Court Opinion

ID: 9443842
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:32:05.66349+00
Date Added: 2024-06-11T17:29:37.453919
License: Public Domain

RUSSELL, Circuit Judge
(dissenting).
I am unable to join my colleagues in directing modification of the judgment of the trial court which held that twenty-five years was “a reasonable time” during which the insurance contract, which expressed no term, should remain operative. Certainly Aetna Life Insurance Company is not entitled to complain of this period under all of the circumstances of the case. Generally, where the parties to a contract fail to specify a definite term for its continuance, with the result that the judicial process must be resorted to in order to determine a “reasonable time” which should elapse before it is terminated, the primary effort of the courts is to determine the time which, as reasonable men, the parties to the contract ought to have understood each other to have in mind at the time the contract was executed, but which time was, nevertheless, for some reason, omitted from the contract. In the present case, consideration of the negotiations leading up to the insurance contract, the nature, terms and provisions of the contract as executed, and the purpose sought to- be attained supports the finding of the trial court, if, indeed, the enforcement of a longer period would not have been justified. The insurer, having cautiously provided, so far as it could foresee, for each and every contingency affecting its liability and the compensation it should receive for its assumption, even to the extent of providing what it doubtless deemed to be protection in any and all events by its prescribed rate of increase in premiums during successive periods of five years each, which would equal, though not exceed, the prevailing rates which underwriting conditions indicated at any particular time, (see note 1 in the majority opinion), can properly be regarded, at the inception of the contract, as having desired and intended that it should continue for a long period of time. With favorable rates, a large insurer desires increases in amounts of insurance in force. Freeport, adopting the plan for its employees, may well be regarded as having had a similar understanding as to the existence of its option to insure new employees. The subsequent decline in interest rates and the increase in life expectancy, while they might make the contract burdensome for the time being, do not, I think, affect what must have been the understanding of the parties at the time the contract was executed.
I think the finding of the trial court is so well supported by the facts and circumstances of the case that the insurer has no cause for complaint.