Bernier v. Pacific Mut. Life Ins. Co. of California
| Decision Date | 04 January 1932 |
| Docket Number | 31431 |
| Citation | 139 So. 629,173 La. 1078 |
| Court | Louisiana Supreme Court |
| Parties | BERNIER v. PACIFIC MUT. LIFE INS. CO. OF CALIFORNIA |
Eugene J. McGivney and Solomon S. Goldman, both of New Orleans, for applicant.
Benjamin Y. Wolf, of New Orleans, for respondent.
O'NIELL C. J. OVERTON, J., dissents, and indicates reasons. ODOM, J dissents.
O'NIELL, C. J.
The Pacific Mutual Life Insurance Company issued a policy for $ 2,000.00 on the life of Ferdinand H. Bernier on the 25th of January, 1929; his wife being the beneficiary. He was killed by the falling of an airplane in which he was riding, on the 5th of April, 1930. The policy contained the following stipulation: "It is hereby understood and agreed, in the event of the death of the insured arising, in whole or in part, directly or indirectly, from engaging in aerial navigation, except while riding as a fare-paying passenger in a licensed commercial air craft provided by an incorporated common carrier for passenger service, and while such air craft is operated by a licensed transport pilot and is flying in a regular civil airway between definitely established air ports, the only liability under this policy shall be for a sum equal to the premiums paid thereon, and the policy shall thereupon be terminated."
The airplane in which the insuredmet his death was not a licensed commercial air craft; it was not provided by an incorporated common carrier for passenger service, was not operated by a licensed transport pilot, and was not flying in a civil airway between definitely established airports.
The insurance company therefore refused to pay the widow the $ 2,000 but offered her $ 94, being the amount of the premiums that had been paid on the policy. She sued for the $ 2,000, basing her claim upon the fact that the death of her husband occurred after the policy had become incontestable by the following clause in the policy, viz.: "This Policy and the application therefor constitute the entire contract between the parties, and the contract shall be incontestable after it shall have been in force, during the lifetime of the Insured, for one year from the date of the Policy, except for non-payment of premium or for violation of the conditions of the Policy relating to military or naval service in time of war."
The civil district court gave judgment for the plaintiff, and it was affirmed by the court of appeal.
The insurance company cites and relies upon the case of Metropolitan Life Insurance Co. v. Conway, Superintendent of Insurance, 252 N.Y. 449, 169 N.E. 642, where the Court of Appeals of New York was called upon to construe, with reference to a proposed air craft clause, a statute (Insurance Law, § 101, subd. 2 [Consol. Laws, c. 28]) making life insurance policies embody the provision that it "shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue except for non-payment of premiums and except for violation of the conditions of the policy relating to military or naval service in time of war." Because of the statute, the superintendent of insurance refused to approve the rider, submitted by the Metropolitan Life Insurance Company, to be attached to its policies, in the following form: "Death as a result of service, travel or flight in any species of air craft, except as a fare-paying passenger, is a risk not assumed under this policy; but, if the insured shall die as a result, directly or indirectly, of such service, travel or flight, the company will pay to the beneficiary the reserve on this policy." The court ruled that the proposed rider would not be violative of the statute. The reason for the decision, stated substantially, was that the statutory provision, making life insurance policies incontestable after having been in force during the lifetime of the insured for a period of two years, was not a mandate as to the extent of the coverage which the insurance companies were obliged to include, or the extent of the risk which they were obliged to assume, in their insurance contracts. "It means only this," said Chief Justice Cardozo, for the court, "that within the limits of the coverage the policy shall stand, unaffected by any defense that it was invalid in its inception, or thereafter became invalid by reason of a condition broken."
We regard the decision cited, therefore, as authority for the proposition merely that a life insurance company may, without doing violence to a provision making the policy incontestable after a stated period, except from the so-called coverage, or risk assumed, any cause of death that the company sees fit to except, provided, of course, that the exception shall be expressed so plainly in the policy as to leave no reasonable doubt that the exception is to remain after the policy shall have become otherwise incontestable. No better illustration of such an exception could be given than the exception "for violation of the conditions of the policy relating to military or naval service in time of war." Other exceptions that were made in years gone by, and approved by the courts, were death by suicide, if plainly stipulated; death resulting from a violation of law by the insured; death while engaged in a specified hazardous occupation or undertaking; death occurring while the insured is beyond certain prescribed limits of residence or travel; or death resulting from a quarrel or duel. All of these exceptions from the risk assumed are, like the exception of death from engaging in military or naval service, or death from engaging in aerial navigation, exceptions relating to a hazardous occupation, undertaking, or situation, of the insured at the time of his death.
By the terms of the policy on which this suit is founded, the insurance company would have been bound to pay to the beneficiary the amount stated on the face of the policy if the death of the insured, arising "from engaging in aerial navigation," had occurred before the policy became incontestable; except that, on proof of death by that means, the company would have been free from liability (except for a return of the premiums paid) if the insured was not a fare-paying passenger at the time he was killed, or if the air craft was not provided by an incorporated common carrier, or was not used for passenger service, or not operated by a licensed transport pilot, or not flying in a regular civil airway, or between definitely established air ports, on the fatal occasion. But after the policy had been in force for a year, the premiums having been paid, the obligation to pay the amount stated on the face of the policy on due proof of the death of the insured was incontestable, except for violation of the conditions relating to military or naval service in time of war. These conditions were not warranties or mere conditions the violation of which would render the policy void. The conditions relating to military or naval service in time of war, stated substantially, were that if within five years from the date of the policy the insured should engage in military or naval service in time of war the liability of the company, in the event of the death of the insured while so engaged, or as a result thereof within six months thereafter but within the period of the war, would be limited to any outstanding dividend additions, etc. These conditions, relating to military or naval service in time of war, constituted a limitation of the so-called coverage or risk assumed, as plainly as did the conditions on which alone the insured could engage in aerial navigation, without affecting the obligation of the insurer, constitute a limitation of the coverage or risk assumed by the insurer; and yet it was deemed necessary to except the conditions relating to military or naval service in time of war from the provision making the policy incontestable after one year, in order that the obligation of the insurer to pay the amount stated on the face of the policy might remain contestable after the expiration of the year, on the ground of violation of the conditions relating to military or naval service in time of war. Our opinion therefore is that, inasmuch as only the one exception was made in the provision making the policy incontestable after having been in force for a year, the intention, at least of the insured, was that there should be no other exception. If the insurance company intended to except also, from the incontestability clause, a violation of the conditions relating to aerial navigation, that exception, like the exception of violation of the conditions relating to military or naval service in time of war, should have been expressed. Article 1958 of the Civil Code declares that, if any doubt or ambiguity in a contract has arisen from the want of some necessary explanation which one of the parties to the contract ought to have given, the construction favorable to the other party shall prevail. The rule is universally recognized, particularly with regard to insurance policies, that any ambiguity in a contract made on a form prepared by one of the parties to the contract ought to be construed against him.
Our conclusion therefore is that the civil district court and the Court of Appeal were right in maintaining that the policy on which this suit is founded, having been in force over a year during the lifetime of the insured, was not contestable on the ground of violation of the conditions relating to aerial navigation.
We could not decide otherwise without going against the ruling in Northwestern Mutual Life Insurance Co. v. Johnson (National Life Insurance Co. v. Miller), 254 U.S. 96, 41 S.Ct. 47, 48, 65 L.Ed. 155. The policy issued by the Northwestern...
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