Miller v. Illinois Bankers' Life Association

• Decision Date: 28 April 1919
• Docket Number: 195
• Citation: 212 S.W. 310,138 Ark. 442
• Parties: MILLER v. ILLINOIS BANKERS' LIFE ASSOCIATION
• Court: Arkansas Supreme Court

212 S.W. 310

138 Ark. 442

MILLER v. ILLINOIS BANKERS' LIFE ASSOCIATION

No. 195

Supreme Court of Arkansas

April 28, 1919

Appeal from Conway Circuit Court; A. B. Priddy, Judge; affirmed.

Judgment affirmed.

W. P Strait, for appellants.

1. The court erred in holding that under the testimony there was no question of fact for the jury, and in taking the case from the jury and in holding that appellee was only liable for the amount of premiums paid by assured. It was not exempted from liability for death from natural causes while in the military service. The company is bound by the acts of its agent Scroggins, and his knowledge was its knowledge. It is bound by the acts of its agent, as he acted within the scope of his authority. 103 Ark. 86; 96 Id. 456; 31 Cyc. 1645; 1 Clark & Sykes on Agency § 200; 63 Iowa 340; 9 Ala. 279; 93 Ark. 521. The agent at the time he made the representations and induced the assured to pay the premiums knew that the assured was in the military service and that the Government was at war, and his knowledge is imputed to the company. 111 Ark. 443; 79 Id. 315; 88 Id. 554; 71 Id. 295; 104 Id. 538; 57 Id. 11; 71 Id. 295; 56 Id. 581; 102 Id. 146. If any negotiations or transactions are had with the assured after knowledge of the conditions, the company recognizes the validity of the policy and acts based thereon the forfeiture is waived and the company is liable. 94 Ark. 277; 65 Id. 54; 99 Id. 476; 67 Id. 584.

2. Whether Scroggins was acting within his authority or not in leading assured to pay his premiums was a question for a jury. 99 Ark. 476; 81 Id. 160. It was not the province of the court, but of the jury to determine whether or not the agent in making the representations which induced payment of the premiums and in collecting same was acting within the scope of his actual authority. 13 L. R. A. (N. S.) 840.

3. The company is estopped. 79 Ark. 315. The acts of the agent bind the company after knowledge. 24 Am. Rep. 784; 85 Mo.App. 155. Where the terms of the application or policy are ambiguous and the agent interprets them and thus induces the assured to pay the premiums, the company is liable in case of loss. 13 L. R. A. (N. S.) 850, note. The nearest parallel case we find is in 66 Ark. 597.

4. The clauses limiting liability are against public policy and void.

Webber & Webber, for appellee.

1. The clauses limiting liability are not void as against public policy and the company is not estopped by the acts of its agent. 3 Cooley Briefs on the Law of Insurance 2217-18, 2231; 4 Id. 2231, 3275; 4 Joyce on Ins. (2 ed.) 3818-20-1-5; 148 Ill.App. 189; 243 Ill. 411; 126 Ill.App 572; 25 Cyc. 823; 102 Ill.App. 280; 100 Id. 22; 48 Id. 148.

2. Scroggins' acts were not a waiver of the forfeiture. 159 S.W. 1113. He was not a general agent, but only a special agent and had no authority to waive.

OPINION

McCULLOCH, C. J.

Appellant instituted this action against appellee to recover on a life insurance policy issued by the latter on March 6, 1915, to Arl E. Miller, who died at Camp Beauregard, Louisiana, on December 26, 1917, while in the military service of our Government. Death of the insured resulted from pneumonia.

The facts of the case are undisputed, and the trial court decided that there was no liability under the policy, except to the extent of the small sum paid to the company by the insured as premiums. The policy contained the following clause:

"It is expressly provided that death while in the service in the army or navy of the Government in time of war is not a risk covered at any time during the continuance or reinstatement of this policy for any greater sum than the amounts actually paid to the company thereon."

There is another clause in the policy which reads as follows:

"This policy shall be incontestible two years from its date except for non-payment of premium calls, or death while engaged in or caused by violation of the law or while in the service of the army or navy of any government which is not a risk covered at any time during the continuance or reinstatement of this policy for any greater sum than the amounts actually paid to the association thereon."

The application contained a clause similar to the one last quoted. The clauses quoted above are not entirely consistent with each other in that the one first quoted provides for an exemption from liability on account of death of the assured while in the army or navy service of the Government "in time of war," and the other two clauses contain much broader provisions, exempting the company from liability for death while in the army or navy of the Government without restriction as to it occurring during time of war. The death of the assured occurred while he was in the military service of this Government during the period of the war with the Central Powers of Europe, and it is unimportant, therefore, to attempt to reconcile the apparently conflicting clauses or to determine which of them controls.

It is suggested by learned counsel for appellant that the above mentioned provisions exempting the company from liability under the circumstances named ought to be held void for the reason that it is against public policy to permit such contracts of insurance to be made, in that the tendency is to prevent voluntary enlistments in the army or navy of the Government, or to induce the holder of such a policy to evade or resist involuntary enlistment under the draft laws. We do not think the argument is well founded. An insurance company has the right to select the particular risks it is willing to assume, and there is no public policy against a contract of this sort exempting the insurance company, in advance, from liability for death of the insured while in the military or naval service of the Government. The stipulation does not provide for a forfeiture of the policy, but merely for an exemption from liability under certain circumstances and conditions. It holds out no inducements to the assured to refrain from enlistment in his Country's service, and does not constitute, in any sense, an agreement not to enlist or to evade the draft law. No authorities are cited by counsel in support of the contention, and we are unable to find any cases in which the question has been raised. The subject of exemptions from liability on insurance policies in case of service in the army or navy is discussed by Mr. Joyce in his work on the Law of Insurance (Vol. 4, Sec. 2237), but there is no suggestion there by the author of any question of doubt about the validity of such a provision. There is likewise a discussion on the subject in Cooley's Briefs on the Law of Insurance (Vol. 3, p. 227, et seq.), but nothing is said by that author about the possibility of those provisions being held to be void. We find two cases on the subject, in one of which the insurance company was held not to be liable under such an exemption (LaRue v. Insurance Co., 68 Kan. 539, 75 P. 494); and in the other (Welts v. Conn. Mutual Life Insurance Co., 48 N.Y. 34) the company was held liable for the reason that the death of the insured did not fall within the terms of the exemption as interpreted by the court rendering the decision. In each of the cases the assured was in the service of the Government during the pendency of war, but in one of the cases it was decided the assured was not in the military service, and that the case was for that reason not within the exemption.

The trial court was, therefore, correct in the present case in holding that the death...