The Northwestern Mutual Life Insurance Co. v. Hazelett

Decision Date27 January 1886
Docket Number11,396
PartiesThe Northwestern Mutual Life Insurance Company v. Hazelett
CourtIndiana Supreme Court

From the Putnam Circuit Court

The judgment is affirmed, with costs.

T Hanna and S. A. Hays, for appellant.

M. A Moore, G. C. Moore, D. E. Williamson and A. Daggy, for appellee.


Mitchell, J.

Sarah S. Hazelett brought suit against the Northwestern Mutual Life Insurance Company, to recover the amount of a policy of insurance issued upon the life of her husband.

The policy stipulates that upon due proof of the death of William J. Hazelett, the sum of three thousand dollars shall, within a time limited, be paid to his wife, Sarah S. Hazelett, as beneficiary. Issues were made upon a complaint filed in the court below, and upon trial by a jury, a verdict was returned upon which judgment was entered for three thousand three hundred dollars, the amount of the policy and accumulated interest. The first error assigned is that the court erred in overruling a demurrer to the complaint. The only defect suggested in regard to it is, that neither the original nor a copy of the policy sued on was filed with the complaint. Conceding that it contains an appropriate averment, that a copy of the policy is filed and made part thereof, and that a copy of a policy follows in the transcript immediately after the complaint, it is contended, nevertheless, that the transcript fails to show the actual filing of a copy.

The policy which is thus copied into the transcript conforms in all respects to that described in the complaint, and which it is averred therein "is filed herewith and made a part of this complaint." Within repeated rulings, this is a sufficient identification of the instrument sued on, and shows that it was filed with the complaint. Whitworth v. Malcomb, 82 Ind 454; Lentz v. Martin, 75 Ind. 228; Carper v. Kitt, 71 Ind. 24, and cases cited. The application was referred to in the complaint in like manner, and is likewise copied into the transcript. It was not necessary that a copy of the application should have been filed with the complaint. Continental Life Ins. Co. v. Kessler, 84 Ind. 310; Penn Mut. Ins. Co. v. Wiler, 100 Ind. 92 (50 Am. R. 769). A demurrer was sustained to the first paragraph of the defendant's answer. This ruling is assigned for error.

This answer sets up a defence, that the policy contained an express stipulation that if the assured should ever become intemperate, or so far intemperate as to impair health or induce delirium tremens, the policy should become null and void. It avers that, after the policy was delivered, the assured did become intemperate to such a degree as to induce delirium tremens.

The second clause of the printed conditions upon which the policy was accepted, as therein recited, contains among many other prohibitions in respect to the conduct and occupation of the assured, a prohibition against intemperance, the substance of which is stated in the answer as summarized above. This clause provides that the doing of any or all of the things prohibited therein shall render the policy null and void.

The fifth clause of the printed conditions of the policy is as follows: "5th. If the said insured becomes habitually intemperate, or so far intemperate as either to impair health or induce delirium tremens, then, in either such case, the company may cancel this policy, and thereupon be absolved from all liability upon the same except only the 'surrender value' thereof, computed according to the practice of the company, which surrender value it will pay on the surrender of this policy if applied for in the lifetime of the insured and within one year from the cancellation of the policy."

In the clause first alluded to, intemperance to the degree of impairment of health, or of inducing delirium tremens, worked an absolute forfeiture. In the other, the result which was to flow from the same conduct was, that the insurance company might cancel the policy, and by that means absolve itself from liability, except for the "surrender value."

The first stipulation is found in a printed clause in which is contained numerous other conditions, the violation of any one of which was to render the policy void. The last is a separate clause of the contract and is complete in itself.

It thus appears that two stipulations were incorporated in the policy, covering the same subject-matter. The one providing that upon certain conditions the policy should become absolutely void; the other, that upon precisely the same conditions, the insurance company might avoid the policy and absolve itself from liability to a certain extent. Since both of these conditions can not stand together, the inquiry is, which shall prevail?

While forfeitures are never favored, yet, if, upon a reasonable construction, it appears that the parties contracted for a forfeiture upon certain conditions, it only remains for the courts to enforce the contract as the parties have made it. It is neither unlawful nor against public policy for a contract of life insurance to stipulate that upon certain conditions or contingencies the policy should become void. Bloom v. Franklin Life Ins. Co., 97 Ind. 478 (49 Am. R. 469); Douglas v. Knickerbocker Life Ins. Co., 83 N.Y. 492.

A forfeiture will not be enforced unless it is clearly demanded by established rules governing the construction of written agreements. When a policy of insurance contains inconsistent or contradictory provisions, it is the rule that the provision most favorable to the assured will be adopted. Moulor v. American Life Ins. Co., 111 U.S. 335, 28 L.Ed. 447, 4 S.Ct. 466; National Bank v. Ins. Co., 95 U.S. 673, 24 L.Ed. 563.

Courts will construe a contract of insurance liberally, so as to give it effect rather than to make it void. Conditions which create forfeitures will be construed most strongly against the insurer. Only a stern legal necessity will induce such a construction as will nullify the policy. Carson v. Jersey City Ins. Co., 14 Vroom, 300 (39 Am. R. 584); Franklin Life Ins. Co. v. Wallace, 93 Ind. 7; Bliss Life Ins., section 385.

In Burkhard v. Travellers' Ins. Co., 102 Pa. 262 (48 Am. R. 205), it was said: "When a party uses an expression of his liability having two meanings, one broader and the other more narrow, and each equally probable, he can not, after an acceptance by the other contracting party, set up the narrow construction."

The policy before us having been presumably prepared by the company, and containing on its face inconsistent or ambiguous stipulations as to the consequences which should result from intemperance, the meaning most favorable to the assured must be attributed to it. This rule is particularly applicable in a case like this, where a forfeiture is insisted upon. To hold otherwise would be to give a construction to the contract which would enable the insurance company to exercise its option, after having collected premiums, to insist upon a forfeiture or not according to its pleasure.

The consequence of intemperance was made the subject of a particular specific and separate stipulation in which no other subject is mentioned, and, according to well established rules of construction, when such is the case, the separate specific stipulation is to be preferred over a general stipulation inconsistent therewith.

As there was no averment in the answer that the insurance company had absolved itself from liability by cancelling the policy, according to the terms of the fifth stipulation contained therein, the demurrer to the first paragraph of the answer was correctly sustained.

The demurrer was substantially in the form of that considered in the cases of Rennick v. Chandler, 59 Ind. 354, and Stone v. State, ex rel., 75 Ind. 235, and is subject to the same criticisms as were there made. It sufficiently appears, however, that it was addressed to each paragraph of the answer separately. Mitchell v. Stinson, 80 Ind. 324. It is, therefore, not a joint demurrer, as contended, to all of the several paragraphs of answer.

It is assigned for error that the court erred in overruling the demurrer to the second and third paragraphs of reply. Both of these replies are directed to the fourth, fifth, sixth and seventh paragraphs of answer.

Each of these paragraphs of answer refers to a stipulation which is found in the policy, to the effect that, whether sane or insane, if the assured shall die by his own hand, the policy shall be void.

The fourth paragraph of answer, which fairly represents all the others, charges, in substance, that after the delivery of the policy, the assured voluntarily entered upon a course of dissipation, by an excessive use of spirituous and malt liquors as a beverage, whereby his mental and physical powers were enfeebled,...

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2 cases
  • Northwestern Mut. Life Ins. Co. v. Hazelett
    • United States
    • Indiana Supreme Court
    • January 27, 1886
    ... ... Hazelett brought suit against the Northwestern Mutual Life Insurance Company, to recover the amount of a policy of insurance issued upon the life of her husband. The policy stipulates that upon due proof ... ...
  • Evans v. Evans
    • United States
    • Indiana Supreme Court
    • March 27, 1886

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