Prudential Ins. Co. v. Fuqua's Adm'R

• Decision Date: 28 November 1950
• Citation: 314 Ky. 166
• Parties: Prudential Ins. Co. of America v. Fuqua's Adm'r.
• Court: United States State Supreme Court — District of Kentucky

Page 166

314 Ky. 166

Prudential Ins. Co. of America v. Fuqua's Adm'r.

Court of Appeals of Kentucky.

November 28, 1950.

Action by Billie Fuqua's administrator against the Prudential Insurance Company of America to recover the proceeds on a life policy. The Circuit Court, McCracken County, Holland G. Bryan, J., entered judgment for plaintiff and defendant appealed. The Court of Appeals, Van Sant, C., held that where insurer excluded from incontestability clause in life policy, the right to diminish amount of benefits in event correct age of insured should be greater than that upon which premiums were based, under doctrine of ejusdem generis, incontestability clause was applicable to clause in policy limiting liability on account of other insurance on life of insured.

Affirmed.

1. Insurance. — Ordinarily, a provision for diminishing amount of liability to conform to correct age of insured is not affected by incontestability clause, since provision is one for mere adjustment of benefits.

2. Insurance. — An insurer may waive its right to diminish benefits in event correct age of insured should be greater than that upon which premiums were based, and at the same time preserve right to diminish benefit on account of other insurance on life of insured.

3. Insurance. — Where insurer excluded from incontestability clause in a life policy the right to diminish amounts of benefits in event correct age of insured should be greater than that upon which premiums were based, under doctrine of ejusdem generis, incontestability clause was applicable to clause limiting liability on account of other insurance on life of insured.

Wheeler & Marshall for appellant.

Earle T. Shoup, W. Pelham McMurry for appellee.

Before Holland G. Bryan, Judge.

VAN SANT, COMMISSIONER.

Affirming.

The case was submitted to the Chancellor of the McCracken Circuit Court on the law and facts. Since the evidence supports his finding of facts, we will adopt his statement of the case.

"On or about June 4, 1930, Mrs. Christine Fuqua, wife of the plaintiff, R.E. Fuqua, and mother of the decedent, Billie Fuqua, signed and delivered to L. B. McGarvey, an agent of the defendant, an application for the issuance of a policy of insurance on the life of the said decedent. The said application contained the following questions and answers:

                Question "11. Is life proposed now insured in this
                             Company? If so state numbers, kinds
                             and amounts of policies. If infantile, state
                             kind and premiums
                Answer       "Numbers                 Kind
                             ________                 ____
                             69687848                 C.E
                                                (Premium) 25c"
                Question "14. Is life proposed now insured in any
                             other company? If so, for what amount
                             If infantile, state kind and premium
                Answer       "None
                

"Although Mrs. Fuqua signed the application, she did not fill in the blanks on the application, that being done by the defendant's agent, the said McGarvey. She did not read the application after the blanks had been so filled in, and the said agent, at the time he filled in said blanks, did not ask Mrs. Fuqua any question relating to the existence of other insurance on the life of Billie Fuqua.

"At the time said application was signed by Mrs. Fuqua, two other policies of insurance were in force on the life of the said decedent, Billie Fuqua, to-wit:

"Policy No. 69 687 848 in the amount of $295.00 issued by the defendant, The Prudential Insurance Company of America, on February 28, 1927. Policy No. 4,709,067 in the amount of $1,000.00 issued by The American National Insurance Company on April 4, 1927.

"The said application was duly accepted by the defendant, and on June 9, 1930, it issued a policy of insurance on the life of the said Billie Fuqua, the same bearing number 82,472,507, and calling for the payment of the following amounts to the executors or administrators of the insured at the expiration of the periods specified.

                                                     Amount payable
                     In Force                          at Death
                     ________                        ______________
                Less than one year                       $300.00
                    One year                              370.00
                    Two years                             440.00
                    Three years                           500.00
                

"All premiums on said policy were paid as they became due until the death of Billie Fuqua, which occurred on August 17, 1937, whereupon no further premiums became payable.

"After the death of Billie Fuqua, and after the appointment and qualification of the plaintiff as Administrator of his estate, as aforesaid, the plaintiff notified the defendant of such death and demanded payment of the proceeds of said policy, which notice and demand were timely given and made. The defendant refused to make such payment, declared the said policy void by reason of the existence of an excessive amount of insurance on the life of Billie Fuqua, and tendered the premiums previously paid, plus interest at the rate of three and one-half (3 1/2) per cent per annum, in full settlement of its obligations under said policy. Plaintiff refused to accept such tender, and thereafter he instituted this suit to recover the sum of Five Hundred ($500.00) Dollars, plus interest at the rate of Six (6) per cent per annum from the date of the death of Billie Fuqua, August 17, 1937.

"The said policy issued by the defendant, number 82,472,507, contained the following provision:

"`Maximum Amount of Insurance. — If the Insured be already insured under any policy or policies issued by this or any other company, and if the amount of insurance payable at the death of the Insured under such policy or policies be less than the limit of insurance fixed by the following table, but when added to the insurance payable under this Policy shall exceed the said limit, the amount payable under this Policy shall not exceed the difference between the amount specified in the said table of limitations and the total amount of insurance payable under such policy or policies already in force on the life of the Insured, but if the amount of insurance payable at the death of the Insured under such policy or policies already in force be equal to or shall exceed the said limit of insurance, this Policy shall be void, except as provided below:

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                Limit of Insurance at Age Next Birthday at Time of Death
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