Swanson v. Provident Insurance

Weaver, J. On January 8, 1914, tbe defendant Provident Life Insurance Company issued its policy upon the life of William Swanson for the sum of $2,000. This company was later — 8 — absorbed by tbe Standard Life Insurance Company, which, assumed the liability of its assignor upon said contract. The insured died in France in the military service of the United States on October 3, 1918, and this action is brought by the administrator of his estate, to recover upon the policy. There is no dispute concerning the essential facts. As will be noted from its date, the policy was issued some three years before the United States became a party to the so-called “World War” with Germany. In the form in which it was issued, the policy, among other things, provided as follows: “This policy is issued and accepted subject to all of the conditions, benefits, and privileges stated on the subsequent pages hereof. * * * If the insured at any time engage in military or naval service in time of war (militia or National Guard not in active service excepted) and death shall occur during such engagement or as a result thereof, the liability hereunder shall be limited to the cash surrender value of the policy at the date of death, unless the insured shall have obtained the company’s written consent and paid the extra premium therefor, at its established rate.” On February 1, 1918, the United States being then involved in said war, and the insured person, William Swanson, being liable to be drafted into the military service, he made application to the insuring company for, and obtained, the substitution of a new war service clause, in lieu of the one just quoted from his policy. The application being granted, the substituted clause was executed, and was attached to and became a part of the contract of insurance. That clause was in the following words: “If the insured engage in military, naval, or Bed Cross service outside the continental limits of the United States in time of war, or within the United States in resisting invasion or insurrection, and death occur during such engagement, or as a result thereof within one year of discontinuance of said engagement or service, the company’s liability hereunder shall be limited to the sum of all premiums that have actually been paid, together with 5 per cent compound interest thereon from date of payment.” — 9 — In May of tbe same year, deceased was inducted into tbe military service of tbe United States, and after two or three months of such service at army posts in this country, be was transferred to France, where be served as bugler in Company H of tbe 349th United States Infantry, and continued in that capacity during tbe remainder of bis life. He was not wounded or killed in action, but died of pneumonia, contracted after bis arrival in France. Stated otherwise, it is conceded that, at tbe time of bis death, and for about 60 days prior thereto, deceased was in France in said military service of the United States in time of ^ar between the United States and Germany, and at the time of bis death was still in said military service, outside of the continental limits of the United States, in time of war. I. The sole question in the case before us is whether the liability of the insurer upon the policy in suit is governed by the last quoted military service clause of the contract, which limits the recoverable insurance to the sum of all the premiums actually paid, with compound interest thereon at 5 per cent from the date of payment, or is such liability to be measured by the full amount of the indemnity named in the policy ? It cannot well be denied that the insurer’s liability is to be measured by the terms of the contract. If the parties so agree, it is entirely competent to provide in the policy that the insurance shall be effective only while the insured continues to live in a certain locality, or shall become void or be suspended if the insured shall, without consent of the insurer, extend his travels beyond a given parallel of latitude, or shall expose himself to the perils of the sea by an ocean voyage. It is not material that the court shall see any good reason for these restrictions or limitations; it is enough that the parties have treated them as sufficiently material or desirable to embody them in their contract; and in the absence of some controlling statutory rule to the contrary, the courts give them effect according to their terms. Had the parties to the contract in suit so agreed, and had the policy provided that the insurance should at once become void and of no effect if the insured should thereafter enlist — 10 — or be drafted into the military service, we could not do otherwise than hold that no recovery of the indemnity was legally possible. If this be true, it can be no less true that it was competent- for the insurer and insured to agree that, if the death of insured should occur under certain specified conditions, the indemnity payable should be limited by some measure less than the full face of the policy. The substituted military service clause of this policy was concededly a voluntary agreement, made with express reference to the fact that a state of war then existed, and the probability that the deceased would be called into the service, and that in such service he was subject to be called beyond the continental limits of the United States, where he would be exposed to greater hazards than would ordinarily be the case if he remained in this country, far removed from the scene of active hostilities. Even if the reasonableness of the agreement were open to review by the court, it could not well be condemned on that ground. Assuming, as we think we must, that the substituted military service clause is a valid provision of the insurance contract, we have then to ask whether the admitted circumstances of the death of the insured require the court to assess the recovery for the benefit of his estate upon that basis. Returning to the language of said clause, to ascertain the precise condition upon which the company’s liability -is to be limited to a return of the premiums paid, with interest, we find it in the following words: “If the insured engage in military, naval, or Red Cross service outside the continental limits of the United States in time of war, or within the United States in resisting invasion or insurrection, and death occur during such engagement, or as a result thereof within one year of the discontinuance of such engagement or service, the company’s liability hereunder shall be limited, ’ ’ etc. Note that the conditions are in the alternative, and need not be in any sense cumulative, in order to bring the provision into effect. It applies: (1) To the death of the insured if it occur during his engagement in the military service outside the continental limits of the United States; or (2) to his death in mili — 11 — tary service within the United States, in resisting invasion or .insurrection; or (3) to his death within one year after snch service is discontinued, and as a result of such service. Now, of the several contingencies the occurrence of either of which would call for an application of the limiting clause, all but one may be eliminated; for the insured did not die in the military service resisting invasion or insurrection in the United States, and he did not die within a year after his service was discontinued, but he did eng’age in the military service outside the continental limits of the United States, and his death did occur during such engagement; and unless we are to assume authority to remake or to destroy the contract freely made by the parties, whete neither fraud nor mistake is charged or proved, we discover no way of avoiding the conclusion that plaintiff’s recovery must be limited by its terms to a repayment of the premium paid, with the stipulated interest. II. Considerable reliance is placed'by the appellee upon the decision of this court in Boatwright v. American Life Ins. Co., 191 Iowa 253. We think, however, that a clear distinc- ' tion exists between that precedent and the case at bar. While Boatwright had enlisted in the navy, he was still in the training school, and, as pointed out in the opinion, had not been assigned to any duty in the naval service when he sickened and died; and following the established rule of interpretation of insurance contracts, we construed' the language most strongly against the insurer, and held that the deceased was not. engaged in the military or naval service, within the meaning of the policy. This court is not disposed to retreat from the position there taken, but it is a border-line case, beyond which we cannot go without introducing confusion into the law upon the subject. In the case at bar, no question is made that deceased was engaged in the military service of the United States, and had been in such service overseas for some two months; and that he died in such service stands admitted. This, as we read it, fulfills literally the condition of the contract upon which the limited liability was predicated. III. It is sought to avoid this result by the argument that, — 12 — to give the death of the insured in France the effect claimed for it by the defendant, it is not enough to show that he died while in. the service, but it must further appear that his death was the result of some hazard peculiar to war; and that since he died of pneumonia, a disease of common occurrence in civil life, the restricted clause of the policy has no application. That the parties might have made a contract to that effect, there can be no doubt; and if this policy were of that character, or were so ambiguously or uncertainly expressed as to be fairly capable of such construction, we should have not the slightest„hesitation in giving it effect, and permitting the representative of the dead soldier to recover the full face of the policy. But an insuperable obstacle to such a result is found in the fact that the language of the agreement is incapable of such construction. Turning still again to the restrictive clause, we find that the first and unequivocal condition for application of the limited liability is the. engagement of the insured in military service outside of the continental limits of the United States, and the occurrence of his death “during such engagement.” This is followed by the disjunctive “or,” which introduces other conditions* which.shall have like effect to limit the insurer’s liability, but which in no manner add to or take from the effect of the first condition. These other conditions do not enter into the question presented by the issues in this case, and the contract may be read as if they were omitted entirely. Much effort is made, however, to tack the words “as a result thereof” to the condition first expressed, and thereby support the theory just referred to, that, to call the restrictive clause into effect, it must appear that the death of the insured was the result of the peculiar hazards of war. A careful reading of 'the entire clause makes it perfectly clear that these words are not used with any such meaning. The entire expression is that the limitation is to apply “if death occur during such engagement” in the military service outside of the territorial limits of the United States, “or as a result thereof within one year of the discontinuance of said engagement or.service.” In other words, the limitation is to apply if the death occur during such service, — 13 — or if it occur after sueb service and as a result thereof, within a year from its termination. If the insured died in the service outside of the United States (as it is agreed that the deceased in this case did), the words “as a result thereof” have no application to his case. "We do not undertake a review of the somewhat numerous precedents which have been cited for our consideration. This case turns entirely upon the proper construction of the language of the contract, and this seems to us so clear and explicit as to leave little room for debate and little occasion for the array of authorities. As having some bearing upon the conclusion we have expressed, see Nowlan v. Guardian Life Ins. Co., 88 W. Va. 563 (107 S. E. 177); La Rue v. Kansas Mut. L. Ins. Co., 68 Kan. 539 (75 Pac. 494); Sandstedt v. American Cent. L. Ins. Co., 109 Wash. 338 (186 Pac. 1069); Bradshaw v. Farmers & B. L. Ins. Co., 107 Kan. 681 (193 Pac. 332); Malone v. State Life Ins. Co., 202 Mo. App. 499 (213 S. W. 877); Miller v. Illinois Bankers’ Life Assn., 138 Ark. 442 (212 S. W. 310). Other questions suggested in argument are governed by the conclusions already announced, and need not be here discussed. It follows of necessity from the views hereinbefore expressed that the trial court erred in entering judgment for the plaintiff. The judgment will be reversed and cause remanded for further proceedings not inconsistent with this opinion. — Reversed and remanded. Stevens, C. J., Evans, AethuR, Faville, and De Geaee, JJ., concur.