National Life & Acc. Ins. Co. v. Mixon, 6 Div. 132

• Decision Date: 02 August 1972
• Docket Number: 6 Div. 132
• Citation: 50 Ala.App. 697,282 So.2d 306
• Parties: The NATIONAL LIFE AND ACCIDENT INSURANCE CO. v. Arthur MIXON.
• Court: Alabama Court of Civil Appeals

Page 306

282 So.2d 306

50 Ala.App. 697

The NATIONAL LIFE AND ACCIDENT INSURANCE CO. v. Arthur MIXON.

6 Div. 132.

Court of Civil Appeals of Alabama.

Aug. 2, 1972.

Rehearing Denied Aug. 30, 1972.

James E. Simpson, Birmingham, for appellant.

Brobston & Brobston, Bessemer, for appellee.

WRIGHT, Presiding Judge.

This case was presented to the trial court on stipulated facts and exhibits. There was judgment in favor of plaintiff. Defendant brings this appeal, assigning as error the entry of the judgment.

The suit was upon a policy of insurance providing benefits in the event of loss of sight in both eyes by the insured. It is stipulated that there was a loss of sight by insured as a result of glaucoma. It is further stipulated that the glaucoma existed on and prior to the issuance of the policy. The insurer denied the claim for benefits because the loss was not covered by the terms of the policy.

The policy provided as follows:

'In all cases, benefits under this provision shall be allowed only if the loss (1) occurs while no premium is in default beyond the grace period, and (2) is caused solely by disease or injuries contracted or sustained after the Date of Issue.'

The policy further contains the following:

'Incontestability--This policy shall be incontestable one year from the Date of Issue, except for non-payment of premiums.'

The only issue presented upon trial and on this appeal is--does the incontestable clause of this policy preclude the insurer from asserting the existence of the glaucoma prior to the issuance of the policy as a defense to the suit thereon?

It is agreed that there is no prior case in Alabama dealing with the precise issue in relation to similar policy provisions. However, the purpose and effect of an incontestability clause in life insurance policies has been considered in several cases in this state. Mutual Life Ins. Co. of New York v. Lovejoy, 201 Ala. 337, 78 So. 299; Independent Life Ins. Co. v. Carroll, 222 Ala. 34, 130 So. 402; Independent Life Ins. Co. v. Vann, 24 Ala.App. 93, 130 So. 520; Moore v. Bankers' Credit Life Ins. Co., 223 Ala. 373, 136 So. 798; Ginsberg v. Union Central Life Ins. Co., 240 Ala. 299, 198 So. 855. It is recognized that an incontestable clause is valid and binding. Independent Life Ins. Co. v. Carroll, supra. There is a statutory incontestable clause of two years required in all life insurance policies. Title 28, Section 7, Code of Alabama 1940.

What is the meaning of the term 'incontestable' as used in a policy of insurance? It appears that the Supreme Court of Alabama has adopted the definition set out in the case of Stean v. Occidental Life Ins. Co., 24 N.M. 346, 171 P. 786. That is, 'The term 'incontestable' as used in a life insurance policy means a contest, the purpose of which is to destroy the validity of the policy, and not a contest the purpose of which is to demand its enforcement.' Moore v. Bankers' Credit Life Ins. Co., supra; Ginsberg v. Union Central Life Ins. Co., supra; Equitable Life Assur. Soc. of United States v. First National Bank of Birmingham, C.C.A.5, 113 F.2d 272. This appears to be in line with the majority of authority in other states in considering incontestable clauses in disability policies. 13 A.L.R.3d 1383, 1393; Mayer v. Prudential Life Ins. Co. of America, 121 Pa.Super. 475, 184 A. 267, and cases cited therein.

An incontestable clause, though general in terms, does not preclude defense of a suit on the policy on the grounds that the claim does not come within the risk assumed under the terms of the policy. In spite of such a clause, a claimant is not relieved from establishing his right of recovery under the specific language of the policy, as where he must show that the insured's illness arose after the attachment of the policy.

In this case, there is a clause excluding from the risk of the policy any loss of eyesight caused by disease contracted prior to issuance of the...