187 S.E. 581 | N.C. | 1936
Civil action to recover on total and permanent disability clauses in supplemental contracts attached to and made parts of two life insurance policies.
Upon the payment of the first annual premiums, the defendant, on 24 June, 1925, issued to the plaintiff two $5,000 life insurance policies, with riders or supplemental contracts attached, each providing for disability benefits in case of total and permanent disability, "as a result of bodily injury or disease occurring and originating after the issuance of said policy."
On the face of each policy is an incontestable clause in the following language:
"3. Incontestability: — This policy shall be incontestable after it has been in force for a period of two years from its date of issue, except for nonpayment of premiums, and except as to provisions and conditions relating to benefits in the event of total and permanent disability, and those granting additional insurance specifically against death by accident, contained in any supplementary contract attached to and made part of this policy."
Each rider or supplemental contract contains the following:
"The provision of the said policy as to incontestability shall apply hereto, but shall not preclude the company from requiring as a condition to recovery hereunder, due proof of such total and permanent disability as entitles him to the benefits hereof."
During the summer of 1927, plaintiff made claim for total and permanent disability benefits under the policies above mentioned, which was allowed by the defendant up to and including the month of August, 1932, when defendant notified plaintiff that no further payments would be made, contending that proof of claim was based upon false and fraudulent statements, which defendant had relied upon to its injury.
This suit was instituted 15 September, 1934, to recover alleged disability benefits accruing since August, 1932, under the supplemental contracts attached to the policies in suit.
Denial of liability interposed by the defendant upon the ground that plaintiff's disability was not the result of bodily injury or disease "occurring and originating after the issuance of said policies"; and counterclaim pleaded for amount of benefits already paid.
The defendant was not allowed to show its alleged defense and counterclaim because of the incontestable clauses contained in the policies. Exception.
Verdict and judgment for plaintiff, from which defendant appeals, assigning errors. Do the incontestable clauses in the policies in suit preclude the defendant from showing that plaintiff's original claim for disability benefits was grounded on false and fraudulent statements, as alleged, and that a continuation of said claim — the gravamen of plaintiff's present complaint — does not fall within the terms of the supplemental agreements? This calls for an analysis and construction of the contracts.
With respect to the original policies, there are numerous decisions to the effect that an incontestable clause cuts off all defenses except those allowed eo nomine in the clause itself. Trust Co. v. Ins. Co.,
It will be observed that the instant clauses contain exceptions "as to provisions and conditions relating to benefits in the event of total and permanent disability." If these exceptions stood alone, the decision inSmith v. Ins. Co.,
With the view just expressed, the defendant says it has no quarrel. It is not contesting the validity of its contracts. Its contention is, that plaintiff's claim is a spurious one, and that it is not covered by the terms of the contracts, but expressly excluded thereby. The provisions in the supplemental contracts, making the incontestable clauses applicable thereto, do not preclude the defendant from requiring, as a condition *442
to recovery thereunder, "due proof of such total and permanent disability as entitles him (plaintiff) to the benefits hereof." Carter v. Ins. Co.,
We are aware of no decision which would deny to a defendant the right to dispute the genuineness of plaintiff's claim, or to controvert the question of liability under its contracts. McCabe v. Casualty Co.,
New trial.