Williams v. Travelers Insurance Co.

168 Wis. 456 | Wis. | 1919

Lead Opinion

The following opinion was filed December 3, 1918:

Eschweiler, J.

By ch. 601, Laws 1913, what is now sec. 1960, Stats., providing for a standard accident and health policy, was adopted. This statute is the same in form and substance as was recommended by the National Association of Insurance Commissioners oí this country in the same year and was adopted in almost the identical form in New York, Connecticut, Minnesota, New Hampshire, North Carolina, and Pennsylvania in 1913, and by Illinois in 1915.

Portions of the statute are as follows :

“Section 1960. 1. On and after the first day of January, 1914, no policy of insurance against loss or damage from the sickness, or the bodily injury or death of the insured by accident shall be issued or delivered to any person in this state until a copy of the form thereof and of the classification of risks and the premium rates pertaining thereto have been filed with the commissioner of insurance; nor shall it be so issued or delivered until the expiration of thirty days after it has been so filed unless the said commissioner shall sooner give his written approval thereto'. If the said commissioner shall notify, in writing, the company, corporation, association, society or other insurer which has filed such form that it does not comply with the requirements of. law, specifying the reasons for his opinion, it shall be unlawful thereafter for any such insurer to issue any policy in such form.

“2. No such policy shall be issued or delivered . . . (6) unless the exceptions of the policy be printed with the same prominence as the benefits to which they apply, provided, however, that any portion of said policy which purports, by reason of the circumstances under which a loss is incurred, to reduce any indemnity promised therein to cm amount less them that provided for the same loss occurring under ordinary circumstances, shall be printed in bold-face type and with greater prominence them any other portion of the text of the policy” (italics ours).

“3. Every such policy so issued shall contain certain standard provisions, which shall be in the words and in the order hereinafter set forth and be preceded in every policy by the caption ‘Standard Provisions.’ . . .”

“(1) A standard provision relative to the contract which may be in either of the following two forms: Form (A) to be used in policies which do not provide for reduction of indemnity on account of change of occupation, and Form (B) to be used in policies which do so provide.”

In the same subsection, after provisions as to what must appear in Form (A), appears in a clause relative to Form (B) (being the form in question in suit) the following so-called standard provision, which appears also verbatim under the heading “Standard Provisions” on the second page of the policy and reads as follows:

“1. This policy includes the indorsements and attached papers, if any, and contains the entire contract of insurance except as it may be modified by the insurer’s classification of risks and premium rates in the event that the insured is injured after having changed his occupation to one classified by the insurer as more hazardous than that stated in the policy, or while he is doing any act or thing pertaining to any occupation so classified, except ordinary duties about his residence or while engaged in recreation, in which event the insurer will pay only such portion of the indemnities provided in the policy as the premium paid would have purchased at the rate but within the limits so fixed by the insurer for such more hazardous occupation.”

Sub. 13, sec. 1960, provides a penalty by way of fine or the revocation of the license of any company, officer, or agent thereof who' issues or delivers in this state any policy in wilful violation of the provisions of the act.

When the legislature declares, as it has by this section in question, the public policy of the state to- be that that which had theretofore been subject to contract between the parties shall hereafter be by certain prescribed forms and with specific conditions concerning the respective rights and duties of the parties thereto-, the statutory provisions step in and control and regulate the mutual rights and obligations rather than the provisions of any contract the parties may attempt to make varying therefrom. Temple v. Niagara F. Ins. Co. 109 Wis. 372, 85 N. W. 361; Keith v. Royal Ins. Co. 117 Wis. 531, 94 N. W. 295; Whitfield v. Ætna L. Ins. Co. 205 U. S. 489, 27 Sup. Ct. 578; Verducci v. Casualty Co. 96 Ohio St. 260, 117 N. E. 235.

The defendant seeks to reduce the amount it must pay for the injury from the primary rate of $25 per week by virtue of the clause of the standard provisions, found under clause (B): — (1) of sub. 3 (1), sec. 1960, which we have quoted, either because when injured plaintiff had changed his occupation to one more hazardous, or because when injured he was doing an act or thing pertaining to a more hazardous occupation than that under which he was classified by the policy, the latter being the one adopted by the trial court.

The policy in suit is before us in the record and shows upon its face, absolutely and without any room for question or debate, that the clause relied upon is not printed in boldface type and is not printed with greater prominence than any other portion of the text of the policy. The provisions of clause (6), sub. 2, sec. 1960, above quoted and italicized, meet the exact condition confronting defendant in this case, where it now seeks, by virtue of the circumstances under which this injury occurred, to 'reduce the indemnity. Under and by virtue of that clause (6) the defendant was required to print the clause now relied upon by it in bold-face type and with greater prominence than any other portion of the text of the policy, because that portion of the policy so relied upon purports, by reason of the circumstances under which a loss is incurred, to reduce the indemnity promised under ordinary circumstances.

In presenting this partial defense by way of reduction from the stipulated indemnity defendant must rely upon the policy it issued. That document, when produced and examined, shows for itself that the defendant has, in issuing the same, violated the express provision of the law as to the manner and form in which such a defensive clause shall be printed. It thus appearing by its own document that it has, as to- the clause in.question, placed itself outside the pale of the law, it cannot, in a suit such as here, be permitted to take advantage of any such clause.

The defensive clause not appearing in the policy in manner and form as required by statute, it is as though it were not there at all. This, in our judgment, is the necessary and reasonable effect to be given sub. 9 of this sec. 1960, which reads as follows:

“9. A policy issued in violation of this act shall be held valid but shall be construed as provided in this act and when any provision in such policy is in conflict with any provision of this act the rights, duties and obligations of the insurer, the policy-holder and the beneficiary shall be governed by the provisions of this act.”

If it does not so apply in such a situation as we have before us, then it seems superfluous. So applied, it gives life to the provisions of the statute which so evidently require that greater publicity be given in the policy to the clauses under which the insurer may expect to lessen its payments than to the provisions under which the insured may have hoped and believed his indemnity was fixed. It will undoubtedly emphasize the warning given on this very point by the insurance commissioner in his letters to defendant after the approval of the form of this policy and which letters áre quoted from in the statement o-f facts above, and it may.preserve these salutary provisions from lapsing into a state of innocuous desuetude.

It is contended, however, by defendant that such a position ought not to' be maintained, inasmuch as from the undisputed evidence and as found by the trial court this form of policy known as ED 9229 was approved by the commissioner of insurance December 19, 1913, and that such approval thereupon became absolute and made such form of policy immune from any collateral attack or question, as to whether or not there was a compliance with the statute, by any beneficiary or policy-holder in a suit for benefits claimed under such policy, and that such was the holding of this court in Lundberg v. Interstate B. M. A. Asso. 162 Wis. 474, 156 N. W. 482, and that by that decision such rule is stare decisis. Furthermore, that in any event this particular policy is to be read and construed as though the views expressed in that case were a part of the contract between the Parties.

In the Lundberg Case the issues were submitted to the trial court upon stipulation and without the taking of testimony. In the stipulation the defendant contended that the policy there in question showed for itself that it was in typographical make-up in accordance with the same clause (6), sub. 2, above quoted and here involved, and that that was purely a question of law for the court. The trial court held by his finding that such question was determinable by an examination of the printed portions of the policy by the court and that the provision in question there was in accord with and met the provisions of the law. On the appeal this court concurred in that conclusion reached by the lower court by that finding (p. 480). In the Lundberg Case, therefore, the fact was determined by the court from an inspection of the policy itself that there was a compliance with the statute. In this case, and beyond doubt or question, the policy in suit shows for itself a fact exactly contrary to the fact found and shown by the policy itself in the Lundberg Case.

While the Lundberg Case, upon the facts there presented, was correctly decided, yet we are now constrained to hold that certain language there used to the effect (p. 479) that after approval by the commissioner of a form of policy presented to him under s'ec. 1960, then, in a suit like this upon the policy by a beneficiary, there cannot be a collateral attack permitted upon such approval, went too far and must be now deemed withdrawn.

The disposition we thus make of this case, in holding that defendant’s failure to comply with the statute prevents it from asserting its partial defense, makes it unnecessary to pass upon the other points presented in the very able brief and argument of appellant’s counsel.

The plaintiff is entitled to the full indemnity of $25 per week from the time of the accident to the commencement of this suit, and judgment to that effect should have been entered.-

By the Court. — Judgment of the circuit court reversed, with directions to enter judgment in accordance herewith.

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Concurrence Opinion

The following opinion was filed December 6, 1918:

Winslow, C. J.

(concurring). I understand that it is held by the opinion of the court in this case, first, that where, as in the Lundberg Case, a question of fact is presented as to whether the policy in question conforms typographically to the requirements of the statute, the decision of the commissioner on that question-is final and cannot be collaterally attacked; and, second, that where, as in the present case, there is no question of fact, but simply a plain violation of the command of the statute, the approval of the form by the commissioner does not help the form in the least, but it may be attacked in any court in which it comes in question for its failure to comply with the plain commands of the law.

The result is that (as applied to the facts then present) the rule stated in the Lundberg Case was right and is approved, but that it should not be extended to a case like the present where there is. no question of fact to be passed upon.

With this understanding of the effect of the present decision I concur in the reversal.

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Concurrence Opinion

Rosenberry, J.

I concur in the views of the Chief Justice.

A motion for a rehearing was denied, with $25 costs, on February 4, 1919.