The Standard Life And Accident Insurance Company v. Martin

• Decision Date: 26 January 1893
• Docket Number: 15,738
• Citation: 33 N.E. 105,133 Ind. 376
• Parties: The Standard Life and Accident Insurance Company v. Martin, Administrator
• Court: Indiana Supreme Court

33 N.E. 105

133 Ind. 376

The Standard Life and Accident Insurance Company v. Martin, Administrator

No. 15,738

Supreme Court of Indiana

January 26, 1893

From the Porter Circuit Court.

The judgment is reversed, and the cause remanded, with instructions to overrule the demurrer to the second and third paragraphs of the answer, and for further proceedings not inconsistent with this opinion.

N. L Agnew and D. E. Kelly, for appellant.

S. C Spencer and P. Crumpacker, for appellee.

OPINION

Howard, J.

On the 26th day of January, 1888, appellee's decedent took out a policy of insurance in appellant's life and accident insurance company. Some time in June, 1888, said policy being in full force and effect, said decedent, while engaged as a brakeman on a construction train of the Chicago & Grand Trunk Railway Company, was accidentally thrown against some projecting timbers, and so injured that, from the effects, he died July 15, 1888. On December 24, 1889, appellant having failed and refused to pay the amount of said policy, or any part of it, the appellee (administrator) filed his substituted amended complaint in the Porter Circuit Court to collect the same. Appellant's demurrer to the complaint was overruled, and appellant excepted, and then answered in eight paragraphs. The court sustained a demurrer to each paragraph of the answer, except the first, fifth, and sixth and the appellant excepted to the ruling. Appellee filed a reply in three paragraphs, and the court overruled demurrers to the second and third paragraphs, to which ruling appellant excepted. The cause was tried by a jury, who, at the request of the appellant, returned a special verdict. Appellant moved for judgment on the verdict in its favor, which motion was overruled, and appellant excepted. Appellant then moved for a new trial, which motion was also overruled and appellant excepted. Judgment was given appellee for twenty-two hundred dollars, and this appeal followed.

The following errors are assigned:

First. Error in overruling the demurrer to the complaint.

Second. Error in sustaining demurrers to the second, third, fourth, seventh, and eighth paragraphs of answer.

Third. Error in overruling demurrers to the second and third paragraphs of reply.

Fourth. Error in overruling the appellant's motion for judgment in its favor on the special verdict.

Fifth. Error in overruling the motion for a new trial.

The first error discussed in appellant's brief is the sustaining of the demurrers to the second and third paragraphs of the answer. As these demurrers practically involve the same questions, we shall consider only the demurrer to the second paragraph of the answer. This paragraph of answer is as follows:

"And for a second and further answer to so much of the complaint as claims judgment in excess of two hundred dollars and interest thereon, the defendant says that by the terms of the policy of insurance sued on--and made an exhibit to the complaint herein, and which is by reference made a part of the answer--it was agreed: 'If the insured shall be injured in any occupation or exposure rated by this company as more hazardous than that herein given, that his insurance or weekly indemnity shall only be as much as the premium paid herefor will purchase at the rate fixed in this company's tables for such increased hazard;' that the premium which said Martin was insured in, was the occupation of a passenger brakeman, and was rated by said company in its tables of risks and in said policy as a medium risk, and the said sum of twenty dollars would purchase insurance in that class to the amount of two thousand dollars; that, after the said policy was issued, the said Martin changed his occupation to that of a brakeman on a construction train, which was a ten times more hazardous employment than that of a passenger brakeman; that he continued in said employment of brakeman on a construction train until the time of his death, and if he was injured at all after the issuing of said policy, it was while employed in the capacity of brakeman on a construction train; that the employment of brakeman on a construction train was, at the time of the issuing and execution of said policy, and has at all times since been classed by said company, in its table of risks and manuals issued by the said company, as a ten times more hazardous employment than that of passenger brakeman; that, by the classification of risks of said company's tables, the sum of twenty dollars premium would--at the time of the issuing of said policy, and at all times since--purchase no more than two hundred dollars insurance for injuries received by insured, while employed as brakeman on a construction train; that, by reason of the premises, the plaintiff should recover no more than two hundred dollars, with interest thereon from July 15, 1888."

We think this answer good, and that the demurrer to it should have been overruled. "The parties made the contract for themselves, and the law will only enforce it according to its terms and conditions." Board, etc., v. South Bend, etc., Street R. W. Co., 118 Ind. 68, 20 N.E. 499.

"The principles of interpretation applicable to contracts of insurance are the same as those which obtain in the case of other contracts." May on Insurance, section 172. American Ins. Co. v. Leonard, 80 Ind. 272.

It is competent for the parties to provide in the policy of insurance that a forbidden hazard shall make the policy void, or that the amount of the insurance in case of increased hazard shall be diminished in proportion; and in case the policy itself does not name the forbidden or increased hazards, it will be for the jury to determine whether such a change in the risk has taken place, and in what degree the risk has been increased. "The contract of insurance depends essentially upon an adjustment of the premium to the risk assumed." Kyte v. Commercial Union Assurance Co., 149 Mass. 116, 21 N.E. 361. May on Insurance, section 245.

It was a reasonable and fair contract for the parties to enter into. Increasing the hazard increases the risk. It was proper to provide against that increase of risk in the contract, and this the parties have done in the most explicit language, in the clause of the contract set out in the second paragraph of the answer. "Upon what principle could that clause be stricken out of the contract?" Robinson v. Mercer County etc., Ins. Co., (27 N. J. Law Rep.) 3 Dutch. 134.

The case of Aldrich v. Mercantile Mutual Accident Association, 149 Mass. 457, 21 N.E. 873, presents a similar question to the one under consideration. That was an action upon a certificate of membership in a mutual accident association. The evidence showed that the certificate permitted an employment different from the one named in the application, but reduced the amount of insurance accordingly; that the insured stated his occupation to be "spare conductor" on a freight train, and that he was killed while performing the duties of brakeman. Devens, J., speaking for the court, held that "the insured having been actually engaged as brakeman when he was killed, the beneficiary is therefore entitled to recover only the sum of two hundred and fifty dollars," being the amount due on the death of a brakeman.

We think it clear that the demurrer should have been overruled to the second paragraph of the answer, and, for similar reasons, we are of opinion that it should also have been overruled to the third paragraph. Substantially the same clause as to increased hazard, which is contained in the policy itself, is also contained in the application for the policy; and the third paragraph of the answer differs from the second only in being based upon the application instead of upon the policy. This condition is contained in the policy: "The Standard Life and Accident Insurance Company, of Detroit, Mich., in consideration of the statement of facts warranted to be true in the application for this policy, and of the payment of certain sums of money specified in an order on the C. & G. T. R. R., hereby insures Fred. Martin (the person described in said application), by occupation a passenger brakeman, under classification medium." We think that the application so referred to in the policy was a part of the contract. Cox v. AEtna Ins. Co., 29 Ind. 586; Mutual Benefit Life Ins. Co. v. Miller, Admx., 39 Ind. 475.

We think that the court correctly sustained the demurrer to the fourth, seventh and eighth paragraphs of the answer. The fourth paragraph alleged that the decedent did not receive any accidental injury whereby any visible mark was made upon his body. The complaint alleged the same matter, and if untrue, the proof could be made under the general denial; so the demurrer to the fourth paragraph was properly sustained.

The seventh paragraph of the answer charges that the decedent warranted that he was a married man, and the eighth charges that he represented that he was a married man, and that such representation was material, while in truth he was not married. These paragraphs are based upon the seventh statement in the application, which reads as follows ...