Provident Life & Acc. Ins. Co. v. Anderson

• Decision Date: 08 March 1948
• Docket Number: No. 5689-5691.,5689-5691.
• Citation: 166 F.2d 492
• Court: U.S. Court of Appeals — Fourth Circuit
• Parties: PROVIDENT LIFE & ACC. INS. CO. v. ANDERSON. SAME v. COCA-COLA BOTTLING CO. OF GREENVILLE, S. C. (two cases).

166 F.2d 492 (1948)

PROVIDENT LIFE & ACC. INS. CO. v. ANDERSON.

SAME v. COCA-COLA BOTTLING CO. OF GREENVILLE, S. C. (two cases).

Nos. 5689-5691.

Circuit Court of Appeals, Fourth Circuit.

March 8, 1948.

John A. Chambliss, of Chattanooga, Tenn., and C. F. Haynsworth, Jr., of Greenville, S. C., for appellant.

C. Granville Wyche and Alfred F. Burgess, both of Greenville, S. C., for appellees.

Before PARKER, SOPER and DOBIE, Circuit Judges.

DOBIE, Circuit Judge.

This appeal involves the interpretation of three substantially identical policies of insurance issued by the Provident Life and Accident Insurance Company (hereinafter called the Company) on the life of Waddy M. Anderson (hereinafter called the insured). The three policies were ordinary 20-payment life insurance contracts of $25,000 each, one of which was payable to the wife of the insured and the other two to the Coca-Cola Bottling Company of Greenville, South Carolina, of which the insured was the General Manager at the time of his death. The insured was the owner of the policy payable to his wife; the Coca-Cola Bottling Company of Greenville, South Carolina, was the owner of the two policies payable to it and had the right to change the beneficiary.

At the bottom of the first page of each policy and at the end of the clause entitled "When policy is incontestable," the following words had been added by means of a rubber stamp:

"War and Aviation Clause Attached"

Affixed to and a part of each policy was a page entitled "War Clause" which contained the following provisions:

"This policy is issued subject to the following conditions and limitations which shall apply notwithstanding any conflicting provision of the policy.

"If the death of the Insured shall occur:

"1. while serving outside the continental limits of the United States in the military, naval or air forces of any country engaged in war regardless of the cause of death, or anywhere within six months following termination of such service if death is a direct or indirect result of injuries incurred or sickness or disease contracted while in such service; or

"2. while serving within the continental limits of the United States in an air force of any country engaged in war regardless of the cause of death, or within six months following termination of such service, if death is a direct or indirect result of injuries incurred or sickness or disease contracted while in such service; or

"3. as a result of operating or riding in any kind of aircraft, except as a fare-paying passenger in a licensed passenger aircraft operated by a licensed pilot on a regularly scheduled flight between definitely established airports within the continental limits of the United States; or "4. within two years after the date of issue of this policy as a result of injuries incurred or sickness or disease contracted while traveling or residing as a civilian outside the continental limits of the United States and as a result of war or any act of war, then, provided this policy is in force, the amount payable shall be the total amount of the premiums paid without interest or the life insurance reserve, whichever is greater, but in no event more than the sum insured."

The insured held a private pilot's license and was the owner of his own airplane. On October 8, 1945, this plane piloted by him, crashed and he sustained injuries from which he died about a week later. The insured, at the time of his death, had no connection whatsoever with the military or naval services, and the flight which resulted in his death had been made solely for reasons of personal pleasure or business.

Upon the refusal of the Company to pay the full amounts of the policies, three civil actions were instituted by the beneficiaries, one action on each policy, in the Court of Common Pleas for Greenville County, South Carolina; all three actions were removed by the defendant Company to the United States District Court for the Western District of South Carolina, where these actions were tried before the District Judge without a jury. From judgments entered by the District Court in favor of the plaintiffs in all three cases, appeals have been taken to us. Since the provisions in question are identical in all three policies, reference by us to one policy is understood to include all three policies.

The District Court, relying upon the general rule that ambiguity in an insurance policy is to be resolved against the insurance company, construed the policies here involved to mean that the Company was exempt from liability only if death resulted from aviation connected with the war effort; therefore the Company assumed the risk of death caused by peacetime civilian air travel. In reaching this conclusion, the District Judge reasoned as follows: "* * * the insurer offered to the insured a policy of insurance containing a provision which it designated as a `War Clause'. That designation is an evidence of the insurer's interpretation of the provision. The insured evidently accepted it as such and acted accordingly. The Company having represented the provision to be a war clause when it was selling the policy, it would be unjust and inequitable to allow it now to say, after the death of the insured, that the clause which it called a `War Clause' is not in fact such, but is something else."

The meaning intended to be conveyed by the section entitled "War Clause" seems to us so clear and unambiguous that we are forced to conclude that the lower court erred in reading an ambiguity into the policies. The rule of strict construction against an insurer only serves the purpose of tipping the scales against the insurer when other aids to interpretation are in equipoise and the policy may reasonably be given one of several constructions. Gulf Refining Co. v. Home Indemnity Co., 8 Cir., 78 F.2d 842; Walker v. Commercial Casualty Ins. Co., 191 S.C. 187, 4 S.E.2d 248; Haselden v. Standard Mutual Life Ass'n, 190 S.C. 1, 1 S.E.2d 924.

A stamped notation on the policy is a part of the contract of insurance. Hatch v. Turner, Tex.Sup., 193 S.W.2d 668; Smooth v. Metropolitan Life Ins. Co., La.App., 157 So. 298; Vancouver Lumber Co. v. Home Ins. Co., D.C., 3 F. Supp. 414, affirmed 2 Cir., 68 F.2d 1019. See also Graham v. Business Men's Assur. Co. of America, 10 Cir., 43 F.2d 673; Walker v. Commercial Casualty Ins. Co., supra. Some courts have held that the stamped words are controlling even when they are in conflict with the printed provisions of the policy. New York Life Ins. Co. v. Hiatt, 9 Cir., 140 F.2d 752, 168 A.L. R. 551; Hatch v. Turner, supra; Givens v. ?tna Life Ins. Co., Mo.App., 59 S.W. 2d 761; Trousdell v. Equitable Life Assur. Soc., 55 Cal. App.2d 74, 130 P.2d 173, 990.

The words, "War and Aviation Clause Attached" are stamped on the bottom of the front page of the policy in letters of approximately the same size as the regularly printed letters on that page; and the stamped letters at the end of the incontestable clause are larger than the letters of that provision. These stamped words are not hidden in the policies but are placed where they can easily be seen and where they should have been discovered by the insured. Indeed, the fact that this notation had been made by means of a rubber stamp should serve to distinguish it from the printed portions of the page and to attract the attention of a reader of the policy.

It is settled law in South Carolina that the insured has the duty of reading the insurance policy and of acquainting himself with its contents and that failure to do so will estop him from avoiding the written contract on the grounds that he did not know its terms. Able v. Equitable Life Assur. Soc. of the United States, 186 S.C. 381, 195 S.E. 652; Dukes v. Life Ins. Co. of Virginia, 184 S.C. 500, 193 S.E. 36. By the stamped notation...