Werner v. State Life Insurance Co.

Dudine, J. This is an appeal from a judgment for appellee (defendant below) in a suit instituted by appellant, the beneficiary of two life insurance policies issued by appellee, to recover on the double indemnity provision of the policies. *29 The complaint was in two paragraphs, one for each policy. The paragraphs were identical except as to the amounts of insurance provided by the respective policies. A demurrer to each of said paragraphs of complaint was filed and sustained, and appellant declining to plead further, judgment was rendered in favor of appellee. On appeal the sole error relied upon for reversal is alleged error in sustaining each of said demurrers. The policies were dated February 16, 1921. They contained an “incontestability clause” which provided that the policy “shall be incontestable after one year from date hereof, except for non-payment of premiums.” The double indemnity clause of the policies was as follows: “During the premium paying period of this Policy, and excluding any time while the same may be in force as extended insurance, all premiums having been duly paid, and this Policy being then in force, in the event of the death of the insured, resulting from bodily injury, sustained and effected directly through external, violent and accidental means (murder or suicide, sane or insane, not included), exclusively and independently of all other causes, provided such dealth shall occur within ninety (90) days from the date of the accident, the Company will pay to the beneficiary or beneficiaries hereunder, in addition to the amount otherwise due, under this Policy, . . .” (Our italics.) The complaint alleged among other things: “. . . that on or about the 4th day of August, 1932, and while said policy was in full force and effect, and there being no indebtedness due on said policy in favor of the defendant, the insured, Jacob Werner, died as the result of bodily injuries sustained and effected directly through external, violent, and accidental means, and not by murder or suicide, exclusively and independently of all other causes, in the following manner to-wit: that on the 2nd day of August, 1932, said insured, while in his *30 office and place of business as a pawn broker at 234 Indiana Avenue, in the city of Indianapolis, Indiana, all without any fault or provocation on his part, was held up, beaten about the head and body and robbed and shot by a gun, through the epigastrium, transverse colon, duodenum and abdominal wall, from all of which injuries he died from gunshot wounds two days later, to-wit, on the 4th day of August, 1932, at the Riley Hospital in the city of Indianapolis, Indiana.” Appellant’s points may be summarized as follows: (1) The facts alleged in the complaint show that the insured’s death “resulted from bodily injury, sustained and effected through external, violent and accidental means” within the meaning of said terms as expressed in said double indemnity clause. Stated adversely, appellant contends that the facts alleged in the complaint do not show that insured’s death resulted from “murder or suicide, sane or insane,” within the meaning of said terms as expressed in said double indemnity clause. (2) Regardless of whether or not insured’s death is shown by the allegations of the complaint to come within the provisions, or exceptions to the provisions of said double indemnity clause, the incontestability clause and Sec. 39-801, paragraph 3, Burns 1933 (§9723 Baldwin’s 1934), permits a recovery on the policies, they having been in force more than two years at the time of insured’s death, and premiums being fully paid at that time. Sec. 39-801, p. 3, Burns 1933 (§9723 Baldwin’s 1934), supra, provides: “From and after July 1, 1909, no policy of life insurance shall be issued or delivered in this state or be issued by a life insurance company organized under the laws of this state, unless the same shall provide the following . . . “(3) That the policy . . . shall be incontestable after it shall have been in force during the lifetime *31 of the insured for two (2) years from its date, except for non-payment of premium and except for the violation of the conditions of the policy relating to naval or military service in time of war.” It will be readily' seen that the policies in the instant case complied with the provisions of Sec. 39-801 Burns 1933 (§9723 Baldwin’s 1934), supra, insofar as con-testability for non-payment of premiums is concerned. We will first discuss the contention that insured’s death, as alleged in the complaint, was covered by the double indemnity clause, and was not excluded by the exceptions to the provisions of the double indemnity clause. Appellant states sixteen points in support of said contention, the first fifteen of which support the proposition that where an insured is murdered without fault or provocation on his part his death is “accidental” within the meaning of insurance policies covering accidental death. Many cases are cited in support of said points, including the following Indiana authorities: Supreme Council, etc. v. Garrigus (1885), 104 Ind. 133, 3 N. E. 818; Phoenix Acc. and Sick Benefit Assn. v. Stiver (1908), 42 Ind. App. 636, 82 N. E. 772; Travelers Protective Assn. v. Fawcett, Gdn. (1914), 56 Ind. App. 111, 104 N. E. 991. We agree with said proposition, but if it be assumed that insured’s death was an “accidental” death, which we do not decide, we must still determine whether it was excluded as a risk. (See Barham v. The State Life Insurance Co. (1931), 17 La. App. 253, wherein the court was discussing the identical double indemnity provision involved here, and the court said (p. 254) : “The meaning of the exception of murder and suicide is that if death was caused by accidental means, it was liable except where death was caused by suicide or murder.” *32 Appellant’s sixteenth point is “when an insurance contract contains conflicting provision, or is otherwise ambiguous, it will be strictly construed against the insurer and that construction will be adopted which will sustain rather than defeat the purpose of the contract, if it can be done without doing violence to the language used when fairly construed in the light of the situation of the parties.” Appellant cites Masonic Acc. Ins. Co. v. Jackson (1929), 200 Ind. 472, 164 N. E. 628; Fletcher Savings and Trust Co. v. American Surety Co. (1931), 92 Ind. App. 651, 175 N. E. 247, in support of said point. We recognize said rules of construction, but they are not applicable here. We hold that the policies m the instant case expressly and clearly exclude death by murder from the risks covered by the double indemnity clause. The facts alleged as to insured’s death constituted murder within the meaning of the statutes in effect when the policy was issued (Feb. 16, 1921), Sec. 347, Ch. 169, Acts 1905 (p. 660), and within the meaning of the statutes in effect at the time when insured was killed, August 4, 1932, Sec' 4, Ch. 54, Acts 1929 (p. 137). Therefore we hold that the complaint alleges facts which show that insured’s death was not covered by the double indemnity provision of the policies. Appellant has cited numerous authorities in support of the contention that the incontestability clause and Sec. 39-801 Burns 1933 (§9723 Baldwin’s 1934), supra, permits a recovery on the policy in spite of the exceptions in the double indemnity clause “murder or suicide, sane or insane, not included.” Some of them are cases in which the court was considering the effect of incontestability clauses, with reference to preventing contests as to facts existing at the time the respective policies were issued, and where the *33 Appellate Court used broad language, to the effect that the incontestability clauses cut off “all” defenses. One of such cases is Indiana Nat’l Life Ins. Co. v. McGinnis (1913), 180 Ind. 9, 101 N. E. 289, wherein the court said (p. 16) : “It seems to be a well recognized principle of insurance law that-a provision in a contract of insurance limiting the time in which the insurer may take advantage of certain facts that might otherwise constitute a good defense to its liability on such contract, is valid and precludes every defense to the policy other than the defenses excepted in the provision itself.” It should be noted that the court in that case was considering the question of whether or not the incontestability clause in the policy before the court prevented a contest by the insurance company on the ground that statements and warranties in the application for insurr anee were untrue; and that the court did not have before it for determination the effect of the incontestability clause as to any other defenses. The statement of the court above quoted is dictum insofar as it purports to decide questions which were not before the court. The instant case should be distinguished from cases in which the court determined the effect of incontestability clauses with reference to preventing contests based on misrepresentation or fraudulent concealment of facts in the applications for insurance, because such contests attack the validity of the contract, while in the instant case the validity of the-contract is not attacked, but on the contrary appellee admits the validity of the contract. Here it is merely insisted by appellee that the contract be not construed to cover risks which are not covered by the contract. This case should also be distinguished from cases in which insurance companies attempt to set up a defense of suicide, under the terms of policies which purport *34 edly exclude suicide from the risks covered, wherein the appellate courts, relying on statutes which specifically prevent the defense of suicide, held that suicide could not be set up as a defense. See Aetna Life Ins. Co. v. Wertheimer (1933), 64 Fed. (2d) 438, involving Utah Statute; Aetna Life Ins. Co. v. Brankman (1934), 70 Fed. (2d) 647, involving Colorado Statute; Iowa State Traveling Men’s Assn. v. Ruge (1917), 242 Fed. 762, involving Missouri statute. There is no such statute in Indiana. Appellant cites one Indiana “suicide case,” to wit, Court of Honor v. Hutchens (1908), 43 Ind. App. 321, 82 N. E. 89. In that case one Hutchens applied for membership in a fraternal insurance association. His application for membership provided “that this order shall not be responsible under this contract ... if I shall die ... by suicide . . .” The constitution of the order, at the time his certificate of membership was issued, provided: “After two years certificates of membership shall be incontestable for any cause except fraud, violation of the constitution or laws of this order or a failure to pay the assessments for the benefit and general fund as provided by the laws.” This court held that the incontestability clause prevented the association from setting up the defense of suicide, after the two-year contestability period expired. That case does tend to support appellant’s contention, but it should be noted that this court did not express any reasoning by which it arrived at that conclusion. In that respect this court merely said, “After the expiration of the two years specified in said article of the constitution said certificate became incontestable for any cause except those specified therein, and the defense of suicide was, after such period, no longer available.” No *35 authorities are cited by the court in support of said conclusion. It is simply a decision as to that question as presented by the facts of that particular case. The facts in the instant case, being materially different, said case is not controlling here. We think cases where incontestability clauses are held to prevent defenses of suicide after the- period of con-testability expires should be distinguished from cases, like the instant case, where an incontestability clause is relied upon against a defense of murder, because of the difference in the risks assumed by insurance companies when they insure against suicide or murder. Sometimes suicide is the result of irresponsibility on the part of the suicide, the result of physical or mental frailty on his part. In such cases suicide bears a similarity to diseases or ailments which cause death, insofar as the life insurance risk on such person is concerned. There are, however, cases where suicide is premeditated. This situation has caused insurance companies generally, so far as the face of life insurance policies are concerned, to avoid liability in case of suicide within a reasonable time, e. g., one year, and thus prevent a person who is planning to commit suicide from taking out life insurance and subjecting the insurance company to liability by carrying out their preconceived plan of committing suicide.' They guard against such risks for -a reasonable time only, because they assume that a person will not plan, for an unreasonable length of time, e. g., more than one year, to commit suicide, in connection with a plan to take out life insurance and enable beneficiaries to collect on the policy. This idea is adversely and more clearly expressed in Mutual Protective League v. McKee (1905), 122 Ill. App. 376, wherein the effect of an incontestability clause was being discussed in the following language (p. 379) : *36 “Under this contract the deceased was not required to understand, that if after two years of faithful membership and payment of assessments, he should, for instance, fall insane and die by his own hand that the important incontestable clause in his contract would be unavailing to his beneficiary. He was warranted in understanding, as any sensible man might, that to meet this possible contingency was one of the principal causes for having such a clause in the contract. Fixing a future time, say two years as in this case, guards against the premeditated fraud which sometimes exists, of having one’s life insured in contemplation of suicide.” Such argument is not available in support of the contention that incontestability clauses generally prevent “murder defenses.” The effect of an incontestability clause, similar in effect to that in the policies before us, with reference to a defense of death resulting “from bodily injury inflicted by another person,” is aptly expressed in Sanders v. Jefferson Standard Life Ins. Co. (1925), 10 Fed. (2d) 143. Murder being a death resulting from “bodily injury inflicted by another person,” and the incontestability clause involved in that case being similar in effect to that involved in the instant case, the language of the court is applicable to the instant case, due allowance being made for difference in amounts of insurance involved in the respective cases. The court said in that case (p. 143) : “In behalf of the appellant it was contended that in the situation disclosed the provision that the policy ‘shall be incontestable for any cause except for nonpayment of premiums’ deprived the insurer of the right to dispute its liability under the ‘double indemnity’ provision, though by the express terms of that provision it was not to apply ‘in case death results from bodily injury inflicted by another person.’ We are of the opinion that a result of sustaining this contention would be to subject the insurer to a liability not imposed by its policy. By the policy the insurer promised to pay specified *37 sums of money in specified contingencies. We think that full effect is given to the above-quoted provisions by holding that, after the policy had been in force for one full year, and in the absence of any default in the payment of premiums, the insurer became incontestably liable to pay $20,000.00, if the insured died from what was called ‘ordinary causes,’ and became liable to pay also an additional $20,000.00 if the death of the insured- resulted from a bodily injury not within any exception stated in the double indemnity provision. “A provision for incontestability does not have the effect of converting a promise to pay on the happening of a stated -contingency into a promise to pay whether such contingency does or does not happen. It cannot properly be said that a party to an instrument contests it by raising the question whether under its terms a liability asserted by -another party has or has not -accrued. The maker of a promissory note payable one year after date would not contest it by resisting an attempt to enforce it before it was due. We are of opinion that within the meaning of the provision for incontestability, the insurer did not contest the policy by invoking the terms of the double indemnity provision, and that it was open to the insurer to deny the liability asserted on the ■ ground that the contingency in which .double indemnity was payable did not occur.” In that case the lower court denied recovery on the double indemnity provision of the policy. On appeal the judgment was affirmed. To the same effect see Jolley v. Jefferson Standard Life Ins. Co. (1930), 199 N. C. 269, 154 S. E. 401; Head v. New York Life Ins. Co. (1930), 43 Fed. (2d) 517; Metropolitan Life Ins. Co. v. Conaway (1930), 252 N. Y. 449, 169 N. E. 642; Williamson v. American Ins. Union (1936), 284 Ill. App. 150, 1 N. E. (2d) 541. We hold that a defense based on murder would not be a contest of the policies before us which is prohibited by the incontestability clause. Such a defense would be merely a defense that the double indem- - ni-ty provision did not cover death by murder, or *38 that death by murder was expressly excluded from the risks covered by the double indemnity clause. The complaint — alleging facts which show that insured’s death was “by murder,” and the insurance policy expressly excluding death by murder from the risks covered by the double indemnity clause — it alleged facts sufficient to constitute a defense to the complaint. Therefore we hold that the court did not err in sustaining the demurrer to the respective paragraphs of complaint. Knaus v. Lake Erie and Western R. R. Co. (1902), 29 Ind. App. 216, 64 N. E. 95, and cases there cited. No reversible error having been shown, the judgment is affirmed. Kime, J. dissents with opinion.