Chicago Nat. Life Ins. Co. v. Carbaugh
| Decision Date | 20 December 1929 |
| Docket Number | No. 19815.,19815. |
| Citation | 337 Ill. 483,169 N.E. 218 |
| Parties | CHICAGO NAT. LIFE INS. CO. v. CARBAUGH. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Suit by the Chicago National Life Insurance Company against Elmer Carbaugh. A decree dismissing the bill was affirmed by the Appellate Court (254 Ill. App. 82), and complainant appeals.
Affirmed.
Appeal from Appellate Court, Second District, on Appeal from Circuit Court, Winnebago County; Edward D. Shurtleff, Judge.
Lee D. Mathias, of Chicago, and Karl J. Mohr, of Rockford, for appellant.
Hall & Dusher, of Rockford, for appellee.
The circuit court of Winnebago county sustained a demurrer to a bill filed by the Chicago National Life Insurance Company against Elmer Carbaugh to cancel an insurance policy upon the life of Bessie V. Carbaugh, in which Elmer Carbaugh was the beneficiary, for fraud in procuring the policy to be issued. The complainant electing to stand by its bill, it was dismissed for want of equity. The Appellate Court (254 Ill. App. 82) affirmed the judgment and granted a certificate of importance and appeal to this court.
The policy was issued on November 16, 1927, upon a written application to the insurance company made by Bessie V. Carbaugh, the insured. She died on May 16, 1928. The bill contained a copy of the application, and alleged in detail that the answers made by the insured to various questions in the application, which were specifically mentioned and were material to the contract, were false and were known by the insured to be false, and that, had the complainant known that such answers were false, it would not have issued the policy; that such answers were made falsely and fraudulently, for the express purpose of obtaining the policy; that the complainant believed the answers contained in the application were true and issued the policy relying upon their truth; that the complainant did not know any of the statements contained in the application were false until after the death of the insured, when, upon investigation, it found that such answers were false.
The policy contained the following provision: ‘This policy is free from restriction as to occupation, residence or travel, and shall be incontestable after it shall have been in force, during the lifetime of the insured, for one year from date of issue, except for nonpayment of premiums.’
The reason advanced by the appellee to sustain the decree is that equity has no jurisdiction of the bill because the complainant has a plain and adequate defense at law to a suit upon the policy. It was held in Des Moines Life Ins. Co. v. Seifert, 210 Ill. 157, 71 N. E. 349, that a court of equity has no jurisdiction, in the absence of allegations of special circumstances, to entertain a bill by an insurance company after the death of the insured, against the beneficiary named in its policy of insurance, to cancel a policy which was obtained by the false statements of the insured, for the reason that the company has a plain and adequate defense at law to a suit upon the policy. This clause is required in all the policies of life insurance issued or delivered in this state since January 1, 1908, by an act regulating the conditions and provisions of life insurance policies, passed in 1907 and subsequently amended. Laws of 1921, § 1, par. 3, p. 482. The provision in question is in the language of that paragraph, except that the time stated is one year instead of two years. So far there is no disagreement between the parties, but they disagree as to the question of what period of time is fixed by this clause within which the policy may be contested for fraud. Counsel for the appellee regard it as of importance to have in mind in determining this question the rule that the language of the insurance policy, when uncertain or ambiguous, is to be construed in favor of the insured and most strongly against the insurer. In reference to the application of this rule we have said: ‘It is not to be presumed that the Legislature in prescribing the terms of the contract intended...
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