Scarbor. v. Am. Nat. Ins. Co

• Decision Date: 12 April 1916
• Docket Number: (No. 321.)
• Citation: 88 S.E. 482
• Parties: SCARBOROUGH et al. v. AMERICAN NAT. INS. CO.
• Court: North Carolina Supreme Court

88 S.E. 482

SCARBOROUGH et al.

v.AMERICAN NAT. INS. CO.

(No. 321.)

Supreme Court of North Carolina.

April 12, 1916.

For other definitions, see Words and Phrases, First and Second Series, Incontestable.]

Appeal from Superior Court, Durham County; Allen, Judge.

Action by J. C. Scarborough and others against the American National Insurance Company. From a judgment for plaintiffs, defendant appeals. Reversed.

McLendon & Hedrick, of Durham, for appellant

Manning, Everett & Kitchin, of Durham, for appellees,

BROWN, J. The defendant insured the life of Willie Bell, payable to his mother, Kitty Bynum, with right to change the beneficiary. The plaintiffs are the beneficiaries, and are entitled to recover if the policy is in force. Willie Bell, the insured, was electrocuted on the 8th day of July, 1915, in accordance with the sentence of the law, for the crime of murder. The policy contains no provision stipulating either for or against the liability of the company in the event the insured's life was taken in punishment for the violation of the laws of the state. The policy does, however, contain this provision: "This policy shall be incontestable after two years from its date of issue for the amount due, provided premiums have been duly paid, except for fraud."

Upon the facts stated, the only question presented on this appeal is: Does an ordinary life insurance policy, in the absence of any provision in regard thereto, insure against death by act of the law administered as a punishment for the commission of a capital felony? We do not think that the parties to the contract contemplated such an extraordinary risk, or that the terms of the policy include it. If such a stipulation had been inserted in the policy, it would be insurance against the commission of crime, and void as against sound principles of public policy.

This identical case, as far as our researches show, was first decided by the House of Lords in the case of Amicable Insurance Society v. Bolland, 2 Dow & Clark, 1, known as the Fauntleroy Case. It was there held by the House of Lords that, though the policy did not contain an exception of the liability of the insurer, in the event the assured came to his death by the hands of the law, the exception would be implied, for the reason that an express contract for liability in such event would contravene sound principles of public policy, as well as good morals. The doctrine asserted in the Fauntleroy Case that death by the hands of public justice as a punishment for the commission of crime avoids a contract of life insurance is said by the Supreme Court of Alabama never to have been questioned, though the case itself may have led to the very general introduction of the exception into policies. Knights of the Golden Rule v. Ainsworth, 71 Ala. 447, 46 Am. Rep. 332. As is said in that case:

"The extinction of life by disease or by accident, not by suicide voluntary and intentional by the assured, while in his senses, is the risk intended; and it is not intended that, without the hazard of loss, the assured may safely commit crime. Bliss on Life Ins. §§ 242, 243."

See Vance on Life Ins. page 524.

This question was decided by the Supreme Court of the United States in the well-known case of McCue v. Northwestern Life Insurance Co., 223 U. S. 234, 32 Sup. Ct. 220, 56 L. Ed. 419, 38 L R. A. (N. S.) 57, and in the case of Burt v. Life Insurance Co., 187 U. S. 362, 23 Sup. Ct. 139, 47 L. Ed. 216. In the former case it is stated:

"The question was before this court in Burt v. Union Central Life Insurance Co. In the policy passed on, as in the policy in the case at bar, there was no provision excluding death by the law. It was decided, however, that such must be considered its effect, though the policy contained nothing covering such contingency. These direct questions were asked: 'Do insurance policies insure against crime? Is that a risk which enters into and becomes a part of the contract?' And answering, after discussions, we said: * * * 'It cannot be that one of the risks covered by a contract...