Darden v. North Amer. Ben. Ass'n
| Decision Date | 08 June 1938 |
| Citation | 170 Va. 479 |
| Parties | WILLIAM G. DARDEN v. NORTH AMERICAN BENEFIT ASSOCIATION. |
| Court | Virginia Supreme Court |
Present, Holt, Hudgins, Gregory, Browning, Eggleston and Spratley, JJ.
1. INSURANCE Policy or Contract — Right of Company to Provide Terms and Conditions. — An insurance company may provide, in its contract of insurance, terms, provisions and conditions not in violation of law and not inconsistent with public policy. It may provide for the amount to be paid, and the risk or hazard assumed. It may charge an increased premium for certain assumed risks, and may exclude from the contract risks not assumed.
2. INSURANCE — Policy or Contract — Construction — Function of Courts. — The terms, provisions and conditions of an insurance policy are to be considered the same as in other contracts, subject, of course, only to provisions of law affecting insurance contracts. The courts have neither the duty nor the power to make the contracts. It is only their function to construe them.
3. INSURANCE — Contract or Policy — Construction — Construction Consonant with Apparent Object. — When the terms and provisions of an insurance policy are clear, there must be given to such terms and provisions the construction and effect consonant with the apparent object.
4. INSURANCE — Contract or Policy — Construction — Construed as a Whole. — A contract of insurance is to be considered and construed as a whole.
5. LIFE INSURANCE — Incontestable Provision — Section 4228 of the Code of 1936 — Rights Which Are Not Limited. — The incontestable statute, section 4228 of the Code of 1936, is a short statute of limitation, applied when the validity of an insurance policy is contested. It is not a limitation upon the amount of the coverage, nor of the risk assumed, and it does not limit the right of the insurance carrier to refuse the payment of a larger sum than is made payable by the terms of the policy, nor limit the right to contend that the terms of the policy exclude certain risks.
6. LIFE INSURANCE — ncontestable Provision — Section 4228 of the Code of 1936 — Defenses Barred — Right to Question Genuineness of Claim Not Denied. — Under the incontestable clause of a life insurance policy, the insurer may not contest the validity of the contract for false or fraudulent statements made by the assured to secure the policy, for questions involved in the inception of the policy, nor for breach of covenants and conditions subsequent by the assured, after liability has become fixed. But the statute, section 4228 of the Code of 1936, does not deny to the insurance carrier the right to question the genuineness of a claim.
7. LIFE INSURANCE — Liability of Insurer — Limited to Risks Assumed in Amount Assumed. — There can be no liability on the part of an insurance company for a risk not assumed, nor can there be a liability greater than the amount assumed.
8. LIFE INSURANCE — Incontestable Provision — Section 4228 of the Code of 1936 — Inapplicable to Contest Relating to Amount Payable under Policy — Case at Bar. — In the instant case, an action on an insurance policy, the policy stated that the beneficiary should be entitled to only one-fifth of the amount otherwise due, should the assured die of heart disease having its incipiency within two years from the date of the policy. Assured died of heart disease which had its inception within the two-year period, but plaintiff contended that section 4228 of the Code of 1936 made the policy incontestable after one year from its date.
Held: That the contest related to the coverage, and not to the validity of the policy, and hence section 4228 of the Code of 1936 had no application.
Error to a judgment of the Circuit Court of Nansemond county. Hon. James L. McLemore, judge presiding.
The opinion states the case.
Thomas L. Woodward, for the plaintiff in error.
No appearance for the defendant in error.
William T. Darden, by his written application, became a member of the North American Benefit Association, a mutual benefit association. In consideration of certain fees paid, and the promise to pay certain further fees thereafter in accordance with the by-laws of the Association there was issued to him a certificate or policy of insurance, dated November 1, 1933. This certificate provided that William T. Darden became entitled during the continuance of his membership to certain benefits provided by the by-laws of the Association.
In the event of the death of the insured, during his continuance as a member, the certificate further provided for the payment to William G. Darden, the plaintiff, as beneficiary, an amount indicated in a schedule of sliding payments ranging from $200 for death of the insured at a minor age to $1,000 for his death between eleven and fifty years of age, thereafter gradually decreasing in amount for added age. The amount of the payment in the language of the certificate was further made "subject to the provisions of said By-Laws which are hereinafter set forth and which are hereby made a part hereof: In each case the amount of Benefits to be determined by the attained age at time of Death." The certificate accordingly contained as a part of the printed policy, the following clause or provision:
William T. Darden died on August 9, 1935, of valvular heart disease, having its inception within two years from the date of the issue of the policy of insurance.
The beneficiary made claim for $450, as the amount due at the attained age of the insured at the time of his death. The defendant refused payment in that sum, and contended that under the terms of the policy it was liable for only $90, being one-fifth of the amount otherwise payable, because the insured had died of heart disease, having its inception within two years from the date of the certificate.
The trial court heard the case without a jury, and entered judgment for the plaintiff in the sum of $90.
The sole issue for our consideration is whether Virginia Code 1936, section 4228,...
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