Prudential Ins. Co. of America v. Rice

• Decision Date: 28 January 1944
• Docket Number: 27938.
• Citation: 52 N.E.2d 624,222 Ind. 231
• Parties: PRUDENTIAL INS. CO. OF AMERICA v. RICE.
• Court: Indiana Supreme Court

52 N.E.2d 624

222 Ind. 231

PRUDENTIAL INS. CO. OF AMERICA v. RICE.

No. 27938.

Supreme Court of Indiana

January 28, 1944

Appeal from Vigo Circuit Court; John W. Baumunk Special judge.

Hickey Dewey & Nattkemper, of Terre Haute, for appellant.

James F. Harper, of Terre Haute, for appellee.

SHAKE Judge.

In 1936 the appellant issued to the appellee a policy of life insurance, providing, also, for the payment of certain disability benefits to the insured if he should 'sustain a physical impairment such as * * * the permanent loss of the sight of both eyes.' The appellee sued on the policy alleging that in 1941 he sustained 'the complete and irrecoverable loss of the sight of both eyes.' Appellant answered that appellee's disability was the direct and proximate result of his attempt to commit self-destruction when he was of sound mind. A demurrer to the answer was sustained and the appellant suffered judgment to go against it upon its refusal to plead over. The only question before us is whether the answer sufficiently alleged a defense to the action.

The policy contained a provision to the effect that it should be incontestable after one year from the date of issue, but we do not consider this of importance to the case at bar. The incontestability clause merely limits the time within which matters affecting the validity of the policy may be urged. It has no reference to whether a particular casualty subsequently occurring is covered by the terms of the policy. In Guardian Life Ins. Co. v. Barry, 1937, 213 Ind 56, 62, 10 N.E.2d 614, 617, this court said: 'There is a recognized distinction between contesting the validity of a contract and defending against an action upon the contract upon the ground that a situation in which the defendant is liable has not arisen.'

See, also Werner v. State Life Ins. Co., 1937, 104 Ind.App. 27, 6 N.E.2d 786, 7 N.E.2d 209. The action before us belongs to the latter class of cases. It does not involve the validity of the policy. While numerous decisions may be found in which the above distinction has not been observed, we think it is, nevertheless, fundamental.

For the purposes of this case it is admitted: (1) that the appellee's disability was the proximate result of wounds which were self-inflicted when he was of sound mind, in his unsuccessful attempt to commit suicide; (2) that there were no express limitations or restrictions in the policy sued on against recovery of benefits resulting from disabilities so caused; and (3) that there is no statute in this state bearing upon the subject.

The appellant relies, principally, upon three cases in other jurisdictions. In Fanti v. Travelers Ins. Co., 1942, 264 A.D. 724, 34 N.Y.S.2d 34, 35, the Supreme Court of New York, Appellate Division, said, on similar facts: 'We are of opinion that it was an implied condition of the policy that the insured when in sound mind purposely would not inflict disabling injuries upon himself, thus creating the liability against which he was insured.'

In Bullas v. Empire Life Ins. Co., 1931, 4 D.L.R. 443, the Supreme Court of Ontario, Canada, held that recovery under such circumstances would be against public policy. And, in Elwood v. New England Mut. Life Ins. Co., 1931, 305 Pa. 505, 158 A. 257, the court, after observing that a sane attempt at suicide is grossly immoral and was an infamous crime at common law, said that recovery must be forbidden in such a case because the offender may not be permitted to take advantage of his own wrong. We do not find in either of these cases any exhaustive consideration of the subject. There may be other cases to like effect, but the above are sufficient to illustrate the theories upon which the appellant relies for a reversal, namely, broad public policy, implied contract, and the specific rule embraced in the common law maxims that, 'No one shall be permitted to profit by his own fraud, or to take advantage of his own wrong, or to found any claim upon his own iniquity, or to acquire property by his own crime.' Box v. Lanier, 1903, 112 Tenn. 393, 409, 79 S.W. 1042, 1045, 64 L.R.A. 458.

There was a time when life insurance was prohibited by law, upon the theory that it operated as an incentive to those who would benefit by the termination of a life to hasten that end. 37 C.J., Life Insurance, § 3. State ex rel. Attorney General v. Merchants' Exch. Mut. Benev. Soc., 1880, 72 Mo. 146. Suicide was once regarded as an infamous crime and, since a penalty could not be inflicted upon the perpetrator, it was decreed that his estate should be forfeited to the crown and his body subjected to the indignity of being buried in the highway without benefit of clergy. 60 C.J., Suicide, § 2. These harsh concepts have long since been softened by force of an enlightened public opinion. It is now universally accepted that life insurance is not necessarily inducive of murder, and we think it may also be said that the more humane view now is that suicide is usually the result of some mental derangement which may or may not amount to actual insanity.

In view of the fact that the question before us is one of first impression in this state, we feel called upon to examine the subject of consummated and attempted self-destruction in its relation to life and disability insurance contracts.

In the leading cause of Ritter v. Mutual Life Ins. Co., 1898, 169 U.S. 139, 18 S.Ct. 300, 305, 42 L.Ed. 693, Mr. Justice Harlan declared:

'When the policy is silent as to suicide, it is to be taken that the subject of the insurance (that is, the life of the assured) shall not be intentionally and directly, with whatever motive, destroyed by him when in sound mind. To hold otherwise is to say that the occurrence of the event upon the happening of which the company undertook to pay was intended to be left to his option. That view is against the very essence of the contract.

'There is another consideration supporting the contention that death intentionally caused by the act of the assurance when in sound mind--the policy being silent as to suicide--is not to be deemed to have been within the contemplation of the parties; that is, that a different view would attribute to them a purpose to make a contract that could not be enforced without injury to the public. A contract, the tendency of which is to endanger the public interests or injuriously affect the public good, or which is subversive of sound morality, ought never to receive the sanction of a court of justice, or be made the foundation of its judgment. If, therefore, a policy--taken out by the person whose life is insured, and in which the sum named is made payable to himself, his executors, administrators, or assigns--expressly provided for the payment of the sum stipulated when or if the assured, in sound mind, took his own life, the contract, even if not prohibited by statute, would be held to be against public policy, in that it tempted or encouraged the assured to commit suicide in order to make provision for those dependent upon him, or to whom he was indebted.'

In an attempt to ameliorate the harshness of the rule announced in the Ritter case, supra, many courts have declared that voluntary self-destruction is a defense to an action on a policy payable to the insured, his assigns, or estate, but not to one brought by any other named beneficiary. See 29 Am.Jur., Insurance, ...