Fore v. New York Life Ins. Co. , 180 Ark. 536 ( 1929 )

Although it is my opinion that the Robbs case, cited and relied upon by the majority for file reversal of the judgment of the circuit court, is unsound in logic and contrary to the overwhelming weight of authority, I do not write this dissenting opinion to criticise that case. I accept it as declaring the law, and it is my purpose only to attempt to show that it does not apply to the policy here sued on.

Upon the authority of the Robbs case, it may be assumed that, as the provision against suicide does not appear in the incontestable clause in the policy sued upon, and more than two years have expired since the issuance of the policy before the institution of this suit, the policy is now an unalterable contract to discharge the obligation which the insurer contracted against. But is it a contest of the policy to inquire what these obligations are, or to resist the enforcement of a liability which the insurer says the policy does not impose?

Stripped of all superfluities, this is the question in the case. What are the facts? For a fixed annual premium the insurance company, hereinafter referred to as the company, issued a policy on the life of Peter J. Fore, for the sum of five thousand dollars. The policy provided that if the insured died a natural death, the sum payable should be five thousand dollars; but if death resulted from an accident, there should be paid twice that amount. There was also a provision that, in case of the disability of the insured, there should be paid ten dollars per month for each thousand dollars of the policy. The policy also provided that in the event of death by suicide during the first two years the policy was in force, the insurance should be for a sum equal to the premiums which had been paid to and received by the company, and no more.

It appears, therefore, that the liability assumed by the company (except as to disability benefits) depended entirely upon the manner of the insured's death. It might have been ten thousand; or five thousand dollars; or the amount of the premiums paid. Did the company not have the right to stipulate what amount should be payable in any of these contingencies? It would appear that it, has the right to do so, provided it be conceded that the right exists to contract as to what obligations the company will assume in a given contingency.

We cannot make a contract for parties. We may, and properly do, resolve all doubts as to the meaning and construction of an insurance contract against the insurer; but when this has been done and the meaning of the contract has been thus ascertained, we should enforce the contract, whatever the result may be.

Suppose during the period of contestability or after its expiration, the insured had asserted his disability and had claimed the disability benefits, would a denial of the existence of disability by the company be a contest of the policy? Suppose further, that when the proof of the death of Mr. Fore had been presented, the claim had been made that death had resulted from an accident, and that the sum payable was not the face of the policy, but twice that amount, would a denial that the insured's death was the result of an accident be a contest of the policy? We apprehend that no one would be so bold as to make this contention.

If, therefore, the insurer may contract to pay a certain sum upon the death of the insured from a natural cause, or a larger sum if the death be accidental, why is it not permissible to contract that upon death from suicide a less sum shall be payable? The amount to be paid in any event is of no controlling importance. The principle that is vital and important is the right to contract, because, if the right to contract is conceded, the parties thereto may stipulate in the contract what sum of money shall be paid in one contingency, and what sum shall be paid in another.

Just here, let us compare and distinguish the suicide clause in the Robbs case from that in the instant case. In the former it reads as follows: "Suicide. Self-destruction, sane or insane, within one year from the date of this policy, is a risk not assumed by the company under this policy. In such event the company will return the premiums actually received." In the instant case it provides: "Self-destruction. In the case of self-destruction during the first two insurance years, whether the insured be sane or insane, the insurance under this policy shall be a sum equal to the premiums thereon which have been paid to and received by the company, and no more."

It thus appears that in the one case it is provided that death by suicide is a risk not assumed by the company under the policy; whereas in the other case the liability upon death from suicide is expressly recognized and a sum named which shall be payable in that event.

It will also be observed that in the Robbs case the policy provided that in the event of suicide the company will return the premiums actually received, and nothing more. The beneficiary gets nothing. The contract is rescinded, and the premiums are returned, and these return premiums would be payable to the administrator of the estate and become a part of the estate.

Under the suicide clause in the instant case the policy is not rescinded, and the beneficiary named in the policy, and not the administrator, is entitled to the sum payable upon the happening of the event insured against. The policy is in force, and not rescinded, and there becomes payable the agreed amount. It is true the sum payable is the amount of the premiums received, but what of that? It could have been for a larger or a smaller amount, and the validity of the contract does not depend upon the sum to be paid, if the company has the right to contract as to the amount it will pay upon the occurrence of the contingency insured against.

Is it a contest of the policy for the company to insist that under the terms of the policy a given amount, and that only, should be payable in a particular circumstance? Suppose the policy had provided that in the event of death by suicide the sum payable should be one hundred dollars, or one thousand dollars, would it be insisted that a denial of a greater liability than that provided by the policy was a contest of the policy? Does the insistence of the company that the obligations of the contract be enforced according to what it insists is the plain letter thereof constitute a contest? Would a denial of double liability upon the ground that the insured had not died from an accident be a contest of the policy? We think these questions answer themselves, and that it is not a contest of the policy to insist that only that liability be enforced which under the contract the company assumed.

We do not concur in the view of the majority that the case of Interstate Business Mens' Accident Assn. v. Adams, 178 Ark. 856, 13 S.W.2d 591, has no application here. We think it has. That case was a suit upon a two-thousand dollar policy, and the application of that case to this is that the recovery of one hundred dollars only was there permitted because the policy provided that in the named contingency only that amount should be payable. The incontestable clause would have no more relevancy to that case than it has to this, because the controlling question in both cases would be, and is, what was the amount of insurance to be paid upon the happening of the contingency insured against?

In the case of Myers v. Liberty Life Ins. Co.,124 Kan. 191, 257 P. 933, 55 A.L.R. 542, was a case identical in all essential respects with the instant case. The headnotes in that case read as follows:

"A life insurance company issued a policy on September 10, 1923 in which it agreed to pay to the insured's wife, as beneficiary, the sum of $3,000, immediately on receipt of proof of death of the insured, provided premiums had been paid and the policy was in force. The policy contained these provisions:

"`This policy shall be incontestable after one year from the date of issue, if premiums have been duly paid.'

"`In case of suicide of the insured, whether sane or insane, within two years from the date of this policy, the liability of the company shall be limited to the amount of the premium actually paid.'

"The insured committed suicide by hanging, on August 27, 1924. The policy was in force, the premium had been paid, and proof of death was made. Held, the entire policy considered, liability of the company is limited to the amount of premium actually paid."

The case just quoted from was decided by the Supreme Court of Kansas in an opinion which was unanimous, and the reasoning of the court is so logical and convincing and the conclusions of the court so fortified by authority that we think it should be followed here.

Another very similar case is that of Stean v. Occidental Life Ins. Co., 24 N.M. 346, 171 P. 786, 24 N.M. 346. The headnotes in that case read as follows:

"The word `incontestable' as used in life insurance policies providing that the policy shall be incontestable, means indisputable and amounts to a guaranty that no objection shall be taken to defeat the policy on the death of the person whose life is insured.

"An incontestable clause in a policy of insurance does not preclude the defense of suicide, where the suicide clause in the policy is a part of the contract to pay, providing how much shall be due and payable in the event of death by self-destruction."

The brief of counsel nor the company cites the following additional cases to the same effect: Childress v. Fraternal Union of America, 113 Tenn. 252, 82 S.W. 832, 3 Ann. Cas. 236; Howard v. Missouri State Life Ins. Co., (Tex. Civ. App)289 S.W. 114; Scarborough v. Am. Nat. Ins. Co., 171 N.C. 353,88 S.E. 482, L.R.A. 1918A, 896, Ann. Cas. 1917D, 1181.

We are of the opinion, therefore, that the circuit judge was correct in holding that this was not a contest of the validity of the policy, in violation of the incontestable clause, but was an endeavor on its part to limit its liability under the policy to the amount which it agreed to pay in the event the insured died by his own hand, as it is admitted he did, and we think the judgment of the circuit court below so holding was correct and should be affirmed.

In this connection, it may be said that the case of Hearin v. Standard Life Ins. Co., 8 F.2d 262, reviews the law of this case in an opinion written by the late Judge Trieber. The reasoning in that case, upon the numerous authorities therein cited, is so clear and forcible as to demonstrate, not only the error in the majority opinion in the instant case, but the unsoundness of the Robbs case as decided by this court as well. The Robbs case was, in fact, as appears from the opinion of Judge Trieber and that of this court (177 Ark. 275,6 S.W.2d 520), the same case.

I am authorized to say that Justices KIRBY and McHANEY concur in the views herein expressed.