National Life & Acc. Ins. Co. v. Collins

• Decision Date: 11 February 1943
• Docket Number: 6 Div. 116.
• Citation: 12 So.2d 353,244 Ala. 182
• Court: Alabama Supreme Court
• Parties: NATIONAL LIFE & ACCIDENT INS. CO. v. COLLINS.

12 So.2d 353

244 Ala. 182

NATIONAL LIFE & ACCIDENT INS. CO. v. COLLINS.

6 Div. 116.

Supreme Court of Alabama

February 11, 1943

Rehearing Denied March 25, 1943.

McEniry & McEniry, of Bessemer, for appellant.

Ross Ross & Ross, of Bessemer, for appellee.

THOMAS, Justice.

The suit was for recovery on life insurance policies.There was conflict in the evidence as to whether or not the policies lapsed for the non-payment of premiums.

The rule as to the procuring c. reinstating lapsed life insurance policies by misrepresentation of material facts has been fully discussed and restated in New York Life Ins. Co. v Zivitz, Ala.Sup.,10 So.2d 276, 278, where the court observed: "Misrepresentations made in an application for insurance will not defeat or void a policy of insurance unless it appears that: (1) The representations were false (2)they were made either with the actual intent to deceive or unless the matter misrepresented increased the risk of loss; and (3) the insurer relied upon them to his prejudice.Sovereign Camp, W. O. W. v. Moore,232 Ala. 463, 168 So. 577;Metropolitan Life Ins. Co. v. Chambers, 226 Ala. 192, 146 So. 524."

In Metropolitan Life Ins. Co. v. Chambers,226 Ala. 192, 146 So. 524, 525, it is declared of contract stipulations: "Such contract stipulations are held valid and enforceable as misrepresentations or warranties, under the meaning of section 8364 of the Code [Code 1940, Tit. 28, § 6]; (Brotherhood of Railway, etc., Employees v. Riggins,214 Ala. 79, 107 So. 44;Miller v. Metropolitan Life Ins. Co.,214 Ala. 4, 106 So. 335;Independent Life Ins. Co. v. Butler,221 Ala. 501, 129 So. 466;Life Ins. Co. of Va. v. Newell,223 Ala. 401, 137 So. 16), and, to avoid the policy, unsound health must be misrepresented with intent to deceive and as being material to the risk, or as materially increasing the risk of loss (Independent Life Ins. Co. v. Seale,219 Ala. 197, 121 So. 714;Life Ins. Co. of Va. v. Newell, supra).There are types of fatal maladies of which the courts take judicial knowledge, such as 'tuberculosis and cancer,' as being material to the risk of insurance; the courts take no such judicial knowledge of or as to the several forms of diseases, such as syphillis, cirrhosis of the liver, or other ailments alleged in the pleas.Louisiana State Life Ins. Co. v. Phillip223 Ala. 5, 135 So. 341;Southern Life & Health Ins. Co. v. Morgan, 216 Ala. 529, 113 So. 540;Miller v. Metropolitan Life Ins. Co., supra;Brotherhood etc., v. Riggins, supra;Brown, Adm'x., v. Greenfield Life Ass'n,172 Mass. 498, 53 N.E. 129;Independent Life Ins. Co. v. Seale, supra;Mutual Life Ins. Co. v. Mankin, 223 Ala. 679, 138 So. 265."

In the consideration of the usual form of ordinary life policies in Commonwealth Life Ins. Co. v. Harmon,228 Ala. 377, 378, 153 So. 755, 756, it is declared: "It is established that a provision in a life insurance policy that 'no obligation is assumed under' the policy 'prior to its date and delivery nor unless on said date of delivery the insured is alive and in sound health' is a reasonable and valid limitation of the contract.Such clauses have been construed as enforceable as a warranty, or of that effect, if at the time of the issue and delivery of the policy the insured is (1) afflicted with a disease that increased the risk of loss; or (2) there is a misrepresentation made with the actual intent to deceive, and which relates to a material fact, as materially increasing the risk of loss.Such breach of warranty or vitiating misrepresentation will defeat the policy so issued and delivered if the insurer relied on them.Metropolitan Life Ins. Co. v. Chambers,226 Ala. 192, 146 So. 524;Metropolitan Life Ins. Co. v. Usher,226 Ala. 314, 146 So. 809;Bankers' Credit Life Ins. Co. v. Ayres,223 Ala. 407, 137 So. 23;Heralds of Liberty v. Collins,216 Ala. 1, 110 So. 283;Southern Life & Health Ins. Co. v. Morgan, 216 Ala. 529, 113 So. 540;North Carolina Mut. Life Ins. Co. v. Kerley,215 Ala. 100, 109 So. 755;Brotherhood of Railway & Steamship Clerks, etc., v. Riggins, 214 Ala. 79, 107 So. 44;Miller v. Metropolitan Life Ins. Co.,214 Ala. 4, 106 So. 335;Empire Life Ins. Co. v. Gee,171 Ala. 435, 55 So. 166;New York Life Ins. Co. v. McJunkin, 227 Ala. 228, 149 So. 663."

Such are the well-established rules that obtain in this jurisdiction as to procuring and reinstating of lapsed policies of life insurance and being in life when the delivery or the reinstatement of the policy is accomplished.

The instant policies contain provisions that the entire agreement between the company and the insured and the holder or owner of the policy is stated in the contract.That its terms cannot be changed or conditions varied, except by written agreement of the president or secretary of the company.That no other person shall have the power to delete contracts, waive forfeitures or receive premiums on policies in arrears more than four weeks or to receipt for the same, and that such arrears receipt by agents or employes "shall not be credited upon the policy, whether receipted for or not, except as provided in paragraph entitled 'revival'."

The pertinent provisions of revival are: "Should this policy become void in consequence of nonpayment of premium, if not more than fifty-two premiums are due, it may be revived at the option of the Company upon written application of the insured showing satisfactory evidence of insurability, and upon payment of all premiums in arrears; provided that the Company's consent to such revival shall appear by endorsement hereon, and that there shall be no liability whatever under this contract for any disability or death resulting from an accident occurring or illness contracted or commencing prior to date of revival endorsement hereon as aforesaid."

Such are the pertinent provisions contained in the policy of appellant issued on August 13, 1934.

On March 29th, 1937, the defendant insured decedent under a policy of insurance against illness, accident and death.The beneficiary in both policies was the wife of insured, appellee here.Pertinent provisions of the last policy are:

"This policy shall not lapse for nonpayment of premiums until the premiums for four (4) weeks are in arrears; the insured, however, shall not be entitled to sick or accident benefits when premium payments are in arrears for two (2) weeks or more, and the subsequent payment of such arrears shall not entitle the insured to benefits for sickness or disability beginning or occurring during the period of such arrears.Should the insured die when the premium payments on this policy are four (4) weeks or more in arrears this company shall not be liable for any sum under this policy except as otherwise expressly provided herein.

"No person, other than the President or the Secretary of the Company, is authorized nor has the power to make, alter or discharge this contract, waive forfeitures or to receive premiums on policies in arrears more than four weeks, or to receipt for the same in the receipt book, and all such arrears given to an agent shall not be credited upon the policy whether entered in the receipt book or not, except as herein provided.Policies having lapsed may be revived at the option of the Company upon written application of the insured showing satisfactory evidence of insurability, and upon payment of all premiums in arrears; provided that the Company's consent to such revival shall appear by endorsement in the space provided, and that there shall be no liability whatever under this contract for any disability or death resulting from an accident occurring or illness contracted or commencing prior to date of revival endorsement hereon as aforesaid."

Further provisions of each policy of the assured were to the effect that if the applicant had prior to the date of issue suffered with certain diseases, among which is named "diseases of the heart," no obligation is assumed by the company.

Evidence of the assistant manager of the defendant is to the effect that both policies had a grace period of four weeks, and that the same lapsed for nonpayment of premiums according to their books on the 29th day of April, 1940, the date of the last payment of premiums being March 28, 1940.The defendant's lapsed records were duly identified and offered in evidence showing such dates.

The evidence for the plaintiff tended to show that payments of premiums on both policies were duly made by the beneficiary to the agent of the company.In this respect the evidence is in sharp conflict and made a case for the jury.McMillan v. Aiken,205 Ala. 35, 88 So. 135.

The defendant's evidence tended to show that after the date indicated as a lapse of the policies, the assured was working for the Republic Iron & Steel Company, and went to the company's physician for treatment, who found that the insured was suffering from high blood pressure and he was sent to the Norwood Clinic for a further check up.In his diagnosis the company's physician found that assured was suffering from hypertension, which the evidence shows was an ailment of kidneys and heart, and this was during the month of May, 1940.

The attending physician with the Norwood Clinic stated that he made the X-ray sheets dated May 6, 1940, when he examined the insured and found his heart enlarged thirty per cent, and...