New York Life Ins. Co. v. Bennion

• Decision Date: 28 December 1946
• Docket Number: No. 3308.,3308.
• Citation: 158 F.2d 260
• Parties: NEW YORK LIFE INS. CO. v. BENNION.
• Court: U.S. Court of Appeals — Tenth Circuit

158 F.2d 260 (1946)

NEW YORK LIFE INS. CO. v. BENNION.

No. 3308.

Circuit Court of Appeals, Tenth Circuit.

November 6, 1946.

Rehearing Denied December 28, 1946.

Edwin Borchard, of New York City (George A. Critchlow and Walter M. Critchlow, both of Salt Lake City, Utah, Ferdinand H. Pease and Ronald Swinford, both of New York City, on the brief), for appellant.

Shirley P. Jones, of Salt Lake City, Utah, for appellee.

Before HUXMAN and MURRAH, Circuit Judges, and BROADDUS, District Judge.

MURRAH, Circuit Judge.

The New York Life Insurance Company issued its policy of insurance to Captain Mervyn S. Bennion, providing for double indemnity for accidental death, but specifically excluding from its coverage, death resulting from "war or any act incident thereto." The policy is a Virginia contract, executed May 23, 1925. On account of the insured's occupation as a naval officer, an extra premium, equal to the normal charge for double indemnity benefits, was included in the total premium.

When the Japanese attacked Pearl Harbor on the morning of December 7, 1941, Captain Bennion was in command of the Battleship West Virginia, at that time lying at anchor in the Harbor. While at his post of duty repelling the attack, he was killed soon after its commencement by a fragment of a Japanese bomb or shrapnel. The Company paid the face amount of the policy, but denied liability for double indemnity on the grounds that death resulted from war or an act incident thereto within the meaning of the policy. The trial court granted recovery, and the Company has appealed.

According to official reports,¹ 250 or 300 Japanese bombing and torpedo planes took part in the attack, resulting in 3,435 American casualties; severe damage to or loss of 8 battleships, 3 light cruisers, 3 destroyers, 3 miscellaneous vessels, and 188 planes, as well as damage to landbased military installations. Japan suffered something less than 100 casualties, the loss of 29 planes, and 5 midget submarines. The event was one of the greatest military and naval disasters in our nation's history. When the attack was launched, we were not only at peace with Japan, but were actually engaged in a peace conference with her envoys. It was deliberately and strategically planned, and while recognized as a possibility in view of our strained relations, came as a complete surprise to our civil, military and naval authorities.

About one hour after the commencement of the attack (7:30 a. m. Honolulu time, 1:30 p. m. Washington time), the Japanese envoys in Washington delivered a note to our State Department informing our Government of the severance of diplomatic relations. The delivery of the note was intended to coincide with the attack as a part of Japan's prearranged war strategy. About three hours after the commencement of the attack, and while it was in progress, the Japanese Imperial Headquarters announced that war began as of "dawn" that date, meaning 7:30 a. m. Honolulu time. About eight hours still later (3:00 p. m. Honolulu time, 9:00 p. m. Washington time), the United States Embassy at Tokyo received a communication from the Japanese Foreign Minister, informing our Government that a state of war had arisen between the two countries "beginning today". President Roosevelt appeared before a joint session of Congress on the following day, December 8th, to request that Congress declare the existence of a state of war between the United States and the Japanese Empire. The Congress was informed that "Yesterday, December 7, 1941 * * * the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan". After detailing the course of events of the preceding day, the President asked the Congress to declare that "since the unprovoked and dastardly attack by Japan on Sunday, December 7th, a state of war has existed between the United States and the Japanese Empire." (See House Document 453, 77th Congress, 1st Session). The Congress responded by joint resolution "that the state of war between the United States and the Imperial Government of Japan which has thus been thrust upon the United States is hereby formally declared. * * *" The resolution was approved by the President and became effective December 8, 1941, at 4:10 p. m., Washington time. 55 Stat. 795, 50 U.S.C.A.Appendix, note preceding section 1.

No one denies the grim reality that the attack beginning December 7, 1941, at about 7:30 a. m. Honolulu time, marked the commencement of an armed conflict between two sovereign nations which ended only when the Japanese surrendered nearly four years later. Furthermore, it seems to be agreed that the existence or non-existence of a state of war is a political question, to be determined by the political department of our Government. The basic difference lies in the contention on the one hand that a formal declaration by the Congress, which alone has the constitutional power to declare and make war, is an essential prerequisite to judicial cognizance of its existence; and the contention on the other hand that the existence of a war is not dependent upon its formal declaration, but rather is determinable from an appraisal of actualities; that the formal declaration by Congress on the day after the attack was merely a formal recognition of that which was already actually in existence. Both contentions find very respectable support in the adjudicated cases. Since the contract was made in Virginia, its construction and effect are of course governed by Virginia law. But the Virginia courts have not spoken, and we therefore have the duty to determine what we conceive will be the law of Virginia when its courts do speak on the subject.

All of the cases which support the appellee involve the death of an insured resulting from the Pearl Harbor attack under contracts of insurance, containing either identical or similar words of exclusion as those under consideration here. They are bottomed on the concept that courts may not take judicial notice of the existence of a war until it is formally and officially declared by the Congress of the United States; that the parties contracted in contemplation of this rule of law and are bound by it. A valid distinction is drawn between an act of war and a state of war, and the attack of December 7th is characterized as an act of war, which did, but not necessarily, eventuate in a state of war. The Panay Incident on the Yangtze River in China is suggested as a comparable act of war which did not eventuate in a state of war. Then too, it is said, in accordance with the universal rule, that if the words used to express the intention of the parties in the contract are ambiguous or susceptible of two meanings, one of which will permit recovery and the other will not, it should be given a construction most favorable to the insured. West v. Palmetto State Life Ins. Co., 202 S.C. 422, 25 S.E.2d 475, 145 A.L.R. 1461; Rosenau v. Idaho Mutual Benefit Ass'n, 65 Idaho 408, 145 P.2d 227; Savage v. Sun Life Assur. Co. of Canada, D.C., 57 F.Supp. 620; Gladys Ching Pang v. Sun Life Assur. Co., Supreme Court of the Territory of Hawaii, October Term, 1945.

The last cited case from the Territory of Hawaii calls attention to the joint resolution of Congress, approved December 8th, formally declaring war, and points to what it considers the significance of the failure of the Congress to comply with the President's request to declare that a state of war had existed since the "unprovoked and dastardly attack by Japan on Sunday, December 7th." To show that the Congress could have, but did not recognize the existence of a state of war on December 7th, the court emphasized the difference between this resolution and the joint resolution of Congress formally declaring war on Spain on April 25, 1898, in which war was specifically declared to exist, and had existed since the 21st day of April, 1898. The court also cites and quotes from a treatise by Manley O. Hudson, 39 Harv.Law Review 1020, to the effect that for the purpose of municipal law, a state of war between the United States and Germany did not exist until its formal declaration by joint resolution of Congress on April 6, 1917, 40 Stat. 1, although the Congress was "perhaps competent" to give the declaration a retroactive effect in view of the many previous acts of war committed by Germany against the United States. This argument, of course, assumes the premise that the courts may not take notice of the existence of a state of war until it is formally declared by the Congress.

The authorities which support the contentions of the appellant also involve insurance contracts which are identical or similar to ours. Vanderbilt v. Travelers' Ins. Co., 112 Misc. 248, 184 N.Y.S. 54, 55, involved an insurance contract excluding from its coverage "death * * * resulting, directly or indirectly, wholly or partly, from * * * war or riot." The insured lost his life when a German submarine sank the British steamer Lusitania, on which he was a passenger. At that time a state of war existed between Germany and Great Britain, but not between Germany and the United States. The court rejected the contention that the United States must have been at war with Germany in order to come within the language of the policy, holding that "`war' is every contention by force between two nations under the authority of their respective governments."

Stankus v. New York Life Ins. Co., 312 Mass. 366, 44 N.E.2d 687, involved an insurance contract also issued by this appellant, containing identical words of exclusion. The insured, a seaman in the United States Navy, lost his life when the USS Ruben James was torpedoed by German submarines on October 30, 1941. At that time, Germany was at war with Great Britain, but at peace with the United States. In holding that the insured's death resulted from war or an act incident thereto, the court reasoned that the existence of a war was not dependent upon its...