25 So. 2d 463 | Miss. | 1946
Lead Opinion
This case involves the construction of a fraternal life insurance policy which provided that "If his death shall *761 occur . . . in consequence of any violation of law . . . then said benefit certificate shall be null and void and of no effect." The insured died by legal execution, and suit is by the widow, as beneficiary. The by-laws, expressly made a part of the policy, contain the following provision: "Sec. 25. Incontestability. — After any certificate of insurance issued by this Society has been in force during the lifetime of the member for two full certificate years, it shall be incontestable except for nonpayment of premiums and except with respect to the provisions contained in any rider attached thereto providing for additional benefits, and except also for risks not assumed."
There is no disagreement as to the payment of premiums or is any other ground for avoidance asserted except the death in consequence of a violation of criminal law. Unless, therefore, death by execution is one of the "risks not assumed," the incontestable clause would bar a defense based upon that ground. Before considering this question, it is well to refer to the provision of the policy first above quoted. Consideration of this provision would require a construction of the words "in consequence of any violation of law . . ." and would invite a resolving of the uncertainty whether a legal execution of the insured is "a consequence" of his illegal act of murder within the meaning of the policy. This, we need not undertake, unless 1) the language compels the conclusion that such death is the consequence of his criminal act, and 2) it would be against our public policy to allow such risk to be assumed by the appellant. If it is not against our public policy, the question is open whether the insurer is barred from setting up the defense, in view of the incontestable clause.
If the risk of death at the hands of the law could be assumed, as not being a violation of public policy, then the exclusion of such risk must arise from the terms of the contract and, unless a defense based thereon is precluded by the incontestable clause, and provided it is *762 held a consequence of his criminal act, the beneficiary could not recover. If, therefore, it is a risk that could lawfully be assumed, a waiver of a defense based thereon could lawfully be made.
That such a risk is not against public policy is now abundantly established. Northwestern Mut. Life Ins. Co. v. Johnson,
Wherefore, such risk was one which the insurer could legally assume, and, regardless of whether the subsequent death was in consequence of a criminal act, the policy was a valid contract and as such remained in force for over twenty years. Circumstances which might have arisen subsequent to its lawful inception were such as be interposed as defenses to a suit upon the policy. Fraud in its procurement could be invoked to avoid liability under the policy. So also, the policy was subject to avoidance by subsequent events, such as non-payment of premiums, death by suicide, or in consequence of a criminal act. It would not be correct to say that the policy was never in force nor to say that the appellee, after the death of the insured, had no policy. Vetter v. Massachusetts Nat. Life Association,
The risk of death at some time was of course assumed by the insurer. But for the exceptions as to the cause of death, the insurer would be liable in the event of death, however caused, provided the policy was in force and there was no fraud or misrepresentation involved in its procurement. Yet, these are defenses against liability, in other words, bases for contesting liability. The appellant, however, has waived all defenses by making the policy incontestable after two years from its date, except as above noted. This clause is not an assurance against the results of crime but is assurance against the hazard of litigation. Mutual Ins. Co. of New York v. Lovejoy,
Having put out of view the question whether death by execution is a risk excluded by public policy, the saving phrase "except also for risks not assumed" has no force except such as is found in specific exceptions in the contract or its attached riders, or such as would be held as contrary to public policy. The incontestable clause is to be read in connection with the other provisions of the policy which, but for the clause, would provide a ground for contest. It would be meaningless if the words "except for risks not assumed" preserved the right to contest all claims arising out of the risks which the contract specifically excluded. If it did not assume a certain risk, the words would be unnecessary with respect thereto. Thus Section 25 of the by-laws (except as to non-payment of premiums and special provisions in an attached rider) would mean nothing, for the policy could in no case be contestable for risks assumed, and the waiver of contestability *764
could refer only to those risks not assumed. As held in Sun Life Ins. Co. v. Taylor,
Cases involving fraud would seem to present the strongest defense since it affects the validity of the policy ab initio. Yet, the incontestable clause has been held effective to bar a contest on such grounds. Metropolitan *765
Life Ins. Co. v. Peeler,
Suicide, involving as it does a deliberate act, and upon occasion done purposely to hasten maturity of the obligation, as well as inviting considerations of public policy, would seem also to challenge the power of the incontestable clause to forbid recovery. Yet, suicide has long since been accepted as one of the risks assumed by the insurer and subject to the incontestable clause. See authorities cited in preceding paragraph. Indeed, its mortality tables take such contingency into account. Jackson v. Loyal Additional Ben. Association,
There is no occasion to compare the relative risk of suicide against the possibility that the insured may, as an incident of his criminal act, be tried, convicted, sentenced, and executed. Arguments based upon the degree of risk are for the insurer in fixing its rates. Public policy is a matter for legislative inquiry and determination or judicial construction.
So that for two years the insurer retained the right to avoid the contract upon any proper contest. Thereafter, it could contest it only upon the grounds above set out, none of which are found here to exist. The circumstance that death is here traceable back to the crime of murder stimulates adverse reactions which are dissipated by the focused light of the general and now firmly established principle that such eventuality was a risk which the insured could assume, and also, even as in the case of suicide, could retain as a basis for a future contest. Such right of contest could in turn be waived either by a failure to include it within the excepted risks assumed, or by restricting its right to assert such contest within the period of the incontestable clause.
The waiver, therefore, includes the right to contest the policy upon the ground that the insured came to his death in consequence of a violation of criminal law. *766
United Order of the Golden Cross v. Overton, supra; Philadelphia Life Ins. Co. v. Arnold,
Lavender v. Volunteer Life Insurance Co.,
It will be seen therefore that death from such cause was not only a risk not assumed but one which was affirmatively excluded. In Scarborough v. American Nat. Insurance Co.,
It is not enough that the policy state that fraud or death by suicide or by legal execution will render the policy void. Avoidance is a matter of defense. But for the incontestable clause such defenses would be available to the insurer. If the risk was, as in the Lavender case, never assumed, the incontestable clause could not be construed as importing such additional risk into the contract. This is likewise true when suicide is expressly excluded. Hearin v. Standard Life Ins. Co. (D.C.),
There is a difference between defenses which raise an issue whether there ever was a contract, and on the other hand those which seek to avoid liability on a policy admittedly valid in its inception. Between the extremes represented by those cases where provisions for avoidance are contrasted with specific exclusions from the area risks assumed, as in the Lavender case, there are cases where the language employed is susceptible of classification in either group. These cases call into play the principle requiring a construction favorable to the beneficiary. Illustration is found in Hurt v. New York Life Insurance Co., 10 Cir.,
Likewise, it was shown in Perilstein v. Prudential Insurance Co. of America,
In Sun Life Insurance Co. v. Taylor, supra, the policy provided, as here, that death in consequence of the criminal act of insured would render the policy void. Yet, an incontestable clause was effective to prevent a contest on such ground, as against the contention that it would be incontestable only as to fraud and other causes existing at the date of the contract. As said in the Lovejoy case, supra [
So it is revealed that such provisions are not self-executing. Liability is to be avoided, if at all, by a litigated contest upon this ground. A defense based on such condition is affirmative and requires strict proof. Cooley, op. cit., supra, Vol. 6, p. 5202. We quote further from the Lovejoy case, supra: "These incontestable clauses are material and valuable provisions in contracts of life insurance. They are stressed by insurance companies as *769
being valuable to the insured or to the beneficiary, because affording the assurance that if the insured lives up to his contract the company will not, upon his death, contest the payment of the amount agreed to be paid, though without such provision the company would have a good defense. It would not do to treat such clauses as mere glittering generalities, inserted in the contract by the insured to induce persons to insure in the company offering same, rather than in a company not so in advance agreeing to waive all defenses, except those specified, and then allow the insurer to defend, as if it had not, for a consideration, agreed to waive its right to defend. Unquestionably, the insurance company can waive any defense after death; and we see no reason why it cannot, as a part of the contract, waive before death the right to defend"; and again later in the opinion: "All the cases seem to hold that, where the policy provides that after a year or more the policy shall be incontestable except for certain grounds specified, and that time has elapsed, and none of the grounds excepted exists, then the policy will be given effect as it is written, and that it is incontestable on the ground of suicide or that of capital execution." To like effect are Supreme Conclave Improved Order of Heptasophs of Baltimore City v. Miles,
So in Simpson v. Life Insurance Co. of Virginia,
In Mutual Reserve Fund Life Ass'n v. Austin, 1 Cir., 142 F. 398, 401, 6 L.R.A. (N.S.) 1064, the language used was "The term `incontestable' is of great breadth. It is the `policy' which is to be incontestable. We think the language broad enough to cover all grounds for contest not specifically excepted in that clause."
These views find summary support in Cooley, op. cit., supra, Vol. 5, p. 4489, where it is stated: "It is of course evident that if the insured is still living at the expiration of the period fixed by the incontestable clause, the insurer cannot thereafter dispute the policy on any ground not excepted by the clause." This distinguished authority also supports the view that the incontestable clause abrogates an exception based on a provision that the policy shall become void if the insured dies while engaged in a violation of law.
It is our conclusion, therefore, that the judgment of the trial court ought to be, and it is, affirmed.
Affirmed. *771
Concurrence Opinion
Sometime, as here, the discovery of its meaning, in the light of the words used, is a most arduous task. Ordinary experience, as well as judicial history, both attest this obvious fact. Here, we are equally divided in our interpretation of certain provisions of the insurance contract. Under such circumstances, I think it is reasonable to say that it is logically susceptible of two maintainable constructions — one favorable to liability of appellant and the right of the beneficiary to recover; the other favorable to nonliability of the appellant and the lack of the right to recover by appellee. Since the appellant insurer, in drafting the policy originally, had it within its power to word it in plain and unambiguous terms, and did not do so, it, and not the beneficiary of the assured, should suffer the result of such obscurity. The primary purpose of the policy — payment of its amount upon assured's death — should supervene and dominate doubtful avoidance of that purpose by language without lucidity or clearness of meaning. So, here, I think the principle of jurisprudence *772 declaring that rule should be applied. Such a course is fairer to insurer than its action in obscuring meaning in vague verbiage is to the beneficiary of its assured, who faithfully paid premiums to it over a long period of years.
There is ample justification for this view in the authorities, and in reason, I think. Let it be understood that I am not unmindful of the rule of construction of insurance contracts; that they are to be construed like any other contract between parties, where the terms are plain and unambiguous; but where they are doubtful and ambiguous, the contract is to be interpreted most favorably to the insured and against the insurer. Such is the announced rule in the state. Georgia Casualty Co. v. Cotton Mills Products Co.,
It is further announced in the same treatise that where there is doubt or uncertainty as to the meaning and it is fairly susceptible of two interpretations, one favorable to the insured or his beneficiary and the other favorable to the company, "the former will be adopted, even though it was the intention of insurer that the policy, or a particular clause or provision thereof, should have a different meaning." The reason for the rule is given as "that insured usually has no voice in the selection or arrangement of the words employed and that the language of the contract is selected with great care and deliberation by experts and legal advisers employed by, and acting exclusively in the interest of, the insurance company, *773 which therefore, is at fault for any ambiguity or uncertainty therein. . . ."
It is contended here by appellant that the insurer never assumed the risk of execution of the insured in consequence of his violation of law. This, it seems, would base the position of appellant upon an exception to the promise by the insurer to pay the amount of the policy upon the death of the insured. But here, with particular emphasis, ambiguity beclouds the meaning of the contract. The rule applies to conditions or other provisions employed for the purpose of creating exceptions to, or limitations on, the liability of the company. There are numerous authorities cited by Corpus Juris Secundum to sustain this announcement, 44 C.J.S., Insurance, section 297, p. 1181. The rule applies to contracts of life insurance, section 297, p. 1187, and ambiguous provisions in constitutions, by-laws, or rules of the company, section 297, p. 1183.
Admitting freely, as I do, the persuasive power of the dissenting views here, and even conceding that such views are supported by sound reasoning, yet, on the other hand, I respectfully contend that the controlling opinion is supported by persuasive power and sound reasoning, too. It must therefore follow, I think, upon the application of the general rule quoted, that of the diverse interpretations in the instant case, that one favorable to the insured must prevail, and the appellee recover because of the argument of the controlling opinion and the consonance with the conclusion therein reached by the views of Judge ROBERDS concurring. I, therefore, concur in the conclusions reached by the controlling and said concurring opinions, as well as in the reasoning on which they are respectively based, and that the judgment of the trial court should be affirmed. *774
Concurrence Opinion
However, I am also of the opinion that death by execution was not included within the provision. ". . . If his death shall occur in consequence of any violation or attempted violation of law . . .," and that it was not so intended.
As to the result of actual violation of the law, death by execution could have resulted in only three cases, i.e., murder, rape and treason, and under these charges conviction and penalty of death are rather remote. A small percentage of those so charged are convicted and sentenced to death. Except in those three cases the death resulting from law violations could only be natural death in consequence of natural injuries received during such violations. So that comparing the number of death sentences with the number who are convicted and who are not sentenced to death under the three named charges, and also comparing such number of death sentences with the myriad of cases where death results from law violations where there is no legal punishment by death, the ratio of legal deaths to natural deaths from actual and attempted law violations would perhaps be no greater than one to four or five hundred.
Again, it will be noted that the words "in consequence" precede not only actual violation of law but also "attempted violation of law." The words "in consequence" appear only once and apply alike to both actual and attempted violations. Now, there is no such thing as legal *775 death penalty for attempted violation of law. It cannot be claimed that legal death was included within attempted violations of law, for such a thing could not happen.
Furthermore, the provisions apply to persons who die from violations or attempted violations of law "whether sane or insane." Now, if the accused is insane death by execution cannot properly and legally result from his act, so that, as applied to insane persons, the provision could not include death by execution. Therefore, if they are construed to include legal death, they will be given a meaning in those few cases which cannot be given them in all of the other cases.
It is noted also that if death by execution is included, then the insurer may later be relieved entirely of liability by act of the Legislature regardless of the protest of the insured and of the original rights of the parties. For instance, robbery with fire arms was not punishable by death when this contract was made, but is now.
While the case of Baker v. Supreme Lodge, Knights of Pythias,
Many insurance policies expressly include legal death, as in the Baker case, supra. The Company drafted this policy as well as the by-laws. They were drafted, of course, mainly for the protection and benefit of the insurer. It knew that many life insurance policies expressly include legal death. It could easily have so expressly provided in the policy and by-laws. It is noted that since the issuance of this certificate in 1925 it has assumed to change the policy provisions by adopting new by-laws. For instance, in the original certificate the cases of personal altercation, violation or attempted violation of law, were all in one and the same cause, and all were preceded by the words "in consequence." Since then new by-laws have prescribed different words defining the circumstances of death from acts of the insured other than law violation or attempted violation. However, the original word "consequence," as applying to such violations, has not been changed, or attempted to be changed. There are cases holding both ways on the proposition under consideration. The insurer herein, being in the life insurance business, naturally knew that many policies, in order to free the question from doubt, contain provisions expressly including legal death, and it also knew that the courts have differed as to the construction of the provision as written in this policy. In other words, the insurer has known all along that the meaning of this provision has been and is doubtful, and the courts have so held. In such case the doubt should be construed against the insurer.
Dissenting Opinion
In Sanders v. Jefferson Standard Life Ins. Co., 5 Cir.,
In the case at bar the language is that the policy shall be void and of no effect as to a death occurring in a certain way. To say that the policy shall be of no effect as to a death occurring in a certain way is precisely the same as to say that it does not cover a death occurring in that way, and is precisely the same as to say that it excepts a death occurring in that way; and is precisely the same as to say that the insurance shall not be payable if the death occurs in a certain way, and would be so understood by the average person; and policies of insurance *778 mean what would be so understood, — highly technical or ingeniously refined constructions should not be placed upon them, as has been done here. See the numerous cases from every state cited in 44 C.J.S., Insurance, section 294, pp. 1155 to 1159. We ought to follow the Lavender case instead of frittering it away by subleties too refined for any use in the practical affairs of life, making distinctions without difference, which, if allowed, no case in our books would ever be worth anything.
McGehee, J., and Sydney Smith, C.J., concur in this dissent.