Stinson v. New York Life Ins. Co.

• Decision Date: 15 March 1948
• Docket Number: No. 9568.,9568.
• Citation: 167 F.2d 233
• Parties: STINSON v. NEW YORK LIFE INS. CO.
• Court: U.S. Court of Appeals — District of Columbia Circuit

167 F.2d 233 (1948)

STINSON v. NEW YORK LIFE INS. CO.

No. 9568.

United States Court of Appeals District of Columbia.

Argued January 22, 1948.

Decided March 15, 1948.

Mr. Harry A. Finney, of Washington, D. C., with whom Messrs. John R. Fitzpatrick and Edward J. Lynch, both of Washington, D. C., were on the brief, for appellant.

Mr. G. Bowdoin Craighill, of Washington, D. C., with whom Messrs. John S. Flannery and A. Murray Preston, both of Washington, D. C., were on the brief, for appellee. Messrs. Caesar L. Aiello and John E. Larson, both of Washington, D. C., entered appearances for appellee.

Before EDGERTON, CLARK, and WILBUR K. MILLER, Associate Justices.

CLARK, Associate Justice.

Appellant is the beneficiary designated in a policy of life insurance which was issued by appellee on November 24, 1942, to the now deceased husband of appellant. At the time the policy was issued the decedent was serving as a Major in the Quartermaster Corps, United States Army, and was stationed at Camp Lee, Virginia. Appellant averred in her complaint that under the terms of the policy the insurer, appellee here, agreed to pay, upon receipt of due proof of the death of the insured, to appellant, or in the event of her prior death, to the insured's mother, the sum of ten thousand dollars. The complaint recites that the insured, Jack L. Stinson, met his death October 2, 1945, by accidentally falling from a window of the Hotel du Nord in Reims, France. It is further averred that appellant properly presented proof of death of the insured and applied for payment in accordance with the terms of the policy, which was refused.

Appellee answered and raised as a complete defense to all except a restricted recovery (which involved a return of the premiums paid, with interest) a rider captioned "Additional conditions relating to War and Aviation," which was attached to and made a part of the policy. The pertinent provisions of this rider relied upon by appellee are as follows:

"The only amount payable under this policy shall be the restricted amount hereinafter defined if the death of the Insured shall occur in the circumstances set forth in any one or more of the following clauses (1), (2), (3) or (4), namely

"(1) outside the Home Areas while the Insured is in the military or naval forces of any country engaged in war;

* * * * * *

"Said restricted amount shall be a sum equal to the premiums which shall have fallen due hereunder prior to the date of death of the Insured and been paid to and received by the Company, together with compound interest at the rate of three per cent per annum, plus the reserve on any outstanding dividend additions, and any outstanding dividends, including dividend deposits, and less any indebtedness hereon. * * *

"Wherever used in this Policy,

"`Home Areas' means the forty-eight states of the United States of America, the District of Columbia, the Dominion of Canada and Newfoundland;

"`War' includes undeclared war;

"`Military or naval service' includes service in the air forces of a country, including air training forces and forces charged with the operation or maintenance of any kind of aircraft, and `military or naval forces' include any such air forces; * * *."

The appellee admitted liability for a "restricted amount" of $880.59, and made tender of that sum, which was refused.

Appellant filed interrogatories, pursuant to Rule 33, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, to determine whether the appellee had continued to write into its new policies of insurance, after the surrender by Japan, the same conditions relating to war and aviation, and also to learn, provided that practice had been discontinued, the date of discontinuance. Appellee objected to the interrogatories and the trial court sustained the objection; appellant contends this was error.

Appellee then filed a motion for summary judgment, contending that there was no genuine issue as to any material fact and that as a matter of law appellee was entitled to judgment. Agreeing that no material fact was in dispute, appellant filed objections to appellee's motion together with her own motion for a summary judgment. By agreement the two motions were heard jointly, and the trial court then granted appellee's motion, but awarded appellant $880.59. Judgment was entered in accordance therewith, and from that judgment this appeal was taken.

We face the necessity of interpreting a contract. Our sole duty is to find out what was intended by the parties according to the expressed or apparent intent manifested by the language employed, and give effect to that intention if it can be done consistently with legal principles. In attempting to judicially determine the probable intent of the parties, consideration is directed to the purpose of the contract and the circumstances surrounding its execution. Subjective analysis of the terms of the contract is of little benefit, for words studied out of context are usually variable in meaning. Objective analysis may not produce an indisputable result, but it is the method we must adopt as the one calculated to produce a greater degree of fairness in the result.

Generally speaking, contracts should not be so narrowly or technically construed as to relieve the obligor from a liability fairly within the scope or spirit of their terms, nor should they be so loosely construed as to frustrate their obvious design.¹ A court has no basis for relieving one party from contract provisions to which he has agreed, merely because they operate disadvantageously as to him. With particular regard to the type of contract before us, it is a well-known rule of insurance law that where an insurance contract is ambiguous and fairly susceptible of two or more interpretations, the interpretation most favorable to the insured will be adopted.² And unless it is obvious that the terms were intended to be used in their technical connotation, they will be given the meaning that common speech imports.³ We must attempt to ascertain and effectuate the lawful intention of the parties, and, in the light of these precepts, we proceed to a determination.

It is conceded by appellant that the insured died outside the "Home Areas" while serving in the military forces of the United States. Clause (1) of the rider contained additional modifying words conditioning the exemption of liability, however, and it is the phrase, "of any country engaged in war," which requires interpretation. We must determine, therefore, whether the United States was a "country engaged in war" when the insured met his death on October 2, 1945. No identical provision has previously received judicial consideration by an appellate court,⁴ although the last two wars involving the United States have produced an abundance of litigation centering on similar war risk exclusion clauses. The decisions are not particularly helpful for the reason that they construe clauses making "status" of the insured, or "cause of death" of the insured, the determining factors. Here we have a "status" clause extended to include also the "war status" of the country. Excellent discussions⁵ and annotations⁶ reviewing some or many of the prior related adjudications are available, which serve mainly to highlight the problems inherent in judicial consideration of the variously phrased war risk exemption clauses.

In a memorandum opinion the trial court expressed the view that the term "engaged in war" has a meaning so well recognized and of such long historical acceptation that it must be presumed to have been clearly understood by both parties that the United States continues to be engaged in war until the legislative or executive authority, or both, recognize and declare that the nation is no longer so engaged. The appellee's argument to us is principally based on the premise that whether the United States is engaged in war is wholly a political question, the determination of which rests solely with the legislative and executive branches of our Government, and their pronouncements are binding upon the judiciary. Appellee urges strongly that we must adopt the view expressed by the lower court or run counter to well established precedent. That argument requires inspection.

The meaning of the phrase "engaged in war" may very according to the purpose for which it was employed and the manner in which it was stated in relation to that purpose. The clause containing that phrase in the contract before us obviously purported to state a condition of non-liability for insurance coverage otherwise provided. The attempt was to define a period of non-liability, dependent on the military status of the insured and the war status of the country he served, by the use of relative terms, since it was impossible to forecast with definiteness the duration of that period.

It is essential to note that fixation of the dates when (regarding World War II only, for the moment) this country became engaged in war and ceased, or will cease, to be engaged in war, depends entirely on the standpoint from which it is viewed. From the standpoint of public law we accede to the view urged upon us here by appellee, and that adopted by the trial court. In Citizens Protective League v. Clark, 81 U.S.App.D.C. 116, 121, 155 F.2d 290, 295, decided May 2, 1946, this court said: "Appellants say that the war has terminated and that, therefore, the Enemy Alien Act, 50 U.S.C.A. § 21 et seq., even if valid, is not in effect. No peace treaty has yet been signed with Germany, and the state of war has not been terminated by act of Congress or by Executive Proclamation. Cases involving the termination of other wars dispose of appellants' point. (Citing cases.⁷) It is not for the courts to determine the end of a war declared by the Congress."

In the Clark case we were treating a matter of public law; here we are concerned with a private contract, and a distinction must be maintained. Professor Manley O. Hudson,...