New York Life Insurance Company v. Campbell
| Decision Date | 03 June 1935 |
| Docket Number | 4-3882 |
| Citation | 83 S.W.2d 542,191 Ark. 54 |
| Parties | NEW YORK LIFE INSURANCE COMPANY v. CAMPBELL |
| Court | Arkansas Supreme Court |
Appeal from Sebastian Chancery Court, Fort Smith District; C. M Wofford, Chancellor; affirmed.
Judgment affirmed.
James B. McDonough, for appellant.
Miles Armstrong & Young, for appellees.
In 1928 appellant caused to be issued its policy of life insurance by the terms of which it insured the continued life of Bruce Campbell, and a corporation in which the insured was financially interested was designated therein as beneficiary. On February 4, 1932, the original policy was reissued and Anna L. Campbell, wife of the insured, was named therein as beneficiary. This policy expressly provided that "this policy takes effect as of the nineteenth day of November, 1928, which day is the anniversary of the policy." On March 19, 1932, the policy lapsed for nonpayment of premium and on March 29, 1932, the insured made written application for reinstatement which was subsequently on March 30, 1932, duly granted and the policy reinstated.
The relevant provisions of the policy necessary to a decision of the contention urged on this appeal are as follows:
About September 10, 1933, the insured suffered a stroke of paralysis and advised appellant thereof, and this suit was instituted in equity by appellant against the insured and the designated beneficiary on March 27, 1934, seeking the cancellation of the policy, because, as it is alleged, its reinstatement was superinduced by fraud practiced by the insured upon it. Appellees answered appellant's complaint by general denial, and affirmatively pleaded the issuance of the policy in 1928, and the two years incontestable clause therein contained as a complete defense to the alleged cause of action.
The testimony adduced upon trial was to the effect that the insured stated in his application for reinstatement of his policy of insurance that his health and physical condition were in the same state they were when the original policy was issued in 1928, and that within two years last past he had had no illness, disease or injury, nor had he been treated by or consulted a physician. Dr. Gregg testified that he treated the insured from October 2, 1931, until February 1, 1932, for dizziness or vertigo, and that the insured's kidneys showed some albumen and a toxic condition. That witness pronounced insured's ailments as "chronic nephritis."
Other testimony was heard by the chancellor, but it is not deemed relevant to the decisive issue on appeal, and we therefore omit a synopsis thereof. The chancellor dismissed appellant's complaint for want of equity, and this appeal follows:
The decisive and controlling question presented by this appeal is, do the misrepresentations made by the insured, and upon which the insurer relied in reference to his health in his application for the reinstatement of his policy render such reinstatement void?
The answer to this question is dependent upon a construction of the contract of insurance in reference to reinstatements of lapsed policies. This contract, as appears from the provisions heretofore quoted, gives to the insured the right to be reinstated at any time within five years after default upon his written application--the presentation of evidence of insurability, and the payment of past-due premiums with interest. We have many times decided under contracts of insurance not materially different from the one here under consideration, that the right of reinstatement is not a gratuity on the part of the insurer, but is a contractual right and obligation, and that the insurer has no right or authority to enlarge the terms upon which reinstatement may be effected. ...
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