Court Opinion

ID: 5170785
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:54:46.74812+00
Date Added: 2024-06-11T08:26:04.948457
License: Public Domain

MORGAN, J.,
Dissenting.
It appears to me the foregoing decision violates some elementary principles of law. We must not overlook the fact that the case has not been tried upon its merits; that it was decided upon demurrer to the answer, and that the answer properly and sufficiently alleged fraud upon the part' of the insured whereby he procured appellant to issue to him the policy of life insurance which *365forms the basis of this action. This state of facts invites the application of the fundamental rule that the demurrer admits all matters of fact which are sufficiently pleaded. (Bouvier’s Law Dict., Rawle’s Third Rev., 841.) So, although life insurance companies have competent physicians to thoroughly examine an applicant, and although it is the company’s duty before issuing its-policy to thoroughly satisfy itself as to his physical condition, and although it is well recognized that many people have ailments they know not of that might have a tendency to make them subject to attacks of pneumonia and other diseases, and although it is a well-recognized fact that pneumonia often attacks robust men and causes death in a very short time, nevertheless, for the purposes of this case, it must be taken as admitted that insured, knowingly and purposely, tricked and defrauded appellant into entering into the contract here sued upon, and that it would not have entered into it had it not been so tricked and defrauded. Since the fraud is admitted by the demurrer, its effect upon the contract is stated in another fundamental rule as follows: “It may be laid down as a general rule that any false representations of a material fact, made with knowledge of its falsity, and with intent that it shall be acted upon by another in entering into a contract, and which is so acted upon, constitutes fraud, and will entitle the party deceived thereby to avoid the contract or to maintain an action for the damages sustained.” (9 Cyc. 411.)
Since the application for insurance, the report of the examining physician, the report of R. G-. Dun & Company, and the report of certain officials of the insurance company which appear as exhibits attached to the answer, are commented upon in the opinion, and the contents thereof are apparently acted upon by the majority of the court as established facts tending to show that appellant was not defrauded, the admission made by the demurrer notwithstanding, it might be well to call attention to another rule which has been heretofore considered settled in this state, to the effect that pleading an instrument by attaching a copy to a complaint or an answer as an exhibit thereto does not tender an issue or *366involve an assertion of the truth of the statements and recitals contained in the exhibit. (Sweeney v. Johnson, 23 Ida. 530, 130 Pac. 997; Schultz v. Rose Lake Lumber Co., 27 Ida. 528, 149 Pac. 726.) Therefore, the statements of purported facts recited in these exhibits cannot be taken as allegations, or weighed as evidence, with a view to disproving the fraud, even though the demurrer do not admit it, which it does.
The case of Patterson v. Natural Premium Mut. Life Ins. Co., quoted from at some length in the majority opinion, does not appear to be in point. . That case was tried upon the merits, and the defense was that the insured, while sane, committed suicide. The court held that suicide, while sane, does not avoid a life insurance policy in the absence of the provision therein to that effect, but, speaking of the contention that the evidence tended to show a fraudulent scheme on the part of the insured, when he took out his policy, to obtain insurance on his life for the purpose of thereafter committing suicide and defrauding the company for the benefit of his children, the court said: “But the difficulty is that we have been unable to find any evidence which would justify the submission of that question to the jury.” In the case at bar that difficulty does not arise; the demurrer admits the fraud and admits that it was by means of fraud the issuance and delivery of the policy were procured.
Another rule generally accepted and applied throughout the United States is: A provision in a contract of life insurance that it shall be incontestable from date is void, as against public policy, so far as it tends to exclude the insurer from contesting upon the ground of fraud in procuring the contract. (Welch v. Union Cent. Life Ins. Co., 108 Iowa, 224, 78 N. W. 853, 50 L. R. A. 774; New York Life Ins. Co. v. Weaver’s Admr., 114 Ky. 295, 70 S. W. 628; New York Life Ins. Co. v. Hardison, 199 Mass. 190, 127 Am. St. 478, 85 N. E. 410; Reagam v. Union Mut. Life Ins. Co., 189 Mass. 555, 109 Am. St. 659, 76 N. E. 217, 2 L. R. A., N. S., 821, 4 Ann. Cas. 362.) The application of this rule ought not to be questioned, much less denied, in Idaho, where the policy of the law has been expressed in the statutes and the length of *367time within which such contracts are contestable has been definitely fixed.
See. 42, chap. 228, Sess. Laws 1911 (p. 748), as amended by sec. 22, chap. 97, Sess. Laws 1913 (p. 406), provides what shall be contained in certain policies of insurance, and one of the provisions to be so included is to be found in subdivision second of said section and is as follows:£ ‘ That the policy, so far as it relates to life or endowment insurance, shall be incontestable after two (2) years from its date of issue, except for nonpayment of premiums, and except for violation of the conditions of the policy relating to military or naval service in time of war.” Subd. 4 of sec. 46, chap. 228, Sess. Laws 1911 (p. 753), is as follows: “No company or agent shall issue or deliver in this state any policy which conflicts with any provision of this act. A policy issued in violation of this act shall be held valid and shall be construed as provided in this act, and when any provision in a policy is in conflict with any provision of this act, the rights, duties and obli: gations of the company and policy-holder and the beneficiary shall be governed by the provisions of this act.”
The legislative intent that a policy of life or endowment insurance shall be read and construed to provide that it shall be incontestable after two years from its date, other than for the causes by law expressly excepted, regardless of what may be recited in the contract attempting to fix a longer or shorter period of time, and that the two years ’ provision expressed in the statute shall govern the rights, duties and obligations of the company and policy-holder and beneficiary, and that the recitations in the contract to the contrary shall not govern them, is so clearly expressed that it ought to successfully resist and withstand all effort to place any other construction upon it.
If any more law is needed to guide us to a correct decision of the sole question in this case, which is stated in the majority opinion in effect to be, whether the incontestable clause in the policy deprives appellant of the right to set up the de. fense of fraud, it is to be found in sec. 3321, Rev. Codes, which is as follows: “Every stipulation or condition in a *368contract, by which any party thereto is restricted from enforcing his rights under the contract by the usual proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void.”
I am forced to conclude that the clause in the contract of insurance attempting to make it incontestable from its date is in conflict with the policy of the law as expressed in the statutes above quoted, and that it is void; also, that the case should be brought to trial upon its merits with a view to determining the truth or falsity of the allegations of fraud, contained in the answer.