Joyce v. N.Y. Life Ins. Co.

• Decision Date: 19 January 1934
• Docket Number: No. 29597.,29597.
• Citation: 252 N.W. 427,190 Minn. 66
• Parties: JOYCE v. NEW YORK LIFE INS. CO.
• Court: Minnesota Supreme Court

190 Minn. 66

252 N.W. 427

JOYCE

v.NEW YORK LIFE INS. CO.

No. 29597.

Supreme Court of Minnesota.

Jan. 19, 1934.

Appeal from District Court, Ramsey County; Richard A. Walsh, Judge.

On reargument.

Order appealed from reversed.

For former opinion, see 250 N. W. 674.

Syllabus by the Court.

1. A life insurance policy which contains a supplemental contract of disability or accident insurance which is not within the exceptions provided for in subdivision 2, § 3426, Mason's Minn. St. 1927, is in its disability or accident provisions subject to the health and accident code. Sections 3415 to 3427, Mason's Minn. St. 1927.

2. The policy here involved contains provisions of disability insurance not excepted from the health and accident code by subdivision 2, § 3426, Mason's Minn. St. 1927, and in consequence the disability benefits (other than death benefits) must be payable to the insured according to that code. Section 3423, Mason's Minn. St. 1927.

Doherty, Rumble, Bunn & Butler, of St. Paul, for appellant.

William W. Fink, of St. Paul, for respondent.

Kellogg, Morgan, Chase, Carter & Headley, of St. Paul, in behalf of Equitable Life Assur. Soc. of the United States; Oppenheimer, Dickson, Hodgson, Brown & Donnelly and George W. Jansen, all of St. Paul, in behalf of Prudential Ins. Co. of America; Snyder, Gale & Richards, of Minneapolis, in behalf of Metropolitan Life Ins. Co.; Doherty, Rumble, Bunn & Butler and E. A. Roberts, all of St. Paul, in behalf of Mutual Life Ins. Co. of New York; and Orr, Stark, Kidder & Freeman, of St. Paul, amici curiae, filed separate briefs in support of appellant's petition for reargument.

S. B. Wilson, of Mankato, Raymond N. Klass, of Cedar Rapids, Iowa, and John P. J. Dolan, of St. Paul, amici curiae, filed brief in behalf of respondent in opposition to appellant's petition for reargument.

LORING, Justice.

1. It is very earnestly contended that it was not the legislative intention to make the health and accident code, section 3415 et seq., Mason's Minn. St. 1927, apply to contracts supplemental to contracts of life insurance such as the one before us, and certain provisions of the statute which were not before cited to us have been called to our attention in connection with the reargument.

Subdivision 2, § 3426, Mason's Minn. St. 1927, provides: ‘Nothing in this act shall apply to or in any way affect contracts supplemental to contracts of life or endowment insurance where such supplemental contracts contain no provisions except such as operate to safeguard such insurance against lapse or to provide a special surrender value therefor in the event that the insured shall be totally and permanently disabled by reason of accidental bodily injury or by sickness. * * *'

This section was part of chapter 156, Laws 1913. It is in the same language as a like provision of the New York law. If our statute was copied from the New York law we find no construction of the section by the courts of that state either before or after the adoption of our health and accident code. It is now claimed (though the record does not so show) that the exception noted in the quoted section covered all contracts that were then being made supplemental to contracts of life insurance, and that it evinces a legislative intent not to include any such supplemental contracts within the provisions of the health and accident code.

The policy before us provides for money benefits in case of permanent and total disability and is admittedly without the literal terms of the exception noted in the statute cited. Much emphasis is placed upon the distinction between the terms used in the accident and health insurance code in describing the insurance provided for thereunder as ‘against loss or damage from sickness or bodily injury or death of the insured by accident,’ and the protection afforded by contracts such as that before us, ‘in the event of total and permanent disability,’ and we find that distinction somewhat carried out in subdivisions 4 and 5, § 3315, Mason's Minn. St. 1927, which contain general provisions classifying the insurance which may be written by various kinds of insurance companies. Subdivisions 4 and 5 read as follows:

‘4. To make contracts of life and endowment insurance, to grant, purchase, or dispose of annuities of endowments of any kind, and to insure against accidents to or sickness of the assured.

‘5. To insure against loss or damage by the sickness, bodily injury or death by accident of the assured, or of any other person employed by or for whose injury or death the assured is responsible.'

Section 3315 also provides that a corporation having the requisite capital stock, and authorized to transact the business specified in subdivision 4, may also transact that specified in subdivision 5. It is to be noted, however, that the authority defined in subdivision 4 is not confined to accidental death or total and permanent disability. It is sufficiently broad to cover any accident or disability insurance. It is true that subdivision 5 refers to ‘loss or damage,’ as does the health and accident code, but surely death by accident and total and permanent disability constitute ‘loss or damage.’ Such losses are, of course, only part of the hazards covered by the broadest policies authorized by the health and accident code or included in the kinds of hazards which life insurance companies are authorized to insure against.

Perhaps the most persuasive provision of the statute which is now cited by the defendant is the amendment effected by chapter 247, Laws 1925 (Minn. St. 1927, § 3402, subd. 3), which included in the authorized exception to the incontestability clause in life insurance contracts those ‘provisions relative to benefits in the event of total and permanent disability and provisions which grant additional insurance specifically against death by accident. * * *'

This exception to the incontestability clause was to be at the option of the company. These provisions of the statutes would have been more persuasive in favor of the defendant's position had the Legislature not left subdivision 2, § 3426, exactly as it was passed in 1913. They are not necessarily inconsistent with an intent to continue the exception in section 3426 just as it is, or that the health and accident code should apply to supplemental contracts not coming within the terms of the exception. If we were to construe section 3426 as defendant desires us to, we would have to construe it as if all of the section from the first word ‘where’ to the proviso were omitted. It would then provide generally that the health and accident code should not affect...