Court Opinion

ID: 9825868
Source: CourtListenerOpinion
Date Created: 2023-09-01 14:13:58.910043+00
Date Added: 2024-06-11T18:12:16.124139
License: Public Domain

OPINION ON REHEARING. Hart, C. J. In a case-note to Mutual Life Insurance Co. v. Hurni Packing Co., 263 U. S. 167, 44 S. Ct. 90, as reported in 31 A. L. R. 102, at page 109, it is said that, where a life insurance policy provides that, after a certain definite time, it shall be incontestable, except for certain defenses, a majority of the courts hold that the death of the insured within this time does not put an end to the incontestable clause or prevent its subsequently becoming operative for the benefit of the beneficiary. The case of Missouri State Life Insurance Co. v. Cranford, 161 Ark. 602, 257 S. W. 66, 31 A. L. R. 93, is among the cases cited. But counsel for appellants claim that the doctrine announced in the Cranford case should not apply here, because the policy sued on contained a suicide clause in which it was provided that self-destruction, while sane or insane, within one year from the date of the policy, was not a risk assumed by the company. We do not think this makes any difference. The policy contained an incontestable clause after one year, and death by suicide was not mentioned as one of the exceptions in that clause. This view was adopted by the Supreme Court of Alabama in Mutual Life Insurance Co. v. Lovejoy, 201 Ala. 337, 78 So. 299, L. R. A. 1918D, p. 860. In the rehearing on that case it was held that the defense of suicide is within the provision of a life insuranec policy making it incontestable after two years. In .the opinion the court called attention to the fact that incontestable clauses .are material and valuable provisions in a contract of life insurance. In discussing- the subject the court said: “'Construing this contract as a whole, it seems that, if the insured dies within two years of its date, the insurance company may contest the cause of the death, or may set up fraud or misrepresentation in the procuring of the insurance, or any other matter that would be a defense to the action on the policy; but, if he does not die within two years from issuance of policy, and he pays all the premiums agreed to be paid, then the insurance company will not contest, or refuse, the payment of fhe amount agreed to be paid, on any ground whatever. It was not an agreement to pay him, his estate, or the beneficiary, that amount if he committed suicide, or was executed by virtue of the criminal law, or in any other manner contributed to his own death. The company merely agreed and bound itself that it would not litigate any of these questions, though, without the incontestable clause, they would-be a defense. To say that the clause applies to all other defenses except suicide while sane, or- death by wrongful, criminal act of the insured, is to read into the policy terms which are not there, and which the very language of the policy excludes:” In Northwestern Mutual Life Insurance Co. v. Johnson, 254 U. S. 96, 41 S. Ct. 47, 65 law. ed. 155, it was held that suicide of the insured, sane or insane, after the specified time, is no defense to suits on policies of life insurance which contain, respectively, a provision that' if, within two years from the date of the policy, the insured, while sane or insane, shall die by his own hand, the policy shall be void, and a provision that the policy shall be incontestable after one year from the date of issne, provided the premiums are duly paid. In discussing- the subject, Mr. Justice Holmes, speaking for the court, said: “When a clause makes a policy indisputable after one or two years, the mere evocation of a possible motive for self-slaughter is at least not more objectionable than the creation of a possible motive for murder. The object of the clause is plain and laudable — to create an absolute assurance of the benefit, as free as may be from any dispute of fact except the ‘fact of death, and as soon as it can reasonably be done. It is said that the insurance companies now generally issue policies, with such a clause. The State decisions, so far as we know, have upheld it. Unless it appears that the -State concerned adopts a different attitude, we should uphold it here. * * * We are of the opinion that the provision in the first-mentioned document, avoiding the policy if the insured should die by his own hand within two years from the date, is an inverted expression of the same general intent as that of the clause in the second, making the policy incontestable after one year, and that both equally mean that suicide of the insured, insane or sane,, after the specified time, shall not be a defense. It seems to us that that would be the natural interpretation of the words by the people to whom they are addressed, and that the language of each policy makes the company issuing it liable in the event that happened.” In Supreme Lodge of Knights of Pythias v. Overton, 203 Ala. 193, 82 So. 443, 16 A. L. R. 649, the Supreme Court of Alabama said that the defendant, for a consideration, having agreed in advance not to contest its liability on any other ground than those specified in the contract, it would not be heard to set up a defense and contest' payments on grounds by which it had induced the contract and which it had agreed not to contest, In discussing the question the court said; ‘ ‘ The decision is not that suicide, while sane or intentional, or death fay public execution, or while fleeing felon, is not a defense to an action on an insurance policy; hut the decision is that, fay a valid contract, the insurer has estopped himself from setting up these as well as any other defenses, except those mentioned in the contract. The court will not presume that .such defenses exist, and the party has estopped himself from alleging or proving it.” In Sun Life Insurance Co. v. Taylor, 108 Ky. 405, 56 S. W. 668, 94 A. S. R. 383, the court said: “By the incontestable feature of the policy the company, in effect, said it would not refuse to pay the amount of the policy, although the insured might, while sane or insane, take his own life, or if he should lose it by his own criminal action. It was not .an agreement that it would pay him the amount of the policy if he committed suicide or lost his life fay his own criminal action, but it was an agreement that no defense should he made on that ground if he lived and continued to pay premiums for three years.” To the same effect see Royal Circle v. Achterrath, 204 Ill. 549, 68 Mo. 492, 63 L. R. A. 452, and cases cited; and Goodwin v. Provident Savings Life Assurance Society, 97 Iowa 226, 66 N. W. 167, 32 L. R. A. 473, 59 A. S. R. 411. The fact of suicide or not could only he established fay proof, and this would faring on a contest, which is the very thing the insurance company has agreed not to do after a certain time. As Mr. Justice Holmes so aptly expressed it, after the period of time expressed in the incontestable clause has expired, there can be no dispute of fact except the fact of death, unless other conditions are imposed in the incontestable clause itself. The cause of death has, fay the agreement of the parties, ceased to he an issue of fact. In short, after the period of time prescribed in the incontestable clause has expired, the insurance company cannot contest the fact of suicide. While there are authorities to the contrary, we think the better reasoning is in accordance with the decisions of the courts above cited. The incontestable clause constitutes, as the courts generally put it, not an assurance against the results of crime, but an assurance against the hazards of litigation; and we are of the opinion that the insurance company could not contest the policy before or after the death of the insured, after the period of time prescribed in the incontestable clause had expired, except for the conditions set out in the incontestable clause itself. Therefore the motion for rehearing will be denied.