof before default was a condition precedent to waiver and benefits.
- The district court directed a verdict for the insurer; the Fourth Circuit reversed; the Supreme Court granted certiorari.

## Issues

1. Whether the policy, issued and delivered in Virginia to a Virginia resident, must be interpreted under Virginia law.
2. Whether the insured forfeits the right to waiver of premiums and disability protection by failing to furnish “due proof” before default when total disability (including mental incapacity) caused the failure.

## Decision

- The Supreme Court affirmed the Fourth Circuit.
- Virginia law governed interpretation because the policy was delivered in Virginia.
- Under Virginia law as applied to this policy, failure to furnish proof before default did not forfeit the waiver-of-premium right when the failure resulted from the insured’s total and permanent disability.
- The reinstatement clause did not limit the waiver-of-premium clause; it operated as an additional remedy rather than the exclusive post-default path.

## Legal Principles

- Insurance contracts are interpreted under the law of the state of delivery when that state’s rules govern the meaning and effect of specialized policy conditions.
- When a policy requires proof of total and permanent disability while no premium is in default as a condition to waiver of premiums, the condition is not enforced to defeat coverage if the insured’s total disability (including mental incapacity) made timely notice or proof impossible, where governing state law so construes the clause.
- A reinstatement provision permitting revival after default does not necessarily imply that post-default proof of disability is irrelevant to waiver; it may be read as cumulative unless the policy clearly makes it exclusive.

## Conclusion

The Court held that Virginia law controlled and that the insurer could not treat the waiver-of-premium protection as forfeited when the insured’s total and permanent disability prevented him from furnishing proof before the premium went into default, entitling the administrator to recover under the policy.


Mutual Life Ins. Co. of N.Y. v. Johnson, 293 U.S. 335 (1934)