Court Opinion

ID: 9559747
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:34:56.474081+00
Date Added: 2024-06-11T09:11:37.547630
License: Public Domain

SCHAUER, J.
I concur in the conclusion reached by Justice Carter.
The argument that in this case the incontestable clause should not be operative because it would work an injustice on other insureds goes too far. On that reasoning the incontestable clause could be held utterly meaningless in any case of misrepresentation or innocent mistake as to a material matter of fact.
It seems incongruous to me to recognize the express declarations of the policy that the “policy and the application therefor [in which the insured’s age is stated] . . . constitute the *90entire contract”; that “This policy shall he incontestable after two years from the date of its issue except for non-payment of premium and except as to the provisions and conditions relating to Disability and Double Indemnity Benefits”; and then to hold that “the matter of defendant’s ‘correct age’ would be ‘open to investigation during the life of the policy’.” The exceptions to the incontestable clause above quoted are specific; they do not include misstatement of age.
The majority, as I understand their opinion, avoid giving effect to the two-year contest limitation in the incontestable clause by holding that this action to reform the policy is not a contest of liability under it. Yet these facts are unescapable: (1) On the face of the contract and the facts established, accepting the age statement as true, the insurer is liable to pay $50 a month to the insured, commencing October 15, 1945, and to waive premiums falling due under the policy from and after June 15, 1945. On the date of trial the amount prima facie due to the insured was $2,400 in disability payments plus $875.60 in premiums paid under protest, a total of $3,275.60. (2) The insurer refuses to pay any part of this sum except that it would refund what it claims are overpayments of premiums made since April 10, 1944, which date it alleges is “the anniversary of said policy on which the insured’s nearest birthday was sixty.” (3) The insurer asks that “said policy of insurance ... be reformed by changing the face amount thereof [from $5,000] to $4,632 and hy reducing the semi-annual premiums . . . payable under said policy . . . from and after April 10, 1944” and that “the application of . . . [the insured] ... be reformed by changing the date of birth of said insured from April, 1886 to April, 1884.” (4) The payment of disability benefits and the waiver of premium are conditioned on disability occurring before age 60; under the facts here alleged by the insurer, if the policy and application are reformed as sought by it, it will avoid entirely the payment of such benefits and the waiver of premiums. (5) The insured was born in Russia and there is no showing that the exact date of his birth was recorded or can be proved with certainty. The policy was applied for on April 10, 1931; it was issued on April 16, 1931; this suit for reformation was filed December 11, 1946. It is reasonable to believe that it would have been easier for the insured to find and produce evidence as to the date of his birth within two years from the time the policy was issued than after the lapse of more than 15 years. Hence the recital in the policy (which *91includes the application) of the date of birth is a matter as to which the contest limitation period of two years is reasonable and appropriate.
It seems to me that the relief sought by the insurer, under the circumstances shown, amounts to a contest of its policy; certainly it is a contest of the insured’s claim under the policy and his claim finds prima facie support in the policy and attached application. It is only by showing misrepresentation or mistake as to the insured’s age that his claim is sought to be avoided. Since misrepresentation or mistake as to age is not listed as an exception to the limitation on contestability after two years, I think the trial judge was justified in the conclusions he reached. At most there is ambiguity in the policy which ambiguity, of course, was created by the insurer. As indicated above, it well may be difficult for the insured at this late date, particularly since he was born in a foreign country, to prove the exact date of his birth.
For the reasons stated I would resolve the ambiguity against the insurer and affirm the judgment.
The opinion was modified to read as above printed and respondent’s petition for a rehearing was denied December 20,1951. Carter, J., and Schauer, J., were of the opinion that the petition should be granted.