Mutual Life Ins. Co. of New York v. Hurni Packing Co.
| Decision Date | 04 April 1922 |
| Docket Number | 5790. |
| Citation | 280 F. 18 |
| Parties | MUTUAL LIFE INS. CO. OF NEW YORK v. HURNI PACKING CO. |
| Court | U.S. Court of Appeals — Eighth Circuit |
G. T Struble, of Sioux City, Iowa, and Ralph L. Read, of Des Moines, Iowa (Sargent, Gamble & Read, of Des Moines, Iowa and Jepson, Struble & Anderson, of Sioux City, Iowa, on the brief, and Frederick L. Allen, of New York City, of counsel) for plaintiff in error.
Edwin J. Stason, of Sioux City, Iowa (Charles M. Stilwill, of Sioux City, Iowa, on the brief), for defendant in error.
Before SANBORN and LEWIS, Circuit Judges, and VAN VALKENBURGH District judge.
This case comes before this court for the second time. 260 F. 641 171 C.C.A. 405. On the first appeal the judgment of the trial court, which was in favor of defendant in error herein, was reversed, and the case was remanded for a new trial, for the reason that the statement made by the insured, in his application for life insurance, that he had not consulted nor been treated by a physician during the previous five years, when in fact he had been treated or prescribed for each year for supposedly temporary ailments, was held to be a material misrepresentation, which under the terms of his contract, invalidated the policy. In the opinion of the appellate court the trial court should have directed a verdict for the defendant.
In the court below, after the case had been redocketed, and after a second trial, the plaintiff, by leave of court, amended its reply as follows:
'The plaintiff states that the defendant failed to contest the policy of life insurance payable to the plaintiff, by the tender of the return of the premiums paid or otherwise within the two year period in which the policy might be contested as provided by the terms thereof, and it is now barred from setting up or urging any of the defenses set forth in its answer.'
At the close of the evidence below, both parties submitted motions for a directed verdict; that of defendant in error was sustained, a verdict was directed accordingly, and judgment for defendant in error resulted.
It is already the law of the case, as held by this court on the former appeal, that the false statement complained of was made, and constitutes a sufficient defense to the collection of this insurance, in the absence of countervailing circumstances. The contention now presented is that the insurance company, under the terms of its policy, has interposed that defense too late for legal effectiveness. This is the only question in the case.
The policy, by the construction of which, coupled with the steps taken by the defendant company to avail himself of its provisions, this case must be decided, was in fact executed in the city of New York by the signatures of the president and secretary on the 7th day of September, 1915. It was then sent by mail to the office of the defendant company in Des Moines, Iowa, for delivery under the terms and conditions of the policy. Said policy was received by defendant's agent on or about September 12, 1915, and was delivered by him to the insured on or about the 13th day of September, 1915. The policy upon its face contains the permission that 'the applicant, upon request, may have policy antedated for a period not to exceed six months. ' In connection therewith no other qualification, limitation or explanatory matter appears. Interlined between the heading and the body of the application appear these words: 'Date policy, August 23, 1915; age 47. ' This is taken to evidence the request of the applicant referred to, and in accordance therewith the insurance policy contains the following testimonium:
It clearly appears, therefore, that the date of execution and of the policy, by contract and agreement, was fixed as the 23d day of August, 1915. It was further provided that the annual premium should be paid upon each 23d day of August thereafter until the death of the insured. In the body of the policy this clause occurs:
'Incontestability: This policy shall be incontestable except for nonpayment of premiums, provided two years shall have elapsed from its date of issue.'
The insured died on the 4th day of July, 1917, less than two years from the time the policy was issued under any theory of the case. Proofs of death were duly submitted. Replying to the claim thereby made, on the 24th day of August the attorney for the insurance company, conceded by stipulation to have been clothed with full authority to act in that behalf, wrote to the attorney for the beneficiary, conceded to have like authority, that the company declined to pay the policy upon the ground of the misrepresentation hereinabove referred to. This was the first action of any nature taken by the company to avail itself of the defense reserved in the two-year clause above quoted.
It is contended by the insurance company that the policy must have been in effect two years during the life of the insured; otherwise, the right of the insurance company to contest became fixed by death within the period of limitation. We cannot agree with this view. The reservation for the benefit of the company was one that might be waived. Affirmative action was necessary to the consummation of the inchoate right created by the terms of the policy. We are equally of opinion that a repudiation of the claim of defendant in error, such as that made in the letter of August 24th, was a sufficient act of contest, and that court proceedings were not essential to the assertion of the right, as counsel for defendant in error contend.
This being true, there remains only to consider whether the defendant company acted in time. We do not think it did. It is conceded that its letter of repudiation was not written nor mailed until the date it bears, which is August 24th, one full day beyond the two-year period, as evidenced by the date of the policy; but plaintiff in error insists that the date of application, the actual date of execution, the date of delivery, and a provision in the application that the proposed policy shall not take effect 'unless and until the first premium shall have been paid during my continuance in good health, and unless also the policy shall have been delivered to and received by me during my continuance in good health,' extend the two-year period of contestability at least to the 7th day of September, if not to the 13th day of September, and that, therefore, its said affirmative act of contest was in good time.
The clause last quoted cannot aid the insurer. Its objective was the good health of the insured at the time of paying the first premium and the delivery of the policy. Conceding that the first premium may not have been paid until the policy was delivered, there is nothing in the record to indicate that the insured was not in good health within the meaning of the instrument on that date. He was found by the examiner for the insurance company to be in good health on the date the examination in connection with the application was made, and there is no intimation that his physical condition had changed in the meantime; but, more than this, the period of contestability was not made to depend upon the payment of the premium nor the delivery of the policy. The language is 'two years from its date of issue'; and by agreement the conventional date of execution, and hence of issue, was the 23d day of August, 1915. In the absence of any qualifying language, the date of a policy is always taken to mean the date of its issue; and the language of an insurance policy when uncertain and ambiguous, has always been construed in favor of the insured and more strongly against the insurance company. So the courts have uniformly held. Mass. Benefit Life Ins. Co. v. Robinson, 104 Ga. 256, 30 S.E. 918, 42 L.R.A. 261-269; 14 Ruling Case Law, 1201-1233, Anderson v. Mutual Life Ins. Co., 164 Cal. 712, 130 P. 726, Ann. Cas. 1914B, 903; Harrington v. Mutual Life Ins. Co., 21 N.D. 447, ...
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