National Life & Accident Insurance Co. v. Mixon

gov- in question vehicles with here to exclude attempting include motor ly defined to ernmentally owner nor owned is void and respect neither the vehicles to which liability in- bodily injury unenforceable. The decision of Court operator carries Appeals surance, run’ 7 of Civil ‘hit and automobiles.” due to be affirmed. Insurance, p. Automobile § Am.Jur.2d 462; Affirmed. said that have A.L.R.2d 1253. We control, ques- act so the words All concur. Justices coverage in the arises whether tion more restrictive than policy is narrower or in the act. It is obvious

that called for definition, that an uninsured

us include an automobile

automobile shall not government or a subdivision by the

owned thereof, general restricts the narrows and So.2d of an uninsured meaning and definition Further, did if the exclusion automobile. In re The LIFE & NATIONAL ACCIDENT meaning of the purpose to restrict INSURANCE COMPANY appears in as it motorist” term “uninsured v. act, why any definition ever then Arthur MIXON. the insurance con- made in the tract The exclusion ? parte Ex Arthur MIXON. is there- the act and more restrictive than void. fore S C 117. Supreme Court of Alabama. argues there arises a conflict

Nationwide Aug. 30, 1973. holding opinion of the and its Appeals this case Court of Civil Mutual State Farm

decision Lammers v. Co., Ala.App. Automobile Insurance certiorari was wherein So.2d 745, 261 nied this court. See repeatedly stated has It been

So.2d petition denial of a for cer-

that the mere appellate of our courts is

tiorari to one agreement as an affirmance or

to be taken opin- all that is said in the

by this court of are appellate court. There

ion of the

many why writs are denied. reasons contrary

argument Lammers is in this case is not

holding of that court necessarily

convincing did not because we by denying

approve Lammers certiorari. opinion that

Being those in

parts of insurance which of contracts

fringe upon attempt the unin to restrict contrary to coverage are

sured motorist Act, Legislative Insurance Co. Safeco Jones, supra, Farm America State Cahoon, supra, see Insurance

Mutual Co. Vaught Farm Fire and Cas

also v. State Co.,

ualty supra, we hold that Brobston, Bessemer, pe-

Brobston & titioner.

HEFLIN, Chief Justice. before this This case comes Somerville, Simpson, & Lange, Robinson way petition of a for a of certiorari writ respondent. Birmingham, for Appeals wherein the Court of Civil Arthur petitioner-appellee-complainant, (hereinafter as “in- Mixon referred to holding of sured”) avers that the Court Appeals prior of Civil conflict with court, Independent Life In- decision of this Carroll, surance Co.

402 (1930). giving con-

The facts rise to the instant troversy stipulated by both have been respon- parties. On 1961 the October dent-appellant-defendant (hereinafter re- ferred to as issued “insurer”) insured, at insurance to the which time suffering glaucoma and insured was totally permanently blind his per- eye. totally right The insured is manently eyes present, blind in both is, and has been the issuance since before policy, Dr. under the care of James Collier the treatment such disease. B. pertinent policy under provisions the insured claimed benefits to- asserting pre- insurer from the defense eyesight, and under which loss of tal disease, and, thérefore, existing under the as follows: denied claim are his facts, stipulated the insurer was not liable Limbs Eyesight or loss under as it had assumed its never “Benefits for —Upon receipt during the lifetime eyesight risk loss due to disease Insured proof Insured of due prior on and existed issuance ., (b) . . (a) policy. has suffered date sight loss complete and irrecoverable Carroll, supra, age beneficiary of a attainment eyes prior to of both ., policy brought claiming life Company, will insurance suit (c) benefits equal under said a sum con- pay, (b), (a) in case tained a clause which stated Insurance that “no obli- the Amount to twice

gation company unless the date and hereof provi- cases, this under all In benefits is alive and in sound health.” The the loss only shall be allowed sion if also contained following the incontestable in default premium is no occurs while clause: period, (2) is beyond grace the con- injuries or solely by disease caused “This shall be incontestable Is- Date the sustained tracted or except non-pay- after from date of issue allowed not shall be Such benefits sue. premium, ment of and intended actual intentionally self-in- any loss is if such military fraud or for in or na- engaging an act of war or if it results flicted war, per- in val service time of without in the Insured while the company; mission from if insured the country, interna- any forces of armed died his or her own hand within one or organization combination tional year thereof, from date whether sane countries. insane, resulting from a crime or attempt pre- only thereat one-half of the Definition— actually paid company mium to the will company’s liability be the hereunder.” Premium— . sought liability un- The insurer to avoid Reinstatement— policy by up setting der the the fact that Age— .... suffering insured was from disease at the time of issuance and in- policy shall be Incontestability —This However, this held year Date contestable incontestability precluded clause a de- Issue, non-payment except fense, reasoning that “usual rules of premiums.” supplied) (Emphasis interpretation governing construction policies applicable are insurance The tried in the Circuit Court case was there- construction incontestable clauses Division, County, Bessemer of Jefferson in, and if there is reasonable doubt as facts, upon stipulated jury, without application in- the extent of the of the incon- judgment rendered for the wherein was $1,000, the total in the sured amount testable clause it in favor must be solved re- damages judgment was claimed. This beneficiary.” in insur- versed and rendered favor Appeals, This er 50 Ala. court had occasion the Court Civil to consider year that the similar App. holding issue one later the case of So.2d preclude did not the Moore Bankers’ incontestable clause Credit Life Insurance only exception pertained It should he noted that contained the incontestable clause non-payment premiums. This court went on to conclude that (1931). Co., So. 798 hold that an- there was a conflict between contained question Moore in- and suicide clauses and incontestability provision did not incontestable op- general exceptions from its clude suicide supersede nullify clause those of the eration. suicide do would violence to clause a su- also contained policy Moore parties plainly The clear intention of the clause stated “[i]f icide unambiguously expressed. years from the issue two shall within sured It appear would the surface that Car- her on own his policy, die date of this insane, roll and each Moore are conflict with act, sane or hand, whether other since in an both contained an amount only for policy shall valid However, incontestable clause. different poli- on premiums received equal to given treatment because in Carroll cy.” obligation that “no his life took own in Moore company date and deliv- unless period, but suit was year ery the two hereof and in within the insured alive expiration of brought until after the warranty. sound held to be health” was beneficiary period. con- year the two brought suit was that because tended A warranty is obliga a contractual year of the two expiration after until tion which into and in enters becomes an by the in- governed case period, the was tegral part completed of the 12 contract. governed, being so and contestable Appleman, Practice, Insurance Law and § liability under could not contest 7341, at early (1943). law up as a by setting suicide warranty state a was a construed as contention, rejected this This fense. court part parcel and of the insur contract of did holding that compliance required ance and strict was suicide, as preclude the defense before the assured was entitled recover to by a risk assumed death suicide was not on the Alabama Gold Life Ins. Co. insurer,2 exactly contention Johnston, the same (1886). Harsh often occurred a clause instant case. results when insurer in the asserted warranty.

was classified a In some in found no This court Moore conflict liberally stances clauses were construed and incontestable between suicide give representation them label of a clause, observing that: warranty rather than a order to avoid early case law war harshness strictness, they to different “In relate ranty rules. In Alabama Gold Life Justice subjects. engaging quali- One relates analyzes Henderson the dis M. Somerville ty of the and the other to defi- a representation tinction and distinction, Observing nition risk. warranty following language: in the company years] at the end of [two was bound to the full extent of the risk not, representation strictly speak- “A assumed, insurance, it but was not it liable on ing, a of the contract of stipulated it it risk ivhich would not as- it, or of but rather some- the essence of e., sume, death and the thing preliminary, suicide] or collateral \i. that the committed sui- assured A an to it. nature of inducement defense no cide more contested the than false war- representation, false unlike a (Empha- that he is still alive.” ranty, operate the con- to vitiate will defense tract, it re- policy, unless added) sis or avoid the controlling period rather than the date of be ia Moore It should observed that the suit. institution of year also held the suicide within two material, ceive, actually lates to a fact or clear- or unless misrepresent- the matter ly made intended to be material ed increase the risk of loss.” agreement parties. It is sufficient Thus, though speaks even the statute representations substantially if be true. both representations, warranties and it has They strictly literally need so. not be been made they clear that are to treated be misrepresentation A renders so pol- same that neither will avoid the fraud, ground void on the while icy unless the conditions of the statute are warranty operates non-compliance awith met (i. e. actual fraud or risk). increased express the contract.” as an breach of Sovereign Camp Moore, 232 W.O.W. v. Ala. (1936). So. 577 the harshness

In order to alleviate between war of the technical distinctions Case law of this state frowned statute, representations, ranties upon the results of technical violations Alabama, appears in now Code warranties and established rules of con Recompiled Ti Code as designed struction to reduce forfeitures That stat tle enacted. Section 6 was from breaches of warranties in insurance ute stated: contracts. Alabama Gold stated substance the court should lean representation oral “No written or against that construction of the contract made, negotia- in the therein impose will upon the insured the policy of life insur- a contract or tion of burden warranty, of a and where a war ance, application therefor or ranty recognized must construed thereunder, proof shall defeat or of loss with provisions other so prevent attaching, its avoid the modify give it and the insured the most fa misrepresentation made unless such vorable construction. deceive, or actual intent unless with misrepresented increase matter Judge Independent Samford in Life Ins. supplied) (Emphasis risk of loss.” Vann, 93, Co. v. 24 Ala.App. 130 520 (1930) holding stated in that the incontest- Empire Life Gee, Ins. Co. v. 171 Ala. able clause controlled warranty over a 435, assessing 55 in (1911), So. 166 good health delivery, at time of the follow- meaning of this statute this court rea- ing: soned : law, It is as contended appellant, that “Perhaps say a our own statute does not clause in a life insur- policy, ance clearly might. what means as it effect that no ob- ligation is insurer, But its introduction of word ‘war- un- less on the delivery ranties’ it makes even clearer than do of the states, insured is statutes those other to alive and in sound health, referred, which held to be a warranty we have that it in- was within tended to break in down a measure the the terms of section 8364 of the Code of 28, 6, technical between Code, distinction warranties 1923. Section [Title 1940] representations, puts Authority for it foregoing warran- for the is to be misrepresentations ties and in a class to- found in Independent the case of Life gether by Seale, providing misrepresen- 197, that no Ins. Co. v. 219 Ala. 121 So. warranty Supreme Court, tation or shall defeat or avoid 714. The in the case policy, misrepresenta- unless ‘such Mutual Mandelbaum, L. Ins. Co. v. 234, 440, tion’ made with actual intent 649, to de- Ala. 92 So. 29 A.L.R. was Repealed by 407, Alabama, 28A, Code, 3. 1940, Act No. Acts of Sections 320 and 341 of 1971, Regular approved 25, Session, August (Recompiled as amended 1958-1971 Cumu- January 1, Supplement) replacement provisions. effective See Title lative period.” Couch, distinction point Cyclopedia pains to out some Insurance Law, warranty a condition at 81-82 (1968). 72.65 a § between a life insurance applied to precedent as clearly in Carroll was an at- of the of section policy, in view tempt to a precedent establish condition 28, Section of 1923. Code [Title part However, of the insurer. decision Code, Since 1940] good established that a “delivery in representation, held courts have clause, although health” a condition policy, application either precedent states, in given most be to both, health relating to legal effect of a in Alabama. delivery time of at the sured holding This was the in Mutual Life Ins. condition warranty, and not a ais Mandelbaum, Co. v. 207 Ala. 92 So. part a warranty and a Being precedent. and it firmly has been (1922), rather in contract, he construed it must fixed as law in Alabama subsequent the whole with connection g. cases. E. Reliance Life Ins. Co. v. shall be stipulates: ‘This which Sneed, 117 So. 307 (1928); its issue the date Independent Seale, Life Ins. Co. v. ac- premiums, nonpayment of except for ; Ala. Independent So. 714 fraud,’ (Empha- etc.” and intended tual Vann, supra. Ins. Co. v. supplied) sis At the time the Carroll case was there Next, realized that it must be decided, by law, a case condition of deliv pre-existing a distinction a valid ery good health legal had the effect of a specifically suicide clause disease or and, warranty, by statute, warranty cov things from contract certain excludes treated representation the same as a so dealt with as was erage, and a clause avoidance grounds of a on the pre-existing not a Carroll, which was that the insured was good not in health at such, clause which but disease clause delivery would have pre a condition attempted establish based on actual fraud or an increased risk. coming into ever the contract clude not delivered policy was if the existence (i. e. common good health the insured warranty, As a good in The Moore precedent). then, condition health by definition, excluded

volved suicide precise question contract. The proper precedent for coverage, and is the whether, involved Carroll was since it is case, on the The Carroll the at bar. a a material breach of pre-existing a did not involve other hand warranty delivery good of health is clause, cut a incontestability but of off as defense exclusion disease Carroll, court clause. The held that the distinguisha good provision, and health preclude incontestable clause did the asser by Couch: ble. As stated good warranty tion of breach health of necessary distinguish between “It to holding as a defense. Such was consistent disease, pre-existence general of which has operation with the view of the removing subsequent the effect of principal the incontestable clause —its func disability coverage poli- from the tion is to cut off as a defenses such breach disease, cy, and the concealment of warranty misrepresentation go to contended be a violation of the condi- pol to the existence of the after the good tion of the existence of health at icy peri for a has been in force and effect policy. time the execution od time. coverage, As the former relates to the proof pre-existence hand, Moore, dis- on the other The issue repre- did not deal with a or a ease is not barred the incontestable 474 Hancock Mut. Life kind, pro- 846 (1935); dealt with a N.E. but sentation John 242, Hicks, App. 183 43 speci- Ins. Co. v. coverage of a which excluded Ohio

vision Metropolitan Palumbo (1931); v. 93 There N.E. death suicide. fied risk —i. e. 35, Co., N.E. 335 293 Mass. 199 policy in Life Ins. attempt to avoid was no Carroll, Sanders v. Standard (1935); the case Moore as was Jefferson Co., (5th 1925); 10 F.2d 143 Cir. Life Ins. the exis- contrary, insurer admitted Accident Flannagan v. Provident Life and provi- and relied on the contract tence of Co., (4th 136 Cir. 1927); 22 F.2d clearly Ins. showed in the contract which sion Philadelphia Wright Life Ins. Co. v. risk claimed outside that the loss Pa., Philadelphia, (E.D.S.C. 25 F.2d 514 Thus, Moore is the insured. assumed ; Scarborough American Ins. v. Nat. 1927) distinguishable Carroll. clearly Co., 353, (1916); N.C. 88 S.E. 482 171 Co., Life Ins. Co. v. Hancock Mut. Liberty 124 Kan. Myers Life v. Ins. John 388, Markowitz, 144 P.2d Cal.App.2d 191, 62 (1927); v. Fra- 933 Childress 257 P. a sit- (1944), America, 252, was faced with 899 113 Tenn. ternal Union under re- similar that of the case uation Brady Prudential (1904); 82 832 v. S.W. view, 645, had contracted Co., wherein insured (1895); 102 Ins. 168 Pa. 32 A. prior Co., disease issuance Woodbery Life Ins. 223 v. New York pre-existing ; 272, contained App.Div. (1928) 227 N.Y.S. 699 an incontestable Burch, as well as 270 F. Washington Ins. Co. v. Nat. court resolved Riley clause. The California (5th 1959); 2d v. Industrial 300 Cir. by allowing matter assert the Co., 891, S.E.2d Health 190 Ga. 11 Life & pre-existing contained dis- defense ; Accident In- Life & (1940) 20 National clause, notwithstanding policy’s 375, ease Chapman, Ga.App. 106 Co. v. surance clause, stating: contestable New (1962); Posner v. 127 157 S.E.2d Co., 179, P.2d 56 106 York Life Ins. Ariz. recognized courts have that an “[T]he ; Life Ins. 488 Head v. York (1940) New operate incontestable clause does Co., 1930); Stean v. 43 F.2d 517 Cir. (10th coverage extend the of a to a dis- 346, Co., 24 N.M. 171 Occidental Ins. ease contracted before the issuance of Jolley v. Stand- (1918); P. 786 Jefferson policy.” Co., 269, 154 S.E. ard Life Ins. 199 N.C. Prudential Insur- 400 Perilstein v. (1930); Markowitz, The lower court’s decree (1943); Co., 29 A.2d ance 345 Pa. 487 affirmed, which was contained the follow- Fishback, Pacific Mutual Life Ins. Co. v. ing language: (1933); 17 Gor- P.2d 841 Wash. Co., Unity Life 30 So.2d 880 don Ins. v. e., disability pre-existing dis- “[S]uch [i. ; Metropolitan Life (La.App.1947) Fohl v. if any, was not and not a ease], dis- Co., Cal.App.2d 129 P.2d Ins. ability against policies, in said Co., 291 Prudential Ins. (1942); Pekras v. awas risk not under said Ill.App. (1937); Mills N.E.2d Co., policies insurance, 210 N.C. plaintiff Metropolitan Life Ins. com- ; pany Prudential Ins. Co. never has lia- been and is now 187 S.E. Elias, (1940); required ble for 188 Okl. 109 P.2d 815 pay to defendant Co., 121 any Mayer disability Prudential Life Ins. Pa. benefits . . . ”. v. Super. (1936); 184 A. Guise approach to the construction of This the Co., Pa.Super. Life York Ins. New adopted by incontestable clause has been a (1937). 191A. 626 majority of other which have con- courts Accident National Life & question. Apter In the case of the v. Home sidered Chapman, supra, the York, Company Insurance Ins. Co. New N.Y. following policy question the supports contained Williston position also the taken by Moore, this incontestable clause: court in supra, that “[a]n particular exclusion of a coverage a aft- policy shall incontestable “[This] policy is not a precedent condition liabil- during in force the life- er it been has ity policy, under the therefore the insurer’s period for a time of the insured pay refusal a loss claim which is not issue, except for year from the date of embraced coverage within policy the premiums . .”. non-payment of . not a is ‘contest’ of policy, therefore it can be asserted before or after incon- policy pre-existing contained also testability Williston, clause has run.” 7 S. to that found in the disease clause similar (3d Williston on Contracts ed. § policy in under the case review. ; 1963) McCann v. Acci- National Life & Co., dent Ins. 226 S.W.2d 177 (Tex.Civ. rejected Georgia the insured’s App.1949); cited, supra. and cases contention that the incontestable clause setting up precluded pre- the insurer from supported This view is also in 43 Am. existing as a to the in- defense 1160, wherein it is that stated “an § Jur.2d policy, stating: suit on sured’s insurer policy does not contest a within the meaning of an incontestable clause where e., incontestable “[S]uch [i. payment upon insurer resists does not mean that the insurer clause] ground that the loss for which claim is a hazard cannot contest whether coverage made is not pol- within the occurred, against not has or has icy, stated, or as otherwise within the risk is is within whether hazard not by insurer; assumed . accord- scope by policy.” covered risks (Emphasis added). ingly, op- an incontestable clause does not prevent erate to the insurer from defend- in accord with the above Williston is ing ground on the that the loss cov- says cases, for he is settled that “[i]t policy.” ered cases cited See there- disability prior if the arose to the issuance in. policy it is not to be deemed to be therefore, policy; com- covered This same view to what “contest” pany liability disability can contest ben- Couch, expressed in 18 G. payments.” efit uses also Williston (2d Couch on Insurance 72:101 ed. § language: 1968), as follows: period uncertainty, “After an initial “The fact li- denies today most courts hold that an incontes- ability exception in the because of an tability clause forecloses contests policy does not constitute a contest validity intended, but preclude does not insurer from

fending grotmd on the that the loss in- “The of a claim insurer’s resistance expressly curred was excluded express for a terms of loss clearly never covered under the terms of the insurer e., policy; perfectly i. ais meaning of an is not contest within the good policy completely incontestable clause.” (except rights expressly reserved did, therein), but it does not and never fact that Couch also states “[t]he particular cover the casualty on which does not has become incontestable plaintiff suing.” (Emphasis add- ed). Williston, rule that the insurer’s . affect the S. Williston on Con- 1963). pro- tracts ed. (3d liability the terms § measured supra, incontestability Couch, clause and the policy of the itself.” visions clause, pre-existing exclusion further said in 72:61 that: disease It is 72:59. § § exception latter to the form- an constitutes not bar “An clause does incontestable er, clause; insist- general that the insurer’s proving from that loss policy that it ence not liable under poli- the terms of the was not covered reason exclusion contained its cy. clause, pre-existing not a “con- meaning of of the test” within period “Expiration incontes- clause; complete and that tability close not the door does sight eyes and irrevocable loss of of both contingency upon which fense which results from a disease contracted liability not depends has occurred. the insured before the issuance insurer, had policy was risk which the pre- “An not incontestable clause does at bar. never assumed in this case asserting clude the insurer not cover- cause of death was within the tried under review was While age policy.” of the effective date the trial before the code, interesting it is the new insurance specific Commenting upon the effect of 28A, note that Title Section 360 Couch, clauses, says: exception 72:63 § Alabama, 1940, (Re- as amended Code compiled Supplement) Pocket 1958—1971 “The does bar incontestable clause pertaining following language contains liability denying the insurer from annuity con- policies and to life insurance ground coverage is no that there because : tracts exception of an contained in the incontestability 360. Effect “§ pre- “An incontestable does not clause annuity insurance or clause life seeking uphold clude the insurer from life any policy contract. —A plain provisions contract, of the such as providing annuity insurance contract exempting liability those in- that such or contract shall specified risks.” specified period shall contestable after validity of preclude only a contest excep- Addressing specific himself to the pre- npt shall tion of a pre-existing disease Couch of de- time clude the assertion says in 72:65: § poli- upon provisions in the fenses based cy exclude or restrict or contract which not de- “The incontestable clause does coverage, restric- whether scope termine the so risk assumed excepted in such are tions exclusions bring coverage an ex- within clause.” pressly excepted risk Ap- opinion Civil of the Court of peals is due affirmed. to be “An not re- incontestable clause does duty lieve the estab- claimant Affirmed. right

lish recovery in the first his specific stance language under the HARWOOD, MERRILL, BLOOD- policy, as where he that the must show FAULKNER, WORTH, McCALL arose attach- insured’s illness after the JTJ.,concur. policy.” ment of the COLEMAN, JONES, then, MADDOX and In conclusion this court what saying JJ., dissent. this: there is no conflict Issue, COLEMAN, except non-payment premi- (dissenting): for Justice ums.” provi- policy The on contains two sued Plaintiff there contends that is conflict controversy. sions to the give rise 1 and Clause and that Clause policy in provision appearing first policy must construed in favor herein as Clause is referred to sometimes insured, plaintiff. be re- and the second will ferred to as Clause 2. Independent Plaintiff relies on Life Ins. Carroll, Co. v. 130 So. fol- pertinent Clause 1 recites plaintiff wherein beneficiary in a sued lows : policy opinion of life In insurance. on prior appeal 79, 121 it 88) Ala. is (219 Eyesight or Limbs “Benefits for Loss said that apoplexy. died of during n — -Uponreceipt lifetime of the Ala., second appeal (222 So.) proof the Insured Insured of due interposed pleas said that setting defendant the com- (b) has suffered . (a) up a breach of as to the condi- plete sight loss irrecoverable tion of health of effect insured to that at eyes prior age both attainment of to date of policy issue of the she had a named permanent disability . total and disease materially increased the risk exist, Compa- shall be deemed and the loss, allege but failed actual or in- ny, upon surrender will tended policy fraud. The contained an in- pay, equal (b), . sum contestable clause as follows: to twice the Amount of Insurance provisions subject . all to the “. ‘This shall incon- testable except date issue

non-payment premium, actual and in- tended engaging fraud or in military or war, naval service in time without cases, “In provi- all benefits under this permission company; if only sion shall be if allowed the loss by sured died his or her own hand with- occurs premium while no in default year thereof, from date whether beyond period, grace and (2) insane, sane or resulting from a crime solely by injuries caused con- any attempt only thereat one-half of tracted or after the sustained Date of Is- premium actually paid compa- shall sue. Such benefits not be allowed ny will company’s liability be the hereun- any if intentionally loss self-in- der.’ ...” (222 Ala. 130 So. flicted or if it results from an act of war at 403) (see Definition page) on this while the in Carroll contained a sound Insured is in the armed forces of health obligation effect that no country, organization international insurer unless combination of countries.” issue of insured was sound health. The defendant contends that it not lia- This court held that the incontestable eyesight ble plaintiff’s because the clause could loss of not be defeated the sound solely inju- rejected was not health “caused disease or This court defend- clause. argument ant’s breach of the war- ries contracted after the Date or sustained ranty of sound there con- health was no of Issue.” upon tract incontestable clause Clause 2 recites: could This court rest. said: “Incontestability “Appellant shall be seeks avoid the effect of —This year language incontestable one from the Date of of the incontestable clause 478 quotation taken 1 pol- in last above from Clause clause the another

by reference to obligation respect in the instant case. In no here ma- as- is icy the effect that ‘no any date terial is difference the by on the there between company the unless sumed in- alive in and the delivery incontestable clause Carroll hereof the insured and has health,’ contestable clause here. If there etc.1 But in and sound ambiguity a such clause conflict between 2 and frequently held that Clause been case, warranty (Independent Clause 1 in the instant that issue legal effect a in 197, Seale, 121 must in be resolved favor of the benefi- Ins. Co. Life part ciary, Carroll, plaintiff. supra. of See constituting and 714), So. connection with in policy is to be read Appeals The Court of in Alabama rules construc- The usual whole. Vann, infra, held a sound health in- interpretation of governing the tion “ obligation policies applicable by are ‘No is assumed surance ’ ” clauses incontestable construction the company unless on . . . therein, doubt and reasonable if there is delivery health, insured is in sound application of the to the extent of the did not require- create a defense where the it must be solved incontestable clause ment of sound health was not mentioned beneficiary. Corpus of the favor Jur- exception clause as an on by is, a breach argument The 540. which a could be contest founded after ex- no warranty fact there was piration of period. the contestable upon an incontestable contract court said: permit the rest, but would clause could phraseology of clause defeat law, “. . is the . It as contended parts other, though both constitute by appellant, that a clause in a life in- is un- same contract. The insistence policy, surance to the that no obli- effect 36, 37, at (222 at 130 So. sound.” Ala. gation insurer, is assumed unless 404) delivery the date health, and insured is alive in sound by insurer in Car- The clause relied on warranty held to terms within the roll recites: of section 8364 of of 1923. the Code “ obligation . . . ‘no Authority foregoing for the is to be company date on the unless Independent found in the case and in livery is alive hereof the insured Seale, Ins. So. Co. Ala. ” health,’ (222 . Ala. . . sound etc. Court, Supreme case of 404) at 130 So. at Mandelbaum, 207 Mutual L. Ins. Co. v. Ala. A.L.R. pertinent, here material As point pains some the distinction out in the instant relied on clause warranty and a condition recites: precedent applied to insurance a life policy, in view of section 8364 under this . . benefits Code Since that decision of 1923. only the loss . shall be allowed if representation, held that the courts have solely is caused . application one or policy, either in the contracted . . after Date both, relating to the health Issue.” sured at the time of condition and not a respect question here is a With precedent. Being warranty presented, distinguish I am able to contract, it must be construed sound health in Carroll from the clause after period.1 connection with whole close of the contestable stipulates: ‘This shall be The court said: incontestable from the date of its issue incontestability “. . The except non-payment premiums, ac- applies policy the as to whole. ‘It fraud,’

tual and intended etc. The whole stipulation not a absolute to waive all de- policy incorporated and was made fenses and “to condone fraud.” the On complaint. plea of the Therefore contrary, recognizes it fraud and all oth- up which sets as a defense that clause in provides ample er defenses it but time policy says: obligation the which ‘No opportunity and they may within which by company the unless on be, beyond they may be, but which date and hereof the insured is is in established. It the nature of and health,’ etc., go alive and in sound must purpose serves a similar as statutes of further and aver actual and intended repose, limitations and the wisdom of Independent fraud. .” Life Ins. apparent which all to reasonable Vann, 96, Ala.App. 93, 95, Co. v. 130 Wright minds.’ Mutual v. Benefit Life 520, 522. Ass’n, 237, 243, 186, 118 N.Y. 23 N.E. Appeals The Court of New York held It 187. ‘is not a mandate as coverage, to incontestability clause, that under an a definition of the hazards to be borne defending by was barred from on a only this, insurer. It means ground exceptions not enumerated in the coverage pol- within the limits of the stand, policy grounds stated in the for contest icy by any shall unaffected military policy proper pro arising during 1. “The life contained the results ‘from causes policy war, vision that ‘This will be incontestable or service in time of or from self- naval during injury, participation after it in in has been force the lifetime inflicted or from un years period derground work, in of the insured for a of two aerial or submarine ex or issue, except non-payment operations, passenger peditions either as a the date of its or premiums; provided, however, None of those or otherwise.’ ‘causes’ provisions relating any applicability or benefits in under conditions to ‘conditions’ have disability permanent appears event of total and ac in this It thus that fraud facts case. any supplementary inception stated in in of the contract is not cidental death contained agreement for or hereto shall become void of the ‘causes’ or ‘conditions’ attached to be one supplementary agreement for the under the stated causes and conditions under which supplementary in There is no reservation therein.’ shall become void. supple good proper agreement the so-called were in full force and stand inception ing required fully paid mentary agreement premiums in the of fraud with all ground declaring years as a more than two after the date of issue of the contract years grounds than if asserted more two thereof. No are stated contract void proper liability supple of the It after the date of issue which under the length mentary agreement may plaintiff significant after stated be contestable years period and ‘conditions’ un after issue in detail the ‘causes’ of two except premiums. supplementary agreement nonpayment should Dur der which the ing premiums agreed disabilty, payment been the intent of Had it become void. only except inception plaintiff fraud in the to to be waived above stated. two-year operation supple from the ‘causes’ and contract ‘conditions’ stated incontestability mentary agreement been a would have for and under which the simple ‘provisions relating to have inserted a or conditions benefits matter power do; permanent disability that effect which it had of total and event * * * meaning any ambiguity (1) in the of the if there is provisions shall become void’ are: failure proof all must be of the contin of the doubt the insured furnish disability permit in favor of the Janneck and to exam resolved Metropolitan insured. v. uance Co., duly 574, company’s appointed Life Ins. inations med N.Y. 182; may Mutual Life Stroehmann v. ical examiner at such time or times as 57 N.E. Co., 439, 607, required by company during 435, 57 S.Ct. the first Ins. 300 U.S. years receipt proof Berkshire Life Ins. Co. v. Wein L.Ed. 732.” two disability; after the ig, recovery 6, 8, 9, 10, 290 N.Y. 47 N.E.2d disability disability; (3) in his the event the 421. inception, Ala.App. 313, that it was invalid in its iense 55 So.2d 518.” Alabama invalid reason Farm Bureau became Mut. Cas. Ins. Co. thereafter Goodman, 538, 541, Met- Matter of Ala. 188 So.2d broken.’ condition Conway, 252 270. Life Ins. Co. ropolitan is di- It N.E. N.Y. meaning given ordinary In the the contract claim that against a rected language here, a reasonable misrep- by fraudulent has been obtained buying policy may man well under- a breach that there resentations year issue, stand that for after date subsequent and precedent or a condition caused he cannot recover for a loss peri- after absolutely rescission bars issue, he had at date of but liability may be contest- od within reasonably probably he could and would Co. v. Ins. Nat. Life Columbian ed. passed, year understand that after one has 602; 605, N.E. Hirsch, N.Y. policy be contested on cannot Co., 251 Life Ins. Metropolitan Killian ground pre-existing he had N.E. N.Y. which caused loss. he bought, and what Weinig “What prepared by policy insurer. A bought, he right understand had a ambiguity or at least an is created conflict pro- with insurance policy of life was a two mentioned. Under the clauses indemni- disability double and visions construction, recognized rule of where well any cause benefits, ty ambiguity appears a conflict in a writ- from the years two after whatsoever against ing, writing construed is to be except for issue it, case, party in this the in- who wrote specifically were those reasons surer. supplemen- and enumerated stated made attached tal rider majority make a distinction between policy. ground liability a contest based on alleged breach with the from should judgment appealed “The coverage, consequence of no and a contest Life affirmed, Berkshire costs.” with ground. The ordi- based on some other Weinig, 290 N.Y. Ins. Co. v. reading nary man the instant reasonable 418, 421. N.E.2d make such distinction. would not a dis- said: If the insurer to make such court has desired This appropri- tinction it could have so done duty of the courts to take is the “It ate words in they an insurance the words opinion Being 1 and Clause it, persons with are found conflict, I construe Clause 2 are would ordinary understanding would usual favor the insured and re- express them used to construe when the decision of the verse Court Civil employed. they purpose for which were Appeals. I dissent. Therefore Holloway v. State Farm Mutual Auto- Co., 275 Ala. 151 So.2d mobile Ins.

774; Lewis, MADDOX, Franklin J., Ins. Co. concurs.

Case Details

Case Name: National Life & Accident Insurance Co. v. Mixon

Court Name: Supreme Court of Alabama

Date Published: Aug 30, 1973

Citation: 282 So. 2d 308

Docket Number: S C 117

Court Abbreviation: Ala.